Niagara Falls completes land acquisition for $220M arena project; judge orders city payment

NIAGARA FALLS, N.Y. (WKBW) — Following a judge’s order, the City of Niagara Falls has used just over $4 million of city funds to acquire the land needed for its $220 million arena project.

This property transfer has been months in the making and was finally completed last month when a judge ordered the city to pay Niagara Falls Redevelopment, LLC $4,029,000 out of the "City’s Unassigned Fund Balance."

In June, the city approved a $4.029 million settlement with NFR for the 907 Falls Street land. It paves the way for both a 6,000-seat arena on city land and NFR’s billion-dollar data center to be constructed.

WKBW

However, over the next several months, the city council never paid NFR. On multiple occasions, the council voted down ways to send that money to NFR, as members disagreed over where the funds should come from.

NFR then took the city to court for failing to pay its side of the already agreed-upon settlement. Judge Deborah Chumes then ordered the city to pay NFR the $4.029 million from the city’s fund balance.

WATCH: Niagara Falls completes land acquisition for $220M arena project; judge orders city payment

Now, requiring the city to use its fund balance could be a controversial decision for city leaders.

When I spoke with Mayor Robert Restaino in July, he believed that using the city’s fund balance was the best way to pay NFR.

"The fund balance is probably somewhere in the $22 million range, and the reserve is $15.5 million, so if you take out the $4 million that is being projected for the acquisition costs, you are still looking at a little north of $3 million in excess of the reserve," Restaino said.

WKBW

However, city council members, like Bridgette Myles, did not agree with the mayor. On more than one occasion, city council specifically voted against paying NFR with the city fund balance.

"Not the general fund, that’s taxpayers’ money," Myles said to me in late July.

At the time, Restaino pushed back against the idea that the money in the general fund is “taxpayer money.” He told me that less than one-third of city income has come from property taxes, making the fund balance a mix of several other tax and revenue streams.

Instead, Myles felt the NFR payment should instead come from the city’s share of state tribal funding from the Seneca Nation gaming compact. That too was voted on and rejected by city council.
 
Despite those rejected council votes, a judge seemingly agreed with the mayor and ordered the city to pay its agreed-upon settlement fee by using the city fund balance.

I have been told by the mayor’s office that this judge's decision had nothing to do with the recently expired state of emergency, and that it would have had the same result had it never been declared.

"The state of emergency has nothing to do with any other item that might be on an agenda. This is strictly for road paving and grass cutting," Restaino said to me earlier this month.

In July, Restaino told me his dream timeline was to break ground on the new arena in 2028.

Restaino has said on multiple occasions that the commissioner of the Ontario Hockey League (OHL) has reached out about putting a team inside the arena.

WKBW

I reached out to NFR several times for comment but never heard back.