Escape Clause Would Allow Hamister To Back Out: Phony Groundbreaking Set

Mayor Paul Dyster at a fund raiser. Mark Hamister has been generous to Dyster and his friends with campaign contributions. The arrow points to the location of the "tipping point" Hamister Hyatt Place hotel a 128 room mid-scale hotel which taxpayers will pay millionaire developer about $10 million to build.

 

Did Niagara Falls Mayor Paul Dyster collude with Niagara USA Development, do nothing Buffalo developer Mark Hamister and a local parking lot operator to provide for a phony “groundbreaking” ceremony on a controversial downtown property for a hotel that still may or may not be built?

It’s a legitimate question.

Although Dyster, Gov. Andrew Cuomo and U.S. Senator Charles Schumer all weighed in on how important it was that the road be plowed to allow Hamister to quickly proceed with his hotel plan back in November 2013, the project has remained in a holding pattern ever since.

In fact, Hamister hasn’t even closed on the property. That happy event is now conveniently scheduled for September 30, nearly three weeks after the 2015 primary election in which Dyster is fighting for his political life.

And the Niagara Falls Reporter has learned that arrangements have already been made with John Guido, the parking lot operator who has controlled the parcel in recent years, to get it back should Hamister walk away from the deal.

The property in question, a vacant downtown lot known as Parcel Four, had been appraised for more than $1.5 million when Dyster proposed giving it to Hamister for $100,000. Nearly two years ago, in the autumn of 2013, Dyster brought Cuomo to town to stress the importance of Hamister getting the property for what Dyster called a “game changer” hotel in Niagara Falls tourism development.

The developer, who had never built a hotel before, painted a lavish picture of the “resort destination” he planned to build on the choice real estate, which lies about 200 feet from the main entrance to the Niagara Falls State Park.

A news release issued at the time describes a 100,000-square-foot establishment with 100 plus upscale rooms and 24 trendy permanent apartments. On the ground floor, 8,000 feet would be devoted high end boutiques for the discerning shopper.

The project would create between 200 and 300 jobs during the construction phase, and catering to the needs of the moneyed patrons who would flock to the premier destination would require the services of 70 full time employees once construction was completed.

Of course, only one hotel chain could provide the necessary opulence to make this all come true, so Hamister announced that Hilton Hotels & Resorts had been brought on board to partner in the venture, lending the most prestigious name in worldwide hospitality to the venture.

The hotel project would be “transformational,” a once in a lifetime opportunity that would provide the “tipping point” that would once and forever serve to revitalize the city’s tourist district, Dyster gushed.

It sounded almost too good to be true and some suspected it actually was. Former city councilman Sam Fruscione had the temerity to question certain aspects of the deal, particularly the giveaway of a $1.5 million property for a token payment of $100,000.

Dyster, along with Cuomo and Schumer, used the three Buffalo television stations and the region’s two daily newspapers to decry Fruscione as an obstructionist standing in the way of development here and, after Cuomo took the unprecedented step of endorsing his opponents in the 2013 Democratic Council primary, Fruscione suffered a stunning upset defeat at the hands of Niagara Falls voters.

In 2014, Hamister was forced to admit that, perhaps, he had been a tad optimistic about his hotel project. The groundbreaking, originally scheduled for spring of that year, was pushed back to autumn and then the spring of 2015. It never happened, and now the meaningless ceremony is expected to take place sometime before the primary election.

Also, in papers submitted to the Niagara County Industrial Development Agency to obtain tax breaks on the hotel, Hamister admitted that there would be no upscale residential apartments, no trendy boutiques and that the hotel wouldn’t be a Hilton at all, but a id scale, 128-room Hyatt Place – indistinguishable from those found near truck stops in Nebraska and Arkansas – instead.

Rather than 70 full time jobs, six fulltime and about 309 part time jobs were on the developers Niagara County IDA tax-breaks application, which is sworn to under penalty of perjury.

About two months ago, the city sent a letter to Guido, the parking lot operator, stating that he needed to vacate the property as per his 2009 lease agreement, which was modified in 2011.

Under the terms of his agreement, Guido had to leave once a building permit was issued for the hotel project and one had been, the letter said. Guido needed to be out by July 27.

Guido promptly sued, on Friday, July 24 and, by the following Monday, July 27, the case had been settled. Try going through the past century’s worth of litigation to find a single case that has been resolved as quickly. You won’t.

Under the terms of the settlement, Guido received a $45,000 payment, which Dyster referred to, in an interview with the Buffalo News, as a “good will payment.”

Good will for what? Guido’s lease was set to terminate on August 1 in any event, and Hamister certainly wouldn’t begin actual construction prior to closing.

According to Guido’s attorney, Kevin A. Szanyi, if the Hamister closing does not take place by September 30, the lease with his client goes back into effect.

Why would such an escape valve be inserted into the agreement if city officials and Hamister were absolutely certain the project was going forth as the people of Niagara Falls have been repeatedly told that it is?

The project is receiving $3.85 million in funding from the state, and the Hamister Group also is expected to save about $4.25 million over 10 years in tax breaks approved by the Niagara County Industrial Development Agency. The city provided no direct funding to the project, but agreed to sell the $1.5 million to Hamister for only $100,000, a price which Dyster has said reflects the fact that the city did not put its own cash incentive into the deal.

All of that is of course contingent on whether Hamister actually builds his hotel, a prospect that now seems increasingly uncertain.