The dispute at the Peace Bridge Authority pitting Gov. Andrew M. Cuomo against a determined Canadian contingent is escalating into an international incident.

And it has been months in the making.

The binational agency that has governed the Niagara River span for decades – usually in a spirit of cooperation – now finds itself paralyzed by a deepening and bitter disagreement over the pace of development on the U.S. side.

And after New York members last month tried to fire the authority’s Canadian general manager, the Canadians now say they can no longer deal with Cuomo and his chief emissary to the board.

What is behind the most serious rift in the 86-year history of the Peace Bridge?

For Cuomo, it revolves around the lack of progress for his vision of the Peace Bridge, which includes an expanded Buffalo plaza with room for improved traffic flow, a new duty-free store and maybe even a welcome center. To an extent, he has staked his political reputation among Western New York voters – who rejected him in 2010 – on achieving progress at a place notoriously famous for stagnation.

For Canadians, it’s about proceeding with $40 million in improvements, including the urgent need to replace the original deck of the aging span – as well as resentment over what they consider Cuomo’s roughshod way of doing business.

The nastiness is rising to the level of international incident on what is supposed to be the world’s most peaceful border.

Tensions rose even higher late last week after authority Chairman Anthony M. Annunziata – a Canadian – refused to work with Sam Hoyt, his American counterpart and Cuomo’s handpicked representative to the authority. Annunziata declared the situation “irreparable” until Hoyt is replaced.

“I am done with Sam Hoyt,” Annunziata told The Buffalo News during an interview in Niagara Falls, Ont. “I am done with the governor’s office and will not speak with them anymore. I want a change, or we will be at an impasse.”

“He’s got to go,” Annunziata added of Hoyt. “That leadership has made it impossible. We need a change.”

Hoyt responded late Saturday that he is not leaving the authority.

“I work at the pleasure of Gov. Cuomo and will as long as he wants me to represent him on the authority,” he said.

The former assemblyman said Canadian members of the authority are unaccustomed to a New York governor committed to a faster pace of progress at the bridge.

“Gov. Cuomo wants very tangible progress on the U.S. plaza, and my mission is to deliver that to the governor,” Hoyt said. “We’ve rocked the boat at the authority … and they don’t like that.”

The impasse is already freezing any significant decisions at one of the busiest international border crossings in the world.

Cuomo appointee resigns

The dispute had been simmering since last summer but boiled over at the April 26 meeting – its first since December – when the board failed to oust General Manager Ronald Reinas in a 5-to-5 vote initiated by the New York delegation.

The situation became even more complicated late last week when Patrick J. Whalen, another of the governor’s appointees to the authority board, resigned. Whalen, who is also the chief operating officer of the Buffalo Niagara Medical Campus, would not discuss his resignation with The Buffalo News but told the governor he was hampered by time constraints.

Authority observers say the timing of his departure raises serious questions just as Canadians are ramping up their opposition to the Cuomo administration’s tough tactics.

Annunziata appears most incensed over a U.S. caucus statement following the divisive April 26 meeting that pointed to Reinas’ “numerous shortcomings and dereliction of duty.” The Canadians were outraged.

“His career is seen as a negotiating ploy,” said Annunziata, who is scheduled to review the situation with top Canadian officials in Ottawa beginning Monday.

Complaints against Reinas

Hoyt on Saturday ramped up his efforts against Reinas by outlining a long list of alleged infractions in a letter to authority members and by releasing documents pertaining to a sexual harassment complaint lodged against Annunziata by a woman who serves as New York’s project manager at the bridge.

“The Peace Bridge general manager has not performed his duties in a way that would facilitate the long overdue American plaza infrastructure improvements and has behaved in a way that does not reflect well on the authority,” Hoyt said.

Hoyt then accused Reinas of several transgressions, among them:

• Using his Peace Bridge position to obtain business for his son.

• Refusing to compensate a Buffalo law firm for its counsel on the general manager’s actions.

• Using his son’s air charter business to transport staff and board members to various meetings.

• Bypassing New York members on tax matters pertaining to the Episcopal Church Home property that is being considered for expansion on the U.S. side of the bridge.

In the end, though, Hoyt was clearly irritated at the lack of progress on the American side of the Peace Bridge.

“Now that the Canadian plaza is complete, his job is to facilitate a project on the U.S. side,” Hoyt said of Reinas. “He is not performing either duty and has made himself an impediment to progress on the U.S. side. I believe immediate termination is warranted.”

The Peace Bridge Authority has spent about $100 million in projects over the past 20 years on the Canadian side, while less than $20 million has been spent over the same period on the U.S. side.

Accusations of harassment

The authority documents Hoyt released pertaining to the sexual harassment complaint were filed by Maria Lehman, the former Erie County commissioner of public works who serves as state project manager at the bridge.

Lehman alleged that, at a December meeting, Annunziata referred to her as “the governor’s concubine” in a way she found offensive.

Annunziata said the remark was humorously conveying that she was engaged to do Cuomo’s bidding.

An investigation launched by the authority concluded that Annunziata’s actions were “objectionable and offensive and demonstrated a lack of good judgment on his part … [and were] in breach of the provisions of the Business Ethics Policy.”

Hoyt said that the board has not acted on recommendations that Annunziata apologize and attend courses in sensitivity training.

He also said U.S. members of the authority have boycotted meetings throughout 2013 because of the board’s failure to address the situation.

“It remains unresolved,” Hoyt said, adding that he believes Annunziata favored firing Reinas until the sexual harassment charge prompted Canadian members to “circle the wagons” around their general manager.

Annunziata would not comment late Saturday except to say he was never in favor of firing Reinas.

Cuomo’s aggressive tactics

Cuomo has made a point of insisting on improvements on the U.S. side of the bridge, and the testiness on the authority board seems to have started in 2011, when the new Cuomo team started championing an aggressive agenda aimed at counteracting a reputation for inertia at the bridge, according to Canadian and American observers.

The governor attempted to convey a sense of progress when he convened a news conference last Aug. 4, announcing agreements to buy a portion of Busti Avenue from the City of Buffalo for bridge plaza expansion.

“This is more evidence of a new day in Buffalo,” he said then. “You can feel it in the streets. You can feel it in the air. Let’s keep going.”

But the Canadians say they have no signed agreements that would allow Cuomo to pursue his plans for an expanded plaza featuring a new ramp system and a relocated duty-free store.

“This notion of acquiring Busti and the Episcopal Church Home would require another environmental impact statement,” Annunziata said, referring to a long delay that study would entail. “They want headlines for a duty-free, a welcoming center and improving the approach. It’s nice to have, but it’s not a need to have.”

Hoyt said he does not believe a new environmental impact statement is needed.

Annunziata, meanwhile, listed three top priorities for the bridge: establishing a truck pre-clearance facility in Ontario, widening both approaches to the bridge, and replacing the original 1927 deck. Attention can then turn to the New York delegation’s wish list, he said, but only after the state has obtained signed agreements paving the way.

So far, he added, those agreements are nonexistent.

The problem intensified last November, the chairman said, when Hoyt and allies proposed a “turnkey” plan for bridge widening, new ramps and anything planned for the Buffalo plaza.

“We were supposed to deposit $95 million in an account and get out of the way,” he said. “That’s what they said we ‘inexplicably’ turned down.”

Criticism of Sam Hoyt

The situation blew up April 24, when Howard Glaser, Cuomo’s director of state operations, blamed a “lack of cooperation” on the Canadian delegation in a letter to Canadian Transport Minister Denis Lebel.

“Glaser doesn’t get his way, and he wants people removed,” Annunziata said. “Sam Hoyt is the doer.”

One source familiar with the situation who asked not to be identified pointed out that many previous authority chairmen were volunteers, independent of the governor’s appointment for their livelihood. But Hoyt earns $139,000 a year as Cuomo’s regional president of the Empire State Development Corp.

“Sam can’t say no to the governor; he can say no to Ron Reinas,” the source said. “It’s a serious governance flaw in the structure.”

Several New York sources familiar with the situation said the Canadians were displeased when Cuomo appointed Hoyt as the top U.S. representative on the authority because of Hoyt’s antagonistic role toward expansion plans while serving in the Assembly. And they point out Hoyt now is advocating many of the same positions he previously opposed.

Another source familiar with the deliberations of the authority also expressed reservations about the Cuomo administration’s “hardball” tactics, especially the statement condemning Reinas.

“It should be understood that not every member of the U.S. caucus supported that statement,” the source said.

Canadian members of the authority are appointed by the federal government in Ottawa. On the U.S. side, three New Yorkers are appointed by the governor; one is appointed by the Niagara Frontier Transportation Authority, a state agency controlled by the governor; and one is appointed by the state attorney general.

Hoyt said Saturday he has “drawn no lines in the sand” that would impede resumption of normal relations with the Canadian delegation, but he said Annunziata needs to “keep his word about removing Ron Reinas, who is an obstacle to progress on the U.S. side.”

Calls to dissolve authority

Adding to the escalation of tensions was the proposal last week from three area New York legislators – all with close ties to Cuomo – to get rid of the binational Peace Bridge Authority.

Republican Sens. Mark J. Grisanti of Buffalo and George D. Maziarz of Newfane, along with Democratic Assemblyman Sean M. Ryan of Buffalo, proposed dissolving the Peace Bridge Authority and delegating U.S. affairs to the NFTA.

A number of sources believe the proposal reflects Cuomo administration sentiments, but Annunziata and others, including Democratic Assemblyman Robin L. Schimminger of Kenmore, are raising questions about the proposal.

“The idea of putting two different agencies in charge of operating one of the busiest international border crossings in the world is a recipe for disaster,” Schimminger said, adding that the deteriorating situation “only puts us further behind the folks in Detroit and Windsor, who are progressing on their own new crossing.”

Area representatives in Washington are also watching the situation with alarm.

Sen. Charles E. Schumer told reporters in a Buffalo visit last week that cooperation has always guided his involvement of Peace Bridge affairs.

“So without pointing any fingers of blame, I plead to both sides to cooperate with one another,” he said. “We’re really beginning to make progress here.”

Rep. Brian Higgins, D-Buffalo, sounded a similar theme.

“People have been hearing about Peace Bridge expansion for the past 25 years, and nothing has been done,” he said. “The recent wrangling among board members is a discouraging distraction from the serious work which should be taking place to create better connections between the Western New York and southern Ontario economies. What we need, and what this community deserves, is progress, not finger-pointing.”

Neither Schumer nor Higgins, however, would respond to questions about any action they were taking to address the situation.