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ECIDA Rebuked for Fee Gouging

Bill for Schools Project Irks City Comptroller

By Brian Meyer
NEWS STAFF REPORTER

Buffalo’s comptroller is accusing Erie County’s development agency of “fee gouging” in the next phase of a citywide school reconstruction project.

In a scathing rebuke of some policies at the Erie County Industrial Development Agency, city Comptroller Andrew A. SanFilippo claimed its insistence on a $500,000 fee for being the pass-through entity for a bond sale shows “callous disregard for taxpayers.”

SanFilippo even resurrected his earlier criticism of the ECIDA for approving a loan for One Sunset, a restaurant that went belly-up shortly after receiving city and county subsidies.

“Let’s not forget that this is the same agency that loaned $50,000 of taxpayers’ money to a restaurant that was hemorrhaging to death,” said SanFilippo. “Now I’m supposed to agree to pay excessive fees to rebuild our schools?”

Al Culliton, the ECIDA’s chief operating officer, said he wouldn’t comment on SanFilippo’s swipe involving the One Sunset saga. As for the school modernization project, Culliton said the ECIDA has already slashed its customary fee by 85 percent. Based on the normal fee schedule, he said, the agency could have charged up to $3 million.

“This is the most reduced fee we’ve ever given to anyone in the history of the agency,” said Culliton.

County Executive Chris Collins, an ECIDA board member, also defended an agency that he said is “bending over backwards” to help modernize city schools. He said the ECIDA should make no apology for collecting a legitimate fee, 94.5% of which will be reimbursed by the state. Collins said the agency is playing a key role in creating jobs and promoting economic development.

“The IDA lives on fees,” said Collins, adding that the agency receives no county funding.

Collins met privately with SanFilippo in a meeting that sources said turned icy when the fee issue surfaced. Based on his conversations with Collins and ECIDA officials, SanFilippo accused the agency of trying to “exploit” the state, which absorbs all but 5.5% of the project’s costs.

“We should not wallow in the trough, at the state’s expense, especially during a time when the state is having difficulty with its budget as a result of the global economic meltdown,” SanFilippo wrote in a letter to Culliton.

Collins expressed no sympathy for the state, claiming its fiscal woes are “self-inflicted.”

“Albany can fix the problems tomorrow. They just don’t want to,” said Collins, who renewed his call for pension reform and other overhauls.

Phase four of the massive school reconstruction project is expected to require a $283 million bond sale based on revised estimates released Friday. San- Filippo claimed the ECIDA and agency attorneys are the only parties that have refused to charge the same fees they charged in an earlier sale. Culliton disputed the claim, noting the previous sale was done in two phases. The ECIDA received $250,000 in fees for each phase. SanFilippo said the agency should be paid only $250,000 for the upcoming borrowing, which will be a single transaction.

“They’ve failed to demonstrate how they even earn this money,” SanFilippo said. “I have a responsibility to keep the costs of this project down. But [the ECIDA] knows they have us over a barrel.”

The agency is expected to vote on the latest phase of the joint schools construction project at a Monday meeting. Buffalo’s control board will hold special meeting Friday to consider the project.