Part #3 on Parcel 0.
This is Part #3 of a series on Niagara Falls Mayor Robert Restaino’s attempt to force the sale of 12 acres of a private company’s land to develop an events center and park project that the City does not have the money to develop.
The mayor said once he uses the force of government to take the land through eminent domain, he will find the $150 million he needs to build the events center.
Mayor Robert Restaino wants to build a 7000-seat events center.
Weighing in against this plan is the private company, Niagara Falls Redevelopment LLC, which owns the land.
NFR has plans of its own and has the money to develop what it wants to build.
NFR plans to build a High Tech Data Center on Parcel 0.
Meet the combatants:
The City of Niagara Falls is an economically depressed city, with a falling population from 100,000 in the 1960s to under 50,000 today.
Niagara Falls New York
Crime is high, and incomes are low.
Albany, the state capital, acting as the shill for New York City, hijacked local tourism in the 1960s by making the State Park the commercial epicenter of the City’s tourism assets – even building a parkway that cut off the City from its park and waterfalls.
The state’s Robert Moses Parkway cut off the City from its park, waterfront and waterfalls. Residents had to cross a four lane – 55 miles – highway to get to the water.
The State Park businesses actively competed with decades-old mom-and-pop concessionaires – and won.
The former “Honeymoon Capital of the World” became divorced from the profits it takes to make a place warm and welcoming for tourists.
And to complete the ruin of Niagara, Albany hijacked the City’s other great asset – hydropower – again in the 1960s – by taking control of the power generated from the mammoth falls.
Once Albany gained control of all the hydropower through the New York Power Authority, the people and industry of Niagara Falls stopped getting access to low-cost power produced in their city.
Albany sent the energy outside of Niagara to New York City, and local industry fled, leaving Niagara Falls’ residents and industry with nearly the highest electrical costs in the continental USA.
The City lost 35,000 jobs in the wake of industry losing access to low-cost local power.
Niagara Falls, once known as “The Power City,” became powerless to do anything about the loss.
This City has been raped, pillaged, and plundered.
It is a ghost town, a shadow of its former self, one of the poorest cities in the USA.
It is led today by first-term Mayor Robert Restaino, who is not to blame for the astonishing decline of Niagara Falls. He is now running for reelection.
He has set the stage for a war over Parcel 0, 12 acres of land.
Niagara Falls Redevelopment LLC [NFR] is a private development company. It owns 142 acres of mostly vacant land in downtown Niagara Falls.
The land they own, mainly vacant, used to lie under several thousand houses occupied in the 1960s and 70s by middle-class, employed people who worked in factories and tourism when the City controlled both.
In time, the people left – died, and because there were no jobs, no one came to replace them – or the living, they left because they went somewhere else where there were jobs.
The land NFR owns today was 100 years of life and dreams of 15,000 people who left or died, leaving only old abandoned homes, whose value went down as inflation went up.
When NFR first came to town in the late 1990s, they made a deal with the City to be the preferred developer of 142 acres, by then a motley collection of old homes, many abandoned, a ghost of the presence it once was – in a city with housing for 100,000 and a population half that much.
NFR came to this wreck of a place with a world-famous name and waterfalls and, like many others, found it astonishing how far the City had fallen.
NFR has been in the Falls for 25 years, and a decade or so ago, they assembled their 142 acres, parcel by parcel – by buying hundreds of old, dilapidated houses and ramshackle buildings, most of which they tore down.
Billionaire Howard Milstein owns NFR. A third-generation businessman whose Manhattan reputation is one of refinement and integrity, whose interests are varied. He is better known for his philanthropy than his shrewd and successful business dealings.
Like him, his father and grandfather were active real estate developers and builders of banks. His family is known for playing the long patient investment game. That families live on, or can, and that good developments outlive the developers.
When Niagara Falls sold itself down the river in the 1960s, it took decades before the people realized what had happened.
Conversely, NFR invested, step by step, inch by inch – as the old routine goes – to finally make money with their holdings.
Over the years, the company has been criticized for not developing anything. It seemed they bought the land, and while the City continued to shrink, they waited, and people criticized them for inaction.
Several mayors and would-be mayors campaigned on a platform that NFR was the problem, and if elected, they would hold NFR’s feet to the fire. They’d drive the rascals out of town.
They underestimated Roger Trevino, who runs NFR.
Affable, popular, glad-handing, generous to charities and not-for-profits, loyal to friends, and strategic.
All who tried to use NFR as their whipping platform failed.
After getting NFR to support him in getting elected, one mayor actively sought to drive NFR out of town. He railed against NFR, complaining that their designation as preferred developer should be revoked.
It is a long story, and Trevino won’t disclose his role. But what would you do?
An investigation by the Niagara Falls Reporter uncovered that the mayor had a preferred developer of his own.
When he ran for office, he received payments, some in cash, and took loans from a certain developer. Then, after he was elected, he awarded that developer with a preferred lease.
After we published the story, the DOJ indicted and convicted the developer and the mayor, who went to prison on corruption charges.
In the last election, Mayor Restaino’s opponent, Seth Picirrilo, the hand-picked successor of the previous three-term mayor and the odds-on favorite to win, ran on an anti-NFR campaign.
What would you expect anyone to do?
A blowhard candidate was spouting half-truths and lies by omission about your company. Falsely blaming the City’s woes on NFR, when most of them preceded NFR by decades, and much of the more recent ones were caused by his boss, a three-term mayor’s wasteful spending.
Candidate Picirrilo roused the bear, NFR’s Trevino, who weighed in on the campaign, using his popularity and years of marketing strategy. He supported Restaino and helped show how Picirrilo was a key administration lackey who helped his boss, the mayor, blow through some $200 million in casino payments with literally nothing to show.
Restaino won by less than 100 votes.
Over the 25 years, the most significant money-making venture NFR had was not when they developed a project – for they have not.
Their biggest win was when the State decided in the early 2000s to take some of NFR’s land through eminent domain – just like the City is doing now.
NFR fought the State for seven years in the State Supreme Court and beat the State at every turn.
In the earlier eminent domain case, NFR did not oppose the State taking their land. They opposed the low price the State offered.
NFR’s Trevino retained the master litigator John Bartolomei Esq.
The lawsuit went on for seven years.
In the end, the initial payment to NFR was over $18 million for 18 acres. They fought on for seven years and got an additional undisclosed amount. It was settled between the State, the Seneca nation and NFR and Bartolomei.
NFR showed they knew and understood every subtlety of eminent domain law and real estate valuation, past, present, and future.
Now NFR faces a second eminent domain challenge. This time from the mayor, who NFR once supported.
This mayor, Robert Restaino, is campaigning on an anti-NFR platform.
Restaino, a lawyer, former City Court judge, and lifelong Falls resident whose daughter is a City Court judge, has taken on NFR.
The two are now locked in a legal battle, in an election year, over a broken City’s right to use eminent domain to force the company to sell 12 acres of their land.
That parcel of land on the corner of John B. Daly Blvd and Falls St, in Downtown Niagara Falls, is Parcel 0 – so named by NFR because it is ground zero of their development master plan for their entire 142 acres.
The Mayor wants to develop a 7,000-seat event center and a small park. Cost $150 million.
NFR, with a Canadian partner Urbacon, wants to develop a $1.5 billion high-tech data center on Parcel 0.
In this eminent domain lawsuit, NFR is not fighting over the price like it did the last time. NFR is opposing the taking. NFR wants to develop a project ten times more costly – with its own money.
The Mayor’s desire to build an events center is perhaps a good idea. A tourism study showed the city needs one, though not the 7,000-seat arena the Mayor wants to build.
But curiously, the tourism study the Mayor cites as support for his plan did not endorse the location.
Today, NFR opposes a mayor who will need to use taxpayer money, which the City does not have.
Mayor Restaino says he will ask a judge and jury to believe in the public purpose of his plan and that once the court lets the City take the property, he will find the taxpayer money to build what he wants to build.
And let the jury decide the price the City should pay to NFR.
Stay tuned for the next in this series when we look more closely at the claims made in this escalating battle.
Parcel 0 – #1 –Reporter Investigates City’s Fight With NFR Over Best Use – Data Center or Events Center
Parcel 0-#2: Pat Whelan, Former NGTI Director: Mayor’s Centennial Park Bound to Fail