NEW YORK - New York state officials, citing procedural problems, have canceled a controversial contract that would have granted a politically connected developer the exclusive right to develop land along the historic Erie Canal for only $30,000.
The lucrative arrangement, which was initially blessed by New York Gov. George E. Pataki's administration, was rescinded this week after months of criticism that developer Richard Hutchens had won the building rights with no competitive bidding.
In a letter faxed last week to Hutchens, officials with the New York State Canal Corp. - a subsidiary of the New York State Thruway Authority, which controls development along the canal - criticized him for bringing another partner, a former state assemblyman, into the arrangement without the approval of state officials.
The letter also said Hutchens' company "has not satisfied material provisions" of the agreement entered into three years ago, and noted that the Erie Canal development agreement officially will terminate on May 20, according to state officials.