Aug. 04, 2012--CLAYTON -- The proposed hotel on the former Frink America site may have hit an unexpected roadblock, but area officials remain optimistic that the project will move forward.

A recently extended state law that strengthens labor rights for state-funded hotels or convention centers would raise the developers' wage costs significantly, making the Frink hotel project financially impractical for them and their investors.

Gary S. DeYoung, executive director of the 1000 Islands International Tourism Council, said the potential developers of the Frink site -- the Buffalo-based Krog Corp. and Hart Hotels -- would have to pay hotel housekeepers as much as $50,000 a year unless they can get a "labor peace agreement" requirement waived.

A market study found that the proposed luxury hotel in Clayton would create at least 90 full-time jobs in addition to several seasonal positions, meaning the Frink hotel would spend well over $4 million annually in wages alone under this scenario.

Under the Public Authorities Reform Act, hotels or convention centers built with state funds are required to sign an agreement with hotel unions in the state indicating they would not contest unionization efforts in exchange for the union members agreeing to "refrain from engaging in labor activity that will disrupt the hotel's operations," such as strikes.

Mr. DeYoung said entering into a labor peace agreement would make sense for larger hotels in populated urban areas, such as New York City, but certainly not in upstate New York.

Krog and Hart Hotels are seeking an Empire State Development grant and state loans to fund the estimated $22.5 million construction project.

Paul R. Neureuter, president of Krog Corp., was unavailable for comment Friday.

Clayton town Supervisor Justin A. Taylor said the developers "have an open line of communication" with state officials and are working "diligently" to move the project forward.

Krog and Hart Hotels also have been tweaking their plans based on public feedback and have reduced the size of the proposed hotel to 106 rooms.

"They want this project to be a jewel not only for them but also the community," Mr. Taylor said.

The original plan called for a 120- to 140-room hotel.

Clayton has spent several years and millions of dollars to remove as much as 20,000 tons of soil contaminated with petroleum and prepare the former snowplow factory site for redevelopment.

And although a land disposition agreement for the 8.4-acre Frink property is still pending, the village, town and development corporation went ahead and secured state grants to install basic infrastructure and help make the construction project financially viable.

The developers have indicated that they hope to break ground on the multimillion-dollar project as soon as this fall and open the "four-diamond hotel" by spring 2014.

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