"To suggest he is being treated unfairly is simply not true,” she said in an email.

In order to make the project work, American Niagara Hospitality would have to acquire a parcel of land next to the Sheraton as a site for the water park. Niagara Falls Corporation Counsel Craig Johnson said DiCienzo signed a purchase contract to buy the 0.57-acre parcel two years ago for $189,262.50. However, Johnson said DiCienzo decided not to close on the deal and forfeited a $1,000 deposit.

Dyster said he believes that there will be no further action on a sale of the vacant parcel unless DiCienzo gets a state subsidy.

In addition, DiCienzo's NFNY Hotel Management currently is pursuing a lawsuit against the city, filed in February 2016, alleging misuse of the "bed tax" money the city collects from hotels and motels for the benefit of the former Niagara Tourism and Convention Corp., now called Destination Niagara USA.

That lawsuit is due for a hearing in State Supreme Court next month, Johnson said.

Dyster said DiCienzo would like a cut of the bed tax to be used in subsidizing his new hotel and water park project. Asked if he thinks the city would give DiCienzo any bed tax money, Dyster answered, "No."