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Questions surround house demolition; Undamaged building was torn down by city

A fire. Two demolitions. An FBI investigation. And a lawsuit against the City of Buffalo.

Hard to imagine how those occurrences could converge, but that's exactly what happened after the city, according to Christopher and Pamela Szeluga, demolished a perfectly good Bailey Avenue rental property following a December 2009 fire at a neighboring house they also owned.

And where does the FBI come in?

When the Szelugas' lawyer went to City Hall months later, in the spring of 2010, requesting copies of the demolition permits for the two houses, he says he got a curious answer from a member of the city's Department of Inspections staff.
"He said I'd love to give you the records, but I can't; they've all been taken by the FBI," recalled attorney Richard G. Berger, the couple's lawyer.

Eventually, with help from the city attorney's office, Berger did get a copy of the demolition permits, and the lawsuit, currently pending in State Supreme Court, was filed in February 2011.

The Szelugas argue that the city demolished their rental houses -- a two-family at 1801 Bailey and a four-family at 1805 Bailey -- without first notifying them of any fire at their properties, or that the houses were being torn down. In addition, while one of the houses was damaged by fire, the other was not, the property owners say.

The Szelugas say the city should reimburse them for their economic loss from the demolition of their rental properties, and that the city -- not they -- should pay the demolition costs. The houses sold for $23,000 and $35,000 a few years ago, records show. Demolition costs are estimated at $40,000 per house.

City officials declined to comment on the case, except to say Buffalo has asked the courts to dismiss the lawsuit on its merits.

In court papers, the city denies making any mistakes.

"Any decision by the City of Buffalo to demolish the structures cited in the complaint was lawful, rational, necessary and warranted under the circumstances," the city's papers state.

The city is asking the court to dismiss the case, citing the procedure the property owners used and length of time the homeowners took to file the lawsuit after the fire.

Berger said the case was filed as soon as possible -- after the city provided demolition documents initially not available because of the ongoing FBI probe into City Hall operations. Berger said he is still waiting for other documents from the city, including a copy of the incident report the Fire Department filed the day of the fire. The Buffalo News also requested a copy of that report and was told the city would not release it.

"Because the city is seeking to have the case dismissed, potential disclosure of key material could impact the ongoing litigation," city spokesman Michael DeGeorge wrote in an email.

The Buffalo News then filed a formal request under the New York State Freedom of Information Law. The report is public information and should be released, said Robert Freeman, executive director of the state Committee on Open Government.

"That there is litigation is irrelevant," Freeman said. "If a record is prepared solely for litigation, it is confidential. That would not be so in this instance. A fire report is prepared as a matter of course. [It] is factual information. This certainly would be public."

The incident began in the early morning hours of Dec. 1, 2009, when fire ripped through the four-unit house at 1805 Bailey Ave. The question, however, is whether the two-unit house at 1801 was also destroyed by fire.

The city hired a contractor to tear both houses down on an emergency basis, then charged the homeowners about $40,000 each for the emergency demolitions, Berger said.

"My clients had no knowledge of the fire or the demolition and were not notified of either," Berger said in court papers. "Upon discovering the facts, the defendants went to the Bailey Avenue site to find that both houses had been demolished. To their knowledge, there was no damage to 1801 in the fire."

The property owners had insurance, which made a payment toward the fire loss at 1805 Bailey Ave. But insurance wouldn't cover 1801 Bailey.

"Other than a little smoke damage there was nothing wrong with 1801," Berger said.

"The insurance company sent an inspector, and refused to pay because it was not a covered loss. There was no fire damage. The demolition was just something the city did," Berger said.

The demolition permits for the two Bailey Avenue houses were issued Dec. 10, 2009, according to court records.

The Szelugas initially requested copies of the permits from the city in February 2010, but the request was ignored, Berger said. The attorney said he followed up by going to City Hall in May 2010 to request the documents. That's when, Berger said, he was told the demolition permits were not available because the FBI had the city demolition records. Berger noted he then spoke with the city attorney's office, and that he and a city attorney went to a room in City Hall filled with boxes of documents the FBI had requested. While Berger and the attorney were unable to find the documents that day, another city attorney eventually found the records and forwarded them to Berger.

The ongoing FBI investigation into City Hall operations led to the recent guilty plea of Timothy Wanamaker in federal court. The former economic development chief pleaded guilty to a felony charge of stealing government funds, admitting that he used a City Hall credit card to charge about $30,000 in personal expenses over a four-year period.

Others familiar with the FBI probe have said the investigation is continuing, and focuses, in general, on how the city uses its federal funds, including some that has been budgeted for city demolitions. The city has denied comment on the FBI probe, except to deny any wrongdoing.