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NIAGARA FALLS – A proposed deal over back taxes and a challenged assessment for a high-profile downtown property tangled up for years in legal disputes may get the go-ahead this week.

A proposed settlement between the city and the owners of the former “flash cube” building would allow the owners to pay about $800,000 less than what the city has calculated they owe.

Now known as One Niagara, the Rainbow Boulevard building once home to Occidental Chemical sits across the street from Niagara Falls State Park, where more than 8 million people visit annually, and at the foot of the Rainbow Bridge.

The City Council will have the chance to approve the settlement when it meets Wednesday night.

The city says the owner – One Niagara LLC, which is led by attorney Paul A. Grenga – owes nearly $2.3 million in back city and school taxes.

One Niagara LLC has been successfully fighting to have its assessment lowered in recent years, while the city has pursued foreclosure because of unpaid taxes.

The two sides have been duking it out in court, but a judge has brokered a proposed settlement.

The deal calls for One Niagara to pay about $1.55 million by the end of the month.

The figure covers all taxes, including penalties and interest, owed for assessment rolls issued before July 1, 2009. It also sets the assessment of the property at $1 million for tax rolls from July 1, 2009, through July 1, 2013. County taxes would be paid in full under the agreement.

With the possible deal expiring at month’s end, the outcome of the Council vote remains unclear, with some lawmakers tight-lipped and only two willing to state their positions.

Councilwoman Kristen M. Grandinetti said she does not support the deal.

“This is a time when millions of dollars are being poured into the downtown area, and I think that the problem is, these property owners don’t want to pay their taxes,” Grandinetti said.

Grandinetti said that with “all the fuss” made over the value of the parcel at 310 Rainbow Blvd. that was part of a development deal reached with the Hamister Group last year, making a deal regarding One Niagara would be “a slap to Niagara Falls taxpayers.”

Councilman Andrew P. Touma said he supports the settlement and will vote for it. “I think it’s a fair settlement,” he said. “I think that this has been going on too long and it’s time to move on.”

Touma, the Council’s newest member, said the feeling he has gotten from talking with the public is that people are ready to move on from the issue.

When and if the property is renovated, the city can always go back in and reassess its value, he said.

Council Chairman Charles A. Walker said he expects there to be a lot of discussions before the Council votes.

Walker said he has some concerns about what potential effect a deal such as this would have for other property owners.

Since this settlement is not being imposed by the court, some other property owners may feel they have a better chance of making deals with the city, rather than paying what they owe in taxes, Walker said, adding that he is concerned about whether this would create “a domino effect.”

“If this was a court ruling, then it would protect the city more than to have the city make some sort of agreement,” Walker said.

The nine-story building – the site where prior owners attempted to develop an underground aquarium known as Aqua Falls – houses food and souvenir vendors, along with tour operators on the first two floors. The site also is used as a paid parking lot.

During the tourist season, the building’s ninth floor is open as an observation deck, while the company has its offices on the seventh floor.

While the city asserts it is owed roughly $2.3 million, One Niagara President Tony Farina said that figure has been debated between the two sides. The company feels that the property was overassessed for a long period of time, but it is willing to, as Farina described, compromise on a deal.

“For the sake of downtown harmony and development, it’s an opportunity to put this chapter behind us and move forward and try to make downtown the best it can be,” Farina said.

Getting the property out from under the ongoing tax issues will allow the company to be more aggressive in its redevelopment efforts, Farina said.

Councilman Robert A. Anderson Jr. said he would not discuss his thoughts on the matter before Wednesday’s meeting, though he did offer: “Right now, it sounds like it’s going to be positive.”

“I haven’t heard any negative going on, so that’s a good sign,” Anderson added.

The proposed deal, supported by Corporation Counsel Craig H. Johnson and Assessor James R. Bird, initially came before lawmakers at their last meeting of 2013, where it was tabled after some lawmakers questioned the timing and said they thought there should be mayoral approval. Johnson and Mayor Paul A. Dyster have said the Mayor’s Office has no role in settling litigation under the City Charter.

email: abesecker@buffnews.com