Tax bill on ex-OxyChem building soars

NIAGARA FALLS — The tax bill on a nine-story glass office building that borders Niagara Falls State Park has grown to more than $1.2 million, and city leaders say there is little they can do about it.

One Niagara manager Frank Parlato Jr. has paid just enough of the city, school and county property taxes on the building at 360 Rainbow Blvd. since he took control of it in 2004 to keep it off the city’s tax foreclosure list.

And because state law allows a property to lapse as far as 21 months in back taxes before a municipality can begin foreclosure proceedings, Parlato has stayed within his rights.

“It’s very frustrating that somebody can owe that much for so long and we are unable to take any action,” Mayor Paul A. Dyster said.

Parlato, a controversial businessman who has waged his own rhetorical battle against the tax-free Seneca Niagara Casino & Hotel, said he is not intentionally avoiding the taxes, but instead has had to focus limited resources on keeping the building running.

Parlato said he intends to pay all the back taxes and will continue to pay enough to keep it from the city’s in-rem tax foreclosure auction.

“It’s not intentional,” Parlato said. “Obviously, I’ve got to pay a sufficient amount to keep it out of in rem as the building has been struggling along to become profitable. It hasn’t yet become profitable.”

One Niagara, once an Occidental Chemical office building, gained notoriety when a project to build an underground aquarium on the site failed and left a gaping 40-foot hole.

Parlato became involved in the building after AquaFalls had failed, but court records show that one of the AquaFalls investors, David Ho, still retains ownership in the building.

Today, the building is closed except for the first floor, where Parlato leases out restaurant and retail space in a food court and welcome center that caters to tourists. Parlato also operates a paid parking lot that has been criticized for aggressive tactics used by parking attendants to lure in drivers.

Parlato said his business plan suffered when the building’s largest tenant — an office of the U. S. Small Business Administration — moved to Buffalo.

“Consider what the building was when I took it over, and consider how much progress I’ve made,” Parlato said. “I think informed people will realize that this is a work in progress. It’s not built in a day. It takes time to develop a project like this, and we’re working in an unlevel playing field.”

City records show One Niagara property taxes lapsed the first year Parlato controlled the building.

As of Thursday, taxes from 2004 and 2005 had been paid in full, but city, school and county property taxes owed were more than $1.2 million.

Acting Corporation Counsel Thomas O’Donnell said the same rules apply to a tax bill no matter the amount under state law.

“Whether it’s a dollar or a million dollars, it’s the timing,” O’Donnell said.

Parlato’s attorney, Paul Grenga, said Parlato has paid roughly $300,000 in taxes on the building — including penalties and interest as high as 18 percent.

About a fourth of the property taxes owed on the building is a re-levy of taxes owed by the AquaFalls investors after they defaulted on a reduced tax payment agreement with the Niagara County Industrial Development Agency in 2004, Grenga said.

Both Parlato and Grenga attributed the current tax lapse to the large amount of capital and time they say has been needed to fill in the AquaFalls hole and reopen the first floor of the building.

djgee@buffnews.com