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Citigroup wire transfer crash threatened tax credit funds for Northland project

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A technical snafu at Citigroup in late December nearly imperiled some of the tax credit financing that the Buffalo Urban Development Corp. is counting on to fund its redevelopment of the Northland Corridor into a new light-industrial business hub.

The agency had closed on $33 million in historic and New Markets tax credit transactions on Dec. 28, alongside $30 million in bridge loans from KeyBank, which had taken months to line up and finalize.

The financing included $19 million in state and federal historic tax credits, plus $14 million from the federal New Markets program. The latter pool included $5 million provided through the National Trust Community Investment Corp. and $9 million from Building America CDE, an affiliate of the AFL-CIO Housing Investment Trust. Citi Community Capital was the investor that bought the credits, giving BUDC the cash for the project.

BUDC officials were expecting to receive the money in agency accounts on Friday, Dec. 29, the last business day of the year. But Citi's wire-transfer room suffered some kind of computer crash that day, hindering the delivery for hours, said BUDC Treasurer Mollie Profic. That posed the risk that the deal wouldn't close by year-end, before the tax rules changed.

Citigroup, one of the world's largest banks, runs a major corporate and investment banking operation at the CrossPoint Business Park in Amherst, with an array of functions for its commercial banking and Global Transaction Services businesses. The facility is one of three primary global funds-transfer operations, alongside Singapore and Dublin, and handles some $1.4 trillion a day in transfers.

A Citi spokesman declined to comment Tuesday about what had happened. Profic said BUDC's money did ultimately get transferred in time, although it wasn't fully recorded in the account until after the weekend.

"Our transaction was probably one of the smallest in there," said BUDC Vice President David Stebbins. "For a bank as big as Citibank, for their wire room to go down, that must have been a mess."

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