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Lightning rod in the Falls Businessman Frank Parlato Jr. stirs the pot, but does he make things better?

Frank Parlato Jr. calls himself the pickle in the middle.

Isolated in his One Niagara building near the Rainbow Bridge, the tax-strapped businessman says he is being squeezed on one side by the tax-free Seneca Indian Nation and on the other by State Parks.

"It's impossible for any American business person or developer, large or small, in tax-burdened New York to compete with an independent nation that pays no taxes whatsoever," Parlato said.

As for State Parks, he said, the agency is simply trying to drive him out of business.

"I'm choking to pay $487,000 in taxes when everyone else around me the Seneca Nation and State Parks -- is tax-free," Parlato said.

Last week, the former Buffalo businessman continued to throw himself into confrontations with both State Parks and the Senecas, using a creative flair common among those who have vowed to do great things in the Falls, but come up short.

Monday, this is how he worded a suggestion that State Parks close its parking lot downtown and make tourists park elsewhere in the city: "I think it would be an elegant and supremely respectful gesture to return the park to Frederick Law Olmsted's vision and remove all commercial enterprise."

In other words, his critics say, remove the state lot so tourists will park in the lot Parlato operates at his building right across the street.

Wednesday, Parlato unleashed his latest public relations weapon against the Seneca Indian Nation in the form of more than 2,000 bumper stickers bearing the slogan: "Americans Demand Equality with Seneca."

While many agree that Parlato makes some good points -- he has collected 5,000 signatures on a petition protesting the tax-free advantage of the Senecas -- others don't see him as an appropriate spokesman for this international tourist destination.

"The activities that go on hurt the entire City of Niagara Falls and our reputation," said Trica Mezhir, general manager of the Comfort Inn -- the Pointe and chairwoman of the board of the Niagara Tourism and Convention Corp.

Privately, the forces that Parlato rails against complain about his operation and tactics, but publicly they don't want to say too much. They maintain a tit-for-tat argument doesn't serve the city well.

"State Parks is committed to providing the millions of visitors that come to Niagara Falls each year with the most positive experience possible," is the only statement that State Parks would release for this story.

Seneca and city officials declined to comment.

Assemblywoman Francine DelMonte, who represents Niagara Falls, is one of few willing to openly criticize Parlato. Her biggest concern these days is the parking issue.

Parlato critics argue that the aggressive approach of flaggers he hires during the peak tourist season to get motorists into his parking lot and his "Welcome Center" paint the wrong image for the city.

"Visitors were repeatedly given misinformation regarding available parking and were given the impression that the 'Welcome Center' was an official site," said DelMonte, D-Lewiston.

State Parks received more than 35 letters from tourists complaining about Parlato's parking lot. Copies were sent to DelMonte, who has asked State Attorney General Andrew Cuomo to investigate the matter.

"It was appalling to read what happened to numerous tourists who attempted to follow signs leading them to Niagara State Park parking lot, only to be flagged into a private parking lot," DelMonte said. "It's not the image we want to cultivate and it's not the impression we want people to have of Niagara Falls."

Parlato counters with the claim that State Parks and Maid of the Mist employees "are going out of their way to solicit people to complain about my operations." More than a dozen of the letters were written on Maid of the Mist letterheads and others were garnered by State Parks employees, he said.

He dismissed Mezhir's criticism by noting that the Comfort Inn is about to be purchased by the Maid of the Mist Corp.

"They are using the power of the state to solicit signatures to give an official discoloring to my enterprise," he said. "This whole thing was cooked up."

Parlato said if he resorted to similar tactics, he could produce "thousands of complaints against State Parks, including the high prices in their souvenir shops and the long waiting lines for the Maid of the Mist."

Niagara Falls businesswoman Lynda Gibas, who owns the Bloomin' Onion gift shop in Parlato's building, said she regularly receives complaints from tourists who come into her shop saying they had to pay double for the same merchandise at shops in Niagara Falls State Park.

"I [heart] NY" T-shirts sell for $7.99 at her shop and up to $20 at State Parks souvenir shops, Gibas said.

Parlato said Parks Police officers on Goat Island harass the half-dozen local tour bus companies that operate from his downtown building and give parking preferences to the bigger out-of-town tour bus outfits.

Tour guide John Dojka, of Cataract Tours, who picks up tourists from Parlato's building, said he pulled his bus into a 15-minute parking space on Goat Island to walk his passengers to the Cave of the Winds and when he returned, a State Parks Police officer told him to move his bus.

"That wouldn't happen to a big tour bus from New York City," Dojka said.

Officers and parks officials also lure visiting motorists into a state parking lot opposite Parlato's building and to lots on Goat Island, Parlato added.

State Parks isn't about to close its parking lots in the city, as Parlato has asked. The lots generated $1.6 million for fiscal year 2007-08, none of which goes to the city.

Parlato's maligned parking lot made about $500,000 last year, and nearly all of it went to pay back taxes on his building. He still owes $700,000 in back taxes, he said.

"I'm the most lucrative parking lot the city has," he added.

Despite the state's tactics, Parlato estimated that a million people came through his doors at One Niagara during the last tourist season to patronize the various ethnic restaurants and gift shops.

From the building's glass-windowed top floor, with its 360-degree view of the two Niagara Falls and beyond, Parlato looks east to the sparkling edifice of the Seneca Niagara Casino.

"I don't believe there is one other community in the world," he said, "where the government has given the heart of the downtown of a famous city to a foreign nation, which then gives an economic and legal superiority to its own people."

In a 2002 compact between New York State and the Seneca Nation, the state handed over nearly 50 acres of prime downtown land to develop the casino, hotel and any other future projects.

The bumper stickers Parlato started passing out last week make his feelings about that clear.

On the first day of their free distribution, about 100 drivers lined up their vehicles in Parlato's parking Wednesday to join his campaign against the tax-free Senecas and drove off bearing the bumper stickers.

"I'll be glad to drive around with this on my car," said Deborah Matte, of Buffalo. "I believe in equality for all Americans. The Seneca Nation's monopoly in Niagara Falls is driving small businesses out of town and scaring away developers."

Matte, who said she opposes the proposed Seneca casino in downtown Buffalo, drew an an analogy between the Senecas and Wal-Mart. "When a Wal-Mart moves into a community, it puts neighborhood stores out of business. That's what casinos do."

Parlato began an official protest against the legal advantage the Senecas have over American trying to do business in Niagara Falls with a September public meeting in his building that attracted more than 150 local business people. The campaign continues to mount. Petitions protesting the unlevel playing field caused by the tax-free status the Senecas currently contain more than 5,000 signatures that a Parlato convoy of like-minded business people plans to deliver soon to lawmakers in Albany.

Parlato, a former Buffalo housing developer, was known for real estate deals in low-income neighborhoods that were investigated by federal regulators and led to an agreement that he would stop selling federally insured housing for a year.

Despite his protestations, he knew what he was getting into when he bought the former Occidental Building in the Falls in December 2004. The State Parks lot across from his building had been there since the mid-1980s, and the Seneca casino was two years old.

He made the purchase with a partner. At the time, it was a friendly foreclosure deal after an international consortium failed to develop the AquaFalls underground aquarium project and skipped town leaving nearly a million dollars in unpaid taxes. The consortium also left behind a huge hole, which Parlato filled in and paved at a cost nearly half a million dollars.

Parlato has since turned the first floor of the building into a retail tourist center of gift and souvenir shops and an ethnic food court that includes Indian, Chinese, Greek, Mexican, Italian and American fare. Each shop is individually owned.

The other nine floors are empty, but Parlato said he plans to turn the top floor into a restaurant and observation area, providing the American side its only panoramic view of the Niagara Peninsula. He has backed off on a vow he made earlier this fall to put up slot machines on the floor, in defiance of New York State.

Parlato calls the Seneca Nation "an island unto itself sucking the life out of Niagara Falls and getting off scot-free."

Not entirely. Since opening New Year's Eve 2002, the casino has generated $50 million in slot machine revenue that has been distributed to the city and several agencies, including the Niagara Tourism and Convention Corp. and the city school district.

It also has created more than 2,500 jobs.

"The casino has generated more revenue for the city from that one location than ever in the history of that property," DelMonte said.

Parlato said this doesn't take into consideration the many businesses that have closed because of the unfair competition -- the landmark Tommy Ryans Restaurant near the state park being the latest casualty.

Parlato has been battling the state for several years over the Seneca matter, noting he has to pay $1,000 a day in real estate taxes on his building, while the Indians, who "operate a gold mine across the street, pay no taxes."

Paul Grenga, an attorney with law practices in Niagara Falls and Lewiston, sees a lot of support in that area.

"Every property owner in Niagara Falls pays more real estate taxes than that billion-dollar casino," Grenga said. "If this case ever went to trial, I would want homeowners on the jury."

Parlato wanted the last word for this story. To his detractors, he vowed: "We're not going anywhere. Get used to it."


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