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The former Episcopal Church Home – the key Busti Avenue property needed to expand and enhance the Buffalo plaza of the Peace Bridge – is now owned by New York State.

The purchase paves the way for an expedited development of the West Side parcels that stood at the heart of a bitter dispute between New York State and Canada over the pace of development on the Buffalo plaza of the Peace Bridge. The international dispute appeared to be settled last week when Cuomo and the U.S. and Canadian ambassadors announced in Buffalo an “understanding” that ensures continuation of previously approved bridge projects along with preliminary steps toward more development on the U.S. plaza.

The agreement also closes a long and dark chapter in the history of the Episcopal Church Home, a one-time major institution of Buffalo’s West Side that decayed and eventually closed after many years of plans for a new bridge or expanded plaza. The purchase avoids state fears of a protracted court fight to obtain the property, makes whole as much as possible the Episcopal agencies that once ran the home, and will result in eventual removal of the now-blighted buildings.

“In just the past few days, work crews have been on site securing the property, cleaning up its grounds, and beginning the process of transforming this blight into a brighter future for Buffalo,” Cuomo said. “These efforts to improve the area around the U.S. plaza of the Peace Bridge protect the community while leaving all future options open for this critical site.”

The state in 2012 announced it would acquire the now-closed nursing home complex by eminent domain, but later opted for direct negotiations to expedite a process that Cuomo loudly complained has proven too slow.

Though the property was appraised at $1.7 million, the state has insisted that the negotiated price settled all outstanding debts (except for a $6.3 million lien held by the Peace Bridge Authority) and clears the way for a “clean purchase.”

The purchase also prompted a review by State Comptroller Thomas P. DiNapoli, whose office noted several weeks ago that necessary state guidelines for property purchase had not been properly followed. But that review is also complete with DiNapoli’s office noting that Empire State Development will now adhere to proper reporting guidelines in the future.

Even Peace Bridge Authority Chairman Anthony M. Annunziata, the most outspoken critic of Cuomo’s actions in the recent dispute, chimed in Tuesday with approval for the deal.

“I am happy to hear that ESD has acquired the Episcopal Church Home property,” Annunziata said. “I look forward to continued collaboration as we begin the Buffalo plaza traffic study to evaluate the current traffic configuration and pursue continued improvements at the Peace Bridge.”

And for the first time in months, Annunziata agreed with Sam Hoyt, regional president of Empire State Development and vice chairman of the Peace Bridge Authority.

“Part of Empire State Development’s core mission is to take urban blighted properties, stabilize them and operate and maintain the property until there are clear plans for redevelopment,” Hoyt said. “The acquisition of the Episcopal Church Home property meets that criteria and continues the road map forward for the Peace Bridge and surrounding neighborhood that was announced by Gov. Cuomo last week.”

Though originally slated for purchase through the state’s power of eminent domain, Albany officials re-examined that commitment last year out of fear of lawsuits and a more complicated purchase stemming from liens on the property.

Karen Rae, Cuomo’s deputy secretary for transportation, noted in a recent interview that Episcopal officials started their negotiations with a 2007 appraisal valuing the property at $14 million.

She said the argument could be made that even with eminent domain, prolonged negotiations would have been necessary to reach an agreement. A judge, she added, would still have the ability to separately determine the property’s value.

“We could have spent three years in court,” Rae said. “And I’m sure the Episcopal Church Home would not have accepted $1.7 million.

“With eminent domain you are still required to negotiate an agreement,” she added. “We didn’t use that tool, but got the same results.”

Rae also said the negotiated price allowed the Episcopal officials to negotiate with their creditors in a way they saw fit to get the creditors to agree with the deal.

“That was their choice,” she said. “It allowed us to get to where everyone could sign off on their future plans.”

The result, added Maria Lehman, Peace Bridge project manager for Empire State Development, was property “free and clear and released from litigation.” She also said the $4.7 million negotiated price was “reasonable” when the Episcopal figure of $14 million is taken into account.

The purchase lifts a “crushing weight” off the Episcopal Church Home and Affiliates, said Rob Wallace, president of the institution.

“For nearly 20 years, we have waited for a solution to a difficult situation that was forced upon us,” he said, referring to the closure of the campus because of Peace Bridge expansion plans. “The completed sale of our former downtown campus not only allows a neighborhood to move forward, it also reinvigorates Episcopal Church Home and Affiliates’ mission of service to the people of Western New York.”

The sale allows the Episcopal organization to settle a number of outstanding debts, especially to the Episcopal Church Home Foundation of Western New York, which helped carry the Busti Avenue facility as threatened Peace Bridge expansion over the years forced it to curtail its mission.

Other institutions were called upon to help or expenses incurred. As a result, sources familiar with the settlement say payments will now be directed to the Margaret L. Wendt Foundation (approximately $1.5 million), M&T Bank (approximately $900,000), trade creditors (approximately $955,000), and attorneys (approximately $94,000).

Though Wallace acknowledged a Peace Bridge Authority appraisal of the properties resulted in a $1.7 million estimate, he pointed to the home’s own appraisal of $14 million. The continued threat of a either a new bridge or plaza expansion over the years, he said, essentially drove the Episcopal Church Home out of business and severely diminished the value of its property.

He said the institution at one time housed 1,000 residents and employed 500. But the Peace Bridge threat created an untenable situation.

“All associated entities have suffered tremendously, including our foundation,” Wallace said. “Now it is basically bankrupt.”

The settlement, he said, will allow the Episcopal foundation to be made whole as much as possible – and even to remain in existence.

“It’s that money that the foundation will use to continues its mission,” he said.

He said the negotiated process should satisfy all parties.

email: rmccarthy@buffnews.com