Two major projects in Niagara Falls bit the dust last week.
The developer of a proposed $20 million indoor water park in downtown pronounced his project dead Thursday.
Michael DiCienzo cast most of the blame on Empire State Development, saying its USA Niagara Development Corp. refused repeatedly to give him a $2 million grant he said he needed.
Meanwhile, USA Niagara disclosed Friday that it has rejected the only offer it received on last summer's request for proposals to build a 75-to-100-room lodge near the falls and to provide outdoor recreational opportunities in the state parks.
The state agency said it's mulling over its next step on that front and has no timeline for deciding what to do.
Both projects were meant to strengthen tourism, especially outside the peak summer season, in Niagara Falls' eternal quest for more visitors who stay in town longer than a few hours.
DiCienzo, a Niagara Falls, Ont.-based hotelier with holdings on both sides of the border, said Thursday that the Niagara Daredevil Waterpark won't be built because of the state's repeated rejection of the grant, which he said he needed to fill a gap in his funding plan.
Empire State Development is backing Uniland Development's plan for Wonder Falls, another proposed water park in downtown Niagara Falls. The Amherst developer was selected over DiCienzo to create that attraction in the former Rainbow Centre Mall.
"The state is not willing to change its mind," DiCienzo said. "Being shut out of the $2 million grant is the last nail in the coffin."
He said his family-owned business, NFNY Hotel Management, was willing to invest $10 million of its own money in the project.
"We've already got quite a bit of equity in it," DiCienzo said. "We had financing set up. We also have financial projections set up. Do we have more money to spend? Yes. Are we going to spend it on that? No."
Instead, DiCienzo said, his company will set its sights on further hotel construction on the Canadian side of the border, where the DiCienzo family already owns six hotels and has three more on the drawing board.
"We've been clear to everybody, we have more opportunities in Niagara Falls, Canada," DiCienzo said.
The Niagara Daredevil Waterpark was to have been built on a lot behind the Sheraton at the Falls Hotel on Third Street, owned by DiCienzo.
DiCienzo also owns the Days Inn in Niagara Falls, for which he has been trying to negotiate a $1.5 million state grant for renovations.
He has received state aid before – $625,000 to add two restaurants to the Sheraton after he acquired it five years ago.
"ESD has invested heavily in three parcels Mr. DiCienzo is associated with in Niagara Falls and have affirmed our interest in being involved in the Days Inn renovation project," Christopher J. Schoepflin, Empire State Development senior vice president.
"We are working with the DiCienzo team on finalizing the incentive proposal. We have declined to award funding for the water feature, which has received funding from multiple other sources," Schoepflin said.
The Niagara County Industrial Development Agency gave the DiCienzo water park a 12-year incentive package, which Niagara Falls Mayor Paul A. Dyster said would have cost the city an estimated $5.2 million in property taxes. Also, there was an exemption on paying sales tax on building materials and equipment for the water park, worth an estimated $1.4 million.
The Niagara Falls Tourism Target Zone Fund, controlled by the NCIDA, gave DiCienzo a $1 million grant for the water park, and the city's NFC Development Corp. granted him $300,000.
"It's disappointing, but I don't think he can validly argue that the lack of government subsidies is a reason not to go forward," Dyster said. "It was our understanding that the reason (NCIDA) got involved at the level they got involved was that Empire State Development would not be involved."
DiCienzo predicted that Uniland's Wonder Falls will fail despite the state's favor, because he believes the marketplace in Niagara Falls is not growing. A Uniland spokeswoman declined to comment.
DiCienzo cited statistics from Smith Travel Research that showed hotel demand and hotel revenue in downtown Niagara Falls in January were down from the same month a year ago, while the number of hotel rooms available was up. The figures for downtown showed demand was down 2.9 percent; revenue fell 3.2 percent; but room supply was up 4.2 percent.
"It's actually horrible," DiCienzo said. "As a developer, it's the worst metrics you can have."
John H. Percy Jr., president of Destination Niagara USA, said the big picture from the same research firm is brighter.
Citywide in January, hotel demand was up 1.4 percent. And for 2017 as a whole, although room supply was up 10.3 percent, demand rose 7.2 percent.
In 2016, Smith Travel Research said citywide hotel demand rose 4.2 percent, and in 2015 it was up 2.3 percent. Room supply rose 5.4 percent in 2016 and 3.6 percent in 2015.
"Our numbers show a repetitive pattern of growth," Percy said. "It's a solid, strong market right now."
Meanwhile, the state did not disclose the name of the only bidder on the outdoor recreation proposal. It wasn't Delaware North Cos., according to a spokesman for that Buffalo firm, which already has the food concession in Niagara Falls State Park.
In January 2017, Gov. Andrew M. Cuomo proposed adding more year-round attractions to the state parks around Niagara Falls, ranging from seasonal campgrounds and cabins to rappelling and zip-line facilities in the Niagara Gorge and rental of bicycles and outdoor gear.
But his initial proposal for a lodge on Goat Island drew howls from local officials and preservationists, and by the time a formal request for proposals was issued June 30, potential vendors were asked to consider lodge sites only in other parks.
But now, Schoepflin said, it's back to the drawing board.
"ESD wasn’t completely satisfied with the response we received for the outdoor recreation RFP, so we are now in the process of strategically weighing our next options for creating a contextually sensitive, viable and authentic experience that aligns with Governor Cuomo’s vision for outdoor recreation in Niagara Falls," he said.
Dyster said he supports the state's idea of "finding more ways for people to have fun in the Niagara Gorge without endangering the ecology and the environment."
He said he thought the original request for proposals was on the right track.
"We think it fits with everything that's happening, the removal of the (Niagara Scenic) parkway and the restoration of the ecology of the Niagara Gorge," Dyster said. "But it's also important to get it right."