The Town of Tonawanda has tried and failed for years to bring development to a prime – if problematic – parcel of waterfront property.
That may be about to change.
A state court has ruled that the town has the right to use eminent domain to take over the former Huntley power station site, a decision cheered by town officials as a key step forward in their efforts.
NRG Energy, the owner of the plant that was the town’s largest taxpayer before it closed in 2016, had gone to court to try to retain control of the sprawling industrial property along the Niagara River.
But the state Appellate Division, Fourth Department, in a ruling on June 9 found the town has a valid public purpose in seeking ownership of the site.
There is community interest, the opinion stated, in “revitalizing and redeveloping the former industrial property, which was a blight on the town, and maintaining the critical raw water supply to significant industrial employers in the town.”
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The town eyes residences, commercial space and waterfront parkland in the future at the Huntley site but has grown frustrated with delays in finding a developer.
“It’s something we’ve been waiting a long time for. And we’re excited that we’re at this point,” Tonawanda Supervisor Joseph Emminger said last week. “But we’re also patient. We know we’re not there yet and we know we have some work to do.”
NRG said it was “disappointed” in the order.
“NRG is a private landowner in good standing in the community and remains concerned about the effect the town’s actions are having on the ability to return the site to productive use,” the company said in a statement Friday.
The Town of Tonawanda can acquire the private Huntley property for public use as long as it pays fair compensation to NRG Energy, which has been accused of repeated delays in selling the property.
The electric-generating coal plant on River Road opened in 1916 and closed 100 years later. At the time, the station produced $6 million in local property tax revenue and had nearly 80 employees, but it also ranked as one of Erie County’s worst polluters.
The main Huntley site covers 84 acres, with two off-site parcels adding another 124 acres, near the Niagara Thruway, railroad lines and a water treatment plant.
NRG didn’t list the plant for sale until 2018. Later that year, concerned at the lagging sale process, town officials launched an eminent domain effort.
That process gives the government the right to acquire private property, for a public use, as long as it pays fair compensation to the former owner.
NRG successfully persuaded the town that a drawn-out legal process would delay a planned sale to a buyer. The town ended its first eminent domain campaign in September 2019.
Then, in June 2020, NRG, without explanation, announced the sale agreement was off.
NRG later hired a national consulting firm, Vita Nuova, to help guide the restarted Huntley sale process.
It’s not clear where those sales efforts stand because NRG has declined to publicly reveal any details or update.
The town vows to revive its efforts to take over the site through eminent domain and to build its own water intake station along the Niagara River
Emminger and others are convinced NRG isn’t in a rush to sell off the Huntley property because it generates revenue by selling raw water pumped from the Niagara River to neighboring industrial customers, the officials said.
NRG has denied it has a financial motivation to keep the property indefinitely.
The town considered pressuring NRG by updating its water treatment plant and investing in the infrastructure needed to sell inexpensive, untreated water directly to some of those manufacturers, at a cost now estimated at $30 million.
The town hasn’t made a final decision but is attempting to take control of the Huntley raw water infrastructure through its eminent domain filing and will move forward with the most cost-effective option, Emminger said.
One reason the town felt the need to prod NRG is because a state fund that offsets some of its lost property tax revenue is set to expire this year, Emminger said, though town officials are working with state representatives to extend the payments.
The town’s acquisition of the Huntley property won’t affect who is required to pay for the cost to remediate the brownfield site, Emminger said.
“Cleanup is and always will be NRG’s responsibility, whether the town owns the site or not,” he said.
The town last July restarted eminent domain proceedings and NRG in September filed its appeal with the Appellate Division in Rochester.
In its decision, the court dismissed a procedural objection raised by NRG and, further, rejected NRG’s contention that this effort was “excessive.”
The town did not “abuse” its discretion in determining what land to acquire, the court ruled, and the town followed state environmental law.
Finally, NRG had argued the town was attempting to engage in prohibited “private enterprise” because it planned to sell the land to another company for redevelopment. But the court dismissed this claim as well.
One judge on the court joined the majority in letting the town acquire the 65 acres where the power plant stood. But he wrote that NRG, and not the town, should control the fate of the raw water intake infrastructure. He was overruled by his fellow justices.
Emminger said if NRG doesn’t appeal the town could, potentially, get the property into a developer’s hands by the end of the year.
The town would have to pay full market value to NRG, a figure that would have to take into account the cost of cleaning up the site, Emminger said.
He declined to reveal an estimated value for the parcel.
The town now will seek expressions of interest from potential buyers, Emminger said, even as wrangling over the ownership of the site could stretch into 2024 if NRG files an appeal.
NRG said it hasn’t decided yet whether to appeal the ruling to the State Court of Appeals.