Mayor to Hold 3rd Public Hearing in March on Parcel ‘0’ as ‘Plans Shift’
Niagara Falls, NY: On February 9, Mayor Robert Restaino convened a special meeting of the Niagara Falls City Council to advance his plans to develop Centennial Park.
All five council members were present.
The mayor’s $150 million Centennial Park plan features a 6,000-7,000-seat arena for events, a 500-car parking ramp with walls for climbing, and its rooftop for concerts and a beer garden. He also plans a splash pad that converts to an ice-skating rink, adventure courses, and other amenities on the remaining three or four acres of unused parkland land.
The purpose of last week’s special meeting was to get council approval for a third public hearing on Centennial Park. The council held two earlier hearings in June and September.
A third hearing is needed for the latest plans call for a reduction of acreage from 12 to 10 acres on his choice location for Centernnial Park –Parcel ‘0.’
Parcel ‘0,’ so-named by its owner, Niagara Falls Redevelopment (NFR), is the lead development parcel of some 140 acres of its assembled land. Parcel ‘0’ fronts Falls Street and John Daly Memorial Parkway in the city’s south end.
The mayor plans to take Parcel 0 by eminent domain, the legal process where the government forces a landowner to sell land for a “public purpose” and “just compensation.”
The mayor’s original plan for taking NFR land included Parcel 0 plus narrow strips of land outside the square boundaries of Parcel 0, on NFR land. The new proposal proposes taking only the square shaped Parcel 0.
NFR does not want to sell
Before the mayor came up with plans to take Parcel 0 for Centennial Park, NFR representatives met with him and members of his administration. NFR disclosed plans to develop Parcel 0 for a technology and data center called Niagara Digital Campus, a $1.5 billion, 600,000 square foot campus of buildings. The company hopes to create 550 data and IT jobs and provide higher speed broadband access for Niagara Falls residents.
After making his staff available and directing then-City Planner Eric Cooper to facilitate NFR’s plans, the mayor did an apparent about-face.
He announced on a Zoom call with attorneys and NFR representatives in early 2022 that he wanted Parcel 0 for Centennial Park. He would use eminent domain if NFR did not donate the land to the city.
NFR filed a petition with the New York State Supreme Court, Appellate Division, to halt the mayor’s plan to force the sale of its land.
Financing Centennial Park
Months before last week’s special meeting, the mayor said the city needed to own Parcel 0 before he could begin to raise the estimated $150 million to develop Centennial Park.
The $150 million does not include the cost of the land or years of projected legal fees associated with the lengthy eminent domain process.
The city’s outside legal counsel, Daniel Spitzer of Hodgson Russ, explained that the public should not expect the mayor to know where the money will come from.
Daniel Spitzer represents the City of Niagara Falls in its eminent domain proceedings.
Spitzer said, “the way New York works in terms of commitment of grant funds and other funds that we’ve been told are available, you first must acquire site control in order to get those grants. You must first line those up. The mayor has spoken with a number of authorities, and my office has spoken with a number of folks at the federal and state level who have all said this is a great project… But the first step is land control that you need to lock up to get to that money…. You have to have land control to get that pot of money.”
To take control of NFR’s land, the city must win the first threshold in court, which is that the taking is for a public purpose.
If the city wins this, it must pay an initial payment to NFR – based on the city’s appraisal of Parcel 0.
In response to where the money will come from to make the initial payment, the mayor said he might borrow against future federal block grant money, diverting about 45 percent of federal block grant funds used for street repairs, demolitions, social services, not-for-profits, and other community initiatives – for the next 20 years.
A past eminent domain proceeding by New York State against NFR dragged on for over seven years. It established the initial payment of NFR land across the street from Parcel 0 at about $1 million per acre – in 2010 dollars, with an additional undisclosed second payment estimated at $5-10 million.
Based on this precedent, the court may determine that Parcel 0 is worth $15 – $20 million.
Comparable sale: In 2010, the courts ruled that the land marked “B” owned by NFR was worth well over one million dollars per acre, and the state had to pay it as a result of eminent domain litigation. The Seneca Nation later purchased it. That was 2010 dollars. The property directly across the street is NFR’s Parcel 0 which Mayor Restaino wants to take using eminent domain. If anything, the land is worth more than the land across the street, firstly because of inflation, and secondly because Parcel 0 is the lead development parcel for NFR.
Last year, the council made a “Determination and Findings” that it would be “a public benefit” if the city forced NFR to sell Parcel 0 and then explore how to fund Centennial Park.
The council voted on November 23 to start the process of eminent domain.
Mayor Questioned at Meeting
At last week’s special council meeting, Councilmember Vincent Cauley raised questions and concerns.
Councilmember Vincent Cauley
He said, “I’m still trying to wrap my head around Centennial Park… How was this footprint [the 10 acres] determined as opposed to the prior action and prior public hearings [for 12 acres]?”
Mayor Robert Restaino
The mayor said, “I guess I am a bit lost with your question.”
“How did we come up with this land acreage requirement,” Cauley asked.
The mayor said, “We are at a critical point of the project. Now the studies have been completed, it won’t be necessary [to take all 12 acres]. We are looking to more clearly, sharpen, the issues in the eminent domain proceeding.”
The mayor did not share the completed studies with council or disclose who completed them.
Councilmember Cauley asked the mayor, “How much money has been spent since the beginning of the Centennial Park process?”
There is no way of knowing, the mayor said.
Cauley asked about the legal position of the change in acreage, “Are we starting from the beginning [of the eminent domain process] again?”
The mayor said, “nothing changed, and nothing that was already done was unnecessary.”
“Why is there a new public hearing then?” Cauley asked.
Mayor Restaino said, “in order to properly proceed under the eminent domain procedure, because there has been a shift in purpose.”
An Alternate Site?
Earlier this month, businessman Jim Szwedo of the Niagara Street Business Association came out with a proposal published on these pages.
Jim Szwedo has a proposal
He suggested the mayor develop the events center on city-state owned land on Third and Niagara St, and the park on 11 acres of land NFR owns two blocks away from Parcel 0. Then the city would also benefit from some 550 jobs the data center would create.
NFR offered to donate the land and $2.5 million over ten years for park maintenance. The city could save $15-$20 million on the cost of the land.
NFR offered to donate 11 acres of land and pay $250,000 per year to the city to maintain it.
Szwedo further explained that city/state-owned land on Third, if used for the events center won’t require diverting 20 years of block grant money to buy it, and would give the mayor immediate site control, which he says he needs to pursue funding and without protracted and expensive litigation.
This would save millions more in legal fees and interest on the block grant loan.
On top of that, Szwedo wrote that the city would save another $20-$30 million, since there would be no need to build a 500-car parking ramp. Adjacent to the Third Street site is an underutilized 2500-car city-owned ramp.
Szwedo further pointed out that the Third Street land is closer to hotels, attractions, restaurants, and retail stores in the tourist district than Parcel 0.
At the special hearing, Councilmember Cauley directly questioned the mayor about an alternate site.
Cauley said, “Everyone wants this/needs the project, but it is my belief that sometimes the right things are done for the wrong reasons at the wrong locations. How was this location determined?”
The mayor replied, “there was an analysis conducted, and this parcel was the only one that would fit the project in order to continue to engage with the Seneca Nation.”
The mayor did not disclose who conducted the site analysis, though the mayor has referenced a study by the Niagara Global Tourism Institute in the past.
Late last year, the author of that study, former NGTI director Patrick J. Whalen, denounced the mayor’s current Centennial Park plans. He claimed the mayor chose Parcel 0 with “no analysis, no study, not much thought.”
Whalen wrote, “The City has not established that parcel 0 is the best or even a suitable location for an event center and park. It failed to consider any of the alternatives to the property set out in the NGTI study on which it purports to rely, including parcels already owned by the City and New York State.”
At the special hearing, the mayor did not explain why the Seneca Nation should be the determining factor in site selection.
The Senecas operate tax-free hotels, restaurants, retail stores, and gas station, which compete with taxpaying businesses in the city. The Seneca Nation has not publicly offered to donate funds to the events center project.
As for the reason the mayor wants a site to benefit the Seneca Nation, he only explained that “at some point in mid-late 2020, I sat down with the President of the Seneca Nation, who expressed interest in being as close to the project as possible.”
The mayor’s selection of Parcel 0 ensures the events center is built closest to the Seneca Nation and separated from downtown taxpaying tourist businesses.
#1 is the Szwedo recommended location for the events center on city-owned land. #2 is the already built Rainbow Parking Ramp. #3 is the Seneca Nation land. #4 is Parcel 0, the mayor’s choice for the events center. #5 is the downtown tourist district. Note that Szwedo’s choice puts the events center right in the heart of the downtown business and tourism section and is also close to the Seneca Nation. Conversely, Parcel 0 is only next to the Seneca property.
If the events center is built on Parcel 0, patrons of events will find themselves across the street from one development, the Seneca complex. An events center on Parcel O could be a feeder for Seneca enterprises, much more so than a high-tech data center with regular employees.
Because Parcel 0 is on the far side of the sprawling Seneca complex, most distant from city tourism businesses, an events center on Parcel 0 will allow the Seneca complex to provide an excellent buffer to keep visitors away from downtown businesses and flow into Seneca businesses.
It’s as if the mayor planned the events center at Parcel 0 to benefit the Seneca Nation exclusively.
Whalen pointed out that the Third Street site would benefit downtown businesses in Niagara Falls.
He wrote, “I believe [the Third Street site] would work for everyone in Niagara Falls: adding critical mass, and near Third Street hospitality businesses, parking, hotels, and other commercial locations.”
If the events center is located on Third and Niagara, it is close to all downtown taxpaying businesses and the Seneca Nation tax free businesses.
As Councilmember Cauley pressed the Mayor further about his plans, Councilmember Kenny Tompkins sought to end any questioning, saying Cauley was out of order.
The mayor called the meeting to vote on whether to proceed with a new public hearing for Parcel 0. Council members Zajac and Bax agreed.
Councilmember Danta Myles said the questions were appropriate, since they were related to whether a public hearing should occur.
Zajac joined his voice with Tompkins to oppose further questions.
Since the mayor could not answer his questions, Cauley asked if the mayor would provide documents and other information before the public hearing to enable him to understand the project and how to vote.
The mayor said, “Councilmembers are not authorized to receive any documents before the next public hearing.”
Councilman Myles asked if a written survey could be prepared for the public hearing to ask citizens how they feel about the project and its location.
The mayor, objecting to a written survey, said. “That is what the public hearing is for.”
The results of a previous survey were leaked, much against the mayor’s wishes. To his chagrin, the survey results showed that almost every resident opposed the mayor’s Centennial Park as proposed.
Tompkins said another survey was inappropriate.
Myles said he would draft a resolution asking for a written survey to send to residents before the March public hearing.
The hearing closed, with four of 5 members voting “yes” to a March 13 public hearing at 6 pm to let the public air its thoughts on the Centennial Park plan.
Cauley was the lone “no” vote.
In the past, Mayor Restaino said if he could not get the money to develop Centennial Park, he would still want to take Parcel 0 from its owner.
“If you have the site and you don’t get the money [for Centennial Park], you still have the site and then you are looking at development…The first step is getting the property. With the property, we now control a critical corner in the downtown. Obviously, our goal is to create Centennial Park. Aside from that, you have the opportunity to directly impact how the development of that parcel unfolds.”
The concept of “take first and find funding later” under the umbrella of “public purpose” may spark some legal debate.
The mayor is transparent in that he admits he may do an about-face on the land, and Parcel 0 may wind up in private developers’, or perhaps in the Seneca Nation’s hands.
This case may set a precedent in eminent domain law, especially since there is a $1.5 billion development plan proposed by NFR– ten times the size of the mayor’s plans – while the mayor is uncertain of any financing.
NFR attorney John Horn
NFR’s attorney John Horn, of Harter Secrest, hinted at the nebulous elements of the city’s proposed eminent domain proceeding. Quoting attorney Spitzer, his legal adversary in the proceedings, Horn said, “The City is commencing to take commercially viable private property based on it had ‘been told’ by ‘a number of folks at the federal and state level,’ in the hopes that, by gaining ‘site control,’ it would get a ‘pot of money’ sufficient to build a $150 million park and event center.”
The Reporter will inform readers of developments, including legal fees and other expenses, sure to expand exponentially in the coming months and years.