The Niagara River Marina, formerly leased by the city to a private company, was sold Wednesday to Mirna Abada of Shawangunk for $520,000 in a public auction.
Mayor David J. Burgio said residents can expect their taxes to be lowered as a result.
"We shouldn't be in the rental business," Burgio said. "It didn't make great economic sense, we weren't making enough, and we aren't in the properties business."
For more than 15 years, the city had leased the 1.2-acre marina with 108 slips to the Niagara River Yacht Club. Under the lease agreement with the city, the company's rent was one-third of the marina's annual profits plus property taxes.
That amounted to little more than $15,000 to the city last year, but the company also made capital improvements to the River Road property with some of its profits.
"We all feel bad because the yacht club actually made it worth what we feel will be half a million [dollars] with their sweat and blood," said Common Council Member Phillip R. "Russ" Rizzo, D-1st Ward. "We would love to see them buy it."
Burgio's proposed 2006 budget includes $400,000 in expected revenue from the sale of property, Rizzo said.
He said that when city leaders reviewed the proposed city revenues, they thought that it would be worthwhile to sell the land to private developers.
"We decided the city should not be a landlord when someone from the public could use it and make more money and fix it up better than the city could," Rizzo said.
He said the city is in the middle of a lease agreement with the yacht club. While the current tenant has offered up to $425,000 for the marina, Rizzo said, he hopes that if another company buys the property, the yacht club would be allowed to stay.
Burgio said the city put the marina, between Gratwick Riverside and Fisherman's parks, up for sale earlier this year and received bids of about $400,000.
That was twice the assessed value for the property, which contains a 2,400-square-foot clubhouse, the mayor said, and so the Council decided to publicly auction the property and hopes to net about $500,000.
Burgio said the city gained the property about 20 years ago through foreclosure. He expects that property taxes on the marina will more than offset the former lease payments and the cost of the property assessment.
Abada would not comment on the purchase, but instead allowed her husband, Abby Jackson, to speak on her behalf.
Jackson said he would like to turn around and re-lease the property back to the yacht club but would not say much he would charge.
Abada will end up paying $556,400 in the deal, including the auctioneer's fee of 7 percent.
Thomas A. Haug, yacht club commodore, said he plans to fight the purchase in court. "We currently have a five-year renewable lease," he said. "We renewed it in December, so we have a four-year lease."
Haug said his members put an awful lot of work into the property and did not want to lose it.
Attorney John L. Trigilio, representing members of the yacht club, said he may begin a court action once the city issues an eviction notice to the club.
Jackson said, "I'm hoping to come to a new agreement. . . . That's our hope."