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Niagara Republican legislators cozy up
to GOP contributor with deep pockets

By Darryl McPherson

William Ross
David Ulrich
Rick Updegrove
It is peculiar: County Republican GOP legislators want to rent (above) this old warehouse for $640,000, that one of their campaign contributors paid $75,000 to buy in 2004. Up until this week, these same GOP stalwarts wanted to sell the warehouse (below), that taxpayers paid $500,000 to build, to another campaign contributor for less than $160,000.
For more than seven years, Niagara County has ranked among the highest- taxed counties in America. Below is a copy of a billboard that once graced our gateways, announcing the proud fact that, in one measurable way of judging governance, Niagara County was the worst of the worst.

When Niagara County entered into a lease deal for records storage at 1961 Transit Road in Newfane earlier this month, it was a friendly arrangement. The deal was made with Clear Opportunity Properties, LLC, a company owned by developer David Ulrich.

Ulrich has been a landlord for the county at his Transit Road property since 2008 when he started leasing space to store voting machines for $86,400 a year.

The brand new lease for records storage will bring Ulrich another $128,160 per year, for the next five years, for a total of $640,800.

That’s a pretty good return on his investment, since, according to public records, Ulrich purchased the property for $75,340.

Ulrich seems to have learned that playing nice with the Republicans in Niagara County – who control county government and have for the last decade - can work out quite favorably.

As an example, consider that he bought the 60-year-old warehouse on Transit Road, formerly used by a mattress company, for $75,340 and, between his two county leases, he will be collecting $214,560 per year. That's a total of $1,072,800 over the next five years in rent from county taxpayers.

Both leases were deals made with the Niagara County Legislature which is controlled by Republicans.

Of course, it might be just coincidence that well-placed campaign contributions given by Ulrich to the Republicans who decided to give him the leases - without a Request for Proposal (RFP) seeking competitive bids – generates an appearance of a quid pro quo.

Maybe Ulrich has the best and only good warehouse deal available for the county to store their records or their voting machines.

However, what is fact is that since January of 1999, Ulrich personally donated $43,050 to GOP powerhouse State Senator George Maziarz and $24,500 to the Niagara County Republican Committee. On top of that, he has given to numerous other local Republicans who ran for county offices, including Wayne Jagow, the county clerk, who is in charge of records storage for the county.

Connect the dots and it may not be a leap to see how the Niagara County Legislature, with majority control in the hands of the Republicans, makes its decisions. And this is not the first time Ulrich reaped a rich profit from the GOP.

The Republican-controlled County Legislature handed Ulrich a long-term lease for 20-40 East Avenue for the County to house the Department of Social Services. Similarly, he leased 111 Main Street (the Golden Triangle Building) for the Veteran’s Office, Probation, Board of Elections, the Office for the Aging, the Department of Motor Vehicles, and Human Resources. He also leased 50 Main Street to Niagara County Community College.

Published reports at the time described the assessed value of the three properties to be collectively $985,000.

By 2005, he sold the properties – all with lucrative county leases, to 37 Holdings Lockport LLC, a holding company for Roberts Management Group from California. The sale prices totaled $9.1 million: 20-40 East Avenue sold for $4.5 million, 111 Main Street sold for $3.5 million, and 50 Main Street sold for $1.1 million. Ulrich claimed that Roberts came to him about acquiring the properties; he was not looking to sell them. The value of the three properties escalated because of the valuable county leases, since commercial real estate is appraised based on its income.

It makes one wonder when looking at the five-year deal for the new records storage facility at 1961 Transit Road; how long will it stay in Ulrich’s hands and how much will it sell for?  

Meanwhile, if Niagara County is leasing a new records storage facility, what is going to happen to the old facility?

Presently, records are stored in a building owned by the county on Davison Road in Lockport. County Clerk Wayne Jagow has cited the need for a facility that meets New York State legal standards and, according to a press release from the Public Information Office, the current facility is inadequate.

 According to Jagow, "The Arts and Cultural Affairs Law sets very stringent humidity control and HVAC requirements for storage facilities, which the Newfane facility meets. The current records facility on Davison Road is a dilapidated structure with water infiltration issues." In other words it has a leaky roof.

The issue becomes confusing, however, because the old facility is sometimes for sale, and sometimes it is not. It depends on who you talk to and when.  In fact, the idea that the county-owned storage area was going to be sold was mentioned as one of the main reasons the county needed to lease Ulrich’s warehouse for storage in the first place.

A communication from the Community Services Committee dated September 27, 2012 told Legislators, "Sale of property currently housing all Niagara County Inactive Records and the Niagara County Inactive Records Management Program is being sold."

The resolution that was ultimately approved by the Legislature on Ulrich's lease also puts forward the same idea: "Whereas, the sale of the property currently housing all municipal records under the custodial care of the RMO and the Niagara County Records Management Program is imminent."

However, after the Reporter, followed by Democrats on the Legislature, started to ask questions, the documented intent to sell what is actually a solid and conveniently located storage facility in Lockport seemed to have come off the table. In a late night press release following the Oct. 2 meeting, Majority Leader Rick Updegrove stated, "Any sale of the Davison Road property does not include the sale of the records storage facility."

While the County has been interested in selling about 17 acres of land it owns along Davison Road, there may be a desire to hold onto the storage buildings. But somewhat contradictory, it was reported that the vice chairman of the Legislature, Clyde Burmaster, said the records facility could interfere with a land sale.

 Minority Leader Dennis Virtuoso has been against the transaction for the way it has taken place. The contradictions involving the potential sale and the turnaround that the buildings would not be sold defy explanation. Referring to the Republican legislators, he said, "They can’t get their story straight." He and Legislator Jason Zona feel there is more life left in the current facility, if the effort was made to repair the structure. With current technology storing records electronically, acquiring more space does not make sense.

Bill Rutland, a labor leader, is also confused. "I’m a long-time county employee. I have worked right next door to that building; so I have firsthand knowledge of how that operation goes. I watched them build that building. Pretty bizarre to me. There’s over a million dollars invested in that building, and it has a lifespan a ton more than 10 years. As a county employee and a taxpayer, I just believe it is a huge waste of money. They act as though it’s a crisis because they’re nearing capacity of the building, but to walk away from it and enter into a lease does not seem like a good move for the taxpayers to me."

It cost $500,000 for the County to build the facility 10 years ago. There has been talk of selling the property to R.B. Mac Properties for less than $160,000. R.B. Mac has given donations to Republicans in Niagara County and is a supporter of Lockport Supervisor Marc Smith, a Republican.

Could the same thing that happened with 1961 Transit Road be occurring again?

Of course, this could all be coincidence, but what is troubling is that Niagara County is among the highest taxed counties in the USA, according to studies made by the Tax Foundation of Washington, D.C. On top of that, there was no RFP issued – no public disclosure of the need (if there is a need) to get new storage facilities. Or any study of the cost of adding on to the existing storage facility which the county already owns, versus leasing storage space.

The Republican super-majority simply decided to hand it out to one of their big campaign contributors. In the months leading up to the county Republicans deciding to hand the lease to Ulrich, he made contributions of more than $12,000 to local Republicans, $6,000 of which went directly into the Niagara County Republican Committee.  (Ulrich was contacted for this story, but declined to comment.)



Niagara Falls Reporter www.niagarafallsreporter.com Oct 02 , 2012