The city's banking arm approved a $10,000 grant Monday for a project proposed by the city's Democratic Committee chairman and his wife, with all elected leaders on the organization's board abstaining from voting.
During a meeting in City Hall, NFC Development Corp. voted, 12-0, to award a micro-enterprise grant to Michael Lewis and his wife, Melinda Scime.
The funds will help to turn a building at 1517 Main St. into a wellness center, a $137,000 project, according to figures provided to the city.
Mayor Paul A. Dyster, Council Chairman Chris Robins, and Councilmen Robert Anderson Jr., Steven D. Fournier, Sam Fruscione and Charles Walker -- all Democrats -- abstained from the vote.
All other board members at the meeting voted to award the funds.
The vote followed Fruscione's request for an opinion from the city's legal staff on whether the elected Democrats should participate in the vote.
The others board members are members of the community.
In response, Richard Zucco, assistant corporation counsel, said nothing prohibited the officials from voting, but he added that board members should consider whether they have any personal or political contact with anyone applying to the agency.
Corporation Counsel Craig H. Johnson also said board members should consider any possibility of an appearance of a conflict of interest.
Fruscione, who is endorsed by the city Democrats, has said he is not aligned with Lewis on the committee.
Scime is a licensed psychologist and certified yoga instructor, while Lewis is a school psychologist. He was elected chairman of the city Democratic Committee a year ago.
Lewis said they plan to renovate the interior and exterior and lease out some commercial space to other businesses providing wellness services. But he also said the building does not currently meet some portions of the city's building code.
The grant will help to complete the renovations, as well as to purchase equipment, said Fran M. Iusi, the city's director of business development. No funding will be released until the building being brought up to code, Iusi said.
Doreen O'Connor, a board member and wife of Niagara County Legislator Sean J. O'Connor, D-Niagara Falls, sympathized with Scime.
Doreen O'Connor, who heads Majestic Tours, said some have made her husband's elected position an issue in her business dealings throughout his political career.
In this situation, Lewis and Scime are putting in more of their own money than most other grant recipients, O'Connor said.
Anne Sawicki, another board member, told the group she was happy to see an application from a business other than bars and restaurants that typically request funding from the organization, which also provides loans.
"They're putting a significant amount of money up," Sawicki said, noting Lewis and Scime's personal investment of $30,000.
In November 2007, NFC Development approved an $8,720 grant to Mickey Rimmen, the chairman of the Democratic Party at the time, for a new roof on a building he owned at 310-316 Niagara St. The funds were disbursed last year, after Rimmen resigned from the committee post.
In other agency matters, the board:
*(Approved a $45,000 loan to the owners of Wine on Third, a wine bar at Third Street and Ferry Avenue. Co-owner Shawn Weber said plans call for renovating part of an adjoining building to create a dining/banquet room.
The new space, which will have a maximum occupancy of 55 people, could be open in two months, said David Giusiana, co-owner.
*Approved a $30,000 loan and a $10,000 grant for the Krows Nest, a family entertainment facility moving to 8735 Niagara Falls Blvd.
Owner Timothy Krawczyk said his business had been located in The Summit, the Wheatfield mall that closed when its owner entered bankruptcy earlier this year.