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Dyster's Hamister Resolution Undressed Takes All Approval Power from Council and Hands it to Mayor Looks like Land Sale Disguised as a Development Project....

By Frank Parlato

The folks who will decide what to do with the public's $2 million asset at 310 Rainbow Blvd. They are (l-r) Councilman Robert Anderson, Chairman Glenn Choolokian, Mayor Paul Dyster, Councilwoman Kristen Grandinetti, Councilmen Sam Fruscione and Charles Walker.

This prime parcel was once the site of a balloon attraction. Before that it was a lucrative city parking lot.

Contrary to reports, there is no deal yet with Mark Hamister.

Mayor Dyster is not asking the council to approve a hotel deal; he is asking them to sell this prime parcel (project site) for $100,000 and allow him to have total say in negotiating a deal with Hamister.

Computer generated renderings do not guarantee how the project will be built. That has to be in a contract and there is none yet.

The so-called "Hamister Hotel Project" and the sale of city-owned 310 Rainbow Boulevard (also known as the old balloon parcel, or parcel 4) have been much debated in recent weeks.

As readers know, the majority on the Niagara Falls City Council voted to table a resolution Mayor Paul Dyster proposed two weeks ago connected with this project.

The council had only days before received the resolution and the majority said lawmakers were never kept up to date on the deal as it progressed and many felt blindsided by the last-minute push for passage.

Mayor Dyster, USA Niagara, and, perhaps unwittingly, some of the local media, have urged the council majority to approve the Hamister project, meaning they should pass the resolution proposed to them on July 8 even though there have been no direct talks with the developer and very little time to digest the sale of a prime downtown parcel for far less than its value.

So we would like to take this opportunity to examine, word by word, just exactly what is the council being asked to approve.

What is within the "four corners" of the resolution presented to lawmakers.

Everything else, the promises of jobs, economic growth, of fancy rooms and a new day in town, are only verbal and are nonbinding.

But what is in writing?

The resolution is the one and only written agreement before the city.

First of all, this is a resolution of Mayor Paul A. Dyster, dated July 2, 2013.

In it, he is asking the council to approve two things:

First: Sell 310 Rainbow Blvd for $100,000, if the mayor decides he wants to sell it.

Second: That Mayor Dyster alone will make all future decisions regarding the proposed Hamister hotel project on behalf of the city with no input from the council.

In his resolution, Dyster is asking the council to allow him to negotiate the deal and that includes amending the project in almost any way he sees fit.

The resolution does not bind the mayor, or USA Niagara, or, for that matter, Hamister.

As far as Hamister is concerned - the term sheet in the resolution that describes the deal is "nonbinding."

Technically, Hamister is not bound to build a hotel or the hotel that he verbally says he will.

He may, with the mayor's consent, "amend" the plans.

The resolution does say that Hamister "proposed developing the Property with a mixed-use project that would include, among other things, a 100-room hotel, 24 apartment units, and street-level retail space."

However, the resolution says this plan is still being negotiated. It reads, "The City and USAN are currently negotiating a development agreement ... with the developer."

The council has been told that this deal is good for the city based on verbal descriptions of the project. They are asked to sell city property at a huge discount because the project will be good for the city, but they are not being told what the actual deal is.

We are not talking verbal. We mean written, enforceable documents.

Not talk, but contracts.

Business is business.

Article IV, $59 of the City Charter authorizes direct sales of City-owned real property when the City Council determines, by majority vote, that the best interests of the City will be subserved by such sale.

Or, to put it bluntly, 310 Rainbow Blvd. cannot be sold without council approval.

This resolution states, "The best interests of the City will be subserved by this Project because the Project: (a) is a significant multimillion dollar mixed use building that will be constructed on City-owned real estate that is now used primarily as a parking lot, (b) will increase the City's tax base, (c) will provide hotel rooms for use by visitors to the City, (d) will provide apartments for people to live, (e) will provide space for retail businesses to occupy, and (f) will provide numerous jobs during construction as well as permanent jobs after the Project has been completed."

The problem with this is that it is only proposed. The mayor can change the scope of the plans.

Hamister is not bound to build 100 rooms or 24 apartments.

The resolution reads, "RESOLVED, and that the Proposed Development Agreement may contain such other terms and conditions as the Mayor and Corporation Counsel deem appropriate, and may thereafter be amended from time to time."

The language the mayor is asking the council to approve is that they will sell the property for $100,000, a parcel that is worth, according to City Assessor James Bird, as much as $2 million, on a deal that is not yet made.

In short, the mayor and/or his appointee, the corporation counsel (presently Craig Johnson) can add or amend the terms of the deal. This could include downsizing or revising the concept altogether.

That's what it says. Any "other terms and conditions" the mayor or his counsel "deem appropriate" can be "amended."

It won't do to say, "We won't do that." If they won't do that, why put it in the resolution?

It says Dyster can change the scope of the project. It reads, "The Mayor is authorized ... to exercise all rights and perform all obligations ... without limitation."

"Without limitation" is a telling statement; that helps explain where the mayor is going with this.

Another sentence explains more.

It explains how lacking in detail the Hamister plan is at this point.

Dyster uses the legal word "generality" to describe the Hamister deal. Generality is defined in legal terms as "indefinite, unspecific or undetailed."

Here is what the resolution reads: "Without limiting the generality of the foregoing resolutions concerning the negotiation of the Proposed Development Agreement and the proposed sale of the Property... the Mayor and Corporation Counsel of the City [are] authorized ...to take such further action ... as either of them deems appropriate to carry out the foregoing resolutions..."

The resolution - and there is no generality here - also plainly takes the council out of the plans permanently.

It reads, "No further approval by the City Council of the fully signed Development Agreement shall be required to authorize the Mayor and/or Corporation Counsel for the City to consummate the transactions contemplated by these resolutions."

In a word, the City Council is asked not to approve the Hamister hotel deal, for there is no deal, but only to approve selling the parcel for less than its value and in so doing forfeit their right to approve what the city gets in return.

But here is where the sickle hits the stone.

All along Dyster has been telling the media that this Hamister deal is a done deal.

It is not a done deal. We do not even know if he has the money.

The resolution says, the council gives the mayor the sole right to negotiate this deal.

"RESOLVED... these resolutions shall not constitute a binding offer, agreement, contract, or commitment of any kind whatsoever, and the City shall not be contractually obligated to enter into the Proposed Development Agreement or to sell the Property to the Developer (or its subsidiary or affiliate) unless and until the terms of the Proposed Development Agreement have been fully negotiated and the Proposed Development Agreement has been executed on behalf of the City by the Mayor."

In short, there is nothing binding on the mayor or Hamister. All the mayor is asking the council to do is bind itself to sell the property, if the mayor decides he wants to, for $100,000 and get the council out of the way.

Now, let's look, finally, at Exhibit B, of the resolution.

This is what everyone is so excited about: "The term sheet" mentions a hotel, and it is described as "an outline of the terms to be negotiated ... by the City of Niagara Falls (by the Mayor), USA Niagara Development Corporation ("USAN"), and Hamister Development Company, LLC, or its subsidiary or affiliate:"

While it states that the developer would get a USAN grant and a PILOT, the whole deal is contingent on the mayor and USAN approving the plans for the project, including the designs and specifications.

It reads, "This Term Sheet summarizes only the basic terms of the proposed Development Agreement, and is not intended to describe all of the terms, covenants, and provisions that are to be negotiated and included in the proposed Development Agreement."

Then, choicest of all, is the last: That none of this means anything, anyway: "17) Term Sheet Is Nonbinding. This Term Sheet is not intended to be binding on any party, nor is it intended as an enforceable offer, contract, commitment, or agreement of any kind. No party shall be bound by any of the terms contained in this Term Sheet unless and until a formal Development Agreement is fully negotiated and executed by the City, USAN, and the Developer (or its subsidiary or affiliate)."

There you have it.

In the 11-page resolution the council is asked to vote itself out of it after giving the mayor complete and full discretion and the right to sell the property for $100,000.

Before the council can approve the sale of the lot for less than market value, they would need to know what they will get in return.

Not verbal. Not hot air.

And a hell of a lot more than a nonbinding term sheet.

Wouldn't you want the same if it was your property?


Click here to read the resolution.



Niagara Falls Reporter - Publisher Frank Parlato Jr. www.niagarafallsreporter.com

Jul 23, 2013