Toronto developer Edwin A. Cogan has sold half the company that is planning to redevelop Niagara Falls to billionaire real estate investor Howard P. Milstein, a co-owner of the New York Islanders hockey franchise.
The addition of Milstein's deep financial pockets to the Cogan effort comes as the prospect nears of Indian casino gambling on the American side of the border. Seneca Nation leaders will soon begin negotiations with the state, and the Falls is thought to be a preferred location.
Cogan has pledged to spend $130 million over the next seven years to redevelop the Falls, but that is a small investment compared with the more than $1 billion in new development already beginning on the Canadian side with its legalized gambling.
"I've always said I would get a deep-pocket partner, whether it was a family or an institution," Cogan said Thursday.
"I'm delighted to have him as a partner," he said. "You're not just dealing with a lot of wealth without the smarts to go with it. He's one of the smartest people I've dealt with."
Terms of the sale were not announced, and Cogan would not specify the exact investment Milstein is expected to make.
"He's going to put a fund together; that's part of our deal," Cogan said. "It will be a pot of money we can use to acquire things."
Richard T. Reinhard, chief operating officer of Cogan's Niagara Falls Redevelopment Corp., said Milstein is the right fit.
"I think it brings a person of great financial capability for sure," Reinhard said. "But I think, more than that, Howard Milstein really understands development. He's been in the real estate business all of his life."
There is no question that Milstein, 47, whose family has an estimated net worth of $5 billion to $6 billion, has both the wealth and the development contacts to further Cogan's vision for Niagara Falls.
Cogan's master plan -- unveiled to Falls residents during a Jan. 20 public meeting -- was designed by the Jerde Partnership of California. It would restore a Niagara Falls defaced by various ill-fated urban-renewal projects through the years. Cogan's concept includes a mix of parkland, shops, restored buildings and an entertainment district, including new hotels and a casino.
"He buys our vision," Cogan said of Milstein, whom he met in the early 1990s, when Cogan developed and managed real estate in New York City. "It's the vision of lake-to-lake, with the (Niagara) river as the spine."
Milstein, whose family made its fortune in construction, real estate and investments and is landlord to some of New York City's most prestigious addresses, has gained most of his publicity through his recent sports ventures.
He and partner Steven M. Gluckstern bought the Islanders in 1995 for $175 million and tried to buy the National Basketball Association's New Jersey Nets. He also is a finalist, along with former National Football League stars Paul Warfield and Calvin Hill, to buy the new Cleveland Browns franchise for an estimated $300 million to $500 million.
Before that, Milstein was among investors who tried to form Major League Football to compete with the NFL and the United Baseball league to compete with the major leagues. Both failed because of lack of television contracts. But it is in development and real estate where Milstein has spent most of his career and is the reason that Cogan brought him into the company, Reinhard said.
Milstein's various companies, begun by his Russian grandfather, Morris, as a floor-refinishing firm, include the Emigrant Savings Bank, with $6 billion in assets; Douglas Elliman, the largest New York City brokerage, with 550 brokers; the Milford Hotel group, whose holdings include the 1,300-room Milford Plaza Hotel in Manhattan; and various residential and commercial buildings, including the million-square-foot Bank of America Plaza at Grand Central.
Family members, from 1975 to 1984, were the controlling shareholders of United Brands, the parent company of Chiquita Bananas.
Milstein, an economics graduate of Cornell University who holds law and master of business administration degrees from Harvard University, is a trustee of Cornell and a board member of three family philanthropic charities. "Mr. Milstein is a person of great stature in New York City and throughout North America," Mayor James C. Galie said in a statement. "His partnership with Ed Cogan . . . is an enormous step toward securing a vital and prosperous future for our city."