A tall mass of yellow, flowering weeds has grown into the deteriorating roof of the 94-year-old Hens & Kelly department store building where more than 400 Erie County Department of Social Services employees now work.
These employees provide child protection and support, foster care and adoption services to thousands of children and families each year.
Abused children come here for interviews. Parents come for supervised visitation. All sides agree the building needs a major renovation.
But a botched effort to either relocate these services or renovate the current space has led developer Carl Paladino to threaten legal action against the county’s real estate broker for alleged bid rigging in favor of Ciminelli Real Estate.
Meanwhile, County Executive Mark Poloncarz has threatened to uproot all Social Services staff now working at 478 Main St. back into other existing county office space, if worse comes to worst.
“This is not political,” said Poloncarz, who noted the county leases other spaces from Paladino without issue. “This is about finding the best location at the best price. And if you talk to the employees, they’re the ones who complain about the conditions of the building the most.”
Paladino’s company, Ellicott Development, has leased 478 Main St. to the county’s Department of Social Services for more than two decades. He said his office has made every effort to address maintenance issues that have come up. Plans for a new roof and climate control system for the building were in the works until county leaders told him they weren’t going to stay there, he said, leaving him without the financing to make the costly renovations, since the financing is tied to the lease.
While he has no issue with the county selecting more expensive digs for its employees, he said, he won’t allow his company to be tarred by “lies.”
He has accused the county-hired real estate broker, CBRE, of manipulating facts and figures to make a more expensive proposal by Ciminelli Real Estate look more attractive and less expensive than his.
“I know deceit when I see deceit,” Paladino said. “I know fraud when I see fraud.”
Mary Ellen Brockmyre, a deputy Social Services commissioner, climbed a ladder and pushed aside a ceiling tile to reveal a 5-gallon plastic bucket catching water. Planter saucers, buckets and basins also catch water in other parts of the building.
“We’ve had continuous leaks,” she said.
Social Services Commissioner Al Dirschberger told county legislators that the work done by Ellicott Development is “Band-Aid-type stuff” and that the conditions are disrespectful to the workers and clients who use that building.
Frustrated employees said they have complained about many of the same issues for years, including broken elevators, pipes and toilets. But while short-term fixes have been made, many long-term infrastructure improvements have not, they said. Water damage is apparent in patches of bubbling paint and stained windowsills running along the outer wall of the sixth-floor space where Child Protective Services employees work and train.
“They left their plaster here from last year,” said caseworker Lisa Noonan, referring to a big, white bucket near her desk.
The dampness also attracts silverfish and centipedes, employees said.
Michele Weaver, who works for Social Services and co-chairs the Civil Service Employees Association committee for health and safety, pointed out that some parts of the building are always freezing cold, while others are sweltering hot.
“That’s been going on for years,” she said.
Between the leaking roof, poor heating and cooling, and other maintenance issues, the department wants to move into a newer building a block away at Fountain Plaza – the home to the posh law offices of Jaeckle Fleischmann & Mugel until 2015. That property is managed by Ciminelli Real Estate.
Paladino expressed outrage at the public comments made about his company’s work. He said he and his managers met with Social Services administrators monthly and that he never heard such strong condemnation of his company’s maintenance until it looked like employees might have the chance to move into the highest-grade, Class A office space at Fountain Plaza, which features polished wood finishes and unobstructed 360-degree views of the city.
“I don’t want people going around saying we were bad landlords, that we didn’t take care of business,” he told legislators. “We took care of business.”
If the county wants to move into Class A office space, he said, his company is prepared to do that work and still offer the building back at a much lower cost than other bidders, but the county needs to be clear about what it wants. As it stands, he said, Ellicott Development has already pledged to replace the roof and climate-control systems, to renovate all bathrooms and create the open floor plan Social Services administrators say they need.
County leaders said it shouldn’t take the prospect of a lease renewal to get Paladino’s company to address major maintenance problems.
Paladino responded that he knew the roof and climate systems needed replacing a year ago, but a renewed lease is necessary to secure the financing needed to make costly infrastructure renovations happen.
“It’s their right to move,” he said of the county. “Don’t go making us look as bad guys on the way out the door.”
Disagreements over the maintenance of the Main Street property have recently been overshadowed by errors acknowledged by CBRE in its cost analysis of the Paladino and Ciminelli Real Estate bids, as well as accusations of fraud by Paladino.
At a committee meeting, a majority of county legislators seem disinclined to support a Social Services move to the 10-12 Fountain Plaza location, especially when the county Comptroller’s Office released an analysis stating that a lease with Ciminelli Real Estate would cost the county $3 million more than if Social Services stayed at the old Hens & Kelly building.
A separate analysis by CBRE also showed it would be cheaper for the county to remain in its existing building for the first five years of a renewed lease, but stated that after 10 years, the Fountain Plaza location would be cheaper.
But during the committee meeting, it became apparent that CBRE had used an incorrect square footage figure to compare Paladino’s bid to Ciminelli Real Estate's, making Paladino’s bid look more costly by comparison. That bombshell led Paladino to accuse CBRE of “totally lying” and a threat to prosecute the company for fraud.
Michael Clark, the director of retail tenant services who did the analysis, later told the county that he referred to the incorrect documents, and as a result, came to incorrect conclusions.
“It’s wrong in my response to the comptroller’s analysis and it was wrong in what I said at the meeting today,” he wrote to county officials.
Though Clark said the faulty analysis was the result of an innocent mistake, Paladino said he doesn’t believe it and pointed out that CBRE receives a larger fee by recommending the Fountain Plaza property over his. He also criticized the county for asking CBRE to conduct an analysis when it benefits financially by recommending a more costly lease agreement. Clark did not respond to a request for comment Saturday.
Poloncarz said the county hired an outside broker to handle the request for lease proposals for Social Services space because his own staff doesn’t have the expertise to do that work. However, he placed full blame for the current debacle in CBRE’s lap.
“To put it mildly, I’m not happy with how this whole thing was handled,” he said. “The county had no involvement in the broker’s handling of the request for proposals.”
Poloncarz has since instructed the broker to reissue a clarifying proposal to all bid respondents, seeking technical adjustments. He intends to review those without prejudice toward any company, he said, as along as their leases assure the county that its employees will be able to work in a safe, well-maintained and high-quality environment.
“We’re going back to the drawing board,” he said.
The threat to move the department’s employees into other county space by the end of the lease term in March may not be necessary because Paladino has pledged to allow the county to continue renting the Main Street location on a month-to-month basis until the matter is settled.
Meanwhile, Paladino said he is undecided about whether to pursue fraud charges against CBRE and possible “co-conspirators” like Ciminelli Real Estate. He said he may eventually ask the district attorney or the federal government to investigate the matter of government corruption further.