The state's new administration will keep USA Niagara Development Corp., the agency formed in 2001 to boost business downtown, where the need is the greatest.
"Right now, the idea is that's a very important and distinct operation that requires additional focus and that we plan on keeping it there," said Kenneth A. Schoetz, chief operating officer of Upstate Empire State Economic Development Corp. in Buffalo.
The Falls' subsidiary of the state's development agency, located on Third Street in the city, was created under then-Gov. George E. Pataki.
Gov. Eliot L. Spitzer has pledged to support the office, but few details have been released.
Schoetz told The Buffalo News in an interview this week that there is no plan to move the operation to the state's new upstate office in Buffalo.
Those are welcome words to city leaders, who said the agency has secured grants and spearheaded new development.
"This is exciting news to hear the office is going to remain because it's just instrumental in our focus and our mission to move this destination forward with a focus on development," said John H. Percy Jr., president and chief executive officer of Niagara Tourism and Convention Corp. "They have done some development here as far as opening the Conference Center [Niagara Falls] that is instrumental in our marketing efforts."
Percy also noted that the state agency helped attract a $20 million hotel renovation project -- with $6 million in state aid -- that recently turned the former Holiday Inn Select on Third Street into a luxury Crowne Plaza.
"That's another updated property we can sell [to visitors]," he added.
Mayor Vince Anello had hoped the agency would stay in the city, and believes the relationship between City Hall and the state agency could improve under the new administration.
"My desire was to make Empire State Development understand that with USA Niagara, we needed more of a partnership," Anello said. "And we would need technical support within the 162 acres that they're focused on, and outside the 162 acres."
The mayor characterized the past relationship as one of "big brother, little brother."
He said the city was left out of the design of the state-funded $3.7 million renewal of four blocks of Third Street in 2005, which was described as a city-state joint project.
Anello said he attends the meetings of the USA Niagara board of directors but wants to be included in the planning sessions as well.
"We don't want to be just at the superficial meetings; we want to be at the work sessions," Anello said. "That's what makes it a partnership."
Schoetz said the state plans to write new "blueprints" for economic development in many areas across the state, including Niagara Falls, and that City Hall and other local agencies will be asked for input.
"I do not know what the relationship was prior to Jan. 1," he said. "One of the things we're trying to do with having an Upstate ESDC is fostering those relationships."
Schoetz said he has come to the Falls several times during the last two months to meet with Christopher Schoepflin, president of USA Niagara, to talk about current and upcoming projects.
He had no word on whether personnel in the six-member agency in the Falls will change.
"We're looking at every aspect of the Upstate ESDC operations, and that includes personnel," he said. "Everyone's going to have to sink or swim on their own."
Schoepflin and other staff have referred all questions about the office to the state's press office, under the policy of the new administration.
As far as USA Niagara's reach in the city, Schoetz expects it to remain on the core downtown area next to Niagara Falls State Park.
"Someone's proposed tinkering on the edges of boundaries," he said. "We're obviously interested in looking at that, but, quite frankly, there's an awful lot of work to be done within the existing boundaries."
He also cautioned that the state agency cannot be viewed as a silver bullet for the city.
"There's no czar that's going to come in and make Niagara Falls a better place," he said. "What I do know is if we get everybody talking the same way and working together, that as a team and as a community we can move Niagara Falls forward, and I have great confidence in that."