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Hamister Development Agreement Leaves A Lot to the Imagination

By Tony Farina

Will Hamister ever really build a hotel on this lot?

The development agreement for the much-hyped Hamister project on prime land in downtown Niagara Falls is so full of contingencies, contingency extensions, and words like “notwithstanding” and “developer’s right to terminate,” that even a legal scholar who reviewed the document for the Niagara Falls Reporter was left scratching his head.

Let me put it this way: if the development agreement between the City of Niagara Falls, USA Niagara (state) and HH310, LLC (Hamister) was a screenplay, nobody would buy it.

The council finally approved the $25.3 million Hamister hotel-apartment-retail project Sept. 13 after a bruising election primary that had at its core the go-or-no go “gift” of city land for $100,000 to Buffalo developer Mark Hamister (parcel appraised at $1.5 million) to build what the Dyster Administration and the state billed as the green light development project that would send the signal around the world that Niagara Falls was going big time.

Even the governor rode into town to push the Hamister deal just before the primary, dispatching his regional development guru, Sam Hoyt, to convince Council member Bob Anderson to go along with the Hamister project because it was a do-or-die decision for the future of Niagara Falls.

Anderson changed his vote, supported the deal, and Sam Fruscione, who had led the old majority in questioning the Hamister project on various grounds including financing and the land giveaway, ran fourth in the four-way Democratic primary and lost his seat. It was seen as a referendum on the Hamister deal, and the administration won the election fight.

Forget Fruscione for the moment. This is not about him or the council. This is about the three-month wait for a signed agreement to get to the council after the approval vote on Sept. 13, and the lack of any substance in that agreement.

Remember the hype from the supporters: this was do-or-die. This newspaper alone had raised questions about the financing for the project and whether or not Hamister, not known for spending his own money, really had the commitments to fulfill his end of the sweetheart deal that USA Niagara presented to him on a silver Niagara Falls platter.

Guess what? According to the agreement that is now a part of the public record, Hamister has no upscale hotel ready to move into his Niagara Falls parcel, and does not seem to have any financing in place.

In short, his over-hyped project is nowhere near ready to move forward, and he has more wiggle room than you can imagine to allow him to bail out if the financing and the rest of what he needs fails to materialize. And on top of that, he would be reimbursed for whatever costs he incurs while trying to find a tenant.

Was the council really wrong in questioning this deal?

Let me take it a step further. The state, courtesy of Sam Hoyt and Empire State Development through USA Niagara, will hand Hamister a cool $2.75 million to do the deal and he will also receive 10 years of tax breaks courtesy of a Niagara County PILOT, and first dibs on a sweetheart parking deal (starting at 75 spots) with the city’s Rainbow Mall.

Right now, according to the more than 150 pages of legal gibberish that poses as a development agreement, Hamister is under no obligation to do anything for two years if he uses all his contingencies and extensions, and maybe a few “notwithstanding” lines that are in the screenplay that no director would touch.

And nothing, and I mean nothing, could happen unless J. D. Gifts and John Guido, who now lease the Hamister parcel from the city at a steadily declining cost, move out of the way peacefully should an owner, whoever that might be, finally obtain a building permit. But there’s no guarantee Guido would go quietly into the night and give up his lucrative car-parking business without a legal fight.

For now, anyway, the so-called development agreement effectively ties up the property for up to two years while the developer looks for financing and a tenant and incurs costs for which he will be reimbursed if the whole thing falls apart.

So what was the big hurry to get this done? Hamister is no closer to breaking ground than he was two years ago. The upscale hotels named in the agreement are not anywhere near the five-star digs that were billed by USA Niagara when they unveiled this amazing project, and Hamister has more escape hatches than a nuclear sub.

I should note that attempts to reach the Dyster administration failed, and Empire State Development sent a text message that it had no comment on the development agreement. One thing you can count on from Empire State is a lack of public accountability even though taxpayers are paying their hefty salaries from Hoyt on down, including USA Niagara’s Chris Schoepflin.

I guess now that the agreement has been logged in, there’s not much anyone can do unless the new council majority decides that its constituency might want to know a little bit more than what is in this vague agreement and pushes for a public meeting with the state and administration about the contingencies and all the rest of the legal double-talk that pose as a development contract for one of downtown Niagara Falls’ prime parcels at 310 Rainbow Blvd.

Maybe a Wallenda museum and display would have been a better attraction for parcel 4? For now, nobody can know for sure after reading the so-called development agreement what will be built on the Rainbow site or even if anything will be built anytime soon. And the state, hoping for a big PR splash in Niagara Falls next year for the governor’s re-election campaign, has to be a little worried about how it all turns out. If the shovels don’t hit the ground in the spring, which looks near impossible, somebody might be looking for a new job.