Jim Anthony came to do business in Niagara County with the usual concerns.
“I had heard that Niagara Falls had some unique political and social challenges that were going to be detrimental to our success,” Anthony said.
That is putting it rather politely. Specifically, he’d heard that the Niagara region had “overly aggressive union labor folks, corrupt politicians and an area that had been largely redlined by the banks for real estate development projects.” Not to mention New York’s reputation for over-regulation.
But that’s not exactly what he found.
Anthony is the Raleigh, N.C., real estate investor who, until a few weeks ago, held a sizable headache for himself and the Niagara County development scene: the largely vacant and almost entirely closed former Summit mall in Wheatfield.
I called Anthony after he sold the mall, because sometimes it’s useful to get an outsider’s perspective on what is holding us back. Anthony, who found success in commercial real estate in North Carolina, ended up owning property in Niagara County when a mortgage he held on the mall went bad in 2002.
What he had to say was a surprise.
“I can’t think of any place that I’ve done business that was more helpful and welcoming,” Anthony said. “And that really made a big difference in our decision to invest heavily as opposed to just abandoning the project when we got stuck with it in the first place.”
What about those challenges he’d heard about before he came to own a struggling mall not far from Love Canal? Yes, there was an element of corruption and union aggression, he said, but it wasn’t nearly as bad as people said. He didn’t find New York’s regulations particularly burdensome.
But those problems with financing?
“That whole redline issue was real,” Anthony said, “and it is very detrimental to the economy.”
Despite not being able to get financing for his proposals, Anthony invested – and lost – money in the mall, which closed except for its anchor department stores in 2009 after the clothing chain Steve & Barry’s went under. There were problems that were specific to the property – it had been through foreclosure twice – that made lending money to its redevelopment unattractive.
But Anthony believes the issue went beyond the troubled Summit.
“It’s really hurt the people in the region by not having access to capital,” Anthony said. “People can’t do real estate projects with all cash.”
Things have changed since Anthony attempted to turn around the Summit. The nearby Fashion Outlets of Niagara Falls has taken off with the surge in Canadian buying power and is poised for a $71 million expansion. In downtown Niagara Falls, several hotel projects are in the works, some with the help of tax breaks and state incentives.
If the region was redlined before, there are projects getting loans now.
“To me, it seems like the tide is turning,” said Frank Strangio, whose family plans to build a Wingate by Wyndham hotel in downtown Niagara Falls and is slated to close on financing for the project this month. “Things are moving in the right direction in Niagara Falls.”
Anthony sees hope, too.
“I do think that there’s tremendous potential that’s untapped in the city,” Anthony said.
The word just has to get out to the rest of the development community.