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By David Staba

One of the longest-running jokes in Niagara Falls is about to lose its punchline.

A group headed by a Buffalo developer purchased the pit that was to become AquaFalls last week, along with the landmark building known as "The Flashcube."

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One Niagara LLC acquired the second mortgage on 360 Rainbow Blvd. South, the property that's home to the AquaPit and the glass-encased former Occidental Chemical headquarters during a foreclosure auction at City Hall on Thursday.

Two days earlier, Whitestar Development acquired the first mortgage on the property.

Frank Parlato Jr. is the president of both One Niagara LLC and Whitestar Development, giving him and a partnership group that includes former Erie County Democratic Party Chairman Steve Pigeon title to the privately held piece of real estate closest to Niagara Falls.

The Parlato-led group replaces AquaFalls Plaza LLC. The foreclosure was against that company and its principals -- 360 Rainbow Associates, Hako Companies Ltd., Hong Kong investor David Ho and Gilles Assouline, who had long served as the alleged project's spokesman.

"This is the corner where the (Niagara) river turns," Parlato said, gesturing out an eighth-floor window during an exclusive interview with the Niagara Falls Reporter. "It's the most important piece of property in the region, and maybe the United States, because of its location."

Whatever the parcel's global impact, from a local perspective, it's become symbolic of everything that's wrong with Niagara Falls when it comes to development, particularly downtown.

An ambitious, and ultimately fanciful, plan to build an underground aquarium called AquaFalls was revealed during the administration of former Mayor James Galie. Ground was broken in 1999 amid much hoopla, but not much happened once the one-acre, 40-foot-deep hole had been excavated.

Various alleged financiers came and went and promises of work starting in "two more weeks" abounded right up until earlier this year. Yet the pit remained, providing a huge liability risk as well as an open wound on the civic psyche.

And for more than three years, the building that was once home to one of Niagara Falls' biggest companies rapidly decayed.

The foundation and walls remain strong.

"This building, even though it was built in 1978, is a better building and a smarter building than a lot of newer ones," Parlato said.

The roof, though, is another story.

That roof, which offers an absolutely spectacular view of the cataracts, as well as the rapids above and below, had time remaining on its warranty. The building's last manager, however, didn't bother calling the manufacturer, instead sending workers up with buckets of hot tar to fix leaks.

It's not as if the warranty was a secret, either. Those workers couldn't have gotten onto the roof without seeing a large, yellow sign explaining the conditions of the warranty and listing the manufacturer's phone number in large, bold letters.

This slipshod approach not only didn't work, it voided the warranty.

Such neglect under the previous owners created a situation where wastepaper baskets line windows on the upper floors, catching rainwater. In one office, a tarp is rigged to guide leaks through a hole in the ceiling and into a rolling trash bin.

Parlato said the building's pluses offset such maintenance needs.

"Because it's a glass building, you have daylight all day long," Parlato said. "During these winters, you need daylight and here, you're bathed in it. At night, you're under the starlight and moonlight and the lights of Niagara."

He believes the setting and location will help attract a mixture of tenants from the service and retail sectors.

The building's primary current tenant, the federal Small Business Administration, announced plans last month to move to downtown Buffalo.

A move is unlikely until spring, at least. About 300 SBA employees currently work out of Niagara Falls.

"I don't anticipate any difficulty filling up space," Parlato said.

Parlato was cautious not to make the sweeping promises that have come back to haunt other developers.

"So many people have pledged to do things that never happened," he said. "Whatever we do has to have a synergy about it. And there's no guarantee of success in any business venture."

AquaFalls failed, he believes, because it involved a foreign corporation owned by a group of other foreign corporations.

"You can't run a project like this from a distance," said Parlato, who has already set up offices in the building. "I do have confidence. But you also need cooperation from people, and I really want to bring the community into this."

His first planned step is to turn the building's first two floors into something the city lacks, an all-night welcome center for tourists.

"That's not even about money -- that's just hospitality and common sense," Parlato said.

"Tourists walk by this building, and the Rainbow Mall, and the Turtle and they say, 'Oh, the United States is closed,' and they go back to Canada. We have to welcome people 24 hours a day."

Another priority -- filling that hole. An underground parking ramp is one possibility, but Parlato said he's willing to consider any feasible idea for the pit and the ground above it once it's filled, from retail businesses to green space.

In addition to renting office space on floors three through nine, Parlato said he'd like to have conference areas where public groups and private businesses could meet while enjoying a spectacular view of the falls. A restaurant on one of the upper floors is another consideration, as well as a rooftop lounge area.

Parlato said Pigeon -- who set up Tom Golisano's purchase of the Buffalo Sabres from Adelphia Communications after working on the Rochester billionaire's 2002 campaign for governor -- got him interested in the property in September, and serious discussions began in October.

"I've always thought the Falls was underdeveloped and underutilized," said Pigeon, who served as counsel to former state Sen. Anthony Nanula. "I saw the intricate legal and real estate entanglements here, and I knew Frank was the sort of guy needed to work those out."

"Steve's the dealmaker here," Parlato said. "I felt there was some potential for the property, and Steve facilitated whatever was necessary."

Pigeon, who worked on the staff of Nanula's successor, state Sen. Byron Brown, until earlier this year, led a team of eight lawyers in working out title and mortgage complications.

Gary Parenti, another Democratic Party operative and former Brown aide who was raised here and recently bought a house in Niagara Falls, provided the group with a local link.

"Gary Parenti was very important in bringing us around and introducing us to all the players here," Pigeon said.

"It feels great to work with Frank on this," Parenti said. "He understands the social impact of having that hole here, and he's got a strong passion to help the city of Niagara Falls come back." Parlato said the reception from the business community, as well as City Hall, has been warm.

"(Mayor) Vince Anello has been very reasonable with us and his administration has made a serious effort to help us realize our best hopes for this property," he said.

Those hopes include creating an incubator for young entrepreneurs in and around the building, using the facility to encourage use of the state parks along the river and eventually acquiring other underutilized downtown properties, such as the dormant Rainbow Centre Mall across the street.

"There's a piece for everybody here," Parlato said.

David Staba is the sports editor of the Niagara Falls Reporter. He welcomes e-mail at dstaba13@aol.com.

Niagara Falls Reporter www.niagarafallsreporter.com Dec. 14 2004