In 2037, the city is scheduled to make its final bond payment on the new state-of-the-art municipal safety complex.
By then, the total cost will have almost doubled the original sticker price of $46 million and the current revenue source paying the bills could be long gone. The bond’s interest over 30 years adds up to an additional $36.7 million for an actual project grand total of $81.7 million, according to City Controller Maria Brown.
“The public safety building hit us hard,” she said. “It’s a very expensive project and uses up money we could use to fix more streets and for other economic development.”
The city has used its share of casino revenue to cover the complex’s nearly $3 million annual bond payment since 2008 — a revenue stream that isn’t
guaranteed to be there after the gaming compact ends in six years, Brown noted.
“It’s a big concern because we would have to find the money in our budget to keep paying off that debt,” she said.
In 2005, the state’s Office of Court Administration ordered the city to replace the crumbling Hyde Park Boulevard courthouse offices that also housed police operations. City officials approved a construction agreement with the development team of Ciminelli Development Co. and Largo Real Estate Advisers to build a new safety complex at 1925 Main St. for both the courts and cops.
The facility officially opened last May and carried a construction price tag of about $46 million. Brown said the city bonded $44.5 million, which included $1.9 million for land acquisition and $3.2 million for the design phase and architects.
In 2010, the courthouse’s debt payment will be $2.8 million, all of which will be paid using the city’s share of casino cash.
“That’s a substantial chunk of casino revenue that’s being spent in order to service our debt,” Mayor Paul Dyster said. “We have tried our best to avoid situations where we become addicted to using casino funds in our general fund but we’ve kind of violated that principle for the courthouse.”
State Sen. George Maziarz, R-Newfane, a vocal critic of how the city is spending its casino revenue, called the courthouse project “a terrible waste of money” that more than doubled in cost what was originally proposed.
“Developers and contractors who don’t live in Niagara Falls and will never live in Niagara Falls became millionaires on that project,” Maziarz said.
City officials justify using casino funds to pay off the courthouse because the facility is considered to be an economic development catalyst in the North End. Since its opening, Dyster points to the completion or announcement of a number of projects in the surrounding area, including Rapids Theatre, the Health Association of Niagara County’s new senior services center and Family and Children’s Services of Niagara’s renovation of an old building to create a new headquarters.
“We’re trying to get some economic development mileage out of the public safety building,” Dyster said. “There’s a change going on along Main Street brought about by the courthouse.”
Though the city needs to continue using casino funds to make its courthouse bond payments in 2010, Dyster said the debt will be evaluated on a year-by-year basis.
“Eventually, there could be a different answer,” he said.
Contact reporter Rick Forgione
at 282-2311, ext. 2257.
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