NIAGARA FALLS – City lawmakers Wednesday night approved a $1.55 million settlement with the owner of a prime downtown property over back taxes and a challenged assessment.

The City Council voted, 3-2, to approve the deal with One Niagara LLC, which had been recommended by the city’s assessor and Legal Department, and which supporters said would resolve long-standing disputes between the city and the property owner.

The owners of the One Niagara building at 360 Rainbow Blvd., formerly the home to offices for Occidental Chemical and known as the “flashcube,” had owed nearly $2.3 million in back city and school taxes. Owners also had been seeking to lower its assessment.

Councilmen Robert A. Anderson Jr., Glenn A. Choolokian and Andrew P. Touma voted in favor of the agreement, while Chairman Charles A. Walker and Councilwoman Kristen M. Grandinetti voted against it.

Anderson and Choolokian said they supported it because was recommended by Corporation Counsel Craig H. Johnson, City Hall’s top attorney, and Assessor James R. Bird. They said they relied on the opinion of the city’s experts.

Choolokian said he asked Johnson and Bird if they considered what was on the table as the best deal for taxpayers, and that both of them said it was and that they supported it fully.

Touma said the vote came down to a choice between continuing “an almost 10-year dispute” or achieving a compromise.

“No one wins if the dispute continues,” Touma said.

Under the deal brokered by the judge overseeing the courtroom battle between the parties, the payment will cover all taxes, including interest and penalties, owed for assessment rolls issued before July 1, 2009. It also sets the property’s assessment at $1 million for tax rolls from July 1, 2009, through July 1, 2013.

From 2006 to 2008, the building had been assessed at $4,665,000. In 2009, the figure was lowered to $4 million.

Tony Farina, president of One Niagara, described the Council’s vote as “a great decision, I believe, for everybody here to be able to move forward and, as I’ve said so many times, put this ugly chapter behind us, concentrate on developing the property, fitting into the downtown environment, making it an attractive and economic catalyst for downtown growth.”

The nine-story building houses food and souvenir vendors, and the site is used as a paid parking lot.

Walker did not publicly state at Wednesday’s meeting why he voted against the agreement, but previously said he had some concerns about the potential effect of such a deal on other property owners.

Grandinetti called the agreement a “slap in the face” of taxpayers and new developers.

“I think that this is a dangerous precedent that we’re setting,” Grandinetti said.