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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!"

Stokes, leonard 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.

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Enough to warm a cynic's heart

I was initially kind of put off by the prospect of "Extreme Makeover: Home Edition" coming to WNY. I have little use for the vast majority of what's on television, aside from "Hockey Night in Canada" and reruns of "That 70s Show," oh, and "Family Guy."

But I've got to admit I think it's neat what they're doing on the West Side, not just rebuilding one house, but making repairs to others in the neighborhood.

It builds off what the good people at PUSH Buffalo, the Massachusetts Avenue Project and Buffalo ReUse are doing.

I'm off the next couple of days. I'll try and have something fresh by lunch on Thursday.

Redevelopment? Yes. Hotels? No.

Rocco Termini wants to restore the luster to the tarnished gem known as the Lafayette Hotel.

He wants to convert the abandoned AM&A's building into something other than the downtown's largest building code violation.

Good for him.



Yeah, maybe.

Because, as they say, the devil is in the details.

Termini is talking the possibility of hotel rooms being part of the mix.And being part of the developer crowd that can't possibly do a project without a government handout, his hand is no doubt poised to dip into our pocket.

The trouble is that practically every hotel in and around downtown Buffalo was built with public subsidies, and most of them are treading water -- at best.

In a story I did a year ago, I reported:

For nearly 30 years, politicians have poured more than $65 million into downtown Buffalo hotels — an average of more than $50,000 per room. The strategy produced five hotels — and a lot of red ink.

Some of downtown’s largest hotel operators say the last thing they need is more competition, especially subsidized competitors.

But that’s exactly the course City Hall is pursuing.

Indeed, since I wrote that story:

Now, Termini is considering adding yet another hotel or two to the mix.

I think the phrase is "Good money after bad."

I mean, if five subsidized hotels can't make it for lack of demand, how will eight, nine -- do I hear 10! -- fare?

A year ago, Richard Geiger, then president of the Buffalo Niagara Convention & Visitors Bureau, said that more rooms would not help bolster the convention and tourism business.

“Based on current market demand, we have a sufficient number of rooms in the downtown core,” he said.

He's since gotten the boot from Chris Collins, and his successor, Drew Cerza, is singing a somewhat different tune, according to our story the other day.

In the end, Cerza believes that the market will decide how many projects move forward.

I think the market decided a long time ago. The problem is the politicians think they know better. They've been wrong -- tens and tens of millions of dollars wrong. The question is whether they'll keep making the same mistake for the sake of photo ops and rewarding campaign donors. 

Not everyone in local government has such a "subsidize now, ask questions later, if ever." Niagara Falls Mayor Paul Dyster is one of them.

As for Termini, I wish him well with his latest undertakings. But please, remember to put up the safety railings before the fact.

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Brian Davis and Byron Brown play hard to get

Political bedfellows Byron Brown and Brian Davis are tough guys to pin down these days -- as always.

Investigators for the State Police and District Attorney showed up at City Hall on Wednesday intending to talk to Davis, presumably related to their investigation of the Ellicott District Common Council member's financial dealings. Depending on who you talk to, Davis either wasn't around or suddenly made himself scarce.

No surprise. I had the same experience when I tried to question him about everything from his bad debts to phony claims of a college degree.

Brown, meanwhile, waltzed into Thursday's meeting of the Buffalo Urban Renewal Agency 15 minutes late, conducted a meeting that lasted all of five minutes, and blew out of the room. Suffice to say, there was no idle chit-chat.

While hizzoner was there, BURA approved contracts for six of the 14 human service agencies still awaiting approval of contracts that were supposed to kick in last May.

No discussion, no explanation of why the other eight agencies are still awaiting approval, and no discussion about the questions involving BURA's handling of the contracts of some 50 agencies that I detailed in Monday's paper.

Quick guess: what do you think Brown and Davis consider their favorite line from the movies?

Pathetic voter turnout speaks volumes

There are some 439 elected officials in Erie County. And they seemed to account for half the voters who bothered turning out to the polls Tuesday.

Turnout was a rock bottom 24 percent in Erie County, and even worse just north In Niagara County, where an estimated 18 to 20 percent of voters cast ballots.

Odd-numbered years are considered "off years," when neither federal offices, starting with the president, nor state, including the governor, are up for election. Turnout is historically lower, but this year it's in the basement.

Consider these trends:

In Erie County, some 141,000 voters went to the polls Tuesday, judging by the votes cast in the high-profile races, including county sheriff. That number is likely to climb to 150,000 or so by the time a few unreported election districts and absentee ballots are counted. By contrast, nearly 450,000 voters cast ballots last year. OK, that was a presidential year, when the vote is high, but consider the last off-year, 2007, when some 250,000 voters went to the polls.

It was even worse this year in Niagara County, where about 23,000 voters cast ballots, compared to 50,273 in the 2007 off year and some 96,000 last year, when Barack Obama and the old guy who ran with Sarah Palin squared off.

Here's a quick chart with the details.

And here's Bob McCarthy's story with more details, including:

The last time countywide races for sheriff and comptroller headed the ballot was in 2005, and turnout was 46 percent. The same lineup in 2001 produced a 30 percent turnout, which then was considered ultralow.

There's lots of nuances that come into play that help explain the variation in vote totals over the years. In 2007, for example, the races for mayor in Niagara Falls and Lockport pushed up the count in Niagara County. But there was a big issue on this year's ballot -- a proposal to downsize the County Legislature.

There were plenty of contested races in Erie County this year -- although I've got to note that candidates seeking 66 of 155 seats were unopposed -- and it didn't move a whole lot of folks off their couches.

In Amherst, turnout was 30 percent. Hamburg, 25 percent. Orchard Park, 24 percent. I could find a turnout of better than 50 percent in only one town or village in Erie County

The numbers were lame for county legislative races, ranging from 19 to 29 percent where there were contests.

Yeah, the absence of an election for mayor -- Byron Brown ran unopposed after winning the Democratic primary in September -- gave a lot of city voters license to stay home. But you'd think that an electoral push by Chris Collins, with his anti-urban agenda and the state of the county holding center, would have been enough to get more city folks to the polls to vote for sheriff and comptroller. 

All this gives lie to the argument that voters are in love with the notion that the smaller the government, the better, that the government closest to the people is better, etc.

Nope, when it comes to town supervisors, clerks, highway supervisors, tax assessors, council members -- to say nothing of school board members -- two out of three voters just don't give a hoot.

The ones who care include the pols themselves, who view government as a jobs program -- for them, their relatives and cronies.

Coupled with the success Kevin Gaughan is having with getting voters to downsize their town councils, I'd say Tuesday's dismal turnout underscores that voters believe they're paying for more government than they want.

Perhaps it's time they put down the bag of potato chips, shut off the TV and do something about it. 'Cause the politicians sure aren't.

(As for analysis of Tuesday's results, the Buffalo Pundit is worth a read. And don't forget to follow this blog and my reporting on Facebook and Twitter.)

Warren Buffett and the future of journalism

I'll admit to initially being a bit put off by the title of the speakers panel I'm participating in Thursday: 

"Journalism on the brink: When the daily paper becomes the daily blog, who wins and who loses?"

The again, it's kind of subtle compared to what Warren Buffett had to say this morning on CNBC:

"Newspapers have a terrible future."

Far be it for me to argue with the boss.

Buffett. whose Berkshire Hathaway owns The Buffalo News and a piece of the Washington Post, went on to note the steep decline in newspaper circulation reported last week.

"The truth is fewer people ... are going to be reading newspapers a year from now and two years from now," he said.

It's not the first time Buffett has let his feelings be known. Six months ago, he told the Wall Street Journal he would not buy a newspaper company "at any price. They have the possibility of going to just unending losses.”

I guess now would not be a good time to insert a YouTube video of Timbuk 3 singing "The Future's So Bright I Gotta Wear Shades."

Instead, let me plug the speakers panel at 7 p.m. Thursday at the Burchfield Penney Art Center. It's sponsored by Buffalo Spree, whose current issue includes a story on the state of local online media.

The panel includes a cast of thousands beyond yours truly: Geoff Kelly, of Artvoice; Newell Nussbaumer, a founder of Buffalo Rising; Marc Odien and Chris Smith of; Alan Bedenko, i.e. Buffalo Pundit, da man among local bloggers; Brian Connolly, online editor here at The News; Ben Siege of Block Blub magazine; Elena Buscarino, editor of Buffalo Rising; and blogger Sharon Bailey.

I think you should show, if for no other reason than to see who can get a word in edgewise.

In the meantime, listen to what new media guru Jeff Jarvis has to say about what the future of journalism will look like.

In a recent post, Jarvis declared:

The future of news is entrepreneurial.

There’s a lot in that statement. It says: The future of news is not institutional… The news of tomorrow has yet to be built…. The structure – the ecosystem – of news will not be dominated by a few corporations but likely will be made up of networks of many startups performing specialized functions based on the opportunities they see in the market…. Who does journalism, why and how will change…. The skills of journalists will change (to include business)…. We don’t yet know what the market will demand and support from journalism…. News will look disordered and messy…. There will be more failures than successes in the immediate future of news….

That statement also holds many implications for sectors of the economy and society: investment (put money into the new, not the old)… public policy (don’t protect and preserve the incumbents but nurture the startups by creating a fertile and level playing field)… education (how do we train journalists when everyone can do journalism? – how do we train everyone?)… marketing (advertising won’t be one-stop shopping anymore and that means it may support news less)… PR (influence will be no longer be concentrated)… technology (there are opportunities here)…

Finally, that statement does not say some things. It does not say that the incumbents’ institutions will necessarily die, only that they have proven not to be the source of innovation and growth in news.

Hey, I think I have my talking points for Thursday.

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Block grant woes go from bad to worse

The city's block grant program may be more screwed up than ever.

Given its history, that's saying a lot.

And given the city's status as the nation's third-poorest city, that's a shame.

Not that anybody in a position of authority seems embarrassed about it, at least not enough to actually do something about it.

Of course, Mayor Byron Brown can fix the problem. But he hasn't exactly built a track record as a problem solver during his nearly four years in office, has he?

From what I learned during the course of reporting today's story, it appears Brown -- with his sidekick Steve Casey doing the dirty work, of course -- is using the program's millions in part to reward friends and punish enemies.

Let's move on to others who could be part of the solution, if they so chose.

For starters there is the U.S. Department of Housing and Urban Development. It's real good at finding problems. Not so good at fixing them.

It has the ways -- it's the will that's lacking.

HUD and the city have been going back and forth since the feds issued their report in March that found 19 serious problems with the Brown administration's management of the block grant program. So far, 10 of the 19 problems have been fixed, ones that to varying degrees involve pushing the right paper across the table. But the root problems, starting with poor management, remain unresolved. The full updated report is here.

HUD has all kinds of regulatory powers. And it's got the power of the purse strings. Not that it acts that way. Heck, the feds won't even use the bully pulpit. Call them for a comment, a chance to nudge the city, and you get blah-blah-blah quotes from a flak. The last time anyone had anything stronger to say, HQ in DC called and told everyone to dummy up.

Perhaps Chuck Schumer, Kirsten Gillibrand, Brian Higgins and Louise Slaughter should tell HUD Secretary Shaun Donovan to get tough. Our local delegation has been awfully quiet about the city's misuse of federal dollars ever since John LaFalce retired. Yeah, I know, they're all Democrats and want to act like We Are Family, but it is their constituents who are getting the short end of the deal.

The Common Council, on the other hand, has had a few things to say. But it's been mostly just talk.

For all its rhetoric, the Council in recent years has changed about 1 percent of the spending proposed by Brown in his block grand budget submissions. And there's been no push for structural changes.

Yeah, the Council was successful this summer in getting HUD's inspector general to agree to come in and audit the block grant program -- not that he's shown up yet. Far be it for me to discourage another pair of eyes from looking over the books, but what we need a lot more than another study is a solution.

Three Council members sit on the governing board of the Buffalo Urban Renewal Agency -- the crew that mismanages the block grant program -- and I don't see them pushing for meaningful change on that front, either. Yeah, the mayor controls the board majority through appointments, but that doesn't mean you just go through the motions. And that's largely what's happening.

Then there is city's foundation community, which invests a lot of money dealing with the vestiges of poverty. It is in their interest to see that the biggest pot of money available to do likewise -- the block grant program -- is money well spent. But they're spectators.

Finally, there are those so-called advocates for the poor. There are a lot of fine people in their ranks. Unfortunately, too many of them feel they have more to lose by speaking out than the community has to gain, and Brown and Casey give them a justifiable reason for pause. But a lot of these advocates have, or want, a piece of the block grant pie. They'll grumble, but not much more.

It's all so Buffalo.

I guess this leaves it up to the citizenry to do something about it.

People, are you ready to rumble?

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