NFR says partner's track record makes Niagara Digital Campus plan different

Jun. 29—Just 24 hours before a scheduled eminent domain hearing on 12 acres of land in the South End, the owner of the property has announced plans for a $1.48 billion development on the parcels.

Niagara Falls Redevelopment (NFR) and Urbacon, a Toronto, Ontario based construction company, unveiled plans late Tuesday afternoon to "develop the Niagara Digital Campus."

A press release issued by a public relations firm representing NFR described the project as a "technology and data center campus in the heart of Niagara Falls, New York."

The proposed location — at the intersection of Rainbow and John B. Daly boulevards — has previously been targeted by the city for the development of Centennial Park, a planned events center and campus that Mayor Robert Restaino has described as "a new gateway to the City of Niagara Falls."

NFR, a subsidiary of New York City-based Milstein Properties, has been engaged in what have been called "contentious" negotiations with Falls officials to acquire "all the real property located at 907 Falls St. and a portion of property along John Daly Memorial Parkway" to develop the Centennial Park project. As recently as April 26, Milstein representatives presented the city with a counter-offer to "transfer 20 acres of property to the city between Niagara Street and Falls Street, and John B. Daly Boulevard and 13th Street."

The city rejected that offer, noting that the Milstein companies don't own all the properties on that acreage. There are 30 individual homes, two churches and Niagara County's Department of Social Services Building located within those boundaries.

"We understand that the city has identified NFR's Falls Street property as its favored location for the recently announced Centennial Park project and has commenced the eminent domain process to that end," Roger Trevino, an NFR principal, said in a statement released by the company's PR firm. "We firmly believe that eminent domain proceedings are not needed, and we oppose such actions as highly premature. Eminent domain can take years and cost taxpayers millions. It would be completely unnecessary in the face of the opportunities we have been discussing with Mayor Restaino."

But Restaino said NFR's property is not properly zoned for the data center project and that the city has offered alternative sites for development.

"They want to build a data center where the property is not zoned for that," the mayor said. "I've had NFR people tell me Centennial Park is the 'perfect place' for (a data center). This is about (increasing) the value of their property."

Restaino suggested the sudden announcement of a $1.48 billion development by a company that has controlled a large swath of South End properties for 25 years, without completing a single project, smacks of an attempt to inflate the cost of a potential eminent domain proceeding.

"I can't imagine any other potential reason for it. But that's just speculation," the mayor said.

In its announcement, NFR said the project would create "an estimated 5,600 construction jobs and more than 550 permanent jobs for area residents." NFR said "the Niagara Digital Campus would be among the largest private development projects in the city's history."

The Milstein Properties subsidiary also said it would "donat(e) public amenities to the City of Niagara Falls, including land with potential use as a new park and events center, and $250,000 per year for 10 years for upkeep and maintenance."

In the announcement, Urbacon was characterized as "one of the premier developers of commercial and industrial properties in Canada and the northern United States.

NFR said Urbacon would develop the project, which "will be home to approximately 600,000 square feet of high-security, technologically advanced data-center space, creating state-of-the-art data and IT jobs for area residents."

"We are truly excited at the prospect of bringing our new facilities to Niagara Falls," Peter Russell, vice president, Properties & Development Management at Urbacon, said. "With ready access to hydroelectric power, Niagara Falls is an ideal location for the campus. And the city's northern climate requires less reliance on mechanical cooling, allowing for operations that are quieter and more energy efficient."

Urbacon has reportedly built similar facilities in Montreal, Toronto and Richmond Hill, Ontario.

Reached by telephone late Tuesday, NFR spokesman James F. Haggerty said representatives from NFR have been engaged in discussions about the project with city officials since September.

Haggerty, who is the president and CEO of PRCG, a public relations firm that specializes in crisis and litigation communications, said the plan calls for the project to be entirely privately funded.

Neither NFR nor Urbacon have approached the state-run Empire State Development Corp. or the New York Power Authority about potential subsidies for the project, according to Haggerty. He said formal plans for the data center have not yet been submitted to the city hall, described those steps as being "premature" in light of ongoing discussions with city officials.

NFR has, over the course of more than 20 years in Niagara Falls, advanced various proposals and projects that have not materialized.

When asked what would make the data center proposal different, Haggerty pointed to Urbacon's track record and expertise.

"Urbacon has done these kind of developments consistently and is one of the premiere developers of data centers and tech-space," he said.

"They will certainly will be partners in this project and are excited about it," Haggerty added.

Niagara Falls residents will get their chance to weigh in on the city's plan to acquire — through eminent domain — NFR parcels for the development of the Centennial Park project. A public hearing will be held at 6 p.m. tonight at Niagara Falls City Hall, 745 Main St.

Restaino said members of his administration will make a presentation at the start of the hearing. Restaino said the estimated cost for Centennial Park is between $150 million and $160 million and there have been discussions with representatives from the Western New York delegation about the state providing funding for the project. During those discussions, the mayor said city officials were encouraged to secure "site control" as a first step in the process.

"This is the city saying we're going to take action to develop a portion of our downtown," Restaino said.

Haggerty, the NFR spokesperson, said the data center project would not necessarily preclude the proposed Centennial Park from moving forward and NFR is open to the idea of partnering with the city on the project.

"The arena and the park and the event center can both move forward and NFR wants to have these discussions with the city so that both things can move forward to the benefit of the city," Haggerty said.

Councilman Donta Myles, who has been highly critical of the administration's scheduling of special council meetings of late, said he is hoping to hear more details from Restaino about important aspects of the Centennial Park proposal, including where the funding is going to come from and what entity would run the arena once it is built.

"I want to know more clarity where the funding is going to come from," Myles said. "Do we have guaranteed support financially from the state or are they just saying, 'We'll talk about it later?' "