Artist rendering of Bridgewater Estates; proposed in Lewiston.
During the next few weeks, the Niagara Falls Reporter will study the lawsuit between the owner of Modern Disposal, Sonya Washuta, and the Town of Lewiston, former Lewiston Supervisor Steven L. Reiter, his 85-year-old mother, Marjorie Reiter, and Steven's partners at Bridgewater Estates LLC, who plan to build a senior complex on Reiter's mother's Ridge Road property near Model City Rd. in Lewiston.
The suit asks State Supreme Court Justice Mark A. Montour to issue an injunction stopping the town from granting a building permit for the project. Montour is scheduled to hear the case April 23 in Niagara Falls.
The whole project, the lawsuit charges, is marred by "an illegal, unethical and impermissible conflict of interest" for Reiter, said Modern's attorney, Charles Grieco, of the law firm of Jaeckle Fleischmann & Mugel.
According to Niagara County IDA records, there are to be three partners in the Bridgewater project: Fred J Hanania, Sr., who has controlling interest at 51 percent, Anthony J Cutaia, who has 30 percent interest, and Reiter, who owns 19 percent.
The proposed 139 unit, "market rate," "senior housing" complex is, if it is ever built, to occupy 3.2 acres.
All together the project will have three, four-story buildings, a 240-car parking lot, a common laundry area, community room with kitchen, computer room, tenant storage areas and rental office.
The total project cost is said to be $12.3 million..
By "market rate" it is supposed to mean that it is not supposed to be affordable housing. Not subsidized, not welfare, but people who can pay for the rent by themselves.
By "senior complex," according to the developers, "occupancy is limited to individuals 55 years of age or older."
It is not known what guarantees will be included in this "55 plus" plan.
In the past, projects start out as seniors only, and because there were no written guarantees, they devolved into affordable or low-income housing projects. One such is Woods at Blairville Apartments in Lewiston, which promised to be a senior complex, and turned into an affordable housing complex, with a mix of seniors, working people, mentally disturbed, welfare and subsidized tenants.
From what we have seen, the IDA documents that give Bridgewater $1.8 million in property and sales tax giveaways, does not have any clause that requires the project to be a senior project, other than the good word of the partners.
Another peculiar item that a cursory glance at IDA records shows is that the Reiter land is contracted to be sold to Bridgewater for $1.4 million. Prior to Bridgewater purchasing the property, Marjorie Reiter marketed the land for $350,000 or 25 percent of the Bridgewater sale price, raising the question of whether the property value was handed a "paper inflation" by Bridgewater to aid in financing the development.
Also, interestingly, the developers will borrow from banks, according to their IDA application, $16.3 million.
This means they stand to pocket $4 million up front since the project cost is listed at $12.3 million.
Yet another interesting fact is that Henry Sloma, the chairman of the Niagara County Industrial Development Agency for more than seven years, resigned from the IDA in January 2013, to work on the Bridgewater/Reiter project. Sloma made headlines when he told the media that he had a "business opportunity which might create a conflict of interest with his IDA service if he pursued it," when he resigned at a January, 2013, IDA board meeting.
"I'm going to look into other things," Sloma told reporters then. "Some of them are commercial in nature and could create a conflict of interest."
According to a report in the Buffalo News "Sloma operates a business consulting company and said he's been contacted by a firm which might be applying to the IDA for assistance."
That firm was Bridgewater/Reiter.
Sloma attended a public hearing for the Bridgewater project - where Reiter presided.
Sloma attended a June meeting in which IDA board members- over which he had been their chairman for seven years, approved a 15-year payment-in-lieu-of-taxes agreement for Bridgewater, worth $1.8 million.
After the IDA approved Bridgewater's tax break, Sloma went back to the IDA in January of this year, one year later. The legislature's Republican-led majority voted to reinstate Sloma as a member of the IDA's board.
Sloma is again chairman.
Yet another curious thing is that Steven Reiter told the Reporter and the Buffalo News that he does not own any interest in the Bridgewater project, a project that he helped get approvals for in Lewiston when he was supervisor.
"My mom is selling. I'm not personally on the deal," Reiter told us. "The only way I am part of the deal is by inheritance.
"Mom will collect monthly payments, rent during the construction period and 19 percent of the profit," Reiter said.
He told the same thing to the Buffalo News.
They reported: "The suit said Reiter has a financial interest in the project, but he denied the charge – for now."
"'Eventually that property will belong to my brother and my sister and me," Reiter said Friday. 'I'd be lying to tell you I have no interest in it, but I have no direct ownership of it.'"
While Reiter claimed he had no ownership interest in the project, as supervisor, he voted for the rezoning of the land from R-2 to general business Jan. 28, 2013, the lawsuit said. Also, he signed an environmental assessment form attesting that the project would create no adverse environmental impacts.
Last week Reiter told the Reporter, "My family has owned that land and paid taxes on it since 1945. We have been neighbors with Modern for years. It has been for sale for some time. If Modern wants to control how the land is developed, why didn't they buy it?"