Council receives notice of failed 539 Bridal Road development, tables rescind of 3140 South Park sale pending legal review

LACKAWANNA, N.Y. — The Lackawanna City Council on March 18 received and filed notice that a planned development at 539 Bridal Road has stalled and the sale contract has been terminated, opening the city to re-market the property.

Why it matters: The Douglas Development project—announced in September 2022—had been promoted as a signature mixed-use development for the former St. Barbara site. Its termination returns control of the property to the city and allows officials to pursue new proposals.

Director of Development and Marketing Chuck Clark briefed the council on the termination, saying the project encountered repeated stalls related to financing, supply-chain problems, and rising construction costs. Clark told the council Douglas Development "could not get the money from their primary bank or a number of secondary banks" and that communications had ceased in December 2024. The council thanked the developer’s team but agreed it was time to move on.

Legal and procedural questions followed regarding another property matter. The council discussed rescinding an earlier authorization (October 21, 2024) that had authorized sale of city-owned property at 3140 South Park Avenue to Amana Enterprises. City Attorney John Gaughan said he had not completed research on whether the mayor or the council must take specific steps to rescind or whether the absence of a signed contract means the city has no legal obligation to sell. "It has to be researched," Gaughan said, noting the charter and city code references but not offering a definitive citation.

Council members asked for clarification on business-registration status: Clark said the prospective purchaser is not registered to do business in Lackawanna despite listing a Lackawanna address. Multiple councilors said the city should hold firm on contract conditions but agreed to allow the prospective purchaser two weeks to address deficiencies. Ultimately the council voted to table the rescission item to the April 7, 2025 meeting to allow legal staff to prepare a memo on process and authority.

What's next: The Development & Marketing office will pursue new options for the 539 Bridal Road site and prepare a recommended approach for reissuing an RFP or seeking infill proposals. Legal will report on the process and limits of rescission or termination before the council considers formal rescission of the prior authorization for 3140 South Park.

Notes: Council discussion stressed that no signed contract existed for 3140 South Park, and the city attorney advised that without a signed contract the city's legal exposure to suit is limited, although litigation is not impossible.