Mayor Byron W. Brown has made economic development a centerpiece of his re-election campaign, pointing to projects totaling $1.7 billion as proof of the city’s revival in his campaign ads and debate appearances.
But how much credit does the two-term mayor deserve for Buffalo’s building boom?
A Buffalo News analysis found City Hall officials were heavily involved in one of every five projects on the mayor’s list of nearly two dozen projects for which he boasts. Of the remaining projects, the city was moderately involved in about half and had only nominal involvement in the others.
The News analysis considered the many ways in which city officials affect a development project.
In some cases, the city played a key role, making land available and picking the developer. For others, the city provided loans or abandoned streets to make way for a project.
And in projects in which the city was less involved, city officials granted permits or the administration supported tax breaks, generally doing what was expected and not getting in the way of progress.
Brown’s opponents, Democrat Bernard A. Tolbert and Republican Sergio R. Rodriguez, contend the Brown administration coincides with – but is not responsible for – the development boom.
“The initiative doesn’t come out of the second floor of City Hall,” said Tolbert, who faces Brown in Tuesday’s Democratic primary.
Brown calls his challengers misinformed. He said his administration has worked to create the conditions that make development in the city attractive. The commercial tax rate has dropped 28 percent since he took office. He said permit fees are lower.
The mayor said his administration has played a role in every project, to varying degrees, from its intense involvement with HarborCenter – the $172 million hockey and hotel complex being built on land the city once owned – to supporting roles, like improving street lighting and infrastructure for the $44 million Hotel@Lafayette project.
At Statler City, the city agreed to put up $5.3 million in state funds to stabilize the exterior, preventing terra cotta from falling on pedestrians.
“It’s a very significant piece,” Statler developer Mark D. Croce said of the city’s role. The Statler is the site of Brown’s campaign headquarters.
Rocco R. Termini, president of Signature Development, which transformed The Hotel @ the Lafayette into a downtown destination, said modest city assistance, such as the $800,000 loan he received from the city, should not be discounted because every bit helps on big projects.
Brendan R. Mehaffy, executive director of the city’s Office of Strategic Planning, pointed to Brown’s focus on finding new life for older buildings ty, through an adaptive re-use incentive program at the Erie County Industrial Development Agency and the Buffalo Building Re-Use initiative, a collaboration with the Buffalo Niagara Partnership.
“The environment that we’ve created is producing great interest in investing in the city of Buffalo,” Brown said. “Even sometimes, when we don’t provide any aid whatsoever, we are still meeting with the developer, we are still selling the project, and selling the city.”
The Buffalo Niagara Medical Campus, the site for three of the most expensive projects on Brown’s list and one that is changing the city landscape, appears to have the least city involvement.
Brown notes he is on the medical campus board, and the board needed city cooperation for the sale of a city street.
But the city mainly serves as a pass-through for federal funds for projects. And others, such as the State University of New York, make the major decisions about medical campus development – not the city, said Bruce L. Fisher, a former deputy Erie County executive.
“The city has representation on the boards that make decisions, but the city is not the lead in making these decisions,” said Fisher, who is now director of the Economics and Finance Department at SUNY Buffalo State.
The groundwork for the medical campus was laid before Brown took office, and the funding comes from a mix of public and private sources.
Still, developers generally had positive things to say about City Hall employees, and most are bullish on Buffalo.
“The myth that City Hall is hard to work with is probably from 10 years ago, 15 years ago,” Termini said. “They bend over backwards to help you.”
Developer Carl Paladino – who has a project on prime waterfront land the city is selling to him – agreed that City Hall departments are “cooperative.”
But he called the commercial market depressed and said the development activity masks problems.
“Downtown is not thriving right now, like the picture that’s been painted recently,” said Carl Paladino, chairman of Ellicott Development and the city’s largest private landlord. “It’s very difficult to operate properties.”
Office space downtown rents for the same rates as in the 1990s, as companies find the suburbs more attractive, Paladino said. “Everything we do has to be highly subsidized,” he said.
Paladino wants the city to provide more parking to help attract commercial tenants.
Paladino is developing The Carlo, a hotel, apartment and office complex, on land near Erie Basin Marina that the city awarded him in a no-bid process after his unsuccessful bid on the site awarded to the HarborCenter project.
He also is developing The Graystone, a 42-unit apartment building in a century-old building north of Chippewa Street, set to open next month. Brown supported the project as a board member of the Erie County IDA, but other than that, Paladino said the city did not help with the project.
Many of the projects on Brown’s list have or will receive some public assistance, such as tax breaks from the county’s IDA.
The most expensive project on the list, a new medical school for the University at Buffalo estimated to cost $375 million, will be permanently exempt from property taxes, given its status as an educational institution.
In some cases, Brown has negotiated in favor of tax breaks for city projects, such as those for a $100 million medical office building on Main Street, which faced opposition at the county IDA.
Some of the projects that Brown touts opened last year, and others are under construction or are close to it.
The redevelopment of Central Park Plaza by LP Ciminelli is estimated to cost $35 million, but the developer has resisted putting a timetable on the project. Demolition is finished, but specific plans are not yet drafted.
The city’s involvement there included prodding the State Attorney General’s Office to force the sale of the property by the previous out-of-town owner.
LP Ciminelli, a Brown campaign donor, credits the city. “They have been a true partner in this project,” said Kevin C. Schuler, Ciminelli’s senior vice president.
In addition to support from several developers, including David E. Pawlik, whose projects include the redevelopment of the Fairfield Library into market-rate apartments, Brown has the endorsement of the Buffalo Niagara Partnership, a regional business advocacy group, and the Buffalo Building Trades and Construction Council.
Not mentioned in Brown’s commercials are some notable economic development failures, such as approval of a $2.18 million grant for an East Side shelter for homeless veterans in 2011. City support for the deal crumbled when The News raised questions about a member of the development group, a felon who served time for identity theft, money laundering and lying to federal officials.
Under Brown, the city also gave extensive help to One Sunset, a bar and restaurant that operated near Gates Circle for one year.
A scandal surrounding the city’s help with the project led to the demise of the city’s Buffalo Economic Renaissance Corp.
A city comptroller audit in 2010 revealed that rookie restaurateur Leonard Stokes, a former basketball star, had a credit score that should have disqualified him from receiving loans. Instead, BERC circumvented its own policies and approved $80,000 in loans in 2007 and 2008. The agency had earlier given the restaurant a $30,000 grant.
Also missing on Brown’s project list are public infrastructure projects, such as returning cars to Main Street and the work Erie Canal Harbor Development Corp. has done to re-establish canals at Canalside.
Tolbert has said that while construction cranes are visible, other parts of the city need help.
“When the mayor talks about the $1.7 billion worth of development that’s going on in Buffalo, it’s pretty difficult to get someone on Jefferson and Ferry or Broadway-Fillmore, Kensington-Bailey, and some other sections of the city. They don’t understand, they don’t see it, and they don’t understand how they’re better because of it,” Tolbert said.
Rodriguez has countered Brown’s claims of economic growth by pointing to an unemployment rate in the city that has risen by four percentage points since Brown took office in 2006, and is now at 10.2 percent.
Brown has responded by saying employment opportunities downtown will help people in neighborhoods.
Rodriguez says he attributes the growth on the waterfront to Rep. Brian Higgins, not Brown.