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As Kay exits, what next for Falls?

Peter F. Kay plans to stay on the city payroll as chief of economic development for the two weeks that are left this year.

But after that -- once his total annual salary drops to $1 -- he will hit the road out of Niagara Falls.

He will leave behind a city that has lost half its population over the last 50 years. Where 1 in 5 people live below the poverty level. Where economic development, to say the least, is a struggle.

City Council members and Mayor Paul A. Dyster have offered differing explanations for the departure of Kay, who was hired in September 2008 after a national search.

But to Kay, who almost saw his salary plummet to $1 a year ago, it's pretty simple.

"My assessment is it's a political thing," Kay said last week, a day after lawmakers cut his $100,000 salary for next year, overriding a mayoral veto that tried to save it.

Some Council members said Kay just didn't "fit in" locally. Others said they weren't happy with the results during his tenure.

Council Chairman Samuel F. Fruscione went so far as to say he had seen "zero economic development" under Kay and wanted to trim the salary for the next person in the job to about $60,000.

But cutting the salary likely would prevent the city from filling the job with someone who has the proper qualifications, according to the mayor.

"It's a long road for economic recovery here, but it sends a strange message to be cutting back on funding for economic development at a time when the economy is in a recession, people are out of work, we're having some success in jump-starting economic-development projects," Dyster said, "and especially when the funding for the position is not in the general fund, [and] it doesn't impact the bottom line of people's taxes. It's casino revenues."

Dealing with change

"Niagara Falls is a unique place," Kay said as he reflected on the circumstances surrounding his pending departure.

The vote had to do, in part, with a dispute over the split of power between the mayor and the Council, he said.

After the Council vote, Kay released a statement saying that he saw the action by lawmakers as "a return to the old ways."

"It's sort of a Niagara Falls euphemism that's understood here," he said last week when asked about that statement. "I think I'll leave it at that."

Kay, 63, previously worked as economic-development adviser to then-Gov. Tom Ridge of Pennsylvania, as well as in economic-development posts in Toledo, Ohio; Tacoma, Wash.; Erie, Pa.; and Dearborn, Mich.

David E. Rosenwasser, former president and CEO of Niagara Tourism & Convention Corp., said that working in the Falls is "a very challenging situation under the best of circumstances."

"Economic development and the turnaround of Niagara Falls, N.Y.," Rosenwasser said, "is a long-term project, where the lack of a galvanized, unified interest is very difficult and poses problems that make it much more complex to succeed than it would be in many other circumstances."

Rosenwasser announced he was leaving the tourism agency in April 2006, after a nearly two-year squabble over funding from Seneca Niagara Casino slot machine revenue that funded his organization's work. He currently is director of the Greater St. Charles Convention & Visitors Bureau in Missouri, the job he took when he left the Falls. Based on his experiences here, he said, he still sees a resistance to change.

"Change is hard every place; it's not just Niagara Falls. But in Niagara Falls, there's an undercurrent that is extremely strong," Rosenwasser said. "And to try and swim against that undercurrent, quite frankly, I wasn't up to the task. So I can't point the finger at anybody else."

John H. Percy Jr., current president and CEO of the agency, said that whenever the city was dealing with a tourism-related proposal, Kay brought in officials from the regional tourism organization to be involved in meetings.

Percy said that it is important that the city have someone fill the role and that time is of the essence.

"We do need someone in that position that has a strong national and international presence and the credentials to represent us in those arenas," Percy said. "So I think it's critically vital that that position be filled immediately. "

"There's a lot of work that needs to be done" to re-establish Niagara Falls as a destination and to "build a foundation," he added, "and that's going to take some time."


Council criticism

Lawmakers gave a variety of reasons for cutting Kay's salary.

Fruscione called Kay's performance "less than stellar" and said the city's economic-development department has "more than enough people" to fulfill its duties.

Fruscione also said Kay initially downplayed to him the significance of having the proposed hospitality and culinary center from Niagara County Community College located in the city.

"The man is not cut out to be doing urban development like it is here in the City of Niagara Falls. This is not his forte," Fruscione said. "He's not connected with the community; he's not in the middle of the community, working with the community. He doesn't understand the need for small businesses."

Councilwoman Kristen M. Grandinetti called Kay qualified and said that he "did his best" but that he was not "a good fit."

"Niagara Falls is a unique place -- I mean that affectionately. I love the city," Grandinetti said. "It requires a new person coming in to put an extra effort forward into fitting into the community. And I think that sometimes people felt that that effort wasn't being put forth."

She also had concerns that there was a "lack of teamwork" within the economic-development department.

"I don't agree with the chairman all the time, and I don't agree with the mayor all the time, but we work together," Grandinetti said. "We yell at each other behind closed doors, but we don't do it in public. And I think that with our community being on the mend, which it is, I think we've made great strides in the last two years, [and] people don't need to see or hear that kind of stuff."

The mayor pointed to NCCC's planned culinary institute, the proposed train station on Whirlpool Street and Norampac's plans for a new $400 million paper mill as three examples of projects that have moved ahead while Kay was head of economic development.

Dyster also downplayed the importance of "fitting in," saying he is concerned that the impression will continue to go out that outsiders will have a tough time in Niagara Falls.

"I think having somebody from the outside who has a sense of objectivity about what is or is not an appropriate level of government participation -- for example, in a project -- and, in particular, someone who does not have any personal ties to the people whose loan and grant applications he has to process can be a substantial advantage," Dyster said.

The mayor said he sees the cut of Kay's salary as the latest in a series of attacks on members of his administration.

In November 2008, three lawmakers -- Robert Anderson Jr., Steven D. Fournier and Fruscione -- voted to eliminate the position of Senior Planner Thomas J. DeSantis.

Last November -- when the Council also tried to eliminate Kay's position -- lawmakers tried to cut the salary of City Administrator Donna D. Owens by $40,000.

"I just think that, to me, I start to see a pattern," Dyster said. "If someone is a key person in my administration, then they're going to come under fire."

Looking ahead

City lawmakers also have varying views of what the city should do with the post moving forward.

Anderson was the only lawmaker who said he didn't think the post is needed.

Fournier said he wants to look at reorganizing the economic-development department, noting that the post "possibly" needs to be filled. He and Grandinetti suggested that the job come with a performance-based salary.

Councilman Charles A. Walker said that the post is needed but that the salary should be flexible, based on the amount of experience of the person who is hired.

"I think it has to be a young mind," Walker said, "someone who really wants to make a name for themselves."

With a $1 salary, Dyster said, he doesn't expect he'll "get a lot of takers" for the job.

"I feel as though in order to maintain all the services, there has to be a tax base out there; there have to be jobs for people," Dyster said. "And to try to fund everything else at the highest possible level and then to skimp on the funding for economic development, I think, is an absolutely backwards strategy."


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