A Hotel Niagara developer has filed a counterclaim against his former partner in regard to their involvement with reopening the historic hotel.
Brine Wells Development LLC filed the claim against Merani Hotel Group on July 22 with the state Supreme Court in Niagara County, denying many allegations Merani claimed in a recently filed suit also filed in State Supreme Court.
Brine Wells is seeking a jury trial and $1 million in damages.
Hotel Niagara was originally due to reopen in 2021, with the two companies part of the planned renovations. The historic hotel originally opened in 1927 and is listed on the National Register of Historic Places.
Empire State Development acquired the property in 2016 for $4.4 million, tapping USA Niagara Development Corp. to manage the redevelopment in 2017. Brine Wells was brought on board in 2017 having renovated Hotel Syracuse, now Marriott Syracuse. Its plans were first presented in 2019.
The project stalled after failed financing efforts and the COVID-19 pandemic, with it getting back on track in 2023.
The project is now estimated to cost $50.8 million, with plans calling for 160 guest, rooms, two ballrooms, a full-service restaurant, a lounge, an exterior patio, a rooftop lounge, and space for private dining and meetings.
In the filing, Brine Wells claims that Merani failed to act in good faith in moving the joint development proposal forward, failed to get approvals from USA Niagara or Empire State Development for a new joint development entity, and failed to move from preconstruction to construction phases by assisting in obtaining property tax incentives, construction financing, a hotel franchise license agreement, and required approvals for the project completion.
The counterclaim states that Merani interfered with Brine Wells’ business relationships with USA Niagara or Empire State Development, consultants, financial institutions, and government entities and that their actions jeopardized the project.
Earlier this month, Merani filed a complaint against Brine Wells claiming they accomplished nothing with the building since 2017. Merani also said Riley approached another developer to work on the project, sending Merani a letter on April 30, seeking to terminate their contract.
This lawsuit seeks an injunction barring the development of Hotel Niagara from going forward unless they are part of it and $2 million in damages.
The Niagara County Industrial Development Agency awarded earlier this month $6.71 million in tax incentives toward this project, including a $4.38 million PILOT agreement, $1.98 million in sales tax exemptions, and $348,000 for mortgage-recording tax exemptions.
Attorneys for Brine Wells and Merani have not returned requests for comment for publication, along with Empire State Development.