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Billionaire's grant in Falls is withdrawn by the state <br> Milstein got $400,000 with Thompson's help

The state giveth, and now it taketh away.

State Sen. Antoine M. Thompson earlier this year had arranged for a $400,000 grant to Eleventh Street Properties LLC, a company owned by billionaire Howard P. Milstein, for a project in Niagara Falls.

But state officials said Thursday that they have decided to withdraw the controversial grant.

Some community leaders were highly critical of the grant to Milstein, who also controls Niagara Falls Redevelopment, a company that has a long record of failing to develop the property it owns in that city.

"We had complained to Albany about it," said the Rev. David W. Crapnell, president of Niagara Organizing Alliance for Hope, a community organization. "We were opposed to the state giving money to a billionaire for projects he should be doing on his own."

Apparently, someone in state government was listening.

The grant application is being withdrawn, according to a spokeswoman for the State Dormitory Authority, which was going to provide the money at Thompson's request.

"On Dec. 21st, [we] received notification from the Senate Office of Fiscal Integrity that they were withdrawing the $400,000 grant application for Eleventh Street Properties," Susan Barnett, a spokeswoman for the dormitory authority, said in an e-mail sent to The Buffalo News. She referred further questions to the State Senate.

The State Senate's media office had no comment. Thompson, a Buffalo Democrat who is about to leave office after being defeated in November's election in the 60th District, did not return calls from The News seeking his comment.

M. Ahmed Diomande, who heads the State Senate's Office of Fiscal Integrity, also did not return a reporter's call.

Charles V. Zehren, a spokesman for Milstein, said he could not comment on the situation late Thursday. Officials of Niagara Falls Redevelopment did not return calls.

Two people who were willing to discuss the matter Thursday were Crapnell and Roger L. Spurback, president of the Niagara Falls Block Club Council.

Both said they were outraged several months ago when Thompson announced that he was obtaining the $400,000 for Milstein's company. In documents submitted to the state, the company said that it planned to use the money to turn a former funeral home in Niagara Falls into an "administrative, operations and preview center for the Niagara Falls Gateway Redevelopment Project."

Spurback and Crapnell said they were thankful to hear that the state no longer plans to give $400,000 to Eleventh Street Properties.

"The city needs that money. The billionaire doesn't," Spurback said. "The city is in dire straits. This money should be allocated to the city to tear down vacant houses. That's where the money is needed."

Crapnell said he is convinced that Thompson's efforts to obtain $400,000 in state money for Milstein's company is one of the reasons that the senator lost his bid for a third term in a very close race with Mark J. Grisanti, a Republican challenger whom many considered a huge underdog.

"I thought it was an outrage, and I know a lot of people in Niagara Falls who felt the same way," Crapnell said. "I know people who voted against [Thompson] for that very reason."

Crapnell said he once asked Thompson why he was pushing to help a billionaire such as Milstein get hundreds of thousands of dollars from a state government that faces huge financial problems.

"I asked him, 'Do you realize what you are doing?' And he just kind of dismissed me," Crapnell said.

As The News reported in September, Milstein's Niagara Falls Redevelopment has donated $2,850 to Thompson's campaigns. Milstein has also donated thousands of dollars to other officials in Erie and Niagara counties, plus $55,000 to the campaign account of departing Gov. David A. Paterson.

But Niagara Falls Redevelopment has been criticized in Niagara Falls for failing to develop long-promised attractions on land that it owns in and near the downtown area.

Milstein and his brother, Edward, have purchased more than 440 parcels of land in the downtown area, but they have not developed the properties.

Earlier this month, a Milstein aide, Anthony Bergamo, said Niagara Falls Redevelopment "remains strongly committed" to developing projects and creating jobs in the community.

While he strongly opposed giving $400,000 to one of Milstein's companies, Spurback said he has not given up hope that Niagara Falls Redevelopment will someday complete projects to help the city.

"They're land speculators. They have invested money by purchasing properties and demolishing old buildings. They own a lot of land in this city," Spurback said. "It's my belief that, sometime in the next year or so, New York State is going to legalize gambling [through the operation of its own casinos]. And I think that's what Milstein is waiting for.

"I still think NFR can do good things in Niagara Falls. The question is: What will that project be? But in today's world, with neighborhoods that are falling down, I don't think it's appropriate to give state money to a billionaire."

News Niagara Reporter Denise Jewell Gee contributed to this report.