Falls City Council members cut a deal with NFR to end Centennial Park project in return for enhanced "donations"

Jun. 7—Republican members of the Niagara Falls City Council, led by Council Chair David Zajac, have engaged in third-party negotiations with representatives of Niagara Falls Redevelopment (NFR) on a proposal that would see the city drop its eminent domain proceedings for land to construct the proposed Centennial Park project.

In return for the support, NFR has pledged to complete its proposed data center development and to modify incentives to the Falls being offered in connection with that proposal, including the donation of the former 13th Street Gym building and a donation of $3.5 million over 10 years for "land maintenance and other projects."

The negotiations, which did not involve Mayor Robert Restaino, City Corporation Counsel Christopher Mazur or the city's outside counsel on the Centennial Park project, have taken place as Falls officials and NFR await a ruling from a four-judge panel of the New York State Supreme Court Appellate Division Fourth Department on whether the city acted properly in deciding to use eminent domain to take between 9 and 12 acres of South End property, described as 907 Falls St. and an adjacent portion of property along John Daly Memorial Parkway, to create what has been described in an environmental assessment as a "multi-faceted, year-round event campus" that would include a 6,000 to 7,000-seat arena for sporting and entertainment events, a smaller arena for sporting and entertainment events and a splash pad that could be converted into an ice-skating rink during winter months.

The $150 million project would also include the construction of a parking ramp with exterior walls that could be used for rock climbing and a roof that could be used as a location for concerts or movie screenings. The South End property is currently owned by NFR and an affiliated company, Blue Apple Properties.

Eminent domain refers to the right of "a government or its representative to take private property for public use, as long as the land owner is fairly compensated." NFR has aggressively fought the city's eminent domain action.

Speaking to a Gazette reporter Tuesday night, Zajac, a Republican, denied having "an agreement" with NFR regarding the future of the Centennial Park project or the developer's proposed alternative data center development. But he admitted that some Republican members of the City Council would attempt to add an item to the agenda of tonight's regularly scheduled council meeting that would stop the eminent domain proceedings before the appeals court rules on whether it's proper and legal.

"I'm not aware of an agreement being brought (to the council) tomorrow," Zajac said. "There is a resolution we've drafted, but it's not completed yet, that would rescind eminent domain."

After unanimously approving the use of eminent domain to acquire the property for Centennial Park in November, the resolution that could be considered tonight declares that the "City Council no longer believes it to be in the city's best interest to pursue the acquisition of the parcels (for the park) by eminent domain."

A draft of the resolution obtained by the Gazette lists all five City Council members as supporters, but at least two members are known to be opposed to it. Zajac declined to identify the actual author of the resolution.

While sources with knowledge of the discussions with NFR, who spoke on the condition of anonymity to reveal private conversations, have indicated to the Gazette that the Republican council members linked to the resolution have consulted with outside counsel on the matter, Zajac did not comment on whether the council had used a lawyer in its discussion with NFR. He also did not disclose the identities of the NFR representatives who met with the council members.

The resolution, which will not be available to the public prior to the council meeting, rescinds all prior actions on eminent domain, declares that the city will no longer seek to acquire the contested land and that it takes effect immediately.

Zajac denied that "an agreement" had been reached between the council members and NFR on support for the developer's proposed data center project or a modification of incentives being offered by NFR in connection with that proposal.

"There are still a couple of things being worked on. That part is not there yet," the council chair said.

A spokesman for NFR, Jim Haggerty, told the Gazette, "There is no settlement agreement (on eminent domain)." However, Haggerty did confirm that "discussions" had taken place between NFR and some City Council members.

"NFR and City Council members have met regarding changes to the donations previously offered by NFR (in connection with the Centennial Park project)," Haggerty said. He was unable to identify which specific council members were part of the meetings with NFR.

In response to the city's plans for Centennial Park and the eminent domain proceedings, NFR, in June 2022, offered a counter-proposal that called for the construction of a $1.48 billion data center complex on that same land. NFR said the project would be undertaken by Urbacon, a Toronto, Ontario-based construction company.

As an incentive to support its project, and drop plans for Centennial Park, NFR proposed donating to the city roughly 10.2 acres of land between Niagara Street and Falls Street, and John B. Daly Boulevard and 13th Street as alternative sites for a park and events center. Those incentives were rejected by the city.

City officials have also noted that the the proposed Centennial Park land is not zoned for a data center development and that the project is three times larger than Centennial Park and would require the abandonment of portions of Memorial Parkway, 10th Street and John B. Daly Boulevard.

As part of the discussions between the city council members and NFR, Haggerty confirmed that the developer was open to donating different parcels of land than had previously been offered, as well as the former 13th Street gym as a potential community center, with a repaired roof, and would increase a proposed donation of $2.5 million over 10 years to $3.5 million during the same period for "land maintenance and other projects."

Haggerty also confirmed that NFR was aware of the resolution to stop the eminent domain proceedings.

Restaino suggested that the council members discussions with NFR over the eminent domain proceedings were a violation of the City Charter.

"The charter delegates the negotiation of (contracts) to the mayor. The council authorizes contracts," Restaino said. "The administration has been completely cut out of this whole deal."

Restaino also suggested that the council should take no action before the appeals court ruling on NFR's challenge to the eminent domain proceedings.

"Let's get the (court) decision and let's do the feasibility study," the mayor suggested.

Council Member Kenny Tompkins blasted Zajac and the other council members who met with NFR in private talks.

"I have never seen politics this underhanded and backdoor in my 7 1/2 years on the council," Tompkins, an Independent, said. "This isn't for the taxpayers, this is for the Republican Party."

Restaino also said it was unlikely that he would execute any agreement that council members might reach with NFR.

"I don't believe it's in the city's interest to execute an agreement that hasn't been vetted by the Corporation Counsel," Restaino explained.