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NIAGARA FALLS – City lawmakers Monday night put off a decision on a proposed settlement agreement with the company that owns the One Niagara building downtown.

Under the proposed deal, One Niagara LLC – which has been fighting its assessment for several years and owes more than $2 million in back taxes to the city and school district – would promise to pay $1.55 million by the end of February.

The City Council voted, 5-0, to table the proposal at what was its last meeting of this year.

The proposed settlement deal, according to a memo from Corporation Counsel Craig H. Johnson and Assessor James R. Bird to lawmakers, would also call for the city to lower the assessment of the building to $1 million on assessment rolls from July 1, 2009, through July 1, 2013.

One Niagara LLC, which owns the nine-story, former Occidental Chemical office building at 360 Rainbow Blvd. that abuts Niagara Falls State Park and is adjacent to the Rainbow Bridge, would also discontinue the legal challenges to its assessment and pay all money owed, including penalties and interest, for taxes levied based on assessment rolls before July 1, 2009.

Both Johnson and Bird are recommending that lawmakers approve the deal.

A specific figure for how much in back taxes is owed to the city and school district was not available Monday night.

The company also owes taxes to Niagara County, but a figure for what would be paid to the county was not discussed Monday.

The building, situated in a prime downtown spot, houses food and souvenir vendors, though not all of its floors are occupied. The site is also used for parking and is busiest during the summer tourist season.

One Niagara LLC has several pending legal challenges against the city, and negotiations have been taking place between lawyers for the parties, with the help of State Supreme Court Justice Ralph A. Boniello, for months.

The city, meanwhile, has begun foreclosure proceedings on the property.

In 2012, One Niagara LLC filed a lawsuit claiming its $3 million assessment was too high and that it had been overtaxed by $1.7 million over the previous four years.

From 2006 to 2008, the building was valued at $4,665,000. In 2009, the assessment was lowered to $4 million.

The property is currently assessed at $2.6 million, according to the city assessor’s online database.

In February 2011, the amount in overdue taxes was pegged at more than $1.5 million.

Niagara Falls attorney Paul A. Grenga emerged as the leader of a new investment group that bought the building in July 2010.

At least two city lawmakers Monday questioned whether Mayor Paul A. Dyster supported the settlement, noting that his apparent lack of endorsement raised questions about it in their eyes.

Council Chairman Glenn A. Choolokian and Councilman Samuel F. Fruscione said they believe Dyster should sign the agreement before the Council acts.

According to Dyster and Johnson, the mayor has no role in settling litigation under the City Charter. That duty falls to the Corporation Counsel’s Office, which works for both the Council and the mayor. The Council then has the power to approve proposed settlements.

“I think it was appropriate that it was tabled,” Dyster said, noting that the situation is “a complicated matter.”

Choolokian said he wants to know if this is the best deal the city can get, adding he needs to do more “fact-finding” before he makes a decision.

After the meeting, Richard F. Soluri, community and government relations representative for One Niagara LLC, said he was disappointed the settlement wasn’t approved Monday but was “confident” the deal will be approved next month.

email: abesecker@buffnews.com