Rolling in that “spin off” from Seneca Casino

by Matt Ricchiazzi

The administration of Mayor Paul Dyster is advancing a redevelopment project at the corner of Niagara and 7^th – directly across the street from the Seneca Niagara Casino.  The project is causing controversy because the Dyster administration is seeking $1 million in state capital for the project, before issuing a Request for Proposals that could have sought a developer for the project without that subsidy.

If the One Niagara Center – a vastly larger and more complicated structure – can be redeveloped without a dime of public money, then why can’t another developer do the same for a much smaller building located a stone’s throw from the casino? critics ask.

Compounding the criticism is the ambitious promise that the city’s elected officials touted 14 years ago: that the Seneca Niagara Casino would serve as a bold catalyst that would spin off new development and revive downtown. That spin off has not materialized, and Niagara Street is lined with vacant lots, abandoned buildings, and empty storefronts.

Dyster, realizing the optics of that failure, has been advancing the concept of a “tourism incubator” for the one-acre parcel at the northeast corner of the Seneca Nation’s territory. The city-owned land includes three commercial buildings, each of which is three stories, in addition to seven vacant residential lots.

The city already owns most of the lots, with a few currently under contract by the city. The Office of Economic Development plans to release a request for proposals in the coming months that will seek a developer.

The Global Tourism Institute will operate the business incubator as the property’s anchor tenant, but the city wants other commercial spaces and new residential units included in the overall development plan. A taxpayer-funded Global Tourism Initiative, critics say, is intended to sweeten the economics of the project for the future developer.

The City of Niagara Falls has already submitted an application for $1 million in state grant funding through the Western New York Regional Economic Development Council. Another application for $500,000 has been requested by Niagara University’s Global Tourism Institute, run by Buffalo area-businessman Patrick Whalen.  Dyster is committing an additional $50,000 a year from city coffers for a full five years to help fund the operations of the incubator.

Critics also take issue with the project’s timeline. The incubator was first proposed by Niagara University in 2013. The city is waiting to secure state grant money before issuing the RFP, which will delay the selection of developer until late 2017. Construction could take several years thereafter.

Many have argued that the tourism incubator should be located closer to the state park, where the incubated start-ups would benefit more easily from tourist volumes that are concentrated around the Falls.

The One Niagara Center, for instance, could accommodate the incubator immediately. The building’s 8^th and 9^th floors are vacant, each comprising 17,000 square feet – far more space than will be available at the corner of Niagara and 7^th.  That scenario would not require state grants or operating funds, and could be available as soon as December 1^st of this year.

Patrick Whalen, the Director of GTI, has helped build the business incubator space located on the Buffalo Niagara Medical Campus known as the Design Innovation Garage (DiG) and z80 Labs, both located in the Thomas Beecher Innovation Center.

Proponents of the project say that the facility represents a new period of collaboration between the city and Niagara University, which had each been pursing incubator projects separately until a year ago.

The commercial buildings at 610, 614 and 624 Niagara Street were acquired under tax foreclosure proceedings by the city. The properties are dilapidated and will require significant renovation, Anthony Vilardo, the city’s economic development officer, told Buffalo Business First. Any developer of the site is likely to seek – and obtain – state and federal historic preservation tax credits that will further subsidize construction costs, he told journalist Dan Miner.

Niagara University will use the space for students in the school’s College of Hospitality and Tourism to cultivate cutting-edge innovations in the tourism industry.

The first phase of the project cost $415,000 — $250,000 of which was funded by the Western New York Power Proceeds Allocation Board in November of 2013, with the balance funded by the university.

That was before the school began talking with the city and USA Niagara Development Corp. about potential space for the institute, Bonnie Rose, Niagara’s Vice President of Academic Affairs, told The Buffalo News in a December, 2013 article.

It is unclear why USA Niagara Development – a division of Empire State Development – encouraged the school to pursue space in a building that won’t be ready for three or four years rather than helping the school find space that is immediately available.

In that same News article, Dyster said NU’s Global Tourism Institute has a “close relationship” with the long-proposed Niagara Experience Center, an ambitious but never-realized plan for a top-of-the-line interactive museum featuring a Niagara Falls theme.

Positive news for one means positive news for the other, he argued.

Much like the positive news of a casino 14 years ago, which was to spin off major development all over the city but didn’t.