NIAGARA FALLS - Frank Parlato Jr. on Tuesday gave The Buffalo News a copy of the city settlement that allows him to renovate and operate a retail and restaurant venture at 360 Rainbow Blvd. for six months before he has to gain Planning Board approval.

"Wasn't it wise of them to craft a deal that would solve one major blight in the city and bring back to life one of its most significant properties?" Parlato said. The Buffalo developer is a managing member of One Niagara LLC, which took over the former Occidental Chemical office building in November 2004 and is in arrears $700,000 in county, city and school property taxes.

Under Parlato's April 25 "Stipulation of Settlement" with the city, he agreed to bring the building up to safety and fire code regulations and apply for various permits and gain approval from the Planning Board by September.

In exchange, the city will drop its lawsuit over sidewalk, vendor and parking code violations filed last year in City Court and Parlato can operate souvenir and food sales throughout the summer "as if said approvals have been granted," according to the document.

A Freedom of Information Act request filed last month by The News to obtain a copy of the agreement was denied by the city's Law Department. A request made in a recent public meeting by City Council Chairman Charles Walker was also denied by Assistant Corporation Counsel Christopher M. Mazur, who said the matter was part of current litigation.

Robert J. Freeman, executive director of the state Committee on Open Government, told The News this week that the city's denial of access to those records was "simply wrong."

"A settlement is essentially a contract, and contracts between the government and whomever are public," he said. "When both parties to the litigation have a copy of the same record, there's simply nothing privileged about the records."

Councilman Louis Rotella said he does not understand why the city never told the Council about the settlement. Walker said he was not satisfied with the explanation given during the July 31 meeting of the Council.

"That agreement should have been approved by the City Council," Walker said Tuesday. "Those are dollars owed to the city. If the city is going to drop violations, that has to be an agreement ratified by the Council."

Walker said he received a copy of the settlement from the city's Law Department late Tuesday. It was negotiated over six months by Mazur and Parlato's attorney, Paul Grenga.

The first item in the settlement requires the aquarium excavation, a two-story hole in front of the building, to be filled within 60 days, work that was completed in May. The site is now being used for a paid parking lot.

The agreement also requires Parlato to install a backup electrical power source; apply to the Planning Board for site plan review and approval within 180 days; bring the building up to code; and apply for approval of planned signage and a special permit to operate tour sales.

The city's Inspections Department said it is satisfied with upgrades to the sprinkler system and new fire alarm installed in order to make the property conform with fire and safety standards, although a few details must still be addressed.

Parlato says he would not have been able to bring the building up to code, fill in the pit or get any business running this summer without the city stipulation of settlement that allows him to temporarily bypass the usual approvals.

"But for this agreement, there may still have been a hole here," Parlato said. "[The pit] was here for six years, and I filled it in one year."

Parlato also said that if he paid the $700,000 in taxes he owes, he would not have been able to renovate the first floor of the building, where he has knocked down walls, painted, installed food service stations, and is working on a bar. He said that if business keeps up, he will be able to pay the taxes "soon."

But Walker is calling for the city to keep an even playing field among all business owners.

"I can understand he wanted to get the hole filled in, and we did, too," Walker said. "Everything looks much better on that corner; we all agree with that. But you still have to do things right. Otherwise, you have a situation where people say, "What you do for one, you have to do for another.' "

Parlato is preparing for an Aug. 17 appeal at the Buffalo office of the state Division of Code Enforcement and Administration.

e-mail: gfranklin@buffnews.com