In an interesting twist of circumstances, the reported “done deal” for USA Niagara to buy and demolish the Wintergarden has, at least temporarily, fallen apart. According to sources close to the situation, the state has informed downtown developer Joseph “Smokin’ Joe” Anderson that the $1.6 million deal he made last fall to sell the Wintergarden and his 30-year lease on the adjacent East Mall walkway will be reduced by $800,000, half the agreed-upon purchase price.
Anderson confirmed that USA Niagara claims to have “discovered hidden expenses,” which they say were unknown to them when they made the original deal.
A state environmental report purportedly reveals there is asbestos on the property, and now the state wants Anderson to pay the entire $400,000 cost to remove it. Lending an air of mystery to the sudden change in plans is a certified environmental report — prepared by AAction Environmental Services (certified asbestos handling license #030116), dated Oct. 10, 2007, and filed with the city — showing that there is no asbestos on the property.
USA Niagara also “discovered” that, if they demolish the Wintergarden, it will damage the north wall of Anderson’s attached Quality Inn hotel. They want Anderson to pay the state $400,000 to repair it. Sources familiar with construction say the state must have known about this before they bought the property, since the Quality Inn and the Wintergarden are attached.
And even the state admits the asbestos is “contained” in window caulk, which if removed wouldn’t necessarily constitute an airborne threat. Delaying the demolition of the Wintergarden could be advantageous to Maid of the Mist Corp. CEO James Glynn, who many believe has powerful behind-the-scenes influence on both City Hall and USA Niagara.
DECISION TIME: As USA Niagara spends taxpayer dollars to build a cobblestone walkway with a giant “Mist” fountain in front of James Glynn’s Comfort Inn Hotel and retail stores, it has to decide whether to demolish the Wintergarden. Fortunately, USA Niagara has Glynn on its advisory board to guide and advise it. Why not ask him what to do?
Glynn contracted to purchase the Comfort Inn and its 25,000-square-foot retail complex 200 feet from the Wintergarden for a reported $11 million last summer and is set to close on the property later this month.
While he may have nothing to do with the sudden change in Anderson’s deal, there is circumstantial evidence showing he could be the beneficiary of it.
In 2007, Anderson planned to demolish the Wintergarden to make way for a new, 20-story, 600-room hotel where both his Wintergarden and Quality Inn properties now stand.
The city required him to put his property through condemnation procedures. Anderson succeeded in getting his property condemned after shutting off utilities, and removing wiring and plumbing. He submitted environmental reports and filed for a permit from the city to demolish the Wintergarden. Within days of filing for the permit, according to Anderson, USA Niagara officials approached him and said he could not demolish the building to build a hotel since the state might want the property. They would work with Anderson, however, to buy the Wintergarden and give him enough land — about 10,000 square feet — to enable him to build his planned hotel.
If Anderson did not agree, he couldn’t build anyway, since the state could seize his property through eminent domain. So he agreed to hold up demolition and began negotiating with USA Niagara officials and Mayor Paul Dyster starting in January 2008.
It wasn’t until June, when Rick Forgione of the Niagara Gazette broke the story, that the Wintergarden purchase became public. City Hall sources said Dyster was livid about it, since he and USA Niagara were trying to keep the plan secret until Glynn could complete his purchase of the Comfort Inn. At the time, Dyster would neither confirm nor deny the Wintergarden purchase.
In August, USA Niagara officially announced the Wintergarden purchase from Anderson for $1.6 million. Their plan was to create a pedestrian walkway between the Seneca Niagara Casino and the Niagara Falls State Park. This would necessitate demolishing the Wintergarden.
IF ONLY THEY HAD LOOKED AT THE PICTURE FIRST: Months after it agreed to pay Anderson $1.6 million for the Wintergarden, USA Niagara said it suddenly realized that if it demolished the building, it would damage the wall of the neighboring, attached Quality Inn.
In an exclusive Reporter interview, Anderson said he will not accept the $800,000 change in the contract — which, after paying off the $480,000 mortgage he owes the city as part of his original $1 million purchase price, would leave him essentially nothing for the valuable property.
“No valid contract presently exists between the state and myself,” Anderson said, adding that he will “certainly reject” the new USA Niagara deal.
That might be what USA Niagara officials expect.
Anderson is in a ticklish position and the state knows it. If the Wintergarden stays, Anderson can’t build his planned hotel. And since the building has been condemned, he cannot easily renovate it.
Coincidentally, things started going bad for Anderson about the time Glynn announced his purchase of the Comfort Inn, the closest hotel to Anderson. A2006 study of more than 200,000 tourists showed that when the Wintergarden was open, tourists would flock through it to the East Mall, and into the city or to Seneca casino property. When the door was locked, tourists were virtually stopped at the Wintergarden and headed back to the state park. Glynn’s newly purchased Comfort Inn is on the way back.
A vacant, locked Wintergarden will serve as a barrier for tourists, keeping them at the park and Glynn’s hotel and stores.
Conversely, the demolition of the Wintergarden would allow tourists a clear walkway to the Seneca hotel and casino complex and away from Glynn’s retail complex. It would also clear the way for Anderson to build a new, larger hotel that could compete against Glynn.
But the state backing down on its original offer has left Anderson in a quandary.
“We’re stuck on our development of our hotel. We’re stuck on our development of the East Mall,” said Al Crogan, Anderson’s chief engineer. “Joe is at a standstill. We were in the middle of a plan to develop a new hotel, and now we’re stopped by the USA Niagara shift.
“Our environmental study came back with zero asbestos. The state’s study said there was some ‘contained asbestos’ in some window glazing. I do not believe there is any asbestos. But the delay caused by an environmental challenge may take a year or more to sort out,” he added.
Some might argue that it is coincidental that USA Niagara’s actions help Glynn — just as it is coincidental that Glynn sits on the advisory board of USA Niagara.
But there have been many coincidences lately, and it’s getting increasingly hard to dismiss them all.
Consider: Glynn contracted to purchase the Comfort Inn and retail stores that front the West Pedestrian Mall. Simultaneously, Dyster moved to buy out the West Mall lease of businessman Lou Antonacci. Antonacci’s vendors sold food and souvenirs, competing with the Comfort Inn’s shops and restaurants. The buyout eliminated Glynn’s main retail competitor. At the time Dyster endorsed it, he did not reveal Glynn was buying the Comfort Inn and its stores.
Meanwhile, Dyster, partnering with USA Niagara, surged forward with plans to renovate the West Pedestrian Mall in front of Glynn’s property with $5 million in taxpayer money.
USA Niagara is replacing the worn, brick walkway with new cobblestone, adding parking, bicycle racks, old-fashioned street lights, benches and ironically, for the Maid of the Mist owner, a giant “mist” fountain in front of Glynn’s new investment.
Also, when Dyster championed demolishing the Wintergarden and rebuilding Old Falls Street, he didn’t disclose that Glynn’s new development was smack in between.
And Anderson’s planned 20-story hotel would exceed building limits Dyster is trying to impose on new construction near the park, which limits heights to 80 feet. Coincidentally, the height of Glynn’s Comfort Inn is 80 feet.
Last year, Dyster fought to win public approval for the demolition of the Wintergarden, despite having championed its preservation during the administration of Vince Anello. To help quell anti-demolition sentiment, Dyster declared, “The Wintergarden’s time has come.”
Will he now change his tune once again?
Frank Parlato Jr. can be reached at email@example.com.