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What happened to Pataki's promise for Falls? <br> Four years after the state pledged to do for Niagara Falls what it did for Times Square in New York City, the vow largely has gone unfulfilled

Gov. George E. Pataki promised in 2001 that the state was going to do for Niagara Falls what it did for Times Square.

Four years later, this hard-bitten city has hardly become a hot spot for tourist-oriented businesses, much less a neon-emblazoned retail mecca.

Main Street is largely a dead zone. Land speculation around the Seneca Niagara Casino has run rampant, but projects have been few. Most of the tourists heading into the Falls keep right on driving, to the Canadian side.

But look a little deeper, and there are unmistakable signs of change.

Motorists crossing into the United States on the Rainbow Bridge find the gleaming Seneca Niagara Casino spa and hotel jutting 26 stories into the sky.

A $200 million building is hard to dismiss. The hotel anchors another $200 million in Seneca construction.

Across Third Street from the casino is a new $20 million conference center built by New York State. It is packed to the rafters with the state-of-the-art videoconferencing and high-tech gear expected by those who book corporate events.

Next door to the center, work will start this fall to turn a Holiday Inn Select into a three-star Crowne Plaza Hotel. The $22 million deal, which includes a $6 million state subsidy, is the largest non-Seneca building deal yet in the city.

The street in front of the hotel boasts new, wide sidewalks and stylized lamp standards, part of a $3.7 million Third Street project that stretches three blocks north. That's the strip that USA Niagara Development, the state's Niagara Falls development office, aims to turn into a nightlife and entertainment area, a sort of Chippewa Strip North.

"It took 14 years of planning to bring us Times Square," said Empire State Development Chairman Charles Gargano, the state's top development official. "We think we have done quite a bit in a short period of time."

No new attractions

A lot of work remains.

While the casino brought 2,400 jobs to the city, it has created little spinoff development. Property values around the downtown Seneca reservation have increased, but between property speculators and cash-strapped operators, there have been almost no new attractions.

Since 1997, Niagara Falls Redevelopment, a Manhattan-based real estate outfit, has had rights to 142 acres of city property just east of the casino. It has spent the last several months buying and starting to demolish old homes on the swath of land, but company executives say they are two years away from opening their first project, a 25,000-square-foot entertainment, hospitality and retail complex on a former city playground.

The only new family-oriented offering downtown, Smokin' Joe's Family Fun Center, resembles a Chuck-E-Cheese without the pizza. Sightseers braving the city blocks nearest the world-famous waterfalls are greeted by a gantlet of hawkers' tables, a Hard Rock Cafe and little else.

Assemblywoman Francine DelMonte echoed the comments of many local leaders when she said that more tourist developments would have been nice, but that USA Niagara Development deserved credit for moving the city forward despite daunting barriers.

"People will say there hasn't been enough done," said DelMonte, D-Niagara Falls. "But when I look at some of the obstacles USA Niagara has had to surmount on some of these initiatives, I understand why the pace hasn't been as quick as many would like."

She cited the United Office Building as one example. The Art Deco landmark was empty for decades, flirting with the wrecking ball, when USA Niagara stepped in to free it up for development.

Project delayed

Buffalo developer Carl Paladino signed an agreement to convert the building into office space and luxury condominiums, personally guaranteeing a $6 million loan for the project.

But the start of work at the building has been delayed several times, as Paladino and USA Niagara worked on unforeseen hurdles. The renovations had to pass scrutiny at the state Office of Historic Preservation, which challenged some of the plans.

Whether it's onerous state regulations, reluctant loan officers or zoning complications, the state is trying to deal with some of the issues that have made downtown Niagara Falls a development dead zone for so long, DelMonte said.

"The public gets a glimpse, but an entity like USA Niagara is dealing with it on a day-to-day basis," she said.

Not everyone is so positive. Dan Vecchies was the first business owner to invest in the USA Niagara development zone along Third Street.

Relying on the state's promises of development, Vecchies said, he bought one of the long-vacant buildings there and invested several hundred thousand dollars, turning it into Shadow Martini Bar. He opened it in 2003, before USA Niagara worked out plans with city officials to upgrade the street's sidewalks and fixtures.

Not getting any better

Now he's so fed up he's "looking to dump everything I own in Niagara Falls and concentrating on other markets," Vecchies said. "I don't see it getting any better."

He was happy with business at first. As the buildings around him changed hands, however, speculators cashed in, but nothing else opened on the street.

"The cost of entry on Third Street has gone through the ceiling," said Vecchies, and when the street improvement project started, it kept additional customers away.

Vecchies said he urged the state to help open more businesses first. "But they had their hearts set on putting in new sidewalks and shrubs. Now those new sidewalks are empty, the buildings are still boarded up," he said.

That's not how it works, responded Empire State Development's Gargano. "It's Civil Engineering 101. Economic development occurs after infrastructure development," he said.

Gargano said that he understood the frustration of people who want to see more businesses opening, but that decades of stagnation take more than four years to wipe away.

Revitalization

Meanwhile, the city aims to revitalize Main Street, develop a historic Customs House near the Whirlpool Bridge into a new regional transportation center and create a cultural district near the Niagara Gorge Discovery Center.

Maid of the Mist President Christopher Glynn agreed that after generations of decay, it will take more time to make fundamental improvements.

"Four years after the governor's speech invoking Times Square, it's hard to see what successes there have been for the tourism industry," Glynn said.

The casino draws about 15,000 gamblers a day and has created about 2,400 jobs.

But "the gaming industry is not the tourism industry," said Glynn. "We need to give the families driving here for their vacations more to do."

That's why USA Niagara Development is concentrating on marketing its development zone to potential investors and holding out the possibility of taking property by eminent domain to move the process along, Gargano said.

"We have to create more of an interest in the private sector," Gargano said. "If willing investors come in and say, 'We'd like to do this there, but the people who have that property are speculators who want to sit on it,' then we use our powers for the public good."

e-mail: agalarneau@buffnews.com

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