Buffalo, N.Y. (WBEN) - One Western New York lawmaker in Washington, D.C. is calling for a federal investigation into the redevelopment of the North Aud Block in Downtown Buffalo. However, the city's mayor feels this call for action is nothing more than political fodder.
Congressman Nick Langworthy (R, NY-23) has sent a letter to the U.S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) requesting an independent review of the federal housing resources and public subsidies associated with Buffalo’s North Aud Block redevelopment project, and determine whether its procurement, financing, and use of public subsidies warrant further scrutiny.
Langworthy’s request centers on the dramatic increase in public financial assistance awarded to the project following the competitive selection of out-of-town developer Pennrose.
In May 2022, the Erie Canal Harbor Development Corporation (ECHDC), a subsidiary of Empire State Development (ESD), issued a Request for Proposals (RFP) for the redevelopment of the North Aud Block. The RFP stated that $10 million in public funding would be available to the selected developer for specified infrastructure and capital improvements.
"To listen to the facts, you have a total bait-and-switch. This was advertised for bid at $10 million in subsidies. Now we're over $80 [million], and you're building low-income housing units and mixed-income housing units to the tune of $610,000 a piece in subsidy alone. This seems like a radical waste of money," said Langworthy on Wednesday during an appearance on WBEN with Joe Beamer.
Specifically, Langworthy is requesting that HUD OIG review:
- Whether HUD funds, programs, approvals or other federal housing resources are directly or indirectly involved in the North Aud Block project and whether all applicable federal requirements have been satisfied;
- Whether the substantial increase in public subsidies following the competitive selection raises concerns regarding procurement integrity, internal controls, waste, fraud or abuse;
- Whether the project’s development costs and public subsidy per affordable unit represent an efficient use of federal housing resources;
- Whether any aspect of the project’s LIHTC financing, development costs or procurement should be referred to the IRS, Treasury Inspector General for Tax Administration, or other appropriate federal or state oversight authorities.
"This is a sought-after piece of property. If the circumstances as they are today had been advertised, I think you would have had a line of local developers that would have used their imagination and bid on a great project. Instead, we have an out-of-town firm, and they have been showered with public subsidies between a 30-year pilot, $30 million in federal tax credits that are supposed to be geared towards low-income housing, as well as just a pile of state money. If a project needs this to be that viable, maybe it's not all as cracked up to be in the first place," Langworthy said.
After listening to business leaders and the investigative coverage into the North Aud Block project, Langworthy feels it's clear the state violated its own policies on procurement.
"Is this an appropriate use of federal tax credits? These are a finite supply. There's not enough for every project. And yes, this is a large, high-profile deal downtown, but these projects are for everyone and for every district. And there's a lot of places throughout Western New York and the Southern Tier where we have just as big of a housing need, and those low-income tax credits, are they best used on something of this grand stature? It doesn't pass the smell test to me," Langworthy said.
Langworthy emphasizes that his request does not prejudge whether any violation occurred, but that the magnitude of the post-award changes, combined with the substantial federal resources supporting the development, warrants independent review.
"I'm not accusing anyone of any crime. I've asked the Inspector General of the Department of Housing and Urban Development to determine if the law was followed, and if this is an appropriate and efficient use of these tax credits. Those are the questions that need to be answered," Langworthy stated. "Should the federal government be a partner in this the way it was executed, or should it be rebid from the beginning?"
Langworthy feels it's important to ask the questions, and believes this process deserves a little more scrutiny before the state starts writing blank checks for giant giveaways.
"I think there's just a certain desperation to get something going, and we shouldn't just settle for something when it's a raw deal for the taxpayers," Langworthy added. "You have the opportunity to start from scratch, re-open the conversation, and invite anyone to come forward with a great business proposal. What a great destination [in] Downtown Buffalo? I mean, you don't have many parcels like that. And to use that for, what is looking more-and-more like just a subsidized low and mixed income [housing]; I do agree there is an affordability crisis, but people that are trying to get a solution to the affordability crisis don't necessarily expect luxury apartment buildings in the core of downtown."
Meanwhile, Buffalo Mayor Sean Ryan feels this move from Langworthy is nothing more than an effort to interject his political influence in the city.
"It's a fairly typical state award for a Division of Housing and Community Renewal Program. It's a mixture of housing tax credits in different programs. From that way, it's somewhat conventional," Ryan said of the funding for the project. "But Congressman Langworthy seems to want to poke his nose into Buffalo for political expedience. You may recall in July he objected to us flying a Somali flag in Niagara Square. So he seems very interested in what happens in the City of Buffalo, only sort of on 'red meat', MAGA type issues."
Ryan feels Langworthy making statements for political reasons takes away from the rational policy realm of the matter.
"You're not trying to start or stop something. You're just trying to get some talking points. That's really not helpful to the City of Buffalo," Ryan said.
Despite that, Ryan does add he'd be more than happy to talk to Langworthy about how the federal government can further assist the City of Buffalo.
"We have over 18,000 vacant lots, we have environmental brownfields, we have environmental degradation. We could use more funding for our light rail. So there's all sorts of ways the federal government could help the City of Buffalo, and I'd be interested in having a pragmatic, forward-looking, non-political discussion with him on that," the mayor said.
WBEN received the following statement from New York Gov. Kathy Hochul's office on Wednesday:
"For three decades, the North Aud Block has generated nothing but blight and zero tax revenue. The project, now underway, will transform a long vacant property into a mixed-income community, creating desperately-needed affordable housing, supporting jobs and tourism and bringing revenue to the city. This project, which is supported by loans the developer must repay, was discussed and approved in public meetings, and the commercial component will pay property taxes outside the PILOT agreement. After 30 years of neglect North Aud Block deserves progress."
