From the Niagara-Gazette:
A report issued Thursday by Niagara University’s Global Tourism Institute questions the city’s ongoing effort to secure taxable property owned by Niagara Falls Redevelopment for the purposes of building an arena and other components of Mayor Robert Restaino administration’s $150 million Centennial Park project.
In addition, the report, a follow-up to one released by the institute last October that called for the pursuit of new developments that could extend the local tourism season, identifies the condition of the city’s finances and a commitment of support from the Seneca Nation of Indians as important factors to be considered before an arena inside Centennial Park gets built.
In the latest report, outgoing NGTI Director Pat Whalen, who is retiring from the organization effective today, notes that when his organization suggested building an event center last October as one possible way to extend the tourism season into the winter months, it “did not envision the city would own it, build it or operate it.”
“Why?” the report reads. “Because the core problem for the City of Niagara Falls is its dwindling population and therefore shrinking tax base. Setting aside one-time influxes of stimulus money, the city government spends an average of $90 million per year, but it has just $75 million in annual revenue. It has ‘made ends meet’ over the past two decades by using ‘casino money.’ That money may be coming to an end when the compact between the Seneca Nation and (New York state) expires (on Dec. 31, 2023).”
In addition, the report describes building an arena or expanding the existing conference center in Niagara Falls as a “big financial risk” for the city, the state or potential investors, one that should only be undertaken if the Seneca Nation is committed to being a project partner.
“The Seneca support could include capital for construction; or a formula for covering operating losses,” the report reads. “But at a minimum, the Seneca support must include an assurance that the Seneca Nation will not build their own, competing facility.”
“And why would they if a new or expanded center benefits them?” the report continues.
The report also suggests it is “important” for city officials to get input from the Seneca Nation on any new facility.
“If they are happy with the size and location, it becomes a lot easier to get their promise not to build a competing center,” the report notes.
Restaino, with support from a majority of the members of the city council, has moved forward with eminent domain proceedings aimed at acquiring 12 acres of land owned by NFR at the intersection of 10th and Falls streets, just off John B. Daly Boulevard. Restaino’s administration has identified the parcel as the preferred site for Centennial Park, which has been presented as including a new events center, an outdoor adventure course, an ice skating rink and areas for outdoor concerts and other events.
City officials have said that the Seneca Nation is supportive of the Centennial Park effort.
On Thursday, a spokesman issued a statement, saying the Seneca Nation has invested hundreds of millions of dollars in developing world-class destinations and creating positive momentum in the region and they are not against pursuing any project that might help continue that momentum.
“We support the exploration of additional development around our territories that can potentially bring more visitors to the area and create possible synergies with our gaming, resort and hospitality facilities,” the Nation said in its statement.
Earlier this month, council members held a second public hearing on the proposed taking of NFR’s property for the project. The council is now within a 90-day window in which members can accept a negative declaration environmental impact statement and make “determinations” that it would be in the public interest for the city to take the parcels.
A 2017 arena development analysis commissioned by the Niagara County Legislature and generated by the Minneapolis-based consulting firm Convention, Sports & Leisure considered two potential options for running a “multi-use hybrid venue” in the Falls that could accommodate crowds of between 4,000 and 6,000 people.
The “tenant model,” which would involve at least one anchor tenant such as Niagara University’s hockey or basketball programs, had the potential to attract 108 events and 184,500 attendees per year, according to the consultant’s report.
That option came with an annual financial loss estimate of $261,000.
The “non-tenant model,” which considered an arena that did not have an anchor tenant such as NU, had the potential to attract 98 events and 148,250 attendees per year, the consultant’s determined.
That option, according to CSL’s estimates, had the potential to run at nearly double an annual operating loss at $482,000 per year.
Restaino, representatives of his administration and members of the city council who have agreed to pursue eminent domain for the purposes of acquiring land for Centennial Park, all acknowledge that the city has not done an in-depth analysis of the potential benefits and costs for running an arena.
They have argued that it’s premature to examine operating such a facility, noting that the city doesn’t have the $150 million needed to build it yet. Restaino has said that members of Western New York’s delegation to the New York State Legislature have advised him to secure a site for the project, which would allow the state to engage in more in-depth discussions about possible funding.
Dan Spitzer, the attorney representing the city during the ongoing eminent domain proceedings, has described NFR’s land as being preferred for the project because it would be large enough to accommodate Centennial Park and part of it served as the site of 10th Street Park before it was acquired by NFR.
Whalen describes the latest NGTI report as a “preliminary analysis,” “not intended to take the place of a full feasibility study, which must include a projected income statement; a market survey; a proposed organizational structure; an opening day balance of projected expenses and revenue and other important considerations.”
“This paper will shed some light on that question by examining the operations; the strengths; and the weaknesses, of the existing facility, as well as the strengths and weaknesses of the city itself,” the report reads.
The report offers “pros and cons” for six possible sites for a new arena downtown, including the NFR land that is subject to eminent domain proceedings.
That site, the report notes, offers benefits in that it would be large enough to accommodate Centennial Park and is located outside the city’s tourism core which would make construction less disruptive to existing businesses and attractions. It also, the report suggests, positioned for “quick access” to Pine Avenue “if and when” the John B. Daly Extension is built.
On the downside, the report argues that adding additional amenities to the larger Centennial Park project instead of focusing solely on an arena or events center “complicates the project, makes it more expensive, and requires a large site.”
Under NFR land drawbacks, the report lists distance from the city’s tourism core and lack of immediate parking
Taking the company’s property through eminent domain would also remove the land from the tax rolls, the study notes. Other sites considered — including vacant space in the old Rainbow Mall Building or the city parking lot located at Niagara and Third Streets would not involve costs tied to eminent domain, according the report, which also lists locations on Seneca property downtown as a possible site alternative.
“Eminent domain refers to the power of the government to take private property and convert it into public use. The Fifth Amendment provides that the government may only exercise this power if they provide just compensation to the property owners. A key phrase is ‘only’ ‘if they provide just compensation to the property owners’. It does not mean the land is acquired for free,” the report reads.
Council Chairman John Spanbauer, who received a copy of the report this week, said he thought NGTI offered some interesting thoughts on various venues that could be considered for Centennial Park, but he said Restaino’s administration has done some research that shows NFR’s land would still be the best spot for the project.
He noted that one of the alternative sites referenced in the NGTI report — the city lot at Third and Niagara streets — generates between $175,000 and $200,000, a significant amount of revenue the city would lose if it built Centennial Park there.
The council chairman noted that while the study did suggest the city is reliant on casino revenues to the tune of $15 million per year, the actual amount of casino revenue put it into the city’s budget in recent years is closer to $8 million.
He said the city’s financial condition and the upcoming impact of negotiations over tribal casino revenues remain factors in the continued pursuit of Centennial Park, but he still believes the project could help the city’s overall financial condition by driving more visitors into the downtown area for concerts and other events.
As to the potential for an arena to cost the city potentially hundreds of thousands of dollars per year to operate, Spanbauer noted that NGTI’s new report described the city’s current conference and event center on Old Falls Street as one of the best facilities of its kind in the state, even though it loses about $100,000 per year.
“If we extend our tourism season on the front and the back end, that’s not a bad thing,” Spanbauer said.
For the project to work, Spanbauer said he agrees with the report that the city would need to partner with other entities, likely the Seneca Nation of Indians included.
“There has to be a collaboration between private and government and hopefully some other investors,” he said.
Spanbauer said he saw nothing in the report that would make him change his mind about the eminent domain process or the city’s effort to turn Centennial Park into a reality.
“Does this paper change anything in the thought process of going in that direction? No, I still think we have to go in that direction,” Spanbauer said.
“I think the Centennial park project is a good project for the City of Niagara Falls,” he added. “There still has to be discussion about the finances, but I think there’s a vision and we’re moving forward on it. The first step is getting the property and we’re doing it now.”