What Came First: the Data Center or Events Center on Parcel 0? Is Someone at City Hall Lying?

This is #4 in the Parcel 0 series.

The Parcel 0 series covers the battle between Niagara Falls Mayor Robert Restaino and Niagara Falls Redevelopment LLC.

Manhattan billionaire and philanthropist Howard Milstein owns NFR. Marketing guru Roger Trevino runs NFR locally.

The battle between the Mayor and NFR is over the fate of 12 acres in Downtown Niagara Falls called Parcel 0.

NFR owns Parcel 0, situate on the corner of John Daley Blvd and Falls St.

Parcel 0 is part of an assemblage of parcels purchased by NFR over the years, totaling about 140 acres.

NFR wants to develop Parcel 0 into a 600,000 square feet high-security, technologically advanced data-center called Niagara Digital Campus.

The campus would feature different buildings to suit the needs of high-tech companies.

 

The estimated cost is $1.5 billion.

NFR says the 135-megawatt Niagara Digital Campus will “create more than 550 high-paying permanent jobs, with expected annual wages of nearly $29 million.”

The company is not seeking taxpayer money.

Niagara Falls Mayor Robert Restaino has another use for Parcel 0.

Through the legal process of eminent domain, he seeks to force NFR to sell Parcel 0 to the City so he can control the site. He says he can get taxpayer money from the state or grants to develop Centennial Park if he gains site control.

Restaino plans to build a 7000-seat events center, an ice skating rink, a parking ramp, and a small park with other amenities.

Restaino estimated Centennial Park would cost $150 million to build.

Centennial Park will be “a multi-faceted year-round event campus downtown capable of hosting a multitude of events, including but not limited to, sporting events, concerts, indoor/outdoor gatherings, multiple youth centered activities and for visitors and local residents alike.”

The City lacks the funds to develop the project or buy the land.

Mayor Restaino proposes to borrow against 20 years of federal block grant money to purchase Parcel 0.

Restaino plans to use about 45 percent of the City’s annual $2.3 million federal block grant funds for the next 20 years to repay the loan.

By diverting about $1 million per year from road repairs, demolitions, and social services for 20 years, he can repay a federal loan at 7.5 percent interest.

Restaino can get about $10 million toward the purchase price of Parcel 0.

Mayor Restaino said the extra revenue Centennial Park would generate will more than compensate for the loss of $20 million in future funds for $10 million today.

The ultimate purchase price of Parcel O is a matter for the court to decide.

Restaino accused NFR of creating a fictional data center project to force the City to pay more for the land.

He suggested NFR came up with the Data Center idea after he announced he was taking their land.

Last June, Restaino said NFR’s announcement of a $1.5 billion data center was an attempt to inflate the value of their property.

“I can’t imagine any other potential reason for it,” the Mayor told a reporter at the Niagara Gazette. “But that’s just speculation.”

Mayor Restaino retained the law firm of Hodgson Russ and attorney Dan Spitzer to pursue eminent domain litigation.

Eminent domain proceedings can take years to reach a final judgment and have two phases. The first phase is to determine whether the taking is justified. The second is to determine “just compensation” for the owner.

Attorney Spitzer was direct about the Mayor’s “speculation.”

He said NFR was likely pretending to build a billion-and-a-half-dollar project on land that would be worth far less lying fallow, as it has for the 25 years NFR owned it.

NFR says the property’s market value is over $20 million.

On June 29, 2022, Spitzer spoke sarcastically at a public hearing about NFR and its supposed Data Center:

Attorney Daniel Spitzer

“This wonderful project they’ve been working on for years. They don’t even have a site plan application. This suddenly showed up when Centennial Park did. And we have a long history with this company. Nothing needs to be said about that, although we certainly can if you have questions about it.”

But is it true?

Did NFR pull this Data Center project out of their hat – at the last minute and only after Mayor Restaino announced plans for an events center he wanted to build on NFR land?

NFR representatives met with Mayor Restaino, the City’s Corporation Counsel, and planning officials to discuss NFR’s plan for a Data Center in September 2021.

This was nine months before Spitzer, and Mayor Restaino, made their “speculative” comments.

In September 2021, NFR’s Trevino revealed his company’s plan to the Mayor.

NFR would partner with Urbacon Data Centre Solutions, a developer of commercial and industrial properties in Canada and the northern United States, to construct one of the largest private developments in Niagara Falls history – on Parcel 0 — a $1.5 billion technology and data hub called the Niagara Digital Campus.

City representatives, including Mayor Robert Restaino, seemed supportive.

Proof of that support came two weeks later, on October 4, 2021, when then Director of Planning for the City Eric Cooper wrote to NFR about its plans to develop Parcel 0.

“Regarding the prospective development of a Data Center within the City of Niagara Falls at the corner of Falls Street and John B. Daly and south to Rainbow Blvd” to set forth “the potential process for review of this development,” Cooper wrote and copied his letter to Mayor Restaino.

Pages from the letter…

On October 26, 2021, NFR, Cooper, and the City’s Corporation Counsel met. As a result, the City requested NFR draft a proposed zoning amendment to get a variance to allow the construction of the data center.

In early November, NFR drafted a proposed amendment to the City’s Zoning Ordinance and submitted it to City representatives for review and comment.

In reliance on what it believed was the City’s support for the Digital Campus project, NFR began site-preparation work.

The City did not respond to NFR’s request for comments.

Instead, on December 21, 2021, at Mayor Restaino’s urging, the Niagara Falls City Council imposed a Commercial Data Center Moratorium – preventing the development of data centers in Niagara Falls.

Then two weeks later, on January 6, 2022, Mayor Restaino, with newly retained outside counsel, participated in a Zoom meeting with NFR leaders and counsel, according to court filings.

During the meeting, Mayor Restaino told NFR for the first time that he planned to prevent the company from building a data center.

He had plans for NFR’s property.

For the first time, the Mayor told NFR he planned to build Centennial Park on Parcel 0 and that if NFR did not donate the land to the City, he would force them to sell through eminent domain.

It was a sudden reversal and a blatant show of hostility.

This out-of-the-blue aggression from the Mayor was in the manner of “you give me your land or I’ll take it anyway.”

None of this was public and only came out in recent court filings.

The diplomatic Trevino, over the next several months, tried to structure a win-win deal with the City.

NFR lead counsel John Horn, of Harter Secrest, attempted to negotiate a two-project solution with the City.

John Horn, attorney for NFR

He sought ways to develop Centennial Park and the Niagara Digital Campus in Niagara Falls.

Negotiations broke after Restaino offered NFR an alternative property on Porter Road for their Data Center.

It took NFR two months to do its due diligence to learn about environmental concerns associated with the property, including the fact that PCBs and other toxins saturated the property.

NFR offered to donate several alternative sites for the City’s project. The City could get land for free. [More on this in a subsequent story.]

The City would not have to forgo one $1 million per year in federal funds. To sweeten the deal, NFR pledged to donate $250,000 per year for a decade to help offset the cost of operating a park.

Restaino rejected these offers. He wanted Parcel 0.

He pulled the trigger. With his outside counsel billing the City by the hour, Restaino began the years-long process.

He moved to take the property from NFR through eminent domain.

Restaino called for a public hearing in June 2022, where the public could learn about his plans to take Parcel 0 by force since the company would not donate the land.

In response, NFR announced it already had plans for Parcel 0.

Restaino sought to marginalize and discredit NFR.

He “speculated” that the company invented the data center plan.

Restaino and his lawyers suggested NFR only created the data center to hike the price for Parcel 0.

“I can’t imagine any other potential reason for it. But that’s just speculation,” the Mayor said.

“Speculation?” he said.

Records show Restaino knew NFR had plans for a Data Center for nine months when he made the statement.