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Cuomo pushes to redevelop prime Niagara Falls properties

A former Native American heritage museum shaped like a turtle. A nine-story glass office building next to the Rainbow Bridge. A shuttered social club just outside Niagara Falls State Park.

All three have failed to capitalize on millions of visitors who come each year to see Niagara Falls. So have more than three dozen other vacant or underused parcels in downtown Niagara Falls.

Niagara Falls properties targeted by Gov. Cuomo for improvement as a tourist destination.

Now, Gov. Andrew Cuomo has a plan to shake loose some of the properties he sees as holding back development of the tourist destination. He wants the state to buy and help redevelop vacant buildings, empty land or other parcels within walking distance of the waterfalls.

The cluster of properties, under both public and private ownership, curve like a horseshoe along the Niagara River and state park at the rim of the city. They range from small pieces of unoccupied but prime real estate to derelict buildings that have sat neglected for years, despite their closeness to the falls, the Rainbow Bridge or the Niagara Gorge.

“Everybody has a pretty fair idea of what properties have been developed and what properties have not,” said Niagara Falls Mayor Paul Dyster. “The contrast gets more and more stark year by year.”

Cuomo’s plan, announced last week as part of the second phase of his Buffalo Billion economic development program, would attempt to get at the heart of a problem that has faced Niagara Falls for years: Some of the city’s prime properties have been land-banked for a long time by the same owners.

To address the problem, Cuomo’s Strategic Land Acquisition Program would invest state taxpayer dollars to buy up some of the properties and then solicit others to develop them. It’s part of a larger push at raising up Niagara Falls that also includes restoring 125 acres of parkland along the gorge.

The plan would target vacant or underused properties in a narrow stretch of the city located within a block from Niagara Falls State Park. However, Empire State Development Corp. spokeswoman Laura Magee said acquisitions would not be limited to that area, noting a broader part of the city “that we think is significant.”

There’s no guarantee of success or even that the plan can start. It depends on lawmakers in Albany allocating money in the state budget. And it depends on owners agreeing to sell. The state has the power to seize property through eminent domain, but “our preferred method is negotiating to acquire land from a willing seller,” Magee said.

The city has tried and failed for years to get some of the owners to develop their properties.

Even so, officials and other area developers say the involvement of the governor represents a needed boost. The Falls has seen new development activity over the past few years, including new hotels that have either opened or have been announced, the renovation of the Rainforest Cafe, upgrades to the Seneca Niagara Casino and reinvestment in the state park.

“I would hope that anyone out there that has been speculatively holding onto properties in downtown Niagara Falls with no intention to develop them, with hope of a windfall sometime in the future, that they would take note of the governor’s initiative,” Dyster said.

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Plan still vague

While details are still vague, the governor’s designated area includes properties on Rainbow Boulevard, Buffalo Avenue and Main Street, as well as Second and Third streets, according to a summary of his latest round of Buffalo Billion economic development proposals. The neighborhood includes a mix of properties that range from active hotels and restaurants to single family homes and doubles. There are also about two dozen vacant lots.

Dyster and Magee said it’s too soon to speculate about specific properties that might be targeted.

The area, however, has several high-profile properties that have been vacant or underused.

Those include a turtle-shaped building next to the state park that once housed the Native American Center for the Living Arts. Long closed and owned by New York City developer Howard Milstein’s Niagara Falls Redevelopment, the property at 25 Rainbow Mall has has sat empty for years.

A turtle-shaped building, shown here in 2015, in Niagara Falls is among several prominent properties near Niagara Falls State Park that are vacant or underused. (John Hickey/Buffalo News file photo)

A block away, at 360 Rainbow Boulevard, the nine-story glass One Niagara building has also had a checkered past. The square-shaped commercial office building has a visitors center on its first floor, but its upper office space has been mostly vacant. It was owned by businessman and Niagara Falls Reporter publisher Frank Parlato for years, until he sold it for $5.3 million to Gordon Reger’s Reger Holdings of West Seneca in 2014.

Joseph M. Anderson, owner of Smokin’ Joe’s Trading Post in Sanborn, owns 16 properties in the targeted zone. In addition to vacant land and a vacant two-story building, his holdings include Smokin’ Joe’s Indian Trading Post.

Other vacant or underused buildings include the former Niagara Club building at 24 Buffalo Ave. Originally build in 1865 as a private residence, it housed a private social club until it closed in 1996 and was later used as a banquet facility before the Patel family acquired it in 2009. It now has an Indian restaurant, but the Patels say they plan to redevelop it into a family-friendly dining facility within the next 18 months.

“Those are some strategic locations,” said Christopher Glynn, CEO of Maid of the Mist Co., which also owns the Comfort Inn The Pointe across from the state park. “There will be better opportunity with the state having control of them.”

Developers and investors have made efforts at various times to acquire some of the sites. But the owners “either have ridiculous prices, or they’re not interested in selling them,” said Mark Hamister, CEO of Hamister Group, a hospitality and healthcare group that is now building a new Hyatt Place Hotel in downtown Niagara Falls.

Steel starts to rise as work continues on Hyatt Hotel on Rainbow Boulevard on Monday, Jan. 9, 2017. (John Hickey/Buffalo News)

“When you can figure out a buyer’s and a seller’s motivation, you can find ways to make deals,” Hamister said. “When you can’t figure out the motivation, it’s usually impossible.”

Artist's rendering of the $25.3 million mixed-use development planned by the Hamister Group at 310 Rainbow Blvd. in Niagara Falls. The building would include a 100-room hotel, 24 apartments and up to 8,000 square feet of ground-level retail space.

That’s why some see the state’s involvement as a game-changer, creating an extra push for owners to sell.

“I think it’s very important,” said William Paladino, whose company owns the Giacomo Hotel, Haeberle Plaza and the former Niagara Gazette building. “This will certainly help them provide some more shovel-ready sites to assist some of these residential neighborhoods. The blight in some of these neighborhoods is pretty extreme.”

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NFR holds properties

Milstein, one of the most prominent property owners in the city, has been the target of complaints for years about assembling vast local holdings but failing to do anything with them.

The Manhattan banker and his brother, Edward, own hundreds of properties in downtown Niagara Falls, which they began acquiring in the late 1990s through their company, Niagara Falls Redevelopment.

Milstein leads the New York Private Bank & Trust, and his family owns thousands of properties, particularly in the New York City area. He and his wife also are big donors to New York politicians, including Cuomo. James Haggerty, a New York City-based spokesman for Milstein’s Niagara Falls Redevelopment, declined to comment on the governor’s proposal.

Anderson also did not respond to a request for comment. The prominent Tuscarora Indian businessman, whose highly successful general store operation on Saunders Settlement Road sells untaxed cigarettes and gasoline, has tried multiple entertainment concepts, especially at the former Snow Park site where he has hosted a Native American dance show and more recently an adventure park with a zipline and ropes course.

Reger said he not only wants to redevelop his site next to the Rainbow Bridge, but said he has held “preliminary discussions” about it with city and state officials.

One Niagara, a former office building shown here in 2013, now has a welcome center on its first floor but is largely vacant. (Buffalo News file photo)

“I’m very interested in doing some kind of public-private partnership to try to redevelop that building and that property into some kind of entertainment attraction that would be consistent with the state’s overall plans for the neighborhood,” said Reger, one of the partners behind the Larkin Center of Commerce in Buffalo.

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Attracting new activity

But more progress is needed. In particular, he cited pending projects like Uniland Development Co.’s $150 million Wonder Falls Resort conversion of the former Rainbow Centre Mall as a potential catalyst. “That would be a huge attraction that would help feed everything else,” he added.

The Wonder Falls proposal, announced in summer 2014, has been delayed as negotiations continue between the developer and the state on a formal agreement. Magee said Friday that Uniland has been “working steadfastly on project requirements” to complete the process.

Uniland Vice President Michael Montante said a collective effort is needed, not a single silver bullet.

“We planned for Wonder Falls to be a piece of the solution to restoring Niagara Falls as a competitive tourism destination,” Montante said. “Other stay-extenders are needed so we can earn our fair market share of the tourists that descend upon both sides of the falls every day. The governor understands that not one project, alone, can be the quick-fix but a multitude of projects, working together, will enable Niagara Falls USA to become a world-class and family-friendly tourism destination once again.”

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