Makeover continues at former Rust bar building on Third Street

Oct. 18—It's been more than four years since the doors closed at Rust, a Third Street bar where, back in 2018, Niagara Falls police investigated a bloody altercation they described as a "racially motivated" assault.

On Monday, state officials joined the current owners in celebrating a milestone they hope will bode well for the building's future — the renovation of six studio and two, one-bedroom apartments upstairs.

By this time next year, they're anticipating the first brewery in downtown Niagara Falls will open inside the bar on the lower floor where Rust previously operated.

Renovating and reviving the entire building at 466 Third St. is part of a larger redevelopment strategy undertaken by the state-run USA Niagara Development Corp. after it acquired 32 parcels in downtown Niagara Falls under a $14 million deal in 2019 with Lewiston businessman Joseph "Smokin Joe" Anderson.

While the old Rust bar building is the first of the Anderson buildings to be transferred by the state into private hands, USA Niagara's President Anthony Vilardo said he expects more deals to follow soon.

"This is the first strategic land acquisition program that's been completed," Vilardo said.

Rust bar closed in May 2018, less than three months after Falls police started investigating an assault at the location involving a white male who visited the bar with his African American girlfriend. Police reports from the incident indicated that the male victim suffered a facial fracture after an allegedly unprovoked attack by staff members wearing hard-knuckled gloves.

Police later charged two men in the case — Todd Biro, the husband of the bar's operator, and Daemon M. Kraft. Both men later pleaded guilty to misdemeanor counts of third-degree assault. Biro agreed to pay $2,500 to cover part of the victim's medical bills.

Cataract Development — a company owned and operated by two Niagara Falls firefighters, Jason Zona and Jason Cafarella, and Cafarella's brother, Matt — was selected to redevelop the property by USA Niagara following the release of a request for proposals.

State officials says Cataract Development invested $500,000 in renovating the apartments upstairs.

It's not Cataract's first project on Third Street. The company completed the renovation of three other properties on the strip. Zona said it has since sold two of those buildings to investors from Buffalo. The company retained the Tierney building, which has been enjoying a renaissance of its own of late with the opening earlier this year of The Gold Bar and plans to soon reopen the old Third Street Tap Room as Halligans Third Street Tap Room.

"Back in the '90s, this was one of the most bustling bar businesses in Western New York," Zona said. "There's a motivation now throughout the city to get this downtown back to where it's supposed to be."

"It's not about us renovating buildings. We're getting good tenants," he added.

At 466 Third St., Cataract Development already has one existing tenant in Donatello's pizzeria. The bar and restaurant space next door to Donatello's that formerly housed Rust has been leased by John Meteer, a Youngstown native who worked for five years as the brewer for Brickyard Brewing Co. in Lewiston. Meteer plans to open the first brewery in downtown Niagara Falls — Hammer & Crown Brewing Co. — inside the bar area next year. That project, which will involve a new kitchen, restrooms and other improvements, is expected to cost about $250,000.

Meteer said he fell in love with the building the day he set foot inside of it for the first time and he's encouraged by investments that have been made by other entrepreneurs on Third Street in recent years.

'There's people actually moving down here again and there's genuine investment in properties going on around here," he said.

Cataract Development did not receive any tax breaks or other public incentives for the project, but USA Niagara Development did sell the building to the company for $1. Records obtained by the Niagara Gazette show the property had a purchase price of $200,000 when the state bought it from Anderson.

Vilardo defended the deep discount on the price of the building, arguing that investors on Third Street and downtown are still dealing with a market that does not allow them to command top dollar for rents. As a result, he said, without some help from the state, buildings in commercial areas can do what many of them have been doing for years — sit empty.

"The goal here is not to make money on these," Vilardo said. "It's to return them to the highest and best use that you can."

USA Niagara previously worked out a similar transaction for four properties up the street, including the former home of the Icehouse nightclub at 512 Third St. and the former Niagara Mohawk building located at 500 Third St.

Vilardo said he anticipates a previously announced deal to transfer the properties to the private firm, T.M. Montante, will close soon. The deal was delayed after the discovery of petroleum contamination at the site. The cleanup effort is now in the process of being cleared by the state Department of Environmental Conservation, Vilardo said.

Montante announced last year plans to invest $3.8 million to renovate 500 Third St. for use as event and office space. At the former Icehouse property, Montante intended to open a brewery and a restaurant.