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Waterfront to receive $279 million in relicensing 50-year Power Authority deal nearly triples original offer

WASHINGTON The Erie County waterfront will get $279 million over 50 years -- nearly three times the original offer under a deal that local officials struck Monday with the New York Power Authority over the relicensing of the Niagara Power Project.

While the deal commits $5.5 million a year for 50 years to waterfront development efforts in the county, upwards of $65 million of that money could come as soon as 2006 to the new corporation charged with remaking Buffalo's waterfront, Erie County Executive Joel A. Giambra said.

That's because parties to the talks agreed to Giambra's proposal for the $3.5 million that is annually targeted to the waterfront corporation to go to the county first. The county will sell bonds that will bring up to $65 million to the waterfront corporation and repay the bonds with the annual settlement payments from the state.

Meanwhile, $2 million a year would be set aside for a greenway along the Niagara River and Lake Erie.

The deal also includes $4 million upfront for an Erie Canal museum and calls for the Power Authority to give up 13 acres of prime land on the outer harbor where it now stores the Niagara River ice boom.

Sources said Power Authority officials signed off on the deal Monday after Giambra and Buffalo Mayor Anthony M. Masiello agreed to it.

Asked to comment, Rep. Brian M. Higgins who had been seeking $10 million a year from the Power Authority said the package will provide a major boost to development efforts.

"It gives us a fighting chance to address a problem we haven't addressed in 40 years: the redevelopment of the Buffalo waterfront," said Higgins, D-Buffalo. "This is a new day. It represents a significant move forward."

Rep. Louise M. Slaughter, who helped bring the Power Authority back to the table after it made a take-it-or-leave-it $2 million-a-year offer, agreed. "It sounds like a good settlement, and I'm proud to be a part of it," said Slaughter, D-Fairport. "It's so much more than we started with."

Sources said Gov. George E. Pataki also played a key role by getting Empire State Development Corp. to contribute $1 million a year to the package.

"I'm pleased that we've reached an agreement," Pataki said. "I think it helps the Western New York economy and significantly helps the waterfront development corporation."

Some $4.5 million a year will come from the Power Authority, and some of that money will come from the sale of cheap hydropower at market rates.

The huge profits from those sales, along with the Empire State Development contribution, will mean the deal won't prompt dramatic power rate increases for the Power Authority's industrial customers, sources said. Those companies employ 43,000 in the region.

Because the deal is tied to the sale of power and because electricity costs are expected to escalate dramatically over the next 50 years the deal eventually could be worth more than $279 million.

"This is a win for everyone," said Assembly Majority Leader Paul Tokasz, D-Cheektowaga, who closely followed the talks between the Power Authority and the local officials.

But the biggest winner of all will be the Erie Canal Harbor Development Corp., which will manage redevelopment of Buffalo's inner and outer harbors.

Combined with the $22.3 million included in a recent federal highway bill for Buffalo-area projects, the Power Authority settlement will set real money aside for waterfront access projects and other efforts in the next few years, Higgins said.

Key to that plan is Giambra's proposal to accelerate payments to the corporation through the bond sale. "This puts ready cash into the hands of the corporation," Giambra said.

Masiello agreed that the settlement should lead to relatively quick change along a waterfront that has remained largely dormant for years. "There can be no more excuses that the money isn't there," Masiello said.

The money for the waterfront corporation comes on top of the Power Authority's original offer of $2 million a year for the Erie County portion of a 40-mile greenway along Lakes Ontario and Erie and the Niagara River.

Mark Zito, who helped broker a $694.2 million settlement for the seven "host communities" in Niagara County, said the greenway will make America's Niagara River waterfront as scenic as the one in Canada.

"This is just a great thing for Western New York," Zito said. "It gives us a way to focus on environmental tourism, along with giving local residents access to green space."

Masiello said the local officials were able to strike the deal because they refused to give in to the Power Authority's original offer and because politicians at every level of government pressed for a better settlement.

"Brian Higgins was instrumental in keeping the issue alive," Masiello said.

Some Niagara County communities and school districts are still looking for bigger settlements. But officials said Monday's deal was a key moment in getting federal approval for a new license for the huge plant, which produces 10 percent of the state's electricity. The current federal license expires Aug. 31, 2007.

"It seemed from the outset that everyone could end up happy, and this deal did just that," said Sen. Charles E. Schumer, D-N.Y.

e-mail: jzremski@buffnews.com.

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