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What Does the Hamister Resolution Really Say?

By Frank Parlato

Two guys with a pretty spotty track record (think Holiday Market, Third Street, Courthouse overruns) want to be the sole negotiators on the Hamister project, eliminating the council from their legal role. Sounds fishy or foolish or both. They are (left) USA Niagara President Chris Schoepflin and Mayor Paul Dyster.

Everybody talks about it but has anyone read it?

Mayor Paul Dyster presented a resolution to the council on July 3. It dealt with the proposed sale of city-owned property at 310 Rainbow Blvd for a proposed development plan now being called the Hamister Hotel.

The council tabled the resolution which means they elected not to vote yes or no at this time.

They say they have found troubling language in the complicated, 10-page resolution.

One of the more disturbing issues is that by law, custom and by city charter, the council must approve all contracts negotiated by the mayor.

This resolution seeks the opposite by calling for the council to approve the deal 'carte blanche' before the mayor negotiates the contract with Hamister.

It is unprecedented.

The resolution wants the council to approve the deal on the mayor's word and not a binding contract.

Nothing is in writing with Hamister yet; nothing concrete.

The only binding part is the sales price of $100,000 for the parcel at 310 Rainbow Blvd.

Once approved, the council is asked to step aside and yield its rights granted in the city charter to approve the final agreement.

It asks the council to agree that the "fully signed Development Agreement" with Hamister (or its subsidiary or affiliate), will not require "approval by the City Council."

While the resolution acknowledges the project is intended to be a 100-room hotel, with 24 apartments and 8,000 square feet of retail space, it also reads that that may change: The final deal "may contain such other terms and conditions as the Mayor and Corporation Counsel deem appropriate, and may thereafter be amended from time to time."

It indicates clearly that the mayor and USA Niagara are negotiating with the Hamister Group and "Unless and until the terms of the Proposed Development Agreement have been fully negotiated" there is no deal.

Of course, there are some terms outlined in the resolution that provide that Hamister could not flip the property or assign the deal unless the mayor approves.

But the resolution reminds the council that there is no "binding offer, agreement, contract, or commitment of any kind whatsoever" between Hamister and the City and that 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)."

Hamister would be expected to start and complete the project with deadlines. Construction is expected to be completed by the summer of 2015.

In the event Hamister "defaults in its obligations to develop the Property," the property "would revert to the City," but the city would be responsible to pay any mortgages Hamister may have gotten prior to failing to complete the project.

The deal would be contingent on Hamister getting a PILOT through the Niagara County Industrial Development Agency, which would exempt him from most property taxes during the first five years. Full taxes would not be paid until the 10th year or later.

Hamister would enter into a license agreement with a hotel franchise that is a national chain acceptable to USA Niagara and the mayor. There is no language in the resolution that requires Hamister to build an upscale hotel, although that may be the intention at this time.

Hamister would create plans, designs, and specifications for his hotel, which must be approved by the mayor and USAN.

All terms and conditions mentioned are subject to change 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."

The resolution reads. "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)."

If the resolution is approved, the mayor will make the decisions for the city for this $25 million (or whatever the final project winds up costing) for this 100-room (or whatever the final number of rooms the mayor finally agrees on) for this upscale (or downscaled) hotel project.

In private business, only a fool would accept this kind of language. It is characteristic of the elected officials and many of the people in this community who shout themselves hoarse over this deal, that almost to a man or woman, they have not read the resolution.

At the Niagara Falls Reporter, we do not support a government devoid of checks and balances, where one man - with no track record of developing anything, is the sole arbiter of what he himself calls the "tipping point downtown project" for the city.



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

Jul 30, 2013