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May 13 - May 21, 2014

The Scam At Reiterville Worsens as Facts Emerge, Media Catches On

By Frank Parlato

May 13, 2014

Councilman Mike Marra and former supervisor Steve Reiter.

Once again we return to the notorious Bridgewater Estates, or the "Scam at Reiterville."

For those who have not been following our series, Bridgewater Estates was supposed to be a 138-unit luxury senior housing project costing $12.3 million to build. It was approved last year during the administration of former Lewiston Supervisor Steven L. Reiter, a Republican.

It was to be built on land owned by his mother on Rt. 104 near Model City Rd.  

As supervisor, Reiter, who led an all Republican board, was able to rezone his mother's property from residential to general business zoning. He even voted on the approval.

This is at the heart of the scam.

The land was for sale before it was rezoned for $350,000 as a residential property. Two weeks after it was rezoned to general business it sold for $1.4 million, four times its previously marketed value with the developers, as if by magic, appearing in town with fully conceived plans for Bridgewater. 

The two men who were the buyers added something extra: On top of the $1.4 million they were to pay to Reiter's mother, they gave Reiter, as a silent partner, an additional 19 percent ownership stake in the $12.3 million development to be known as Bridgewater Estates, according to documents they submitted to the Niagara County IDA.

Reiter's partners are Anthony Cutaia from Amherst and Fred Hanania from Buffalo.  Hanania and Cutaia were to come up with the financing.  Reiter was to come up with the approvals.

As supervisor, Reiter signed off on the Environmental Impact Statement saying there were no adverse environmental impacts arising from the project- something that may have saved the developers hundreds of thousands of dollars, despite the fact that there are apparently serious drainage issues on the property. 

Reiter, as supervisor, waived a traffic study - which may have saved the developers another several hundred thousand dollars, despite the fact that there was a planned driveway to be used by 200 seniors coming out on a 55-mph speedway against Rt. 104 truck traffic. 

Reiter also got his all-Republican town board to go along with the approvals without asking a question.

Knowing this was Reiter's mother's property and knowing Reiter, they did not ask – see the town board minutes for yourself - a single question.

Reiter signed the Environmental Assessment Form, which requires a "reasoned elaboration" backed up with studies to show if the proposed project will cause any harm to the environment, the neighborhood, or the character of the area.

However, Reiter waived all the required studies.

Reiter got the Planning Board to approve the project without any of the required studies and that wasn't hard since the chairman of the Planning Board worked full time in town hall and Reiter could fire him.

Reiter got the Zoning Board to grant unheard of variances allowing for the first time in the Town of Lewiston nearly 50-foot tall residential buildings so developers could squeeze in more apartments.

It is easier and cheaper to build up.

The developers offered the justification that the height would provide a great view.

The town board went along perhaps not knowing the view would be, of course, of Modern Disposal's storage area of some 1,000 portable toilets, old scrap trucks, a giant landfill heaped tall with garbage, and a truck parking lot.

But the board asked no questions, taking Goldsmith's cue - ask Reiter no questions, and he will tell you no lies.

The community should be aware, based in part on what other local developers have done, such as the developers of the Woods at Blairville in Lewiston, that there is nothing in any of the town approvals - or any contracts - that would prevent Bridgewater from converting their planned "luxury senior housing" into a low- income project or a hybrid of low income and moderate income housing and not at all what was originally promised.

Enter Henry Sloma.

It could be coincidence, but Reiter's longtime political ally, Sloma, stepped down from his unpaid position as chairman of the Niagara County Industrial Development Agency (IDA), charged with granting tax breaks to businesses and developers in return for the creation of new jobs in the area, just in time to work on Bridgewater.

As a paid consultant working for Cutaia, Hanania and Reiter,, Sloma went before the IDA Board he had chaired for seven years.

Sloma helped the developers, Cutaia, Hanania, and Reiter, get a deal with the IDA that was unheard of before: $1.8 million in tax breaks from the people of Niagara County - in return for creating  three $30,000 jobs.    

The IDA, like the Town of Lewiston, also did not put any provision in their contract requiring Bridgewater Estates to build luxury senior housing and not low income housing.

One other curious thing cropped up: it was learned that the $12.3 million project had financing in place for $16.3 million, according to the IDA application filed by Cutaia and Hanania, which meant Reiter and his partners were going to over-finance, and pick up a tidy $4 million on the deal. The upfront windfall meant that no matter if the project failed or if the developers stiffed the bank and investors and let the building go into foreclosure, they still pocketed a cool $4 million off the top.

Reiter's share, at 19 percent, was $750,000, not including the $1.4 million his mother received for the formerly $350,000 property.

The over-financing was probably abetted by the tax breaks that Sloma delivered.

After Sloma got Bridgewater approved, he returned to his unpaid chairmanship at the IDA, perhaps to await the next paying customer with a curious deal, that will require him to step down again, earn his fee as a paid consultant to the developer, then, once the project is approved, return again to the IDA.

Last week, the Zoning Board tabled Bridgewater's request for an extension on the now- expired zoning variances, and a lawsuit filed by Sonia Washuta, owner of Modern Disposal, and neighbor of the Reiter project, heads toward court.

The leading characters of this sordid deal also include the then -all-Republican town board that served under Reiter and whose acquiescence was required in order to get this deal approved without all the legally required steps the town follows in development projects of this magnitude.

Like Councilman Mike Marra - who we have tried to reach but who has chosen instead to avoid our repeated calls. He voted for this plan without asking a single question.

Then there is Al Bax, also a councilman and a lawyer. A lawyer would know that this deal was not kosher.

And Ron Winkley, a former police chief of the Town of Lewiston. When contacted by the Reporter, Winkley said the lawyer for the town, (Republican) Mark Davis, advised him to say nothing to the Reporter.

Then there was Ernie Palmer. Former Chief of Police for Niagara Falls, the Republican Palmer resigned earlier this year just as this scandal was breaking.

All these Republicans failed to stop Reiter, and today they refuse to comment.

The Democrat, Dennis Brochey, Reiter's replacement as supervisor, has told the Reporter that the deal should be revisited.

But he is alone.

Meantime, last week, WIVB (Channel 4) covered the Zoning Board meeting where Bridgewater tried to get zoning variances extended.

They reported that neighbors of the proposed Bridgewater Estates know they have been had.

"Neighbors say something stinks about the proposed Bridgewater Estates senior luxury apartments in Lewiston – namely, who's behind the project," WIVB reported, "Steven Reiter, the former Lewiston supervisor."

In the report, neighbors said they were worried about the dangers posed by increased traffic entering and leaving the apartments, and poor drainage on the lot.

Maryann Day, who owns a house next to where the apartments would be, told News 4; "The ground bubbles like a witches' brew when it rains too much, but we're going to add 139 apartments?...

"(Reiter's) motive is money. He wants to line his pockets. He doesn't care about me or my children or what's going to happen," Day said.

 "I'd like to have you guys reconsider all of it," said Marland Schmitt, who lives across the street, and who found a new, polite way to all but call a man a thief: "There were some other agendas when Mr. Reiter was in office."

Bridgewater's attorney, Jennifer Dougherty, said with a naïveté that would make a teenager smile, that the man who ruled the Town Board and appointed people to the Planning Board, and the Zoning Board, in this all-Republican cabal, the man who voted on the zoning, and signed the environmental impact statement, that Steven L. Reiter had nothing to do with the approval of the project.

"My client has not done anything wrong," Dougherty said, trying to separate Cutaia and Hanania from Reiter. "They've provided all of the documentation, all of the engineering plans and everything that's required for the approvals for this project. This was before the Planning Board, which Mr. Reiter was no part of. This was before the Zoning Board which he was not a member of. And Mr. Reiter – there was an incorrect entry in the IDA application, stating that Mr. Reiter was the owner of the property. He was not the owner of the property, never was at any time. It was Marjorie Reiter, his mother's property. And he recused himself from the vote at the Town Board meeting on July 22, 2013," she said.

But Dougherty made a misstatement.

It is true that Reiter did not own the land. His mother did. But Reiter was listed on the IDA application as a partner owning 19 percent of the Bridgewater Project, not as an owner of the land.

The bottom line is that Reiter was and is conflicted and that he stood to gain potentially millions as he cut through the bureaucracy as supervisor to get the project done as quickly and cheaply as possible for the benefit of the developers and for himself.





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Publisher and Editor in Chief: Frank Parlato
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