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A $450,000 federal grant will be part of the financing of a planned 80-unit Elmwood Avenue housing project for low-income senior citizens.

Alfred DelliBovi, president of the Federal Home Loan Bank of New York, and Rep. John J. LaFalce, D-Town of Tonawanda, announced the grant Tuesday.

The money will go to American Shelter Inc. of Buffalo, a church-affiliated nonprofit agency that serves as general partner for both the $5.6 million Lockport project and an identical one approved Monday by the Niagara Falls City Council.

Burke Bros. Construction of Hamburg is the developer of both projects.

In both cities, the cottages would be off the property tax rolls because of the involvement of American Shelter, which is affiliated with the Old Landmark Church of God in Christ of Memphis, Tenn. That church has a Buffalo congregation.

A press statement issued by LaFalce said the $450,000 would "fill a gap in financing arranged by M&T Bank."

LaFalce hailed the grant.

"This cooperative effort is a tremendous example of how financial institutions, working together with local nonprofit agencies, can provide an urgent community need," he said.

Plans submitted to the Federal Home Loan Bank called for 56 one-bedroom cottages of 650 square feet and 24 two-bedroom cottages of 720 square feet. They would be arranged in 10 circles of eight cottages, each with a central courtyard. There would be parking areas between the circles, and a central dining area.

Burke Bros. Vice President Rocco R. Termini said subsidized rents for low-income seniors would be about $200 a month.

The Lockport plan has had a rough time of it at City Hall. The Common Council and Mayor Kenneth D. Swan refused to support it. Swan roundly condemned it at a public hearing Oct. 18.

The project was blasted for allegedly eroding the tax base and requiring city services without providing any substantial revenue to pay for them.

IDA Executive Director John R. Simon said he then received letters from Swan and the Council, indicating that they opposed the project and would not issue permits for it.

Termini said the IDA bonds are needed for the Lockport project in order for the company to obtain up to $2 million in federal income tax credits. He said no IDA bonds are needed for the Niagara Falls project because a different type of tax credit is being employed.

Noting the opposition of Swan and the Council, the IDA board tabled the bond issue for the Lockport proposal Oct. 21 and hasn't returned to it since.

Termini said Burke Bros. has been waiting for Swan and some of the aldermen to leave office at the end of the year before trying to move the Lockport plan forward.

Mayor-elect Thomas C. Sullivan said Termini called him after he won the November election. "I told him I wouldn't talk to him until I was in office," Sullivan said Tuesday.

Sullivan said he has no fixed opinion on the project yet.

"I'll listen to anybody. I don't want to scare this guy away from us," he said. "We cannot afford to chase business away."

If Sullivan and the incoming Council have a different view than Swan and the outgoing Council, Simon said the IDA board would likely take the Burke Bros. request off the table and pass it.

Niagara Falls has proved more cooperative with Burke Bros. than Lockport. The Council on Monday approved the use of $180,000 in federal Housing and Urban Development Department aid to buy seven acres of land at Frontier Avenue and 93rd Street, now owned by Summit Housing.

The city will "donate" the property to Burke Bros., Mayor James C. Galie wrote in a memorandum to the Council, and it will use another $140,000 in federal aid to help construct the cottages.

Because the project is tax-free for the first 15 years, the Council approved a payment-in-lieu-of-taxes arrangement. The developer will pay the city $13,250 in the first year after completion of the cottages, and that fee will rise by 2 percent a year to $17,485.35 in the 15th year.

That arrangement is identical to that approved for the Vincent Morello Senior Citizen Housing complex at Frontier Avenue and 95th Street, another Burke project.

Burke Bros. also has a plan for 16 fully taxable homes on the site of the old 93rd Street School. The Niagara Falls Board of Education last week approved the sale of that building to the Love Canal Area Revitalization Agency for $1, though a referendum is required to make it official.

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