Falls City Council ends retainer agreement with outside attorney reviewing eminent domain issues involving proposed Centennial Park project

Rick Pfeiffer -, Niagara Gazette, Niagara Falls, N.Y.
·4 min read

Jan. 30—A unanimous Niagara Falls City Council has voted to terminate its retainer agreement with an outside attorney who reviewed the city's ongoing efforts to acquire 10 to 12 acres of South End property currently owned by Niagara Falls Redevelopment (NFR), and an affiliated company, through the use of eminent domain as well as a now expired NFR proposal to settle those proceedings.

But a sharply divided council refused to acknowledge that attorneys with the Buffalo-based Hodgson Russ law firm were "the sole attorney of record for the city" in matters concerning the Centennial Park project.

Council Member Donta Myles (D), with support from Members Brian Archie (D) and David Zajac (R) objected to language in a resolution to terminate a retainer agreement with attorney Jeffrey Palumbo, and recover any unexpended funds still held by Palumbo's law firm, that also acknowledged that Hodgson Russ lawyers, retained to handle the Centennial Park project by Mayor Robert Restaino, were the only attorneys who could work on the events center proposal.

City Council Chair James Perry (D) and Member Traci Bax (R) voted to include the acknowledgment of Hodgson Russ' role in handling Centennial Park matters.

"I do, as a council member, recognize that Hodgson Russ is our attorney for this particular matter," Bax said.

Despite assurances from Deputy City Corporation Counsel Thomas DeBoy that the council would still have the ability to hire an outside attorney to advise them on Centennial Park, Myles and Zajac said they were only willing to terminate Palumbo and not endorse the work of Hodgson Russ. Archie said he also wanted to make sure that the council preserved its legal options.

DeBoy told the council members that acknowledging Hodgson Russ's position as the city's outside counsel for Centennial Park would "send a signal to NFR" and others that any negotiations on eminent domain issues or proposed settlements would have to be handled by the Buffalo law firm.

"I want nothing to do with sending a message to NFR," Myles replied.

The hiring of Palumbo followed an effort by Zajac and former City Council Member Vincent Cauley to cut a deal with representatives of NFR that would have seen the city drop its eminent domain proceedings for the land to construct the proposed Centennial Park project.

In return for dropping the eminent domain proceedings, NFR offered to complete a proposed data center development on the contested land and provide incentives to the Falls including the donation of the former 13th Street Gym building along with a further donation of $3.5 million over 10 years for "land maintenance (of a park) and other projects."

The negotiations, which did not involve Restaino or the Hodgson Russ lawyers were immediately challenged as a violation of the Falls City Charter's separation of powers provisions.

A pair of Hodgson Russ attorneys reviewed the settlement and advised the council to reject it. Palumbo later echoed that opinion.

The proposed settlement agreement was never presented to the city council for approval.

The retainer for Palumbo, a partner in the Buffalo-based law firm Block, Longo, LaMarca and Brzezinski, called for the outside counsel to be paid at an hourly rate of $350 and provided for the payment of an hourly rate of $250 for a paralegal. It also required the council to pay expenses for "filing fees, transcripts of court and other proceedings, postage, subpoenas, expert witness fees, travel expenses, mileage, judgment and lien searches, computerized legal research and the like."

The retainer specifically provided "no guarantee" of the total attorney fees and expenses the council may be charged. It also required the immediate, upfront payment of $6,000 to Palumbo's firm. It's estimated that about $3,000 of that upfront fee remains in an escrow account with Palumbo's firm.

The council previously voted unanimously to use eminent domain to acquire the NFR property to build the proposed $150 million Centennial Park events campus. Eminent domain refers to the right of a government to take private property for a public purpose with the payment of compensation to the owner.

A New York state appeals court, in response to an NFR challenge, confirmed the city's right to use eminent domain for the park project. The state's highest court, the Court of Appeals, affirmed that ruling.

City officials have said that the use of eminent domain was necessary because NFR has maintained the property is not for sale. NFR is proposing to use the property for a $1.5 billion data center campus.