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NIAGARA FALLS – Construction companies will soon pay a $1,000 yearly fee for the right to demolish homes and other buildings in the city.

City lawmakers Monday approved a new registration system for demolition contractors that would require each company to register and pay the up-front fee once a year.

The regulation is seen as a way for the struggling city to right its financial ship in the midst of tough budget times.

“We have to generate new revenues,” City Councilman Sam F. Fruscione said. “It doesn’t directly affect the taxpayers and businesses in Niagara Falls.”

Mayor Paul A. Dyster appears to support the plan, adding that the city is re-evaluating the various regulations in each department.

“This was just first on the list,” Dyster said.

Councilwoman Kristen M. Grandinetti said the system was created for better regulation of the companies, not as a revenue source.

Demolition contractors now pay an average of $280 in city permit fees, officials said, not including state asbestos removal charges that can cost more than $1,000.

Lawmakers see the new charge as a small sum for the dozen or so demolition contractors who regularly do business in the city.

“They’re all making money,” Fruscione said, “so what is $1,000 when you’re making $400,000 [or] $500,000 [each year]?”

Fruscione said more than $1 million in demolition work has been done in recent years, and some companies in recent times have submitted large change orders that show the industry is in need of more regulation.

“This is probably the quickest- growing business in Niagara Falls, because the city is rotting in front of us,” he said. “They’re clearing a lot of cash.”

The new regulations are expected to take effect within weeks. Existing contractors would be required to pay the fee, Fruscione said.

Lawmakers have said the city will again struggle to balance its budget without more than $60 million in revenues from the Seneca Niagara Casino.

The money has been withheld due to a dispute between the state and the Seneca Nation, blowing a hole into the city’s budget and leaving the city in a frenzy to find more revenue sources.

email: cspecht@buffnews.com