Tonawanda News

May 7, 2014

Natale may sue City of Tonawanda

By Jessica Bagley jessica.bagley@tonawanda-news.com
The Tonawanda News

Tonawanda News — The Tonawanda council entered an executive session Tuesday night to discuss a potential lawsuit from Natale, the company that intended to build homes the Little League Drive property until the city severed ties with the builder last month.

City Attorney Ron Trabucco and Mayor Rick Davis said they are not able to provide more details about Natale’s possible lawsuit until they receive more information.

Natale was selected as the preferred developer after the city sent out a request for proposals in 2010. The two parties reached a tentative agreement at the end of July under former Mayor Ron Pilozzi, but the council never passed the contract and never approved the sale of the land.

That contract called for the construction of 56 homes ranging in cost from $180,000 to $300,000. Natale proposed to pay $192,000 for the 16.94-acre property, and would have also covered the infrastructure costs at the site.

The company requested that the city allow them to classify the homes under the state’s condominium status, so the homes would be assessed at a reduced rate.

“The result of assessing it that way is that it comes in at about 65 percent of the construction value. Those evaluated at 100 percent with comparable value of construction would be paying more in taxes,” Larry Rubin, the attorney the hired to represent it during the negotiations explained last year.

Put simply, homeowners whose properties cost $250,000 to buy would pay taxes as if the home was worth $162,500. The tenant proved highly controversial and many angry residents argued that the new homeowners wouldn’t be paying their fair share.

New council members, who took their seats in January, objected to the contract. Although Davis said he attempted to negotiate with Natale, he said his efforts were unsuccessful.

“Ultimately I couldn’t come to an agreement that I was comfortable with and that a supermajority of the council would agree to,” he said in April.

The city planned to issue another RFP for companies to develop the property, but has not yet due to the possible lawsuit from Natale.

In other news, the council also tabled a two-year contract with Canal Fest on Tuesday night. Common Council President Carleton Zeisz said the agreement was tabled because Canal Fest Inc. owes them $6,000 from the 2013 and 2012 events.

The owed money is part of a $3,000 yearly cost that Canal Fest is contractually obligated to pay for capital improvements to the city.

Canal Fest is aware of the issue with the payments, Zeisz said.

Herschell Carrousel Factory Museum Director Rae Proefrock, whose organization sponsors the fest rides, attended the meeting to discuss the contract, which specifies a closing time of 10 p.m. The council first changed the closing time from 11 p.m. to 10 p.m. in 2012, based on the recommendation from the city’s police chief, who hoped rowdiness and arrests would decrease as a result.

Profrock expressed concern that ride operator Corky Powers, of Powers Great American Midways, won’t continue to come to Tonawanda due to a reduction in revenue.

“He is a businessman, and he can not afford to lose any more revenue,” Proefrock said. “He’s losing six hours of revenue, and it is one of the (largest) revenue producing hours.”

Powers’ contract was up last year, and although he will be at Canal Fest this summer, he hasn’t signed another multi-year deal.

“We are jeopardizing the possibility that they’ll be back,” Proefrock told the council. “When we lose this midway, and I guarantee we will, we will not get a first class midway ... and any accidents that result from an inferior midway will be placed on your heads.”

Zeisz and other council members defended the city.

“This city has supported Canal Fest for 30 years, and the city has borne the brunt of this event,” Zeisz said. “I do believe ... the time change has made a difference.”

Contact reporter Jessica Bagley at 693-1000 ext. 4150, or follow her on Twitter @JessicaLBagley.