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That NFTA Land Sale

Last week the Niagara Frontier Transportation Authority announced its intention to solicit bids on some of its massive land holdings in Buffalo’s Outer Harbor, specifically the Small Boat Harbor and 60 acres of adjacent land that includes two gargantuan empty warehouses, Terminals A and B.

The authority, which already is facing a deficit, says maintenance on the properties could cost $50 million.

The NFTA has held that valuable, if environmentally compromised, lakefront property for more than 50 years, and it has languished. That’s not entirely the NFTA’s fault: The arc of history has not been kind to Buffalo’s economy in those decades, and the environmental remediation costs associated with any proposed reuse of the Outer Harbor are prohibitive. Even today, it is unlikely that any development will take place there without the assistance of state or federal funds. Also, the NFTA is in the business of transportation, not development, as the agency’s executive director, Kim Minkel, pointed out to WGRZ TV’s Scott Brown when he asked if the NFTA owed the region an apology for failing to do more with the property: “I don’t know that we owe an apology,” Minkel said. “Over the past 50 years there’s been a lot of time and effort by the Authority to try to do something with that property. We’re not developers; that’s not our expertise.” In fact, the NFTA has improved the Small Boat Harbor in recent years.

Still, as the region has witnessed glimmers of hope for waterfront access and revitalization—Times Beach, Gallagher Beach, Lakeside Commerce Park, bike trails, the proposed Buffalo River dredging and attendant reclamation plan, continued progress at the Inner Harbor—resentment over the NFTA’s stewardship has grown.

So most folks responded to the news of the sale with relief. For North District Councilman Joe Golombek, it was an “I-told-you-so” moment. In 2004, Golombek was the only one of nine councilmembers to vote against a deal in which the city relinquished its rights to that property in the event the NFTA ceased to use it for purposes explicitly related to transportation.

Those “reversion rights” were written into the deal whereby the city, which owned the land before the NFTA, conveyed the property to the Niagara Frontier Port Authority in 1957, an agency which eventually was folded into the NFTA in 1969.

The opening of the St. Lawrence Seaway soon struck a mortal blow to port operations in the Outer Harbor. Even after the port died, however, the NFTA held onto the land. In 2004, the NFTA began talking about divesting itself of its Outer Harbor property, specifically contracting to sell the Small Boat Harbor to the New York State of Parks, Recreation, and Historic Preservation.

Golombek researched the original property deal and decided that there was evidence that the city had retained its reversion rights, and that the city was entitled to either payment for the land or title to the land itself.

“I’ve just never understood why a bus company would be in charge of developing our waterfront,” says Golombek. “I thought, and I still think, it would be much better to have councilmembers and a mayor deciding how our waterfront should be developed, because they can be held accountable by the public in an election, unlike some faceless, autonomous state authority.”

Golombek drafted resolutions asking the city’s law department to assert the city’s rights to the property and file restraining orders preventing the sale of the property. The NFTA’s Lawrence Meckler responded that the city’s claims had “no validity.” Nonetheless, the authority took the claims seriously enough to negotiate a deal: In exchange for relinquishing its reversion rights on part of the NFTA’s Outer Harbor property, the city would gain the following concessions, as detailed in a communication to councilmembers in December 2004:

The City of Buffalo will have significant participation in the presently ongoing development process. Specifically, the Mayor and the Common Council will each have one appointment on the Outer Harbor Evaluation Team. Meetings have already taken place. The City will also have two (2) representatives on the Citizen’s Advisory Review Panel. The preferred developer is expected to be selected in January 2005.

The NFTA agrees to abide by the City’s Local Waterfront Revitalization Plan (“LWRP”) to be approved by the Common Council;

The City of Buffalo will receive P.I.L.O.T. payments on property used for non-transportation purposes pursuant to § 1299-U of the Public Authorities Law. Any P.I.L.O.T Agreement would be subject to and require the consent and approval of the City of Buffalo. In this regard, the NFTA has agreed to limit the definition of “transportation purpose” with measurable benchmarks to facilitate revenue coming to the City of Buffalo. Moreover, if no development takes place within ten (10) years, title will revert to the City of Buffalo.

The City of Buffalo will receive 50% (fifty percent) of the net lease or sale proceeds after expenses relating to the Seaway Piers.

The NFTA will deed land near the Main-LaSalle housing development to the City for one dollar ($1.00). (Note: In May 2000, the City had discussed purchasing the land for $220,000).

The State of New York will build a State Park on property adjacent to the Small Boat Harbor.

The NFTA will withdraw four (4) claims filed against the City of Buffalo seeking monetary compensation of approximately one million ($1,000,000) dollars. This includes two (2) pending Supreme Court lawsuits.

State money received by the NFTA (i.e. $4,000,000) will be utilized to benefit Metro bus and rail service.

In return for the above, the City of Buffalo has agreed to the following:

The City will release its reversionary interest in NFTA lands along the waterfront;

The City will extend its lease to the NFTA for the Main-LaSalle Park and ride lot for ten (10) years at the current lease rate of one dollar ($1.00) per year (i.e. from 2009 to 2019).

The City will withdraw its claim in the amount of thirty-five thousand ($35,000) for clean-up work performed by the Mayor’s Impact Team on NFTA land.

With regard to various issues raised by the Common Council at earlier meetings on this subject, I wish to advise the Council of the following. First, the NFTA has agreed to designate two (2) individuals to serve as liaisons to the City of Buffalo to address any constituent issues in the future. Secondly, the NFTA has agreed to narrow the definition of transportation purposes” to benefit the City of Buffalo. In this regard, the City’s outside counsel has proposed language, which the NFTA has agreed to. The NFTA has provided a letter explaining that the $4,000,00 in State money will not be used to fund capital improvements on Main Street. The NFTA has also provided a written response on the issue of pursuing federal money for light rail expansion. A copy of two (2) letters and an e-mail addressing these issues are attached.

The Common Council accepted the deal by a vote of eight to one, with Golombek voting in the negative. Mayor Tony Masiello signed it.

“I think the city made a terrible mistake,” Golombek says. “We received nothing of significant value in comparison to the value of that property. I’ve often said that years from now some graduate student will be researching this decisions and place it among the region’s biggest planning mistakes, right up there with building UB in Amherst and putting the football stadium in Orchard Park.”

Golombek also notes the sunset provision in the 2004 agreement: If the NFTA fails to begin developing the property by 2014—not so far in the future, considering how little has transpired in seven years—title will revert once again to the city.

geoff kelly

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