Let's give a little credit to Council Chairman Sam Fruscione and Councilman Bob Anderson for rewriting Mayor Paul Dyster's deal to give $225,000 of public money to Mark Rivers of Brix and Co. to develop a Holiday Market on Old Falls Street near the state park.
The deal got better for the city, and some safeguards were added by the two Council members that would not have been there had the Council merely gone along with Dyster's original proposal to give city money to Rivers with no questions asked.
Everything was indistinct in Dyster's original plan.
Rivers was to get $225,000 of city money, along with another $225,000 from the state's USA Niagara, and then he was off on his "Holiday" -- to do with it as he pleased and catch as catch can.
That was the message from Dyster: We want a holiday market. We want it now, and to question is to possibly ruin the chance of having it.
But someone ought to check it.
After all, Rivers supposedly developed the $60 million BoDo development in downtown Boise and other big-time developments. Why does he need a mere $225,000 from the city?
Rivers claims he left his heart in Niagara Falls and is doing it because he has a "passion" for us.
Fruscione and Anderson led the Council to reduce the initial city investment from $225,000 to $40,000.
Rivers will have to prove the project really will get off the ground, using some of his own money, something Dyster did not care to insist upon, before he gets any more from the city.
We understand why Dyster did not want to risk asking too many questions. Does it really matter to him whether this Holiday for Rivers actually takes place?
Remember, Dyster is desperately running this year for mayor and has precious little to show in the way of accomplishment. If his Holiday Market is approved, he can say he got an exciting project done. After all, the Market would not actually take place until late November, after the election. If it was a flop, it would not affect his campaign.
Fruscione and Anderson insisted Rivers be held to account.
Rivers said he would put $500,000 of his own money into the project. Dyster took him at his word with no safeguards in place. Rivers has been accused of doing projects that operate only with public money, while he makes all the profits. Now Rivers has to show the money.
In fairness, Rivers' plan sounds nice. He said he will establish 80 vendors, each selling unique and marvelous holiday foods and gifts. With our money, he will put on shows, carriage rides, ice skating, train rides and amusements, and Saint Nick will be in attendance.
A European-style Holiday Market -- the largest, Rivers says, in the country.
Some questions remain: Are the 80-some vendors paying rent to the city of Niagara Falls or Rivers?
Rivers allegedly is running this as a not-for-profit. If the Market is really going to rake in millions, as Rivers claims, the city should get all the public money back from rent.
In a 36-day holiday period, a vendor may do $100,000 in gross sales. Who is he paying rent to? Vendors pay as much as 25 percent of gross sales for similar markets elsewhere. If fair rent is charged, over a million might be paid in rent by vendors, offsetting the entire cost of the market.
How much rent will vendors be charged? Who gets the money? Shouldn't the rent go in equal percentages based on true investment by the state, the city and Rivers?
Without strict rent monitoring in place, Rivers can boost salaries and, with his not-for-profit company, show no profit, while sub-renting all or some of the vending booths to a for-profit company he has a stake in, which in turn can sub out to for-profit vendors.
Rivers can dip both ways.
It fell to Fruscione and Anderson to ask the tough questions Dyster should have asked.
Dyster said he worked with Rivers for six months to make the deal. Maybe he should get the more business-savvy Fruscione and Anderson to help out whenever he is thinking of spending months negotiating a deal to hand out public money.
"When the Holiday Market got to the Council meeting, Dyster gave us nothing," said Fruscione. "That's why it got tabled until we could devise a really good package, well broken down."
Councilman Anderson added, "The Holiday Market is going to be part of Dyster's election campaign. It was just our job to make sure, if the money is spent, it is not wasted, and the market a total flop."
|Niagara Falls Reporter||www.niagarafallsreporter.com||March 29, 2011|