Hamister Deal Still Raises Lots Of Unsavory Questions About Murky Dealings At City Hall

Should Mark Hamister get a $2 million plus property for $100,000?

Sam Fruscione said there's "no way, we are going to approve a sweetheart deal for (Buffalo's) Hamister when people in this city have to pay full price for their prop- erty."

ARE YOU NUTS? This is a valuable property; you don't have to give it away, or pay someone to develop it. "A" (above) is Parcel 4 or the old bal- loon parcel, located only 300 feet from the Niagara Falls State Park, at 310 Rainbow Blvd. B: Niagara Falls State Park (parking lot). C: Niagara Falls, Ontario. D: One Niagara and parking lot. E: Rainbow Bridge. F: Old Falls Street. G: Rainbow Blvd. Parcel 4 is one of the most valuable properties in Western New York.

This undistinguished, small hotel is what USA Niagara and Dyster want to pay Hamister to build on one of the most valuable parcels of land in Niagara Falls which they want to give away to him for about 5 percent of its market value. You have to wonder what’s wrong with them.

While Niagara Falls Mayor Paul Dyster would like to ride up, up and away in his beautiful balloon parcel proposal - a deal appearing custom designed to benefit the Hamister Group of Buffalo - questions are being raised as to the transparency and legality of the selection process that awarded the development option to Hamister in the first place.

The “balloon parcel” is .88 acres of land at 310 Rainbow Boulevard in the city’s “tourism district,” about 300 feet from the most visited state park in America, the Niagara Falls State Park. The land was the former site of a tethered helium balloon ride that afforded ticket buyers a perch above downtown and Niagara Gorge, about 300 feet in the air.

Before that, the balloon site was known as parcel 4, and was a city-owned parking lot, which is what it is being used as now temporarily.

The modest balloon ride was a fairly popular attraction in what was, and still is, a tourism corridor starved for significant man-made attractions. The balloon served to offer one of the few aerial views of Niagara Falls on the US side of the falls and served, more than once, as a wedding platform as couples - suspended under a twilight canopy - tied the knot in the air.

Prone to falling prey to unpredictable downtown winds, the balloon was known to sway wildly and often was grounded.

Be that as it may, the balloon operators let the air out of the ride several years ago and it drifted off to join other unique – if questionable – tourism attractions in the city’s history. As the balloon ride exited, Mayor Dyster, along with USA Niagara entered.

Hilarity did not ensue.

In fact, a rather curious development process followed.

In late 2011, Dyster, USA Niagara’s Chris Schoepflin, Schoepflin’s boss Sam Hoyt and city corporation counsel Craig Johnson named themselves as a four-man-panel that said they would review requests for proposals at the old balloon parcel. They would, in effect, they said, "search the clouds for a star to guide them" in the development of what may be the single most valuable piece of undeveloped land in the city.

When the clouds cleared, however, in early 2012, there were allegedly seven proposals on the table resulting from the solicitation. When the four-man review team pitched the council in February of 2012, they recommended a proposal by the Hamister Group, Inc. of Buffalo. The company's CEO, Mark Hamister is a prominent businessman who “almost purchased” the Buffalo Sabres in 2003. His deal collapsed when the $40 million he sought in government assistance fell through.

Although Hamister’s proposal to construct a “$22.5 million up-scale hotel” on the old balloon parcel drew high praise from the four-man panel, the panel never shared the details of their secretive selection process. Neither did they share information regarding the six other proposals that failed to catch their collective eye. The public, which owns the land, does not even know the names of the other bidders.

The RFP went out, proposals were submitted, the four men locked themselves figuratively – or maybe literally – in a room and when the door opened, the winning proposal went to Hamister, a long-time supporter of Sam Hoyt and friend of Mayor Dyster. More significantly, a huge financial supporter of Hoyt's boss, Gov. Andrew Cuomo.

To say the selection process was lacking in transparency is an understatement of gross proportions.

One might say, if poetically, the four men, "sort of found a cloud to hide them, but kept the moon beside them."

“When the Hamister proposal was recommended to the council it was presented as not requiring city dollars. That was a plus at the time,” said Councilman Sam Fruscione. “I have serious questions regarding the project’s funding.”

But why all the secrecy? At the end of the day this RFP process appears to be a well-organized conspiracy to make sure the property at 310 Rainbow Boulevard gets transferred to the Hamister Group.

Who decided that a prime piece of downtown Niagara Falls land could be willy-nilly handed off to a local developer via a cloudy closed door meeting of four friends of the winning developer?

It doesn’t pass the smell test.

“The council agreed to let the city continue to talk to Hamister as the details of the proposal were being worked out,” said Council Chairman Glenn Choolokian. “We understood it wouldn’t cost the city money and that we would be kept informed as things moved along. Well, we haven’t been kept informed and I’ve never been assured that it wasn’t going to cost our city money. If they want city money to do the project it won’t happen.”

Although local media wrote glowing stories following the Hamister/USA Niagara presentation at a February 2012 city council session, their reports never addressed the questions at the root of it all: Was the selection process legal? Where are the records of the selection process meetings? Was the parcel appraised before the selection process began? If it wasn’t apprised prior to, should the selection results be voided?

In a quote of record breaking proportions, as it serves as an unctuous blend of disingenuousness combined with pure chutzpah, Chris Schoepflin said (Reporter, July 17, 2012) “The idea is to take an underutilized, vacant, non tax-producing piece of land that is going to create construction jobs and permanent jobs and net new tax revenues for a community that could use them,” Schoepflin said. 

No, Chris, the idea should be to appraise that parcel and then market it to the world in order to get top dollar from the most reputable and best financed business people possible.

To build another mediocre hotel in a town where on 355 days of the year, rooms go a-begging; where there are already two large boarded and vacant hotels- the famous Hotel Niagara and the old Ramada Inn on Buffalo Avenue and 4th and build a new subsidized hotel; to take this land that is so close to the falls and instead of developing an attraction with something to do for tourists, make it another hotel and a tax subsidized one as well, is galling.

To suggest for one minute that one of the most valuable properties in Western New York has to have tax subsidies is nonsensical.

To give it away for less than full value is appalling.

The curious timing of it all has not escaped us. In February of 2012 the deal was selected to move forward. In March of 2012 council member Choolokian told USA Niagara that he would not support the city putting any of its money into the project. The deal went silent. On June 13, 2013, Governor Andrew Cuomo announced a casino cash settlement and the secretive Hamister project is now suddenly back on the front burner. In fact, the city’s Planning Board cleared the way at their June 26, 2013 meeting for the city to sell the property to Hamister, but, amazingly, at no listed price.

There was good reason not to mention the price.

The fix is in, the skids are greased, the deal has been cut…take your pick of characterizations because frankly all of these are accurate portrayals of what went on here.

On Monday, Johnson and Schoepflin met with Fruscione and Choolokian.

Johnson and Schoepflin told the two councilmen that they had good news.

Hamister wasn't expecting a gift of the old balloon parcel. The city wouldn't give anything away.

He was going to buy it for $100,000.

Unbeknownst to the carpetbaggers for Hamister, the two councilmen had already begun to investigate the value of the parcel.

An email written in response to a request by Choolokian to ascertain its value from City Assessor James R. Bird, Bird reveals the magnitude of the swindle of trying to "sell" the old balloon parcel to Hamister for $100,000.

Bird wrote, "The Balloon parcel, 310 Rainbow Boulevard, is a 0.88 acre commercial site (SBL #158.12-1-4.111). To determine it's current value, I would have to compare it to similar vacant commercial sales which have occurred in the area. Although similar sales are limited, there have been a few. Based on what market data is available, I would estimate current market value for the balloon parcel to be between $1.5 million and $2 million. Keep in mind, this is just a rough estimate and actual appraisal of the property has not been done. "

"The bank is being robbed in broad daylight, ' Fruscione said. " They want the council to approve a sale to Hamister for $100,000 on a property worth $2 million or more. We are not going to do it. I'm not going allow the people of this city who have to pay full price for their homes and businesses to be cheated this way." 

"This may be criminal," Choolokian said, "To argue that $100,000 is all the parcel is worth."

When Johnson and Schoepflin heard that the two councilmen did not plan to accept $100,000 from Hamister, they ended the meeting Monday's meeting abruptly.

Now, perhaps, what is most interesting in this whole contrived inside deal is going down without so much as a whimper from the local media. That this scam can be carried off in broad daylight is a testament as to how Niagara Falls has come to accept the smelly wheeling and dealing of city government as the normal course of business.

And as for those four-men-in-a-room, I say separate them and start asking questions.

Here are some I would ask:

Why is Hamister getting the inside track?

What is the deal?

What were the other deals that were offered? Why is Hamister's deal better?

Why shouldn't we put this property out for open bidding?

What proof can you offer that we need more 2-3 star hotels right next to the park?

Has anyone done any kind of study to determine what the highest and best use of the parcel is?

Why do you think this site cannot be developed without a subsidy?

What is its true market value? Do you honestly believe it is $100,000? Or did you crook that up for Hamister?

If Hamister were to develop this property will there be any IDA tax abatements?

Has any one of the four - Dyster, Schoepflin, Hoyt, or Johnson - ever done a private development with their own money that would qualify them to judge the best development for this property?

What experts have been consulted to determine the best ways to develop?

The Niagara Falls Reporter has written at length on this subject. We recommend you read: “Hamister, Big Political Donor Wins Nod In Secret Process,” July 17, 2012, “Despite All The Hype Hamister Project Still Under Wraps,” July 17, 2012, “USA Niagara Continues To Delay FOIL Request,” October 16, 2012, and “Reporter Story Sparks Debate,” September 2, 2012.