Niagara Falls, NY: Niagara Falls Mayor Vincenzo Anello is under investigation by the FBI and a grand jury impaneled by the U.S. Attorney's office in Buffalo.
There are a few points that have not been reported.
To recap the story: Federal Investigators are looking into loans totaling $40,000 -- from Smokin’ Joe” Anderson, the Tuscarora vendor of tax-free cigarettes and gasoline, and Niagara Falls developer - to Anello’s Electrical contracting company.
In June, July, and November, 2003 -- while serving as city councilman, and just before, and after being elected mayor -- Anello received three checks, totaling $40,000, from Aarow Brokers, a company owned by Anderson’s ex-wife, Gail.
The loans became public through an article in the Niagara Falls Reporter, on May, 3, 2005. After the story broke, Anello explained that the 40k was a non-interest loan for his struggling business, that no repayment schedule was established, and he hadn't made any repayment yet.
The FBI have interviewed a number of Anderson’s associates, Anello’s political appointees and allies, and subpoenas have been issued to board of election officials, and several documents from the city and county have been seized.
While other issues are being investigated by the FBI, for the most part, what the media and perhaps investigators feel is the “smoking gun,” is the money Anello received from Anderson and, in turn, Anderson’s potential benefits received from the Anello administration.
Anderson – who operates a store on the Tuscarora reservation pays no taxes and has one of the largest retail gas and cigarette stores in Western New York. Much of his business is in cash.
However, Anello and Anderson committed their transactions to writing. If there was a secret plan, some have asked, why did the two men not do what others have always done in Niagara Falls (and elsewhere) put the cash in an envelope, and that would be that?
Yet, on July 30, 2003, a month before the Democratic mayoral primary, two checks for $15,000 were written to Anello. Michael Gawel, who works for Anderson, submitted official check requests forms to the company.
According to reports, in the Niagara Falls Reporter, one part of the request form indicates the payments were for "electrical services later," elsewhere the document contains the word "loan."
One check is dated July 30, the day the request was made, the other, June 20, more than a month earlier. Joe Anderson reportedly authorized both payments to Anello, and the checks were signed by Gail Anderson.
Anello said he deposited the money in his business account and recorded the loan on disclosure forms on file at city hall.
At the time of the loan, Anello was a city Councilman and running in the democratic primary for mayor; he went on to win the primary, defeating Paul Dyster by 300 votes. It has been mentioned that Anello outspent his opponent by a wide margin.
After the primary, Anello went on to defeat incumbent mayor Irene Elia in a landslide.
A week after the general election, on Nov. 12, another check was written on the Aarrow Brokers account to Anello. The check request form for $10,000 has the word "contribution" scribbled out and the words "loan -- promissory note" substituted.
Aarrow Brokers dissolved in 2004, after Anderson and his wife split. And, since his election, Anello has had several official dealings with Anderson.
This is not surprising since Anderson is one of a bare few developers who are doing anything in Niagara Falls.
Whether Anderson got preferential treatment from the city, however, needs to be studied before hasty conclusions are made.
Much has been made of the fact, for instance, that, in 2004, the Anello administration negotiated (and the council approved) a potential 30-year lease agreement with one of Anderson's companies for a pedestrian walkway called the East Mall, which runs from the former Wintergarden -- now known as The Family Fun Center, to the Seneca Niagara Casino.
Anderson's no-bid contract called for initial payments of $7,500 a year which some have said is "low."
Still, Anderson is not the only one who got such a deal.
Anderson was actually charged a higher rent than Lou Antonacci, owner of the Como restaurant, who leases a connecting walkway, which runs from the Wintergarden to the Niagara Falls State Park, a walkway closer to the falls then Anderson’s and more traveled.
The leasing rights to a walkway give a developer the responsibility to maintain it and bring attractions to a three-months- a- year active sidewalk area.
He may rent spaces to vendors of hot dogs or Indian food or beer tents etc. and provide amusements such as a climbing walls or putt- putt golf games and bring shows or events or musical acts there.
While it is true that Anderson and Antonacci got no-bid contracts, it is also true that there was no line up of people clamoring for such a task.
Both developers have been active in promoting attractions and events on their walkways. Before Anderson took over his walkway, the area was nearly a ghost town. Anderson’s walkway, combined with Antonacci’s, doubles the length of what one might call a brand new -- sort of “honky-tonk” district, and a very active walkway – now connecting the Casino all the way to the park, and with a plethora of different amusements developed.
Anderson alone has more than 30 events planned this season and Anderson knows how to promote. Every one of his events thus far have drawn thousands of visitors and helped fill up local hotels.
Overall, if Anderson got some benefit from the walkway, so did the city.
And I am quite sure that, to date, Anderson has invested more into his walkway than he has taken out.
From a purely governmental standpoint, it could be argued that Anello scored a home run for the city, by getting a serious and active investor like Anderson to work and further invest in the area.
And work Anderson does. Last Saturday, as I know for a fact, Anderson was at that walkway at 9:59. By 10:01 he was on the phone with his walkway manager Mike Gawel demanding to know why the garbage was not yet emptied – as he required it by 10 Am.
This kind of developer in Niagara Falls, New York, is refreshing. When you consider that much of Niagara Falls’s best downtown property is owned by billionaires and multi- millionaires and has been vacant for years – property like the United Office Building, the mammoth Nabisco property, the Turtle and the Rainbow mall- all of these – a real blight on the area, vacant - and Anderson is out there looking after garbage and creating new attractions- working on site - not only for his walkway, but the Wintergarden also – which he purchased before Anello came to office- turning it into a fun center where children and adults can find something to do in an area - where it has been often said- there is nothing to do.
Anderson has made something happen in Niagara Falls, and he did it pretty much by himself. If he got a little help from Niagara Falls and the Anello administration- that seems a good thing, since so many developers have gotten a lot of help from a lot of previous administrations and have done nothing in return. And no one held their feet to the fire. Million dollar giveaways – and the developers milked them and did nothing in return, scandals really, the real reason why Niagara Falls is broke and dying – and we’re talking about a $40,000 loan?
As far as the walkway is concerned, Anderson has done much for the city.
Additionally, Anderson started a t- shirt company to try to promote Niagara Falls souvenirs.
Much has been made of the fact that Anello helped S.J. Anderson Graphics and Embroidery get a $70,000 low-interest loan from NFC Development, the city's lending arm.
What has been forgotten is that Anderson was developing a brand new company in Niagara Falls- a novelty at best, in an area that hardly has a high demand - and that NFC has a committee including bankers that approved the loan; it was not just Anello.
Additionally, Anderson put up collateral, has excellent credit, and paid the loan each month on time- something few developers who have borrowed from NFC in the past have done.
The NFC was developed to assist new businesses get start- up capital- and that is exactly what it was used for. Anderson’s t- shirts are on sale right now in Niagara Falls.
Anderson's Club Malibu on Third Street also received a pair of grants totaling $90,000 from the city and the state's USA Niagara Development Corp.; these were for façade improvements. While much of third street’s properties are in tough shape- Anderson’s are well kept – with brand new and very nice facades. The City and USA Niagara gave a lot of grants to other developers and some of them - whose names I would not care to mention- have done nothing to date but take the grants and run.
Also, it has been argued that a number of Anderson's city properties did not see a raise in tax assessment from last year's reassessment –while some others on third street did.
Anderson has invested heavily in his properties. His assessments are not truly out of line with the general, comparable sales or comparative system of real estate values -as they are generlly assessed in municipalities. Anderson may have invested and improved his properties more than others- some of which are more or less derelict – yet one questions whether Anderson should be punished with hefty increases in taxes because he invested in downtown Niagara Falls, while others disinvested.
Also, it has been mentioned that the reassessment of the former Wintergarden reduced its value for tax purposes from $1.6 million to $1 million. The reduction seems about right, since the property needed millions in renovations and was vacant at the time he purchased it (before Anello was mayor.)
Anderson said he invested $2 million into the property, and it is a fact that he converted a vacant, downtown property into a popular tourist venue with boxing, concerts, games and a native American museum.
The property was over- assessed before he bought it.
Anello should not be blamed if he a had a hand in making the taxes fair and reasonable for an attraction such as a family fun center in order for it to possibly flourish. Anderson should not be burdened with super- high taxes because he invested both money, time and energy and improved an area significantly.
Indeed, Anderson could probably qualify to get tax- exempt status, if he applied for help with IDA. As it is, he is paying taxes- far more, for instance, than his neighbor, the owner of the Rainbow mall. If Anello was secretly trying to help Anderson, perhaps he could structure a real sweetheart deal like some of the ones negotiated for past developers in previous administrations did – such as the Rainbow Mall or two dozen others I could name.
While it is true that Anello got a loan from Anderson, before we conclude that Anderson got any special favors from Anello, we should pause and be sure of our facts.
The facts may show that Anderson got less than many other developers who did far less than he did for the city.
Take it all around, and I think I can – as a developer myself, evaluate it, Anderson probably got less than he deserved from the city- irrespective of any personal loan.
Anderson has been for a long time practically the only living thing in downtown Niagara Falls. If such as he are not helped- then what are these various economic development programs for?