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Apr 01 - Apr 09, 2014

Taxpayer Champion Joins Canalside Legal Fight

By Tony Farina

April 1, 2014

Rus Thompson

Where it will end is anybody's guess.

The costly legal fight over Canalside's signature replica canals project at the old 'Aud' site is swimming in red ink, much of it being spilled by taxpayers caught up in the battle between the ousted developer who is challenging the termination and the Erie Canal Harbor Development Corporation, a subsidiary of the governor's chief economic development agency, Empire State.

The legal battle and the mounting costs to taxpayers has once again attracted the attention of one of the region's leading crusaders against government waste and corruption, Tea Party activist and taxpayer champion Rus Thompson.

Thompson has written a second letter to the state comptroller, asking the state's chief fiscal officer "to revisit the use of taxpayers' funds paying for the continued salaries and defense of Sam Hoyt, Thomas Dee and Mark Smith, as there are many other qualified… individuals within the State of New York, and specifically Buffalo, who would embrace the responsibility and professionally perform their duties as employees of the State of New York."

Hoyt, of course, is the politician-turned-development guru who is the regional president of Empire State Development and the state official who signed off on the dismissal of the DiPizio Construction Company last July even though admitting in court testimony that he didn't know anything about construction.

Dee is the president of Erie Canal Harbor Development Corporation who teamed up with Smith, the director of construction for ECHDC, in terminating DiPizio for allegedly causing delays on the project, allegations that don't appear to be supported by any evidence seen so far in the various legal suits connected to the case or confirmed by subcontractors on the job.

Dee was recruited to take over as ECHDC president by Rep. Brian Higgins, who has been very prominent in waterfront development except when it comes to the stalled replica canal project and the enormous costs to taxpayers associated with the legal fight. It appears no work has been done at the site since last July when DiPizio was fired even though the state had publicly complained about delays in getting the project completed, delays they blamed on DiPizio.

I contacted Rep. Higgins' office but neither he nor his staff would discuss the stalled Canalside signature project or his relationship with Dee who was installed in March of 2009 to head ECHDC.

The silence is consistent with the rest of the development officials involved in the Canalside work who say they can't comment on the case because of the ongoing litigation. How convenient to hide behind a court case that doesn't seem to be going their way and is costing taxpayers hundreds of thousands of dollars in legal fees and increased construction costs.

Thompson's second letter to the state comptroller's office---his first was last September--- makes specific note of the state's sputtering legal defense, the testimony of state officials, and the soaring legal costs:

"As their own testimonies [Hoyt, Dee, Smith], and exhibits have shown, and the decision by the Court to not dismiss the allegations [by DiPizio] as they relate to the individuals, if they are allowed to continue to not incur any personal costs, and continue to be paid their NYS salaries from taxpayer dollars, where or when will their accountability be borne by themselves as individuals?"

Thompson has started a petition campaign that will be forwarded to the state comptroller with the goal of curbing the growing taxpayer costs for the defense of ECHDC and Hoyt, Dee and Smith, noting the success so far by the construction company in the court fight, and warning the comptroller of the potential for costs to hit $50 million for a project that began with a $20 million price tag.

Thompson invites any and all taxpayers to join with him in urging the comptroller to step in, and interested people can do just that by signing his internet petition at

With no end in sight to the legal battle and no real attempts at settling the dispute, there's no way of predicting how much this now stalled project will end up costing taxpayers and how much more damage will be done to the construction company with a 37-year history of getting the work done.

The state can talk glowingly of building an attractive and enticing waterfront for locals and visitors to enjoy, but this giant negative associated with the signature replica canal piece is a huge black eye on what otherwise might have been something to crow about for Cuomo, particularly in an election year. As of now, it is hard to say the state looks very good and is skating on-- figuratively speaking-- very thin ice by incurring staggering costs and in failing to complete a major part of its election year publicity campaign.

Are you watching this, Gov. Cuomo, as you plan to trumpet your Western New York development success as your signature Canalside project slips deeper into the red ink abyss?





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Publisher and Editor in Chief: Frank Parlato
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