By JAMES FINK
jfink@bizjournals.com | 716-541-1611

A lawsuit filed by a neighboring property owner to block a Verizon data center in the Town of Somerset was enough to prompt the telecommunications giant to scrap plans for the proposed $4 billion development.

Officials of the Niagara County Industrial Development Agency were notified Thursday that Verizon decided to build the data center in another state, presumably Wyoming. This was despite an 11th-hour plea late Wednesday from state Sen. George Maziarz, R-Newfane, and Gov. Andrew Cuomo.

"Quite frankly, the lawsuit took it over the edge," said Henry Sloma, chairman of the Niagara County IDA. "It is absolutely tragic. We finally land a major, transformative project and we can't bring it home."

John Bonomo, Verizon spokesman, confirmed the lawsuit played a factor in the company's decision. Another factor was the delay in closing the deal by AES Corp., owner of the land targeted by Verizon.

"All of this took us past the time we needed to finish this deal," Bonomo said. "For this project, that location is now off of the table. There were just too many delays and uncertainties."

Verizon considered building the nearly 1 million-square-foot, back-office data center on a 179-acre parcel that adjoins the AES Corp. plant on Lake Road in the Town of Somerset. The development project would have been the largest in the region in terms of cost alone.

Verizon said the center could have employed 200 people, with most of them earning at least $80,000 annually.

The project was warmly greeted by Niagara County officials, who approved the center last year on a fast-tracked basis.

The approval, however, prompted Amherst resident Mary Ann Rizzo to file suit against the IDA and six other agencies, claiming a proper environmental review was not conducted. Rizzo owns a 117-acre parcel across from the site Verizon was considering. Her family has owned the property for more than 40 years.

In January, state Supreme Court Judge Matthew Murphy III rejected the suit on several counts. Rizzo's attorney, Arthur Giacalone, filed an appeal, which is still being heard in the Appellate Division.

The uncertainty of the appeal process played a key factor in Verizon's decision, according to Sloma.

Not so, countered Giacalone.

"They are using the lawsuit as an excuse," the attorney said. "I'm convinced they were never serious (about Somerset). I think they were playing one site against the other. I looked at this entire thing and saw nothing but red flags."

The Verizon decision came as AES Corp.'s parent company put the Somerset plant up for sale. The plant is the largest property taxpayer in Niagara County.

"We didn't know who are our neighbor was going to be," Bonomo said.

Sloma, meanwhile, said he fears the ripple effect of Verizon's decision and the Rizzo lawsuit may give developers of other projects a reason to look elsewhere.

"Opportunities like this don't come along very often," he said.

"And we lose it because of issues out of our control: a lawsuit. This will be noticed by other communities and other developers."