NIAGARA FALLS — It almost defies logic.

Niagara Falls, N.Y. sits on the edge of one of the great wonders of the world.

It boasts some of the highest-profile developers in America.

The local governments have an array of economic development agencies and programs and assistance packages at the ready.

Millions of visitors arrive each year, bringing with them millions of dollars in disposal income.

And yet, the community as a whole continues to languish behind its more prosperous cross-border neighbor — Niagara Falls, Ontario, a city that is literally walking distance away.

The American side of the Falls has gained notoriety for a lot of the wrong reasons — Love Canal, factory closings, potholes, union corruption, FBI raids and indictments.  

Issues became problems. Problems became serious concerns. Serious concerns grew into a full-blown mess.

A multitude of mayors and council members and department heads and state and federal officials presided over it all.

In a community with a well-documented history of bickering, in-fighting and finger-pointing, there never seems to be a shortage of blame to go around.

Solutions have been a lot harder to come by.

Today, the city’s potential is often preceded by its reputation.

Could it be, to paraphrase the famous line from that old comic strip, that “we have met the enemy and it is us?”

“There’s a legacy of not getting done what needs to get done here,” said Tony Farina, a former veteran reporter in Western New York who currently serves as president of the One Niagara building downtown. “For whatever reason, people haven’t been working together on a common goal.”



Power failure

Buffalo developer and former gubernatorial candidate Carl Paladino sees a lot of challenges in Niagara Falls.

He also sees a whole lot of sitting back and waiting.

“Everybody in this town is waiting for a miracle,” said Paladino, who turned the old United Office Building into what is now known as the Giacomo Hotel on First Street. “They are all waiting for the state of New York or somebody else to deliver something. You don’t see any private initiative.”

Paladino points to Howard Milstein’s Niagara Falls Redevelopment as an example, noting that the company owns a huge swath of land in the downtown area with seemingly no immediate plans to redevelop it.

He views the presence of the Seneca Nation of Indians as an obstacle, at least under its current agreement with New York state. Paladino said local and state officials erred when they agreed to allow the nation to establish a casino, a hotel and other amenities on tax-free land downtown. He believes local officials should be focusing on the upcoming end of the current term of the nation’s gaming compact and need to drive a harder bargain during negotiations this time around.

If the community wants growth, Paladino said it needs to demand more revenue from the casino and an agreement that the nation will pay sales, property and bed taxes on its hotel and other developments moving forward.

“The money is huge and it’s revenue that should be coming into the community and it would put everybody on a level playing field in the hospitality industry,” Paladino said.

More elected officials should be challenging the existing relationship with the New York Power Authority, Paladino added. He argues that for many years the authority has robbed the Niagara Region of not only the low-cost electricity being generated at the Robert Moses Power Project in Lewiston, but the substantial earnings from the sale of the excess power as well.

“That’s money that should have been set aside for the redevelopment of Niagara Falls,” Paladino said.

Add it all up, tack on the state’s high taxes, the burden of supporting bloated local governments and the lack of a concerted effort to address any of it and Paladino says the results really aren’t all that surprising.

“You put all of those factors into the pot and that’s why it looks like it does outside your window,” Paladino said.



Down on Main Street

Richard Hastings started buying up vacant properties on Main Street 12 years ago.

Today, he is the owner of a substantial chunk of the strip’s available real estate.

There are those who say he should be working harder to fill his spaces with small business owners and tenants.

He said he would if he could find anyone interested in Niagara Falls.

“Nothing makes sense financially,” said Hastings. “The cost of remodeling far exceeds the return.”

Hastings remembers when community leaders were focused on the development of a grand new vision for Main Street, an award-winning plan for the re-creation of the once-lively commercial district.

Today, it remains on the drawing board.

Hastings says its another example of the community’s biggest problem: lack of leadership.

“We need leaders,” Hastings said. “We need brilliant, charismatic leaders that are more committed to doing what’s right for Western New York than what’s right for themselves.”



Losing patience

Dan Vecchies has been an advocate for investment in downtown Niagara Falls for years. The former owner of the old Shadow Lounge on Third Street and current operator of the 9 Bar on Ferry Avenue keeps waiting patiently for more signs of life.

His patience is wearing thin.

For every encouraging project like the plan to build a culinary arts center inside the old Rainbow Centre Mall downtown, there’s a foreclosure auction like the one involving the old Hotel Niagara, a bidding process that failed to draw any interest from a private-sector investor that might have been willing to shore the place up and re-open it.

“When you see distressed sales or foreclosures, to me, that’s a troubling sign,” Vecchies said. “When properties are selling at auction prices or going at auction, that’s not a good thing.”

At the same time, Vecchies notes that downtown Niagara Falls has some of the biggest names in development, both locally and nationwide. There’s Paladino and Milstein as well as Baltimore developer David Cordish, who recently relinquished his rights to Rainbow Centre but maintains a presence as owner of the nearby Hard Rock Cafe building.

And yet, much of downtown is desolate, empty land and buildings with little or no signs of life.

If guys like Milstein can’t make a go of it, Vecchies wonders what kind of message that sends to the greater investment community at large.

“We’re a community that actually has a lot of wealth downtown,” Vecchies said. “You’d be hard-pressed to find a community with this much wealth. To me, it just gets back to local leadership. There should be a way to get them engaged in some type of development or at least have an ongoing dialogue with them as to why they are not developing.”

Vecchies has long advocated for improvements in the handling of local economic development efforts, arguing that the system set up now involves an often confusing and ineffective system of officials and programs. Beyond that, he believes, the city itself needs people in charge of development who are aggressive and know how to get a deal done.

“You need a salesperson, somebody that will come in with a book of businesses and a list of investors and contacts,” Vecchies said. “That’s what’s really needed — a salesperson. Somebody that is working to sell the benefits of Niagara Falls.”



The city’s next salesman?

Mayor Paul Dyster thought he had a good salesman in former Economic Development Director Peter Kay.

City lawmakers and several local business owners, including Vecchies, disagreed.

Last year, the council voted unanimously to cut Kay’s salary from $100,000 to $1, effectively showing him the door.  City council members were highly critical of Kay’s performance, suggesting he was not doing enough to assist existing developers or court new ones.

 Dyster said the move, which happened heading into his final year of his current term as mayor, made it that much more difficult for the city to spur investment.

“It’s not like we’ve got a super abundance of resources out there,” Dyster said. “We’re competing with communities that are, in some cases, larger or wealthier or both. So, having good people that are working for you is how you get things done. We are trying to eliminate the horror stories here. We’re trying to make it clear to people that we want this to be a business friendly place.”

Dyster said that includes dealing with large companies like Norampac which is in the process of undertaking a $400 million expansion project as well as high-profile developers like Paladino, Milstein or Cordish.

“For being a relatively small city the entities we deal with are sometimes large entities,” Dyster said. “They are expecting to see a certain level of expertise on the other side of the table or they aren’t going to stay on that side of the table very long.”

Dyster concedes that it has been difficult changing the perception of Niagara Falls but believes successes like the Norampac project and the culinary institute are starting to make a difference.

“I think succeeding in some of these things is going to eventually change that image,” Dyster said. “You have to have the product development, but you also have to have the marketing. Developing a positive image for our city is an important part of that.”

 

The county view

Niagara County’s Commissioner of Economic Development Sam Ferraro can rattle off a list of programs and services available in Niagara Falls that are intended to promote the area as a place to do business.

Renewal Community. Empire Zones. Brownfields redevelopment initiatives. Recently, the county itself developed what it calls the Opportunity Zone Program, which provides incentives for retail and tourism-based businesses that are willing to re-invest in economically depressed urban areas like downtown Niagara Falls.

So far, Ferraro notes, the private sector isn’t exactly jumping at the opportunity.

“We actually have probably the best place to invest in the state of New York,” Ferraro said.

Niagara County Industrial Development Agency Board Chairman Henry Sloma believes there’s “something else” going on in the city, but admits he’s not quite sure what it is.

He believes there’s a negative perception that has worked against Niagara Falls and that he’d like to see more of a commitment to a singular plan, a given neighborhood or district. Start somewhere, use the available resources at the local, state and federal level, do the work and move on to the next problem, Sloma says. No fan of the city’s handling of Kay’s departure, Sloma said he believes it is important for Niagara Falls to have someone in place to serve as a leader on the economic development front. He said county and city officials have been meeting at least monthly to discuss various issues of mutual concern and he believes continuing to strengthen the relationship will help.

“I think it involves leadership beyond City Hall,” Sloma said. “Let’s work together to create some success. I think the hallmark of all of that would be downtown Niagara Falls.”

In the end, Sloma said, all parties involved should be focused on making the process as seamless and professional as possible for private-sector investors.

Niagara Falls included.

 “We have to look and sound like a business, not like another government agency,” he said. “We have to be as quick and responsive as the investors are or we lose them.”

Contact Mark Scheer at 282-2311, ext. 2250.