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Transportation commissioners have given unanimous approval to an agreement with the City of Buffalo in a waterfront land dispute.

The commissioners approved a memorandum of understanding that will allow the Niagara Frontier Transportation Authority to transfer ownership of the Small Boat Harbor and Gallagher Beach to the state for creation of a new state park. The agreement also clears the way for efforts to develop about 120 acres of land on Buffalo's outer harbor.

The city had gone to court contending that it, not the NFTA, had title to the waterfront property. The agreement now goes to the Common Council for formal approval.

In exchange for dropping its immediate ownership claims, the city will have a say in outer harbor development proposals, the NFTA guarantees that developed parcels will generate payment-in-lieu-of-taxes for the city, and the city will get half of all sale or lease proceeds generated at the Seaway Piers.

If the NFTA fails to develop the 13-acre site within 10 years, the city would have an option to buy the property.

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