NFR files legal answer to city bid to acquire company's 5 acres
The private law firm representing Niagara Falls Redevelopment has filed a formal answer to Mayor Robert Restaino's administration's claim that the city — not the company — owns 5 acres of the 10-acre site identified by the city as the preferred site for the proposed Centennial Park arena and events campus.
The answer includes a counterclaim seeking 'consequential damages,' including reimbursement for taxes paid, for the 'value and benefit' conferred on the city as a result of NFR's 'justifiable reliance on the city's actions for more than 20 years.'
Attorneys from NFR's law firm, Harter, Secrest & Emery of Buffalo, filed the company's verified answer on May 16, denying the city's contention that the 5 acres — located at the intersection of 10th and Falls streets — was designated as public parkland, served as a public park for decades and was never properly conveyed when the city agreed to turn it over to NFR more than two decades ago.
In its answer, NFR argues that the 5 acres, which were transferred by the city to the company under a development agreement on Aug. 4, 2004, were not subject to the 'requirements and encumbrances' of the Public Trust Doctrine, a legal principle that designates certain resources, such as parkland, as held in trust by the government for public use.
The city, through its attorneys with the Buffalo law firm Hodgson Russ, has argued in legal filings that NFR failed to obtain proper approval from the state legislature before accepting the property as its own and using it for 'non-public purposes.'
In its answer, NFR suggests no such approval was necessary while also denying the city's allegation that the land transfer required authorization from the Niagara Falls City Council.
'The subject parcel is not encumbered by the Public Trust Doctrine, and its Aug. 4, 2004 conveyance from the city to NFR did not require approval from the New York State Legislature or the Niagara Falls City Council,' NFR's answer reads. 'For a parcel to be encumbered by the Public Trust Doctrine, there must either be an express or implied designation that demonstrates the clear and unmistakable intent of the owner to dedicate the land as public parkland. Here, no such express or implied designation ever occurred.'
In its counterclaim, NFR describes the city's chances of succeeding in its quiet title claim as an 'unlikely event' while arguing that should the 2004 property be ruled null and void it is owed compensation from the city. The company's compensation list of requested compensation covers: the expenditure of 'considerable resources' related to the property, including money, services, labor, materials and equipment; paying the purchase price for the 5 acres; paying taxes on the parcel; maintaining the parcel; performing environmental cleanup work on the site moving playground equipment off-site and 'spending millions of dollars to develop a data center on the subject parcel, which the city, directly through its agents and representatives, encouraged NFR to spend.'
'NFR has expended these resources with the reasonable and justifiable expectation that, in accordance with the city's actions, NFR rightfully owns the subject parcel,' the company notes in the counterclaim found in its verified answer.
The question of ownership of the 5 acres looms large in an ongoing eminent domain proceeding in which the city is poised to acquire, using its power of eminent domain, two NFR properties totaling roughly 10 acres off John B. Daly Boulevard at the intersection of 10th and Falls Street for the purpose of developing Centennial Park.
NFR spokesperson James Haggerty released a copy of the company's response to the city's so-called 'quiet title claim' in response to questions from the newspaper on Thursday.
The release came hours before Falls lawmakers were scheduled to vote on a request from Restaino to approve an offer of just over $4 million for NFR's land. The offer was tabled by the city council during Thursday's meeting.
In a previous eminent domain case involving NFR, the company sought $75 million for the former Niagara Splash Park site, which is located across the street from NFR's 10-acre parcel. In that case, a judge determined that the state of New York, which acquired the Splash Park land for use in the development of Seneca Niagara Casino, ultimately owed NFR $17.8 million for the land.
Haggerty described the city's initial $4 million offer for the proposed Centennial Park site as being based on a 'so-called appraisal' Restaino 'made up out of thin air.'
'In the end, though, it doesn't matter,' Haggerty said. 'Just as happened with the Splash Park parcels years ago, the court will decide the fair market value of this private property after considering actual appraisals submitted by both sides as this litigation moves forward — all clouded and complicated, of course, by the mayor's claims in his new quiet title action that the city already owns half the property it is seeking to acquire through eminent domain.'
Haggerty also criticized Restaino and city lawmakers for not only suggesting the city's offer was based on a 'mysterious' appraisal but also for taking action before the mayor released the contents of a feasibility study conducted by a private firm to examine the potential pros and cons of building Centennial Park. He also referenced NFR's idea for the same 10-acre site, which company officials insist is needed to allow for the development of the first phase of what they claim would be a $1.5 billion data center in the city.
'The taxpayers continue to pay legal fees for all the mayor's litigation and are forced to watch as he works tirelessly on the taxpayer's dime to prevent NFR from building its economy-transforming, privately funded, $1.5 billion data center,' Haggerty said.
In addition to the company's answer to the city's quiet title claim, Haggerty released legal requests sent last week by NFR's attorneys to the city that seek more detailed information about what he described as Restaino's 'scheme' to acquire NFR's 5 acres without having to pay fair market value for them.
Examples of information sought by NFR include identities of individuals who may have knowledge regarding documents and information about 'any express or implied designation of the 10th Street playground as parkland,' documents used by the city to draft its legal complaint or support the city's position and identification of city officials who communicated with 'any third-party,' including New York state government agencies, concerning the action.
'Under court supervision, NFR will now see all documents, emails and text messages related to the mayor's attempt to avoid paying fair market value for this land,' Haggerty said in a statement from the company.
'Mayor Restaino may be able to ignore Freedom of Information Law requests, but he cannot ignore the courts, and we look forward to his testimony in this action,' Haggerty added.
Dan Spitzer, an attorney representing the city, classified the requests as 'standard deposition notices' served in response to the city's quiet title claim.
While Haggerty suggested both Mayor Restaino and his brother, City Administrator Anthony Restaino, were served 'subpoenas' in the case last week, Spitzer said that was inaccurate. He classified the requests for additional information as 'standard deposition notices' sent in response to the city's lawsuit.
'There have been no subpoenas served on the city, nor would it be proper to do so,' Spitzer said. 'While the misinformation is consistent with the legal abilities and veracity frequently demonstrated by NFR, we suspect what you are referring to are the standard deposition notices.'
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