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Waterfront Legal Fight Costing Taxpayers Big Dollars

By Tony Farina

Fiddling While Rome is Burning? Sam Hoyt and Thomas Dee play ping pong at Canalside. While they were playing ping pong, their bumbling assistant, Mark Smith, may have cost taxpayers a whopping $30 million more on a $20 million job. More on this next week.

The actual cost and the potential cost to taxpayers keeps going up but is anybody counting?

We're talking about the nasty legal fight over the replica canal project on Buffalo's waterfront that has already cost taxpayers millions of dollars in construction costs and legal fees and the matter is far from settled.

So who are the key players in this escalating drama that threatens to reach the stratosphere in terms of public cost, potentially big enough to rebuild the foundation of sagging Ralph Wilson Stadium?

For the public record, here are the key players in the waterfront soap opera that seems to have no reasonable end in sight and no relief for taxpayers being fleeced in a very big way.

Let's start with the state side, where the first legal blow was struck when a long established local construction company was terminated for so-called delays and disputes on what granite to use and where to get rid of non-hazardous contaminated soils, issues that were decided in November in the construction company's favor by a State Supreme Court judge, a ruling that is now under appeal at considerable public cost by the losers in that legal fight, the state's Erie Canal Harbor Development Corporation.

On the state side, the most notable figure in the enormous legal battle is former State Assemblyman and political operative Sam Hoyt who is now Gov. Cuomo's high paid local chief of Empire State Development who admitted in court testimony in the current legal battle that he has no development experience. And he's the state's local development go-to guy. Simply astounding.

The two other key state operatives who fired the DiPizio Construction Company with Hoyt's blessing are Thomas Dee, president of ECHDC, and Mark Smith, construction director for the state agency.

Hoyt, Dee, and Smith were the players who terminated the DiPizio Construction Company for alleged problems on the replica canal project, problems that none of the other contractors on the job witnessed or complained about. In court, where Hoyt admitted he knew nothing about construction, there was a lack of any evidence that DiPizio did anything wrong on the $20 million to cause them to be terminated. What may have happened, the testimony suggests, is that state honchos were worried the much-hyped project would be embarrassingly late, mostly because of their intransigence, and they needed a scapegoat and settled on the contractor.

And curiously, the full board of ECHDC, which approved the DiPizio bid for the job, never was asked to vote on the dismissal and to this date, has not.

On the private side, where people are paid for the work they do and not by government paycheck, the 37-year-old, well-established DiPizio Construction Company which has paid hundreds of workers money to support their families over all these years, is fighting for its life, paying hundreds of thousands of dollars in legal fees to oppose the state's hired legal guns, to clear its name and recover financially from the debacle that continues to this day.

To make matters worse on the state's side and potentially boosting the public costs into the stratosphere, Hoyt, Dee and Smith personally, as well as state taxpayers, could be held liable for defaming the DiPizio firm for press comments released at the time of the firm's termination which could be found to be legally damaging. No final decision yet, but the potential numbers could be enormous for irreparably damaging and putting out of business an established firm like DiPizio. And who is going to cover for the state gang that couldn't shoot straight if they are found liable?

At the end of the day, without a fair settlement, state taxpayers could be on the hook for close to $40 million for a $20 million project when you consider legal fees, money still owed to DiPizio, and costs for the new construction company, Pike, out of Rochester. And of course there is the defamation case.

It is all playing out without a lot of public attention, and that's exactly what the state is hoping for in this election year, even though there have been some signals recently that Albany (read that Cuomo) would like to settle if possible. There's still hope but eventually the full bill is going to come due, and taxpayers will realize what has happened right under their noses with a signature development project on the waterfront that could end up costing a serious boatload of public money.

The time to act is now and every day lost is another costly one for taxpayers who should be clamoring for someone to take charge and settle this mess before the financial price becomes out of sight.

Hoyt, Dee, Smith Untouched Personally by Costly Legal Fight

By Tony Farina

As I noted in the main story on the waterfront legal battle over the replica canal project, the three state figures involved in the disputed termination of the DiPizio Construction Company are Empire State's Sam Hoyt and Tom Dee and Mark Smith of Erie Canal Harbor Development Corporation, a subsidiary of Empire State.

While DiPizio, a private company, is paying all of its substantial legal fees, the three state executives who axed the company with some unkind comments part of the terse dismissal, have not had to spend a penny of their own money to defend themselves in the lawsuit. State taxpayers have borne all the costs for the state's legal defense which, at last count after several freedom-of-information requests, is well over $370,000, paid to Phillips Lytle.

With the very latest court ruling in a separate lawsuit about possible defamatory statements made by the state agency, it is possible that Hoyt, Dee, and Smith could be held personally liable for allegedly defamatory public assertions made by ECHDC executives about delays and other problems with DiPizio's work at the time of termination, none of it supported by any evidence.

Now I guess the state would pay any damages that could result from the defamation lawsuit, but what about Hoyt, Dee, and Smith? Would the state taxpayer umbrella protect them if they are found personally liable for destroying the DiPizio Construction Company?

Meanwhile, the project's status is uncertain, lawsuits are continuing on many fronts with several court decisions favoring the private company, and the legal tab for the public is growing by the day. As for Hoyt, Dee, and Smith, so far they have not suffered personally for pretty much destroying a 37-year-old company's business and financially injuring every one of the workers and their families that have relied on DiPizio for their livelihood.

How much is too much for taxpayers to endure?



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

Mar 11, 2014