February 28, 2023
Niagara Falls Mayor’s Plans to Kill $1.5 Billion Data Center for ‘Poor Location’ Event Center Facing Opposition
This article first appeared in Niagara Falls Reporter on February 28, 2023:
Niagara Falls Mayor Robert M. Restaino is seeking to purchase a 10-acre plot of land from Niagara Falls Redevelopment LLC (NFR) to develop Centennial Park, a $150 million project of a 7000-seat events center, a parking ramp, and a small park.
NFR has other plans for the land it calls Parcel 0. The company wants to build a $1.5 billion data center campus and is unwilling to sell to the city.
NFR plans to build a $1.5 billion Niagara Digital Data Campus, which will employ 550 permanent employees.
Mayor Restaino plans to use eminent domain to stop the data center and force the sale to the city.
Although the mayor claims he can raise the $150 million necessary for the project once the city acquires the land, the city does not have the money to buy the land.
To fund the land purchase, the mayor proposes the council approve a $10 million loan from the federal government, repaid over 20 years at $1 million per year. He suggests the city repay the loan by spending $1 million less annually on road repairs, blighted house demolitions or repairs, and not-for-profit support.
Potholes abound in Niagara Falls.
Mayor Restaino retained eminent domain expert Daniel Spitzer of the Buffalo law firm Hodgson Russ, to represent the city in the eminent domain proceedings to take the land. However, the mayor has not disclosed how he plans to fund the legal fees to the council.
The council page on the Niagara Falls website. The mayor has declined to inform the council about the legal costs expended and to be expended for outside lawyers during an estimated seven years of legal proceedings.
The mayor previously asked NFR to donate Parcel 0 but was refused. The company values the land at $20-$25 million.
The land owner, Niagara Falls Redevelopment LLC [NFR], calls the 10 acres “Parcel 0” since it is the critical development frontage for the company’s 140-acre holdings.
The mayor also offered to swap properties with NFR. The company declined after discovering that the city-owned land on Porter Road is contaminated with PCBs and could be an environmental disaster if developed.
Some oppose the mayor’s proposed location for Centennial Park.
Business leader James Szwedo believes the city should build the events center on city-owned land.
Szwedo argues this option would cost taxpayers nothing to acquire, saving the $20 million plus the cost of taking NFR’s land and additional millions in legal fees.
The city-owned land would also not require building a parking ramp since there is ample parking in an adjacent parking ramp, saving the taxpayers another $30 million.
Businessman James Szwedo proposed the city build an events center on Third St and Niagara on city-owned land.
The city-owned land would be closer to downtown tourism and hospitality businesses, which would benefit from the spinoff of visitors exiting the events center.
Mayor Restaino admits his priority is building the events center close to the sovereign Seneca Nation, which has 50 acres of land separating downtown Niagara Falls and the NFR property. Building the events center on Parcel 0 would mean that the only adjacent businesses would be the Seneca Nation’s hotel, retail stores, restaurants, and casino, which pay no property, sales, or state income tax and enjoy higher profit margins than taxpaying Niagara Falls businesses.
The Seneca complex of tax free enterprises can snag the spinoff from the events center with the mayor’s plan, and effectively sequester the events center patrons from downtown businesses.
To support his decision to build the events center closer to the Seneca Nation, Mayor Restaino cited a study by Niagara Global Tourism Initiative, which endorsed the construction of an events center, but did not recommend a specific location.
The study’s author, Patrick Whalen, said the mayor’s proposed 7,000-seat events center was too large, and at the more remote location of Parcel 0, Centennial Park was likely to fail.
The mayor has chosen to proceed with eminent domain to compel the sale of Parcel 0, with Hodgson Russ eminent domain specialist Daniel Spitzer serving as the lead attorney on the litigation.
NFR has retained the law firm Harter Secrest and eminent domain expert John Horn to prevent the city from forcing the sale of Parcel 0. This legal dispute will be a clash between two skilled lawyers and their teams, both knowledgeable about the intricacies of eminent domain proceedings.
In addition, it will be a struggle between a small city mayor lacking funds to implement his plans and the well-funded NFR. Manhattan billionaires and philanthropists Edward and Howard Milstein own NFR.
Mayor Restaino admitted that if the city acquired Parcel 0 and could not find the funds to build the events center, he could sell or donate the land to another developer, including, conceivably, the Seneca Nation.