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SEP 30- OCT 07, 2014

USA Niagara Gets A $500,000 Spike in Management Fees From Casino Cash.... But Why?

September 30, 2014

Obviously questions arise with Niagara Falls Mayor Paul Dyster's plan to use part of the city's share of the casino cash to pay a state agency, USA Niagara Development Corporation, $1.5 million to operate the Niagara Falls Conference Center and manage events on the city-owned Old Falls St.

Two years ago, the city paid $1 million for the same services out of state aid it received. Why the raise?

Global Spectrum Inc. actually manages the Conference Center and Old Falls St., and did so for several years for a sum of $1 million.

Is USA Niagara acting as a middleman? How much will Global Spectrum get paid with Dyster's new USA Niagara agreement? Will USA Niagara get the difference between what the city used to pay ($1 million) and what it will pay now ($1.5 million)? Or did Global Spectrum raise their fees by half a million?

The state taking the city's money is nothing new. Not many know it but for years the City of Niagara Falls paid USA Niagara, a subsidiary of Empire State Development, $3.1 million per year.

That's right. The state agency charged with investing money to develop downtown Niagara Falls actually took 18 percent of the total state aid the city received.

When USA Niagara's contract with the city came to the end in 2012, three defiant council members refused to continue the gift.

One of those, Sam Fruscione, the voters in their wisdom chose to not re-elect and the council majority swung to Dyster.

It was on Jan. 22, 2001, that then-Gov. George Pataki announced the creation of USA Niagara to promote economic development and tourism in Niagara Falls.

"We are beginning a new chapter for Niagara Falls," Gov. Pataki said. "USA Niagara ... will bring a brighter and stronger future for Niagara Falls. (It) worked in Times Square. We will use this same 'Times Square' energy and vision to revitalize Niagara Falls."

An agreement signed in 2002 required the city to pay $2.1 million of its $17.5 million annual state aid to USA Niagara and later modified to add $1 million more toward USA Niagara's management of the Conference Center and Old Falls St. The agreement expired Dec. 31, 2012.

A majority of the old council, Fruscione, Glenn Choolokian and Robert Anderson opposed the $3.1 million payment from the third poorest city in the United States to a bureaucracy supposed to be a state funded agency.

"The model is inefficient. The city gives USA Niagara money and they throw it back at us and say 'we are going to give you this or that.' The money they 'invest' is our money," Choolokian said.

Up to that date, the city had given USA Niagara around $24 million.

Over the years that USA Niagara has operated, for every business that opened several closed and Niagara Falls went downhill by measurable standards including population and employment.

Times Square it wasn't.

USA Niagara did however develop the Conference Center after Gov. Pataki handed the Senecas the city's (10,000 plus capacity) convention center, which they turned into a casino.

The Niagara Falls Conference Center accommodates only 3,000 people, and cost $20 million to build/renovate.

Once USA Niagara took over the events at Old Falls St. and the conference center they managed to post losses every year.

Choolokian said, "The city owns Old Fall Street but USA Niagara dictates what we are allowed to do. Local business people with solid business ideas who want to make money on the street have to jump through hoops then get turned down. Then USA Niagara loses money and sends us the bill. The city of Niagara Falls should run our own entities! After all, it is our money." And even though it was cut off from city funding in 2013-2014, USA Niagara still managed the Conference Center and Old Falls St., - suggesting they might be profitable after all.

The majority on the present council are going to agree to pay $1.5 million per year for what they paid $1 million just two years ago.

Our next story will detail just what that will mean starting next year.





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