NIAGARA FALLS— Frank Parlato Jr. came onto the city’s development scene in 2004 as an outsider with a plan to take over a faded downtown building that had a 40-foot hole in its front yard.

Six years later, the hole is long gone. The first floor of the square glass building, once offices for Occidental Chemical, is a tourist welcome center filled with trinket vendors and food stands. And Parlato has learned the intricacies of Niagara Falls.

Parlato arrived from Buffalo as a colorful character and only added to the hues before he walked away from One Niagara last week.

He still sees himself as an outsider, undefeated by what he calls an “ingrained pattern of corruption and self-serving motivations that have choked the life out of the community.”

“I didn’t understand how you could have a tourist town with maybe 8 [million] or 10 [million] or 12 million people visiting it annually that’s broke,” Parlato recalled of his first few months in the Falls. “. . . It took me a couple years to understand why Niagara Falls is broke, and whatever made it broke, I had to face.”

Parlato, 55, announced last week he had sold his company, Whitestar Development Corp., to a local management group led by local attorney Paul A. Grenga.

The transaction — the details of which have not been disclosed — gives Grenga and his group control and half ownership of the building at 360 Rainbow Blvd., a nine-story glass structure near the foot of the Rainbow International Bridge.

The deal caps off six years in which Parlato, an unconventional developer, became a lightning rod for controversy as he sought to turn the mostly vacant building on a prominent downtown corner into a tourist center with paid parking.

“I fought every inch of the way,” Parlato said. “And I did it without taking any government money. I’m glad for that. To the extent that I did develop the property, I did it with all local people. I really believe Niagara Falls has to develop itself with its own resources and keep its own resources.”

Parlato leaves a building fraught with problems.

Seven of its nine floors remain vacant. The ninth floor is open only under court order. More than $1.5 million in property taxes is owed on the parcel — roughly $476,000 of which could land the building on a city tax foreclosure list. Legal disputes over the management of the building have persisted in federal and county courts.

Parlato estimates almost $1 million has been spent on legal battles over the building — money he says could have been invested in its development.

He believes the new group can “bring it to a higher level.”

Two members of the team, Grenga and attorney James C. Roscetti, have been closely involved in the building for years. They have represented Parlato in various lawsuits between Parlato and co-owner Incredible Investments Limited, as well as the city.

Parlato said the group also includes two investors from Toronto who “are not going to be active” and have asked to remain unnamed.

Grenga also will work with a management team that includes former Village of Lewiston Mayor Richard Soluri, real estate broker Mike Hooper, Niagara Sport Tours President Gene Carella, former Fire Chief Richard Horn and two vendors in the building, Dan Cipollitti and Frank D’Agostino.

Tony Farina, a former TV reporter brought on as president of One Niagara earlier this year, will remain in that role.

Soluri said he is not an investor in the building but will serve as a part-time consultant on issues such as “government and community relations” and “beautification.”

“If the Falls does better, it benefits everybody in the area,” Soluri said. “If we improve that property, then maybe other property owners along the way will get the message. It’s a long-term proposition.”

Parlato — who said he was given a “fair offer, a good offer” for his stake in One Niagara — said he is still evaluating his options for the future. He said he will no longer have an involvement in One Niagara, but plans to continue to write for a local weekly paper, the Niagara Falls Reporter. He is also considering an opportunity in Nevada.

He said he has no regrets about entering Niagara Falls development.

“At least in my own heart,” Parlato said, “I can walk away knowing that this was true: I was far from perfect. I made a lot of mistakes, but I know I never did anything there that wasn’t right in my mind, that wasn’t in the best interest of the project and the community.”

djgee@buffnews.com