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A billion-dollar battle is being waged across the border in Niagara Falls, Ont., with stakes as high as the sky-scraping hotels that threaten to obscure a natural wonder.

Closely monitoring the situation, officials in Niagara Falls, N.Y., believe a development boom across the Niagara River in Canada will have a positive impact on the city on this side of the border, which is in desperate need of resurgence.

"There's at least a billion dollars being spent on development over there," said Richard T. Reinhard, chief operating officer of the Niagara Falls (N.Y.) Redevelopment Corp. "It means on this side we can respond or not respond. We can either become a complement, or an East St. Louis to St. Louis."

High-rise development plans along Canada's Niagara escarpment pit aesthetics against economics.

Over the summer, a dispute erupted between the Niagara Parks Commission and the city of Niagara Falls, Ont. Just last week, with the help of a mediator, both sides agreed to consider a compromise that would alter proposed hotels' architecture, but maintain their height.

"We're certainly not anti-development," said Archie Katzman, interim chairman of the Niagara Parks Commission in Ontario. "Our mandate is to be good neighbors."

The parks commission had requested an amendment that would alter the height requirements for new buildings -- prohibiting structures from exceeding the tops of trees. City officials viewed the "tree-line rule" as an unrealistic approach that would discourage development.

"The tree-line height restriction was not appropriate considering the opportunities for development," said Mayor Wayne Thomson of Niagara Falls, Ont. "That would restrict the hotels to four to six stories, and that is unrealistic."

The compromise plan, which affects an area stretching from Clifton Hill to the Minolta Tower, would create a skyline defined by pointed structures, or peaks, rather than the conventional block-shaped buildings.

"Rather than no skyline, we are looking at an appropriate one," said Thomson.

Among the new buildings under consideration is a proposed 27-story hotel next to the Skylon Tower. Development plans for the hotel were originally approved by the city's planning commission in the early 1970s. The latest incarnation of that proposal is still in its infancy, said Thomson.

"The plan was sitting there dormant until a new owner purchased the property through a bankruptcy," said Thomson. "It wouldn't be affected (by
any new design restrictions), unless the developer wanted to alter what was already approved."

The more than 20-year-old plans do not call for a structure with points or a peaked roof, though the city may seek to negotiate with the new developer, Ed Cogan of Toronto, to modify the original design, Thomson said.

"It's a very unique project on a small piece of land. Since there is not much room around the (proposed) tower for parking, (the developers) would have to provide above-ground parking on the first three or four floors," he added.

Several existing structures, including the Skylon, the Minolta Tower and the new Casino Niagara are taller than the proposed 27-story hotel, Thomson said.

He added that city officials might even consider allowing a 30-story structure as long as the design included peaks or points.

Plans for a permanent casino in Niagara Falls, Ont. -- with a site recommendation expected within a month -- call for one of several development groups to build an entertainment complex that could cost $150 million.

Niagara Falls, N.Y. Mayor James Galie, meanwhile, said any Canadian development can only enhance his city's plans, which currently call for an infusion of $140 million.

"There is no question with $1 billion dollars being spent on development across the river, it will affect us here," Galie said. "The planning across the river acts as a catalyst."

The Niagara Falls, N.Y., investment group led by Cogan already purchased the vacant United Office Building as a gesture of good faith. A master plan is expected by year's end, Galie said.

Galie insists that Niagara Falls, N.Y., will not be left behind, that the $140 million pledged by Cogan, is only a beginning.

Reinhard believes he is correct.

"What is happening is major corporations are making major investments in Niagara Falls, Ont.," he said. "We're putting together a plan that we hope will enable us to catch up with what is being done over there."

Staff Reporter Harold McNeil contributed to this story.

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