IDA continues to obfuscate in wake of One Sunset fiasco

The folks who run the Erie County Industrial Development Agency must still be smarting over the grief they caught for lending Leonard Stokes $50,000 when his One Sunset was in the process of tanking.

A few months ago they made the laughable claim that "due diligence is a way of life" at the IDA. This, from an outfit that didn't even do a basic public records check on Stokes and his restaurant, one that would have screamed "do not lend money to this business!"

Now, earlier this week, the IDA staged a press event in which it trotted out some of the other minority business owners who borrowed money at the same time as Stokes in an effort to make the point that not all the loans went bad. In fact, the IDA says, nine other loans made at the same time are panning out.

Perhaps a bit of perspective is in order, however.

For starters, a report released by the IDA in February showed that nearly half of the money its Regional Development Corp. has lent to minority businesses over the years has not been paid back. As in 43.6 percent. Compared with 12.7 percent for all loans.

In other words, the RDC's track record when it comes to lending to minority business is abysmal.

Don't get me wrong. We need to seed minority-owned businesses. But we also need to be smart about it. And the record strongly suggests the IDA/RDC isn't.

But there's more.

I inquired last month as to the repayment status of the RDC's current loans. The Buffalo Economic Renaissance Corp. routinely makes this information available. But not the RDC/IDA. It responded to my recent Freedom of Information request with a denial.

I called Bob Freeman, executive director of the New York State Committee on Open Government, and he termed the IDA's position "ridiculous." I've filed an appeal.

Think about it -- a public agency is lending money to businesses and claiming that it's none of the public's business whether the money is being repaid, at least not until the loans go officially belly up. Thus, the IDA is less transparent than BERC.

I'm not the only one the IDA is trying to stiff for this information. County Comptroller Mark Poloncarz is having the same problem getting this data.

One final bit of information. The IDA is paying good money for all I reference above.

The press events are being staged managed by the PR firm of Travers Collins & Co. The bad legal advice comes from Harris Beach.

(Follow this blog and my reporting on Facebook and Twitter. Have a story tip or something else you want to share? e-mail me.)

 

Comments

[Mark]

Start up businesses have a very low success rate in their first couple years, so there are going to be failures. It is certainly up to the agencies to do a better job at managing the loan process. Really doesn't matter what the skin color is of the applicant business.

[OP Mike]

The City of Buffalo skims 30% off the top of all HUD money it receives just to bankroll the bureaucracy (patronage jobs) it has created.

Then the Regional Development Corp. squanders away over 43% of the taxpayer dollars it receives by making ill advised loans that quickly go belly-up.

Add to these insults the fact that over 20% of all Medicaid money is lost to graft and corruption and you readily see why the State and the Country are on the fast track to bankruptcy.

The government, from the White House down to the local RDC and Medicaid office, is filled with incompetent bunglers, along with liars, cheats and thieves at every level.

[ImInDisbelief]

The IDA's response is just unacceptable and how do you change that?

[fgire5215]

We can let you get security alarms and immobillisers.If you worry about your car,we can help you to prevent thiefs. We accept OEM orders for nearly all products, including car alarm, security alarms, immobilizers,central lock actuators, sirens and switches.Trust us, TESOR is an ISO9001 certified professional manufacturer of car alarm ,what is your the best choice.

[who am I?]

I hope OP Mike is also referring to the Bush administration ..when he speaks about incompetence in all the halls of government...federal to city...because he is correct..did I agree with him?....and this must change most likely through some sort of civilian- civil unrest and action driven.

[OP Mike]

who am I?,

Incompetence in government is the one attribute that is truly nonpartisan, and is freely dispersed on an equal opportunity basis. Governmental incompetence does not discriminate based upon party affiliation, race, gender, national origin, hair color, religion, wealth, physical disability, genetic makeup, legal status, educational achievement, military service, exemptions claimed on form 1040, or sexual disorientation.

[Christopher Bieda]

"The IDA's response is just unacceptable and how do you change that?"

I'm no expert, but I'm pretty sure reelecting incumbents or successors from retiring incumbents' political parties does not help.