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Two highly touted local projects linked with local developer James "Harry" Williams--Aqua Falls and the Buffalo Avenue steel plant--both are effectively dead and will not be built without the infusion of millions in state and federal aid.
"We were told the people behind these projects had the funding in place to make them happen," one former top official in the James C. Galie administration said. "Now they're crying poor and asking for corporate welfare."
Aqua Falls remains a 40-foot-deep hole in the ground, one of the last sights tourists get to see as they drive toward the Rainbow Bridge and Canada. No work has been done at the site since late in the summer of 1999, despite periodic announcements from developers and Mayor Irene Elia that construction will resume in "a couple of weeks" or even "days."
The steel plant got as far as the demolition of the old Acheson Graphite plant, although much of the asbestos-laden rubble remains on the site. When the building was torn down without proper permits in October, City Administrator Al Joseph explained to reporters there wasn't time to issue them because construction of the new plant was imminent.
But none of the developers behind either of the projects seems to have the financial wherewithal to proceed any further.
Williams, whose Florida-based Laker Airways closed its doors due to financial difficulties in October, last month announced the closing of the Pier, a popular Buffalo harborfront restaurant. Again, financial trouble was cited as the reason.
The Pier reportedly owes the City of Buffalo $1.5 million in back property taxes, with another $308,158 owed to Erie County.
While Williams never formally announced partnership, his expressed interest in building a steel plant at the Acheson site led many to believe he was involved with Penninox America Inc., a steel brokerage company currently operating out of a rented, one-story building in Trenton, N.J.
Financial reports made available to the Reporter indicate Penninox has had no fewer than seven judgments filed against it in New Jersey courts, along with four additional lawsuits that remained outstanding as of October. Additionally, a half-dozen filings under the Uniform Commercial Code indicate the company used all of its machinery, products, equipment and proceeds as collateral on at least six occasions since May 1998.
On May 27, 1998, the company filed for Chapter 11 bankruptcy, a filing that was dismissed the following month, the report states.
But Penninox has sought as much as $30 million in aid from the federal government, a quest that the Niagara County Industrial Development Agency has endorsed.
Meanwhile, Williams' partners in the Aqua Falls project--Gilles Assouline and David Ho--have had no luck in selling more than $40 million in bonds issued to cover construction costs.
"They're worthless," one local investment analyst said. "If (the bonds) are what they're counting on to see the project to completion, they might just as well fill the hole back up now." Ho and Assouline reportedly met with billionaire New York real estate developer Howard Milstein to come in on the project, but the talks have since broken off.
Assouline, described as a "multi-millionaire" in the local media when the project was announced, is head of Capitol Media, a publicly-held French company that lost millions last year. He reportedly earned just $250,000 in 1999.
Sources close to the project say the excavation, for the most part through solid bedrock, cost far more than had been anticipated. Aqua Falls originally was scheduled to open in May 2000, but the date was pushed back to December. Developers now have given up entirely on announcing an opening date.
Despite the lack of progress, Williams still is benefiting from property tax breaks given the project, which is adjacent to his Occidental building downtown. A spokesman for the project said recently that construction would resume once certain building materials arrive from overseas, an excuse that has been used on numerous occasions over the past year of inactivity.
Sources close to both the Aqua Falls and steel plant projects say developers are hoping desperately that USA Niagara Development Corp., an arm of Empire State Development Corp., will come to their rescue. The agency was created late last year by Gov. George Pataki, and is expected to pump between $5.1 million and $7 million into the local economy to spur development.
But even $7 million would not be enough to see either project through to completion.