NIAGARA FALLS — The state Senate has approved a $400,000 grant award for one of the city’s largest downtown landholders, but a spokesperson with the state agency in charge of the money says it isn’t a done deal yet.

State Sen. Antoine Thompson, D-Niagara Falls and Buffalo, confirmed Monday that his office secured $400,000 in state grand funds to assist in the demolition of “dilapidated” residential properties owned by Eleventh Street Properties, LLC, a subsidiary of Niagara Falls Redevelopment. In a statement from his office, Thompson said the demolition and construction would take place within NFR’s development territory, specifically in the area bordered by John B. Daly Boulevard, Portage Road, Buffalo Avenue and Niagara Street.

“Discussions with Eleventh Street Properties and the New York state Dormitory Authority are ongoing to finalize the scope of the project,” Thompson said.

An official with the state Dormitory Authority confirmed Monday an application for grant funding through the authority’s Economic Development Program has been made on behalf of Eleventh Street Properties, a company that owns more than 400 parcels in and around the downtown territory claimed by Niagara Falls Redevelopment.  

Dormitory Authority spokesperson Susan Barnett said her agency does not yet have full information on the scope and purpose of the project, but initial information indicates that the grant funding could consist, at least in part, of demolition and construction at 1338 Niagara St., the address of the old Magaddino Funeral Home. The dormitory authority spokesperson indicated that the authority’s involvement in the project dates back to March and the project is in the preliminary stages of review at this time.

According to the city assessor’s office, Eleventh Street Properties, LLC owns 420 parcels downtown, including the former Magaddino funeral home. The company shares a Buffalo Avenue mailing address with NFR, which is backed financially by New York City real estate developer and billionaire Howard Milstein. NFR signed an agreement with the city in 1997 that granted it exclusive rights to redevelop 142 acres downtown. The company has not built anything since and has been criticized locally for failing to make good on the lofty development goals it set for itself 13 years ago.

City officials said they were aware of the availability of $400,000 in state funds for demolition projects in the city, but were not aware of any specific proposals involving NFR or Eleventh Street Properties.

 Mayor Paul Dyster said City Hall staffers recently inquired about the availability of those funds but were told by state officials the money had already been earmarked for an undisclosed project involving Eleventh Street Properties.

As for NFR itself, Dyster said representatives from the company have approached members of his administration with some tentative proposals in recent months and the two parties are keeping the lines of communication open at this time.

“I know there has been a focus on NFR’s part to try to get something going on the land they own,” Dyster said.

Gazette attempted to contact NFR’s Executive Vice President Roger Trevino Monday afternoon but his secretary said he had already left the office for the day and was not available for comment.

A reference to Eleventh Street Properties’ $400,000 grant proposal was included in a campaign flyer distributed by Thompson’s office earlier this month. The so-called “Niagara Falls Update” described various accomplishments that occurred in Thompson’s 60th Senate District during the previous year. The mailer included a list of 2009-10 capital fund allocations, with one $400,000 item listing “Eleventh Street Properties - Demolitions” as the intended recipient.

The dormitory authority spokesperson said the company’s application will undergo financial, environmental, tax and legal reviews as would any grant proposal considered by her agency. She also said the project would be subject to a three-way approval process involving the Senate, which arranges for the approval of both houses of the Legislature and the Division of Budget, the dormitory authority and the state’s Office of Fiscal Integrity. The authority serves as administrator of economic development grants once the Division of the Budget makes funds available. Grant recipients are required to enter into a disbursement agreement with the authority which reimburses applicants for documented costs incurred during the course of a project approved for funding by the agency.