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Spitzer scout scopes out signs of progress in Falls Zemsky part of upstate work group for Empire State Development Corp.

Gov.-elect Eliot L. Spitzer holds some major cards in the effort to redevelop Western New York.

He showed part of his hand when he announced plans to create an upstate office of the Empire State Development Corp., the state's development agency, with its own co-chairman and headquarters in Buffalo.

Spitzer also told The Buffalo News in September that if elected he would continue to support USA Niagara Development Corp., the state's development office in the Falls created by Gov. George E. Pataki five years ago.

While there is still no word on who will head either the Buffalo or Falls offices -- or how the Falls office could change -- Spitzer recently sent a scout to the city to see firsthand the progress USA Niagara has made and to get a sense of how far the city has to go.

Howard A. Zemsky, a partner in City View Properties, a group that has built and redeveloped many successful residential and commercial properties in downtown Buffalo, toured the Falls in early December with USA Niagara President Christopher Schoepflin.

Zemsky said he is part of an ESDC upstate work group working with Spitzer's transition team. He said he was asked to gather information about the projects USA Niagara has worked on over the past couple of years and find out what direction the agency is heading.

"I wanted to see if the private sector investment was backing some of the public investment and where in the continuum of the development process they are," Zemsky said last week. "Truthfully, there were too many years of disinvestment in Niagara Falls. I was interested to see anything and glad to see some of the projects that have taken hold."

The USA Niagara projects, some completed and some still in progress, that Zemsky toured and talked to Schoepflin about during his visit include:

A completed $3.5 million Third Street reconstruction and streetscape project completed jointly by USA Niagara and the City of Niagara Falls.

The $18.8 million Conference Center Niagara Falls, built by the state in 2004 to replace the former Niagara Falls Convention & Civic Center, which is now the Seneca Niagara Casino.

An ongoing $3.1 million Old Falls reconstruction and downtown visitor-friendly signage program.

The new Crowne Plaza Hotel, which opened this month in the former Holiday Inn Select on Third Street. It is a $34 million purchase and renovation deal that USA Niagara helped make happen by securing a $6 million state grant for the developer.

A shovel-ready surface parking lot at Niagara and Third streets, which USA Niagara is working with the city to seek a developer to build on the parcel.

>Helping Niagara Falls

Schoepflin and Zemsky also discussed the planned $92 million Niagara Experience Center, an interactive museum that would be located downtown and could boost tourism for the region, and the $11.8 million plan to remove part of the Robert Moses Parkway at the southern entrance to Niagara Falls State Park, which would give more access to the riverfront and calm that part of the highway.

USA Niagara has gained funding and support for the latter projects, which are still in planning stages.

Buffalo developer Carl Paladino credited USA Niagara last year with helping him get through state regulations that had blocked his planned $6.5 million renovation of the 20-story Art Deco United Office Building on Rainbow Boulevard into luxury apartments and office space. Zemsky said he got a look at that building, which is supposed to be completed in 2007.

Schoepflin credits Pataki with investing $95 million in downtown Niagara Falls in the last five years, and says Spitzer has a lot to live up to. Schoepflin gave The Buffalo News a detailed breakdown of how he reached Pataki's investment -- not including any casino revenue -- to fund items such as $44 million in improvements at the Niagara Falls State Park and the current street construction on Rainbow Boulevard.

During a conference call, Zemsky said he told the governor-elect's office that he believes USA Niagara has invested wisely and is moving in the right direction.

"The marketplace eventually will identify Niagara Falls as an opportunity, which it hasn't been thought of as an investment opportunity for too long," he said. "[USA Niagara is] facilitating community building, facilitating planning and facilitating helping Niagara Falls move in a better direction."

The businessman said he doesn't know any details of how Spitzer will handle the Falls development agency.

A Spitzer spokeswoman said it would be premature to comment before the new upstate development team is announced.

"Our goal is to reinvigorate ESDC as a whole, especially its new upstate arm, for the purpose of revitalizing our upstate economy," said Christine Anderson.

Zemsky said he thinks the Falls should, and will, be part of that effort.

"It's a shame that Niagara Falls was so fallow for so long. I would advise the new administration to support redevelopment efforts of USA Niagara," Zemsky said. "It would be a shame if funding went into Niagara Falls and bypassed ESDC."

Zemsky is referring to local casino slots revenues, which under an amendment to state finance law approved last week by Pataki does not set aside any casino money between 2006 and 2016 specifically for USA Niagara. That's a change from the past couple years, where agreements guiding millions of dollars have included the agency and even pinpointed what the money would pay for.

For example, the Niagara Experience Center gained $3 million of 2004 and 2005 local casino revenue through USA Niagara.

Zemsky said he envisions the state agency's task as continuing to provide gap funding for developers so the city reaches what he calls the "tipping point," where there is so much private sector interest in an area that there becomes competition for the best locations rather than the state and city having to work just to attract any developers.

He said that is what has happened with an increased interest in residential development in downtown Buffalo, which has begun to result in more retail and commercial development as well."

>Change from past

"What you really want is to get to the point where . . . you no longer have to spend all your time convincing anybody that it makes sense [to do business]," he said.

Last fall, Spitzer told The News that he would continue to support the Falls agency if elected governor.

"The people of Niagara Falls have told me a great deal about how glorious downtown Niagara Falls once was," he wrote in an e-mail this fall. "And I believe that by working together with local officials, business leaders and citizens, we can make it great once again."

Mayor Vince Anello said it is vital for the state to keep up its efforts in downtown Niagara Falls.

"Whether it's named USA Niagara or something else, we do need the support of the state and the leadership of the state through ESDC," he said. "We need their leadership to make sure we redevelop Niagara Falls, and on the fast track."

He also called for the state agency to approach the city's economic development department as a co-partner and said he wants professionals at City Hall to be involved in every project from start to finish.

The mayor said that some city departments should have been more involved in past projects led by USA Niagara.

Assemblywoman Francine DelMonte, D-Lewiston, who has touted her close relationship with Spitzer, said she has told him several times that she wants the agency to continue operating in Niagara Falls.

She said in the future she wants the agency to focus on bringing more retail and restaurants to Third Street and would like to see development of the corner parcel at Niagara and Third streets begin this year.

She said it's important to have a mix of big and small development, and one of the biggest projects she's passionate about was just announced.

DelMonte, Anello and leaders from across the city signed a letter to Spitzer last week asking him to help fund, and put ESDC in charge of, an effort to develop quality housing and new businesses on a large target area near the casino. The effort is in planning stages in the city's economic development office. Spitzer has not publicly responded to the letter.

Schoepflin, who said he has not aware of any of the future plans for USA Niagara, said he is proud of what the agency has accomplished in his hometown during the past five years.

"It is very gratifying to be a part of this agency, working with such a dedicated group of people who are focused on always doing the right things in making Niagara Falls a better place," Schoepflin said.

e-mail: gfranklin@buffnews.com

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