Canal Street 'cave' deal off

Local News

November 29, 2011

By Joyce Miles Lockport Union-Sun & Journal The Lockport Union-Sun %26 Journal Tue Nov 29, 2011, 12:06 AM EST

LOCKPORT — The city’s deal with Hydraulic Race Company Inc. to turn Canal Street property into the base of a tourist attraction is off.

Hydraulic Race Company, the corporate owner of the Lockport Cave & Underground Boat Tour, last month informed the city that it no longer wished to purchase 79 Canal St. for various reasons. Instead, it proposed entering a long-term lease with Greater Lockport Development Corporation, which has a long-term master lease on all Canal Street properties.

GLDC’s board of directors has declined to negotiate property rental with the tour company, GLDC’s attorney, John Ottaviano, informed the company in a letter dated Monday.

Further, the purchase deal offered by the city, signed by Mayor Michael Tucker this past April but not signed by either Clancy Burkwit or Thomas Callahan, the shareholders in Hydraulic Race Company, should be considered null and void now, Ottaviano’s letter said.

It all means 79 Canal St., the most popular of three city-owned properties on the rehabilitated commercial block, is “available” again for purchase or lease to the right business occupant, according to GLDC executive director R. Charles Bell.

“We do have several other interested parties” looking at the property, including a retail operation with a “tourist bent,” Bell said.

Through an attorney with the Syracuse-based Mackenzie Hughes law firm, Hydraulic Race Company informed the city in an Oct. 12 letter that it was no longer interested in purchasing 79 Canal St., due to concerns about a state environmental easement on the property, sale terms approved by the Common Council and the results of a physical inspection of the property.

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“However,” the letter said, “Hydraulic does not want to leave the city with this longtime vacant property on its hands. As a reasonable alternative, Hydraulic proposed entering into a long-term lease (if the city would) undertake structural repairs which are needed and certain improvements to the property as will be agreed upon.”

The GLDC board briefly discussed — and quickly declined — the possibility of leasing the property to Hydraulic Race Company on Nov. 12, according to Bell.

“The board just simply wasn’t interested in trying to negotiate any further” with the company, he said.

Negotiations for the sale of the property, between GLDC/city officers and Callahan, were lengthy as it was. Callahan first approached GLDC in mid 2010 and didn’t submit a formal purchase offer, for $70,000, until this past February. Council members including 2nd Ward Alderman Jack Smith expressed reservations about the city selling property to Callahan, because of Callahan’s history of unpaid debts. Before approving the sale, the Council directed Ottaviano to add language to the sale contract requiring Hydraulic Race Company to own the property for at least 10 years and Burkwit to remain the majority shareholder in the business throughout.

Buying 79 Canal turned out not to be in the cards for Hydraulic, for “purely economic reasons,” Burkwit said Monday. He had not seen the letter or been informed of its receipt by the Mackenzie Hughes law firm, he added in a telephone interview.

“Life is a lot easier for us if we just go out and rent a place. Ownership is not all it’s cracked up to be,” Burkwit said. “With a lease, we know exactly what our expenses are over the long term. It might be more expensive, but it’s easier planning, easier forecasting.”

“We love Canal Street ... and we’d love to lease (a portion) from the city,” he added.

The location, so close to the hydraulic raceway and the historic Flight of Five canal locks, is ideal, Burkwit said previously. For years the business rented space in Old City Hall, Pine Street near Canal Street, to use as a ticket office but that building is up for sale.

Currently, the 14-year-old business does not have a physical base, although it does own land at 29 Gooding St. Selling tickets and starting cave tours from there is a strong possibility in 2012, Burkwit said.

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