Restaino’s Hidden Costs: Niagara Falls Dishing Out Big Bucks for Eminent Domain Battle
By Frank Parlato
How Much Has Niagara Falls Spent on Buffalo Lawyers to Stop the AI Data Center ?
Niagara Falls Mayor Robert Restaino has decided not to disclose the amount of money the City has spent on a Buffalo law firm for an eminent domain procedure against a private landowner.
Restaino is interested in acquiring 10 acres of land owned by Niagara Falls Redevelopment LLC (NFR).
The 10 acres, known on survey maps as Parcel 0, part of a larger 100 plus acre site, is in the middle of NFR’s planned development of an AI digital data center. The data center is expected to create 500-600 jobs.
Restaino wants 10 of the 100 acres in front of the data center project, which would block the entranceway to it.
His “public purpose” – a requirement for eminent domain lawsuits – to build Centennial Park, a 7,000-seat arena with a pocket park.
The estimated cost of the project is $165 million plus the cost of taking the land and legal fees.
Restaino retained Hudson Ross, a Buffalo-based law firm, to take the property. Eminent domain is a two-fold legal process that allows the government to force an owner to sell property if it is for a public purpose, but in return forces the government to pay fair market value to the owner.
Eminent domain legal battles – especially over the price – can go on for years and cost millions of dollars in legal fees.
Restaino estimated the value of 10 acres of land at $10 million, but a previous eminent domain procedure for land directly across the street indicates the value is $25 – $30 million.
There is another factor that will likely emerge in the fight over price between NFR and the City.
Restaino is not merely taking 10 acres from a private owner, but stopping a 100-acre project, planned to be the Niagara Digital Campus with a $1.5 billion cost.
The eminent domain price war will almost certainly include NFR’s claims that the City took the economic use of 100 acres and its $1.5 billion project away with its taking, since Parcel 0 is planned to be the entrance to the proposed digital data center.
The final cost to the City may be significantly higher, possibly upwards of $50 million.
As of today, Restaino refuses to say how much the city has spent with Hudgson Russ to handle the procedure.
Despite criticism by the Niagara Falls Reporter and Niagara Gazette, Restaino has declined to answer Freedom of Information Law requests to disclose what public money he has spent with the Buffalo law firm.
Some insiders at City Halls have disclosed Restaino has paid more than $1 million to Hodgson Russ, and the City has not yet acquired the land.
According to its website, “As one of the oldest law firms in the United States and the oldest law firm in Buffalo, Hodgson Russ provides business-focused advice to many of the most recognizable companies in the world. The 200-plus attorneys at Hodgson Russ work in every major area of the law. Our clients include public and private companies, high-net-worth individuals, government entities, and not-for-profit organizations.
“Our Buffalo office serves as the firm’s headquarters and is located in The Guaranty Building, a National Historic Landmark designed by Louis Sullivan.”
With its 200 lawyers and 400 support staff, Hodgson Russ employs – with its 200 years of operation – about as many people as the number of new employees the NFR Niagara Digital Data Center will create almost overnight should Mayor Restaino chose to let go of his plan to take their property – with its exceptionally high costs and build elsewhere.
He might consider doing just that.
