It’s been two years since the former director of the Niagara University’s Global Tourism Institute, Pat Whalen, warned us about the looming tax burden Mayor Restaino’s Centennial Park and event center will inevitably create for us. Despite these warnings, our mayor is forging ahead with his plans which are founded upon loose and lofty sentiments.
In 2022, Niagara Gazette’s Mark Scheer reported, “Restaino, representatives of his administration and members of the city council who have agreed to pursue eminent domain for the purposes of acquiring land for Centennial Park, all acknowledge that the city has not done an in-depth analysis of the potential benefits and costs for running an arena.” Here we are two years later and still no one from any Western New York delegation has so much as hinted at where the $150 million in funding will come from. This leaves us all to wonder how much it will ultimately cost each individual taxpayer.
In that same article, Scheer reported “They have argued that it’s premature to examine operating such a facility, noting that the city doesn’t have the $150 million needed to build it yet. Restaino has said that members of Western New York’s delegation to the New York State Legislature have advised him to secure a site for the project, which would allow the state to engage in more in-depth discussions about possible funding.”
What is perhaps most troubling is that it seems as though whichever administration is in power, feels compelled to focus on a capital project which further mortgages the city’s financial future. The train station is hemorrhaging an annual deficit of $130,000; Dyster spent $800,000 on a “symbolic statue” and now Mayor Restaino is taking 38 Main Street properties off the tax rolls without any disclosure of who or how the city will fund housing for Niagara University students. Developers for these properties remain undetermined (as confirmed in Mayor Restaino’s announcement on Wednesday). Where is the actual MOU or contract between the city and Niagara University? Transparency is key and unfortunately Mayor Restaino is known for being opaque.
ANALYZING THE USE OF PUBLIC FUNDS FOR THE EVENT CENTER
The use of public funds for developing sports arenas and event centers is widely criticized by economic experts like Greg LeRoy and his non-profit group Good Jobs First. Founded in 1998 by LeRoy, Good Jobs First is one of the nation’s leading advocacy groups for economic development and transparent government labor policies. The group is known for their expertise regarding corporate subsidies paid for by taxpayers.
Greg LeRoy, founder of Good Jobs First.
The Niagara Reporter interviewed LeRoy for his opinion on Mayor Restaino’s planned use of public funds for his $150 million event center. The project has already used hundreds of thousands (if not millions) of taxpayer dollars in what LeRoy calls “soft money.”
“This is called soft money, there’s a lot of soft money trying to prep it up here.” LeRoy told the Reporter. Regarding what types of jobs the event center might generate, LeRoy said, “There’s the construction phase of jobs and then there’s the jobs operating the facility. The quality of those jobs and whether or not they’re part time and marginal or closer to full time depends on how many events the venue attracts. When you get into that issue, there’s this whole fishy world of consultants that keep making overly rosy projections about how much traffic that place can attract, but often the assumptions about those numbers don’t account accurately for how much of the activity might be pirated from other venues. This is also in the land of convention centers.”
Back in February, Mayor Restaino tried to drum up support for his event center idea by asking locals for their memories from the convention center (which is now the Seneca Niagara Casino). Restaino said in his weekly address on February 8th, “We are working very hard to deliver back to this community an event center that can help us recapture those moments. There’s no reason for us to not enjoy those same types of opportunities.”
The memories that Restaino is conjuring up about the Convention Center stem from its 1974 heyday up to over two decades ago. Since then, the City of Niagara Falls has seen a tremendous decrease in its population. Today’s market is unrecognizable compared to what it once was. For example, the Niagara University basketball program was at full strength with Canisius and Saint Bonaventure when NU hosted games at the Convention Center, which was also the venue for the Miss USA pageant; so arguable the marketplace has changed considerably…
Mayor Restaino’s attempt to drum up support for his event center by comparing it with the failed convention center market.
LeRoy recommends the book “Convention Center Follies” by author Heywood Sanders. According to LeRoy, the book proves that “even pre-9/11 the convention center industry was a teetering industry. It also revealed the fact that the association that keeps putting out annual numbers about convention center traffic basically skims the cream of the market while looking at the booming places and newer places, without looking at the whole picture for example. Whatever claims the (Restaino) administration might be making about how many events they’re going to attract, I would ask immediately ‘doesn’t that event already occur someplace else here? How many times every decade could we attract that event versus other venues who will compete for it?’ There is a finite number of events that venues must compete for.”
EARLY PROJECTIONS SPELL BAD NEWS FOR TAXPAYERS
For the answers to LeRoy’s questions about market saturation, please refer to this breakdown on the fourteen event centers which currently exist in and around the City of Niagara Falls, NY. The city literally just acquired the bank note for the Rapids Theater which went under after struggling through the pandemic. Restaino’s administration continues to wade our city further out into the murky financial waters of the development business. The deeper the Restaino administration takes us, the higher our taxes will rise. Carefully consider the potential debt from the slate of 38 properties on Main Street which the city is currently acquiring, with no plans in place for funding. Taking these properties off of the tax rolls will directly impact the taxpayers.
Greg LeRoy warns that “Usually it’s necessary to have some sort of anchor activity. Whether it’s a ball team, a retail magnet or a transit hub that’s got high traffic employment and retail centers in it. Having an arena without an anchor attraction is absolutely risky, because that’s usually the foundation a deal like that is built on.” Currently, Mayor Restaino’s proposed event center has not been able to officially attract an anchor tenant. Even if there was an anchor tenant, according to Mark Scheer, “That option came with an annual financial loss estimate of $261,000.” Scheer also explained that the “non-tenant” model, “had the potential to run at nearly double an annual operating loss at $482,000 per year.”
Let us recall, the ill-named and ill-fated “Niagara Falls Buffalos” semi-pro hockey team that Mayor Restaino effusively touted at us, which lasted only one season here in the Falls before scrambling for the nearest exit earlier this year. A member of the team told the Reporter that their reason for leaving was a total lack of attendance at their games. The hockey team was plugged and promoted shamelessly by Mayor Restaino but he’s been silent about their exodus.
In the blink of an eye, the Niagara Falls Buffalos left our community and became the Nickel City Buffalos.
Mayor Restaino does not actually have any plans for generating new annual tourists. The natural wonder is our main attraction and it draws millions of people here every year. The problem is that those tourists rarely stay within our community or repeatedly spend their money here. Most tourists dare not venture into our city and our local business owners have to compete with Niagara Falls, Ontario or New York State and their business partners. It’s a commonly known fact that our community suffers from a lack of tourism in the winter season. But how can we expect to generate winter tourism when we have yet to actually capitalize on the millions of tourists who already flow freely through the state park every year?
Basically every expert on the subject has tried to convince the mayor that the best possible location for his event center is not Parcel 0, but the land that is already owned by the city on the corner of Niagara/Third streets. In that location the event center and Centennial Park could actually plug right into the Third Street corridor which has been decades in the making, and has readily available parking within walking distance.
LeRoy agrees that an event center “with enough flexibility to house different types of activities, and in the right location” could benefit a community; but he asks, “is the event center integrated with revitalization of a restaurant, commercial or retail district? Or is it just an offramp of the highway for people who will go someplace else and not stay or do anything before the game or event. Would any of the events attract people from far enough away where they’re going to stay at a hotel for one night? What will it do for hotels?”
RED FLAGS: THE SUPPRESSION OF INFORMATION BY THE RESTAINO ADMINISTRATION
Last year, Pat Whalen wrote, “In late 2021, our group released a study that involved interviewing a large cross section of tourism professionals and city stakeholders. It pointed out the obvious: low winter visitation by tourists in the six month ‘off season’. More importantly, it offered several ideas to help correct the current situation. One of those ideas was that an event center — in the right location, and at the right size — might work for Niagara Falls.”
“The next step was to figure out where such new development should go, and how big it should be. We never got to that second step. Before we could get to the second part of our analysis—where exactly such a facility should be located, and what size and type of event center it should be—Mayor Robert Restaino took off without us and launched his plan, apparently based on nothing more than his gut. No analysis, no study, not much thought.”
Whalen is among the experts who believe that the city-owned parcel at Third and Niagara is one of the most viable option for the event center for a variety of reasons. According to Whalen, the idea of an event center was originally proposed by the Niagara University’s Global Tourism Institute, an organization established to help use tourism as an economic and social driver to improve our city. The mayor ignored the NGTI’s findings which warned against the construction of Mayor Restaino’s proposed event center; says Whalen, “First, it will most likely never be built; and, second, if a miracle happens and it is built, it will surely fail.” Whalen continued, “He wants an event center, but nowhere near the city’s hotels, bars and restaurants. With little parking. The closest hotel and parking is on the Seneca Nation’s land.”
Whalen’s story might mark the very first time Mayor Restaino used his office to bury data that does not support his prime directive. Last year, an official survey was given to about forty residents at a City Council Meeting. The topic of the survey was whether or not the residents supported the use of Community Development Block Grant Funds (CDBG) for the city to obtain a loan or bond for Centennial Park and the event center. According to those who were at the meeting; out of everyone who filled out the survey, only two were in support of the Mayor’s proposed use of CDBG funds.
Mayor Restaino threw (former) Community Development Director Cliff Scott, Jr. under the bus when he told the Niagara Gazette that there should not have been a survey, claiming that he never authorized it. The results of the survey have since vanished and have yet to be found. Mayor Restaino has since back-pedaled on his proposed misuse of CDBG funds but his administration attempted to thwart investigative journalist Mark Scheer’s FOIA requests for information relating to HUD funds (as they may relate to Centennial Park).
Earlier this year, Mark Scheer wrote, “Documents submitted by the city to a federal agency in 2022 suggest Mayor Robert Restaino’s administration would be banking on $122 million in state funding to help build his proposed arena and ‘events campus’ known as Centennial Park.” Scheer explains, “To round out the project’s total estimated budget of $165 million, the documents indicate the city would rely on $10 million in the form of a ‘developer loan’ and another $5 million from various ‘private partners.’” Scheer has published an investigative series documenting the total lack of transparency from Mayor Restaino’s administration surrounding the use of public funds for his proposed events center.
Commenting directly on Mayor Restaino’s actions, Greg LeRoy said “If you throw out the findings of a committee that you went to the trouble of convening, if you ignore advice and still plow ahead – that’s a red flag to me.”
LeRoy also explained the type of bond that the City of Niagara Falls might attempt to procure, telling the Reporter “It is a loan and the taxpayers are going to pay in two different ways. You’re going to have to pay the bond back. It’s going to be sold on Wall Street to an investor who’s going to expect a pay back on the deal. And taxpayers will pay for it in a second way because the interest on the bond is tax free. It will be New York State tax free and federal tax free if it’s a typical bond. That means both state and federal treasury will not tax the income or interest on the loan for the investors. It makes the deal more feasible because the investors will accept a lower interest rate because it’s tax free and it therefore makes the deal cheaper in terms of borrowing costs. But not for you or me or the person buying a hotdog.”
Mayor Restaino’s plans for a publicly-funded event center is a losing deal for local taxpayers. It almost seems as though the “Centennial Park” portion of the Mayor’s proposal only exists as a means by which to justify the use of public funds for the event center. If Mayor Restaino has it his way, our children and our great-grandchildren will still be paying for his event center long into the future.