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Rainbow Centre thought for food

Published:August 9, 2009, 6:46 AM

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Updated: August 21, 2010, 1:13 AM

NIAGARA FALLS — Politicians and developers celebrating the opening of the Rainbow Centre mall in 1982 poured champagne into a 62-foot water fountain that was the focal point of the new shopping center.

If cards are played right, sparkling wine could flow again at the deserted mall.

But it won’t be easy. Niagara County Community College and the mall’s developer are in serious discussions about locating the school’s Hospitality and Tourism Center and Culinary Arts Institute in the Rainbow Centre.

The deal would require a complex series of steps to bring life back to a building that has virtually been dead for nine years.

“The situation gets a little more complicated if, indeed, the culinary center is going to be put inside the Rainbow mall,” said Peter Kay, economic development director for the City of Niagara Falls.

It is essentially Plan B to an earlier proposal to locate the culinary institute in the Crowne Plaza Hotel.

Plan A has started to unravel. For more than four years, NCCC

President James P. Klyczek has pursued a home for the hospitality, tourism and culinary institute that would give the school a chance to show off the program with a restaurant and laboratories on public view.

The Crowne Plaza, on Third Street, emerged as the college’s top choice for the institute in late 2007. Plans called for retail and restaurant space for inside the hotel, with a new building constructed next door that would house laboratories, classrooms and offices.

The college drew up conceptual plans, ordered equipment and started the hard sell to raise millions of dollars. Klyczek expected the project’s first phase — a restaurant, deli and wine boutique in the Crowne Plaza — to open this year.

But negotiations between the college and the hotel stalled after the managing partner of the company that owns the Crowne Plaza filed for Chapter 11 bankruptcy protection late last year. The partner, Arizona-based Namwest, and nine related companies that handle housing development in the Southwest took a hit when banks stopped lending last fall.

Namwest, led by chief executive Michael McBride, had been leading the negotiations with the college on behalf of the Crowne Plaza.

Those negotiations hit another snag in the spring when the hotel entered foreclosure proceedings after it missed a property tax payment and incurred other debt. The hotel is now under the control of a court-appointed receiver.

Months passed, and no deal came together between the college and the Crowne Plaza.

Klyczek said last week that the hotel’s mortgage holder, Gramercy Investment Trust, is not interested in approving a lease with the college.

By June, Klyczek and other college officials had started to move on.

A block away from the Crowne Plaza, the vacant Rainbow Centre mall was undergoing its own change. The state’s USA Niagara Development Corp. began tearing down the glass Wintergarden next door, revealing the mall’s south side for the first time since it opened in 1982 and providing space for street-level retail along what will become Old Falls Street.

At the suggestion of City Councilman Sam Fruscione, Klyczek contacted developer David S. Cordish of Baltimore to discuss the possibility of locating the hospitality program in the vacant Rainbow Centre mall. The Cordish Cos. holds a long-term lease on the mall.

Klyczek and three other college officials flew to Baltimore in June to meet with Cordish.

Both sides have characterized the discussions as serious, and another meeting is planned for later this month in New York City.

But the college’s new path is not easy. The new location will require that a third party, the City of Niagara Falls, enter the negotiations because the city is the leaseholder to the mall.

“The challenge with the Rainbow Centre, of course, is the complicated legal arrangement with the city and the Cordish Company,” Klyczek said. “Even though that all looks like it could work out and people are agreeable and willing to work on it, I’m just a little nervous about how long that could take.”

Klyczek said the school is still looking in downtown Niagara Falls for other potential locations.

There are several factors that could complicate a Rainbow Centre deal, Klyczek and Kay said.

Those include:

The college would use about 70,000 square feet, or roughly a third, of the mall’s space. Because the city now owns the shell of the building and Cordish leases its interior mall space, a new deal would have to be struck between the city and Cordish.

To use the mall, Klyczek said, the county would have to own the portion of the mall used by the college. The city would likely retain control over the rest of the building and have to provide maintenance.

No specific plans have emerged for the rest of the vacant building.

College officials estimate the cost of the project will increase by $2 million to about $15 million if it is located in the mall.

Engineers for the city have also estimated that nearly $5 million of structural repairs are needed on the Rainbow Centre ramp and mall. That includes replacing a leaking skylight over the mall’s atrium. The city does not have money lined up for that work yet but has applied to the state’s Upstate Regional Blueprint Fund for the project.

“It’s more complicated than a straight-forward two-party deal because it’s three parties in this one, and each of them will have rights and responsibilities,” Kay said. “Three-way negotiations are exponentially more difficult than two-way negotiations.”

To complicate matters further, the relationship between the city and Cordish has been prickly in recent years.

Some city officials have been bitter that a major downtown building a block from Niagara Falls State Park is closed to the public. Cordish has claimed that the city failed to properly maintain the building.

A lawsuit the developer filed last year blamed the city for allowing a skylight in the mall to leak and understaffing the parking ramp to a point where a body left in a minivan went undiscovered for a week.

Tensions between the city and Cordish cooled in May, when the two sides reached a detente of sorts. A negotiated settlement noted that the two parties “acknowledge that in the current business climate” . . . “it is not feasible to operate a retail shopping mall in the Rainbow Centre . . . .” They agreed to consider alternative uses for the mall.

“There are a lot of challenges, but the culinary school project is so interesting,” said Christopher Schoepflin, president of USA Niagara Development Corp. “It’s a positive on a number of levels, so we’re doing everything possible to try to look at what can be done at all those different areas that need attention to move forward.”

One thing is clear: There are plenty of supporters of locating the college hospitality, tourism and culinary institute and its restaurant, wine store and bakery in downtown Niagara Falls.

There also are plenty who want to see the mall’s vacant floors filled again.

“The city’s interested not only in the piece proposed for the culinary institute,” Kay said. “We’re also interested in the redevelopment of the entire mall.”

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