Will Taxpayers Bear The Burden Of Building Mark Hamister’s New Hotel?

by Mike Hudson

The story of Mark Hamister and the little hotel he’s been trying to build in downtown Niagara Falls for the past three years gets stranger with each passing month.

Last week, Gov. Andrew Cuomo, who has benefited from Hamister’s campaign contributions in the past, announced that the developer had finally found the financing for his $35 million hotel project. The Governor failed to mention where the financing would be coming from, a pesky detail that hasn’t been clarified since.

The timing of the announcement also gives rise to suspicion. Hamister’s building permit, issued last June when construction was supposed to begin, expires on June 24, just two weeks away. If ground has not been broken by that deadline, the whole process of getting a new permit would have to begin again, with new review by the city Planning Board and the Zoning Board of Appeals.

The last time around, that process cost Hamister $28,000 in fees to the city.

The taxpayers are already into Hamister’s little hotel project for quite a bundle. The Niagara County Industrial Development Agency granted a 10-year, $4.25 million tax break for the hotel, and the USA Niagara Development Corporation, a subsidiary of Empire State Development, agreed to up Hamister’s financial assistance last year to $3.85 million, a proportional increase from the project’s original $2.2 million allotment that accompanied its initial price tag.

That’s because, under the terms of his agreement with the state, Hamister is to receive $1 in state aid for every $9 he sinks into the project. Could that be why the projected cost of the new hotel has ballooned from $22.4 million to $35.7 million even as the scope of the project has been significantly downgraded?

To top it all off, Niagara Falls Mayor Paul Dyster and the city Council gifted the shifty developer with the lot at 310 Rainbow Boulevard for a token price of just $100,000, far below its appraised market value of $1.5 million.

All told, taxpayers in the city, county and state are already backing the Hamister hotel project to the tune of $9.5 million. How much more will he get? That’s anybody’s guess.

It was highly unusual for Cuomo to announce a financing deal involving a private developer unless it is the state that is going to be doing the funding.

Financial institutions have been reticent to loan nearly $36 million in order to build a hotel that should only cost $18 million. Last year, Iskalo Development built a six story Hyatt Place hotel in Amherst that is nearly identical to what Hamister has proposed for $18 million, and hotelier Michael DiCienzo has repeatedly said he would be willing to build the downtown Niagara Falls Hyatt Place for that same price.

But unlike Hamister, DiCienzo has not contributed to the political war chests of Cuomo, Dyster or U.S. Sen. Charles Schumer.

Does the Cuomo announcement mean that the taxpayer will be underwriting the entire project?

In his prepared statement, the Governor didn’t say.

“Niagara Falls is one of New York State’s greatest tourism assets and by building these high-quality accommodations, we are showcasing the region’s beauty to even more visitors,” Cuomo said. “This project will support jobs, attract private investment and offer new economic opportunities throughout the region. I am proud to see this project underway and encourage residents and visitors alike to take a trip and experience all this region has to offer for themselves.”

Neither did the developer, in his prepared statement.

“I am thrilled we are able to break ground and start construction,” said Hamister. “Thanks to the direct assistance of Governor Cuomo on this project. Without their support, this project would not be a reality today. We look forward to being part of the successful revitalization of Niagara Falls and Western New York as a whole.”

Likewise, in his prepared statement, Dyster didn’t say either.

“Today’s long anticipated announcement of the start of this important project represents a milestone in the continued development of downtown Niagara Falls,” Mayor Paul Dyster said. “I would like to thank Governor Cuomo and Empire State Development for their persistent focus in seeing this project through to a positive outcome.”

In 2012, Hamister was named as the preferred developer following a closed door selection process that resulted after the state sent out requests for proposal (RFP). What the criteria were has never been made public, Hamister’s original proposal to build a luxury class Hilton hotel with upscale shops on the ground floor and private apartments seemed to largely meet the standards set out in the RFP.

The Hyatt Place he says he’s going to build now emphatically does not.

The state called for an “upper upscale” hotel with private apartments renting for $750-$850 a month and a bustling retail center facing Old Falls Street.

Hamister’s Hyatt Place will have no private apartments, is a cookie cutter business class hotel many steps removed from any kind of “upscale,” and has room for only two or three small shops on the ground floor.

Originally, Hamister said his hotel would provide 130 permanent jobs here. Much later, when the company had to submit papers under pain of perjury in order to get the IDA tax breaks, that number was downsized to six full time and 29 part time jobs.

Hamister’s promises were absurd on their face. Have you ever stayed at a hotel where the number of employees was greater than the number of guest rooms?

Nobody else has either.

Why this wasn’t questioned by city and state officials is tragic. Those elected to represent the interests of the people of Niagara Falls have instead bent over backwards to represent the interests of one man – Mark Hamister.

Will the taxpayer be forced to bear the bulk of the $36 million cost to build Hamister a hotel? Will there be a groundbreaking in the next two weeks so he doesn’t lose his building permit?

More will be revealed, as they say.

The Hamister deal has been stinking the place up since 2012, and the smell shows no sign that it’s going away any time soon.

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