LEWISTON — A day after defending himself against claims contained in a legal complaint filed by a group with ownership ties to his building, One Niagara owner and operator Frank Parlato Jr. issued a formal challenge to his critics.

Parlato, whose partners, Incredible Investments LTD, have taken legal action in an effort to force him to pay taxes owed at the tourist welcoming center downtown, sent his critics a letter urging them to “put up or  shut up” by providing half the money necessary to cover the most pressing portion of the tax bill in question.

“In the spirit of cooperation and fairness, I will pay the first two years (of taxes owed), under protest, if they support it,” Parlato said Thursday.

The letter follows public disclosure of details contained in a lawsuit filed by Incredible Investments, a group that holds partial ownership rights to One Niagara under a pre-existing management agreement. The group claims, among other things, that Parlato has failed to pay more than $1.5 million in back taxes on the site, a situation that could result in the property being placed on the city’s in-rem foreclosure list in a matter of days.

To stave off the commencement of foreclosure proceedings, Incredible Investments says Parlato — who serves as manager of the building under a long-standing management deal — must, at a minimum, pay off more than $465,000 in taxes owed for 2006 and 2007.

 Parlato, who is challenging the city’s assessment of the property, had his attorney, Jim Roscetti, draw up a letter containing his offer to pay half the amount on Thursday for delivery to Incredible Investments’ attorney Kevin Burke, Jr.

 In the letter, Parlato offers to pay half of the $465,000, provided his business partners pay the other half. It also indicates that after such payments are made, the “first monies” taken out of net revenues of the One Niagara management company will be used to “re-pay the members for those advances.”

“If they want to dictate how we handle things, let them put up some money,” Parlato said during a telephone interview on Thursday. “Otherwise, I feel I need to run it the way I see fit.”

Incredible Investments maintains that it is a member of One Niagara, LLC, the company that owns and operates what is now a visitor welcoming center and parking lot at 360 Rainbow Blvd. South and 363 Prospect St. The other partner in One Niagara, LLC is listed as Whitestar Development Corp., a company owned by Parlato. Both Parlato and Whitestar are named as defendants in the lawsuit.

Reached by telephone on Thursday, Burke described Parlato’s offer as a “ridiculous non-offer” not worthy of consideration.

“What he’s doing is asking us to pay money that he took for his own personal use,” Burke said. He later added, “As our court papers show, he has ample funds to pay (the taxes).”

Parlato maintains Incredible Investments’ court documentation doesn’t prove anything. He said the money was not for personal use and instead used to make building upgrades.

“We’ve put a fortune into this property,” Parlato said. “(Incredible Investments) has put nothing into this property. The idea that they put up half the taxes is consistent with their plan to be recognized as partners.”

In legal documents on file in state Supreme Court in Niagara County, Incredible Investments claims Parlato has “chosen” not to pay the property taxes while alleging that he paid himself a $400,000 salary in 2009 and another $200,000 for “unspecified reasons.”

Parlato described the salary claims attributed to him, as well as other figures described in the lawsuit as One Niagara revenue estimates, as “exaggerated” and “misstatements of facts.” Parlato insists he did not receive a salary for operating the center last year.

“There are records that we will show in court that show a dramatically different story,” Parlato said. “I did not receive any compensation in 2009. That’s just their hubbaloo to try to force their management on me when I have a right to manage this place.”

 Another one of his attorneys, Paul Grenga, concurred, saying Parlato’s net earnings from the property are closer to $50,000 per year after his investment in the property and what he is still owed for his involvement in the project is considered.

 “Their numbers are so far off it’s ridiculous,” Grenga said.

 Burke insists the payments in question were documented as withdrawals made by Parlato on check registers he supplied to representatives from Incredible Investments. Burke added that the registers are included as information in his clients’ court case.

“Those withdrawals are in those registers and he’s never said what that money was for,” Burke said.

In response, Parlato said Burke’s comments are “disingenuous” and that he’s repeatedly told Incredible Investments partners the money has been used to invest in the property.

“Look at the place,” he said. “We’ve filled the hole, there’s now 12 restaurants, four stores and an observation deck.”

Incredible Investments has asked the court to compel Parlato to make good on the property’s outstanding real estate taxes, arguing that the company stands to lose out on its investment interest if the building goes through foreclosure proceedings and finds its way to the auction block.

 Burke said his client is concerned that it may wind up losing ownership rights to the building, but is more concerned about Parlato’s intentions and long-term plans. He questioned why the manager of a building that is generating revenues from parking and other services would fail to follow the rules and pay taxes owed on his property.

“It’s cheating the taxpayers,” Burke said. “These taxes are owed. They should be paid.”

Parlato noted that he’s still in the process of disputing the taxes that are owed and said he will not give in to either Incredible Investments’ “unfair demands” or the “unfair and unjustified assessments of the city.” One of his points of contention is the city is taxing him for a nine-floor building but has only given him permission to operate one floor at One Niagara.

“What I’m doing is defending the taxpayers,” Parlato said. “If the private individual doesn’t stand up to government when they overreach and over tax, then government becomes unbridled, undisciplined and unjust, as it has been in the case of One Niagara.”

Parlato and Grenga described Incredible Investments’ recent legal action as the latest in a series of attempts to discredit Parlato’s record as the property’s manager. Both men maintain that Incredible Investments LTD includes as one of its partners David Ho, a Hong Kong investor who was involved in failed plans to build an underground aquarium at the site several years ago. They maintain this is the fifth claim involving various entities with connections to Ho, including a 2007 case in which state Supreme Court Justice Frank Caruso concluded that  Parlato had “irrevocable rights” under the operating agreement to serve as manager or appoint a designee.

 Parlato and Grenga questioned the ability of Incredible Investments to come up with the other half of the taxes owed as part of the proposal to meet them halfway. They produced a copy of a June 8 order in which Caruso scheduled a June 28 hearing on a request for a retaining lien from a law firm that claims is owed $141,769 by an executive with ties to Incredible Investments.