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Apr 29 - May 07, 2014

Reiter, 19 Percent a Liar? Who's the Owner? Timeline Shows Sloma, Reiter Deeply Involved In Bridgewater's Raft of Surprisingly Lax Approvals

By Frank Parlato

April 29, 2014

Steve Reiter.: Is he an owner?

The more one looks at it, the more one senses this was a scam.

Now Lewiston mice are scurrying.

Following the publication of our story last week about former Town of Lewiston Supervisor Steven Reiter, who, while acting as supervisor for the town, was able to sell his mother's recently rezoned property for four times its previously marketed value, and snag for himself, according to IDA records, a 19 percent interest in a senior housing project to be built there, a lawyer for the developers says Reiter is not and never was a partner in the project.

When our story first broke that Sonia Washuta, owner of Modern Disposal, was suing the Town of Lewiston, Steven Reiter, and his mother, Marjorie, to halt the proposed senior project on Marjorie Reiter's land, Steven Reiter said he had no financial interest in the project.

He said, "My mom is selling. I'm not personally on the deal. The only way I am part of the deal is by inheritance."

But, the Niagara County IDA application tells a different story.

When developers of the Bridgewater Estates, Fred Hanania and Tony Cutaia, applied for $1.8 million in tax free subsidies, they listed Steven L. Reiter, not his mother, as 19 percent owner.

They even got his middle initial right.

When questioned by the Reporter, Reiter admitted that, yes, he was a 19 percent owner but, because of expenses on the deal, he might not make a lot of money over and above what he secured for his mother: $1.4 million.

The Reiter property was marketed in the prior year for $350,000. Bridgewater bought the property from Reiter and his mother for $1.4 million or four times the previous amount.
Reiter, who was supervisor during the time the Bridgewater project went through the necessary town approvals, said he abstained from voting on all matters relative to his mother's property except for a vote he made for changes in the town's master plan that allowed his mother's property to be rezoned on Jan. 28, 2013.

The time line shows this to be not true.

Reiter was up to his neck in the approval process every inch of the way.

Prior to January of 2013, the majority of Marjorie Reiter's property was zoned "R-2," which meant only single or two-family residences can be built there.

But Steven Reiter, as supervisor, participated in the Town Board's deliberations concerning amendments to the Zoning Code and voted for the amendments on Jan. 28, 2013..

''The only conflict I could see was I voted on the plan for the whole town," said Reiter. "….I can't help it if my family owns the property."

He could not help that, but he could help the kind of changes that were made that helped his mother such as allowing, for the first time, high-density residential development on her property and a height change allowing structures of up to 45 feet.

And, speaking of helping, enter Henry M. Sloma, longtime Republican operative and ally of Reiter.

After seven years as chairman of the Niagara County IDA, Sloma resigned from the IDA in January of 2013, the same time Reiter was getting town-wide rezoning changes that would help his mother's property's go from "R-2" to "General Business" and allow four-story buildings to be built there.

Sloma said he needed to resign from the IDA so he could work for a client seeking IDA assistance.
The IDA board is a voluntary position. But Sloma told no one at the time that his new clients were Steve Reiter and his partners, Bridgewater LLC developers, Tony Cutaia and Fred Hanania.

“I think I’ve given my fair share,” said Sloma, at the time, of his voluntary service to the community, “I had a birthday (69th) the other day and I had to decide what to do with the rest of my life.”

Shortly after Sloma resigned, and less than two weeks after the town board adopted Reiter's helpful changes that rezoned his mother's property, an application was made by Bridgewater to develop the Reiter property.

Anyone who knows anything about development will know a plan to build 139 senior housing units cannot be conceived in two weeks. This was in the planning stages for months.

It was not disclosed then that Reiter was a partner.

While Reiter was fronting a town-wide rezoning effort, what apparently was going on was a push to rezone his mother's property so he could sell it to Bridgewater for four times the value.

Once rezoned, things started happening fast.

On April 4, 2013, Bridgewater submitted an application for site plan review for their development which was to consist of 139 units and 240 parking spaces.

Reiter, while still not disclosing his interest in the project, reviewed the application.

On April 10, one week later, Reiter signed the Environmental Assessment Form for the Town Board stating there were "no adverse environmental impacts."

Reiter waived potentially more than a million dollars worth of engineering and remediation that any town would normally require for a project of this size.

There should have been a complete environmental impact study, including a traffic study.

There was planned to be a driveway used by 200 seniors coming out on a 55-mph speedway against Rt. 104 truck traffic.

Reiter, with his signature, and the consent of his all Republican town board, saved the developers (including himself) a traffic study, which might have cost developers a million dollars, counting costs associated with constructing recommendations made in the study.

The very next day, the Zoning Board granted variances authorizing multi-family residential use of the property.

By May, Reiter, now past the main approval process, could afford to be more open.

He was listed on the IDA application for tax breaks as 19 percent owner.

On June 26, Sloma appeared, on behalf of Bridgewater, before the IDA board that had, for years, taken its direction from him. The IDA approved Bridgewater getting $1.8 million in tax subsidies in return for creating three $30,000 jobs, or some $600,000 in subsidies per job.

Other details emerged that were little commented upon at the time: The senior housing project was to cost $12.3 million to build but the developers were borrowing $16.3 million, thus pocketing $4 million in upfront fees.

At 19 percent, Reiter would pocket $760,000 in cash right off the bat.

That's on top of the $1.4 million for the land for his mother.

Combined it was more than six times the value of the property.

While Reiter and the developers say it was a mistake to list Reiter as 19 percent owner, Sloma said he saw the IDA application. “(Bridgewater) had some questions on the application," Sloma said at the time, "and I just helped them navigate the process."

With $1.8 million in tax subsidies, $1.4 million for his mother, $760,000 in upfront fees, Reiter then marshaled the Planning Board, on July 18, 2013, to recommend the site plan be approved.

Lest anyone think Reiter had no control of the process, consider that, at the time, the chairman of the Planning Board was Robert Martinez, who was employed by the Town in the Building
Department, thus working directly under Reiter.

Then another time record was broken.

Four days later, on July 22, the Town Board approved the site plan, without discussion or elaboration, by a vote of 3-0.

This time, not needing his own vote, Reiter abstained.

It was a done deal now.

So now, after the Reporter starts writing a series on the subject, now they say it was all a mistake.
Reiter doesn’t own any of it?

Then how come the ownership numbers were precise on the IDA application?

Hanania owns 51 percent. Cutaia owns 30 and Reiter 19 percent.

Somebody came up with 19 percent for Reiter and put his name down.

Somebody did the math.

Nevertheless, Bridgewater's attorney, Alan J. Bozer of Philips Lytle, was specific in a letter he wrote last week to Washuta's attorney.

"Stephen (sic) Reiter does not have an interest in Bridgewater Estates LLC, either directly or indirectly…. Marjorie A. Reiter, upon sale of her parcel and as part of the consideration, will have the right to an indirect interest in Bridgewater Estates LLC," Bozer wrote to Charles Greico of Jaekle Fleishmann. "… In short, there is a mistake in that 'application.'”

Bozer also said that Bridgewater should amend the old IDA application taking Steven Reiter's name off.

"Please note that we are advising our client to amend the incorrect statement (listing Steve Reiter as owner in the IDA) 'Application for Assistance,'" Bozer wrote.

It might be a little late for that.

The Washuta lawsuit, filed in State Supreme Court, asks Justice Mark A. Montour to issue an injunction stopping the town from granting a building permit for the project until the whole project is re-evaluated.

Montour is scheduled to hear the case on May 14 in Niagara Falls.

If the town board won't rescind the approvals themselves, as is their right as lead agency, and considering the conflict of their former leader, now coming to light, their obligation, it will be up to the judge to determine if Reiter violated the New York General Municipal Law and the New York common law prohibitions on conflicts of interest.

In Meinhard v. Salmon, way back in 1928, the judge ruled in what has become a historic precedent-setting ruling, "A [public official] is held to something stricter than the morals of the marketplace. Not honesty alone, but the punctilio of an honor the most sensitive, is the standard of behavior."

The reader can judge for himself the punctilio of honor Reiter possesses.

As for Sloma, who said he wanted to "decide what to do with the rest of my life,” after getting record breaking tax credits for Bridgewater and Reiter, he returned to the board of the Niagara County Industrial Development Agency in January, 2014, after exactly one year.

He was promptly elected chairman again at the annual reorganization meeting.

It was almost like it was planned.


Related Story:

The Story Behind Lewiston's Bridgewater Estates Will Unravel Before Your Eyes, Reveal More Reiter Subterfuge





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Publisher and Editor in Chief: Frank Parlato
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