CHECKMATE OR CHECK FRAUD? Mayor’s Eminent Scheme to Block $1.5B Data Center Exposed

By Nick Del Vecchio

An intriguing game of chess is being played out in court between attorneys representing Niagara Falls Redevelopment and Mayor Robert Restaino. Restaino and the city are determined to capture NFR’s Queen, 10 acres of land known legally as Parcel 0, which is essential to the completion of the digital data center they hope to build downtown.

NFR has re-positioned several pieces to protect their lady by filing two new documents with the City of Niagara Falls Planning Board. At stake for the taxpaying residents of Niagara Falls is an opportunity to reverse decades of decline and decay by jumping on the AI bandwagon and riding it to a progressively prosperous future.

The cornerstone of Restaino’s strategy to defeat NFR’s project is to acquire the land via eminent domain. But he must first show that the property is necessary for public use. The Fifth Amendment to the U.S. Constitution also requires that the city provide just compensation to the rightful owners. The fact that the property in question is worth somewhere between $20 and $ 30 million makes this a very dubious proposition for the mayor and his administration. The city simply doesn’t have that kind of money so their hired guns from Hodgson Russ are attempting to drag the matter out indefinitely. NFR is having none of it.

Last week, attorneys representing NFR filed a Planned Unit Development (PUD) petition with the City of Niagara Falls Planning Board to end Restaino’s obstructionist delay tactics. The petition asks the board to consider the benefits its Niagara Digital Campus will bring to the city of Niagara Falls:

It cannot be overstated just how important the data center and technology industries are to national, state, and regional economic development. With the proliferation of artificial intelligence-driven technology, the need for data centers has soared in the United States. Data centers are essential for the United States’ growth and economy because they underpin the digital infrastructure, drive innovation, create jobs, generate tax revenue, and enhance energy connectivity and resilience. Their strategic importance will continue to grow as our society becomes increasingly dependent on digital technologies.

Despite NFR’s obvious vested interest in this narrative, there’s no denying that AI technology is the wave of the future. And a report recently compiled by MRB Group – an established engineering, architecture and municipal planning company – details the enormous economic potentialities of a $1.5 billion digital data center in the heart of Niagara Falls, NY. According to MRB Group’s study, the data center is projected to produce $414 million in tax revenues over twenty years, including taxes paid on the project’s energy use that “will generate $298 million in property, sales and gross receipts tax for the City and School District.” The estimated earnings of the thousands of construction jobs the data center will create could exceed another $1.66 billion over the same period. Any way you slice it, the choice between NFR’s Niagara Digital Campus and Mayor Restaino’s “Centennial Park” money pit is a no-brainer.

The second petition to the Niagara Falls Planning Board regards the city’s High Energy Use Law (HEUL), which was enacted in late 2022, after NFR began plans to build a data center. It demonstrates the impossibility of complying with the ordinance by showing how ambient noise level requirements are already exceeding the limits imposed by the law.

The filing also quotes Councilmember David Zajac, whose public comments on the matter are as revelatory as Restaino’s.

“Is this Code perfect? Probably not. Will we go back to it and revisit it in a year or so? I would probably say most definitely, just to make some changes and try to make it even better. But I do think this is in the right direction to welcome an industry,” said Zajac during a public hearing on HEUL held September, 6, 2022. “I do believe we have to make a full evaluation of this Code if it is approved within the next year with all parties involved; the industry, the administration, our residents, and see what needs to be tweaked on it.”

Zajac failed to explain how requiring industry to abide by an ordinance for which compliance is an impossibility amounts to a red carpet for their potential projects. It is far more likely that the HEUL law was enacted solely to serve as yet another barrier to NFR’s data center. Counsel representing NFR say their text amendment request to revise HEUL “is designed to provide the City Council with greater flexibility regarding the location of high energy uses and to address noise restrictions that have proven to be unattainable and problematic for City officials, businesses, and residents.” But if Zajac and a majority of other councilmembers enacted the HEUL code with NFR specifically in mind, it’s obvious they’re politically beholden to Restaino and in on the fix.

Just as Restaino’s targeting of Parcel 0 was a calculated and disingenuous pretext for the “necessity” of building Centennial Park, the enactment of the City of Niagara Falls Council’s HEUL code appears to have been carried out to serve one purpose and one purpose only: To prevent the building of NFR’s Niagara Digital Campus. An earlier 500-page PUD submission filed by NFR in October 2024 “provides critical new noise data showing the Data Center will comply with the applicable standards.” But as Zajac candidly admitted, if “some changes” are necessary the ordinance should be “tweaked… to make it even better.” His cynical meaning is crystal clear. If NFR’s data center manages to comply with HEUL’s requirements, it will be changed in such a way as to make it impossible for them to do so.

Mayor Restaino and his councilmember cronies are conspicuously getting down and dirty in their efforts to prevent the building of NFR’s $1.5 billion digital data center. If he’s successful in his quest to keep the city down, taxpayers and the students of the Niagara Falls City School District, who stand to gain exponentially if he fails, will have missed a golden opportunity that may not come around again in the foreseeable future, if ever. It appears Restaino likes to play chess the same way he plays cards, moving pieces around the board when his opponent isn’t looking. Whether or not he gets NFR’s coveted queen, however, remains to be seen.