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Sinatra says he has paid $1.2 million owed in back taxes

Developer Nick Sinatra said he has fully paid delinquent Buffalo and Erie County property taxes, approaching $1.3 million, after scrambling to make the payments at the end of last week.

The owner of Buffalo-based Sinatra & Company Real Estate said he made payments to Erie County “as of the close of business” on Friday, even seeking to show the receipts to County Executive Mark C. Poloncarz, who had earlier criticized the developer for his previous decision not to pay.

Joseph L. Maciejewski, county director of real property tax services, said Monday that Sinatra’s companies had paid $503,791 to the county over the course of last week, with most paid on Friday. A total of $40,703 remains outstanding on eight parcels, Maciejewski said.

However, Maciejewski said last week that Sinatra owed a total of $778,700 to Erie County. The gap between what the county and city said Sinatra's companies paid and what they owed appears to be village, town and other taxes for 2018, which are still being collected by municipalities and are not reflected yet in county records, Maciejewski said.

The actual amount that Sinatra paid the city wasn’t disclosed. But Sinatra’s director of development, Amy Nagy, told The Buffalo News that the firm had paid more than $600,000 to cover taxes, prior to the bulk of the county payments.

City spokesman Michael DeGeorge confirmed receipt of the money, saying on April 17 that only a few items remained to be sorted out.

“He is in the final stages of full payment being completed,” DeGeorge said.

Sinatra told The News last week that his failure to pay the taxes stems not from any financial difficulties but from a business decision to withhold the money as his companies challenged property assessments. In the case of a mobile home park property in Alden, Sinatra also cited a dispute with the village.

Nick Sinatra owes over $800,000 in back taxes, calls it business strategy

Poloncarz responded that property owners are required to pay their taxes even when challenging their assessments.

Sinatra, however, rejected criticism of the back taxes owed by his companies, citing over $10 million in tax payments last year on local properties. And he has said he has invested over $150 million in renovating and redeveloping sites to create new housing, office and retail space.

"If various folks want to expose business practices they don't agree with, that's unfortunate, but at the end of the day, we're staying focused on the development and investment that we're doing here in Western New York," said Nagy, Sinatra's director of development. "We make choices every day, and we may have to suffer the consequences for those choices: penalties, fees, interest. We made a business decision, and we've owned it."

Sinatra's final tax payments came after he and Ellicott Development Co.'s William Paladino obtained variances from the Zoning Board of Appeals for a joint construction project in the Elmwood Village. Critics had said earlier in the week that he shouldn't be granted the exceptions unless his taxes are paid in full.

He also has been criticized for seeking tax breaks and other benefits from the government – including $1.47 million from the Erie County Industrial Development Agency – while owing back taxes.

"It's ironic that Sinatra thinks so highly of his community contributions when he can't even take the basic step of paying his taxes," said Robert Galbraith, a researcher at the Public Accountability Initiative, a government watchdog group that was the first to reveal the tax debt. "Most of us know that we can't simply make a business decision to not pay our taxes."

Political donations

Sinatra is one of the region's youngest and fastest-growing developers, with a host of new projects completed, underway or announced, including his remake of the Market Arcade, as well as the Phoenix Brewery Apartments, Fenton Village apartments and the former School 56. He's also working with David Pawlik of CSS Construction on four Jefferson Avenue projects. And, he teamed up with Paladino on the $100 million redevelopment of the eight-acre former Women & Children's Hospital of Buffalo site in the Elmwood Village neighborhood.

He denounced criticism of the unpaid taxes as "a political smear campaign" against him "because I'm a Republican."

"We have worked very hard to build a strong company reputation in this community and I get very upset when others try to smear it," Sinatra said. "Eight years ago, I decided to come home to rebuild my hometown – the community I love. Armed with major investors, I could have set up shop in Seattle, Dallas, anywhere. I chose Buffalo because I see our potential and love this town. We have accomplished a lot to rebuild it but there is a lot more to do and these smears disappoint me on a very personal level."

He declined to comment further.

Sinatra's companies have spent significant money in the past two years to acquire properties. His West Seneca Apartment Group LLC spent $7.6 million last year on the 104-unit complex known as Oakridge Estates Apartments. It was among a string of new assets Sinatra bought in 2017. The new holdings include an apartment complex on Starin Avenue, a Delaware Avenue apartment complex and a self-storage facility on Grand Island.

In the same period, he's also directed money to politicians, according to Buffalo News research. Since 2016, Sinatra and his companies have given about $37,000 to political luminaries, including Reps. Brian Higgins, D-Buffalo, and Chris Collins, R-Clarence. Collins is also an investor in some of Sinatra's ventures. Sinatra, who worked for both former Gov. George Pataki and later President George W. Bush, also gave to the Rep. Paul Ryan's re-election fund in 2016 and to a political action committee connected to Collins.

In total, Sinatra gave just under $20,000 to federal accounts since 2016, according to Federal Election Commission records. Funds set up for Collins received the bulk of it, or about $12,400.

Sinatra gives to state political funds on both sides of the aisle, too. For example, he donated $1,350 to Democratic state Sen. Timothy Kennedy's campaign fund and $1,500 to Republican state Sen. Chris Jacobs just since 2016, records filed with the State Board of Elections show. He gave $6,650 to the "Brown for Buffalo" fund, which supports Mayor Byron Brown.

"I support those who are good for Buffalo and Western New York," Sinatra said. "Democrat, Republican, it doesn't matter to me. I support good people, people who are pro-Buffalo and strong leaders for our community."

Erie County Legislature Chairman Peter Savage, an attorney, worked as an in-house counsel for Sinatra for two years, from mid-2014 through the end of 2016, when he left to join the law firm Block Longo LaMarca & Brzezinski. The firm, including Savage, still represents Sinatra. Savage's name appeared on an ECIDA incentive application last September for Sinatra's Great Arrow Apartments project.

But Savage, Nagy and ECIDA counsel Robert G. Murray say the lawmaker has stayed out of any dealings with the county or ECIDA on Sinatra's behalf. And they said the inclusion of his name on the application, as a contact, was a mistake by someone filling out the form.

"It is my understanding those forms were completed by the company itself, who provided that information in error," Savage said. "I believe the individual who prepared the application, unsure of who would be handling the matter, listed a general counsel, but I did not handle that matter."

Savage also said he was not aware of the tax debts until reported by The Buffalo News.

"Obviously, we expect taxes to be paid, and I've been assured they will be," he said.

Back taxes tallied

The Buffalo News reported earlier this month that Sinatra's companies owed more than $822,716 in back taxes to Erie County and the City of Buffalo, with about 87 percent from 2017. That tally was based on a report by the Public Accountability Initiative and verified by additional Buffalo News reporting.

The report examined 79 properties owned by Sinatra through various limited liability companies, but was not an exhaustive study of his entire portfolio. That's because the developer uses many different entities that are difficult to identify and track, making it hard to know the extent of his holdings in Western New York.

The report found his companies owed $445,182 to the city on 39 properties and another $377,534 to the county for 38 properties. That included $154,430 for the Market Arcade Building at 617 Main St. in downtown Buffalo, where his firm is now headquartered. Maciejewski said Sinatra made one significant payment of $41,209.48 in the last week to cover the Market Arcade debt.

Further research since then by Public Accountability Initiative and The Buffalo News identified 83 of his companies' other properties, with $254,644 in county taxes owed on 41 of them at the time. Most are in Buffalo, but the largest debts were owed in Alden and Tonawanda.

In particular, he hasn't paid $93,254.85 on Alden Landings, a 53-unit mobile home park at 13391-13397 Broadway that he purchased from a Los Angeles investor in 2015. That's more than 10 percent of the $885,000 purchase price that he paid at the time.

He also owes $147,485.98 on a series of retail buildings stretching from 2860 to 3107 Delaware Ave. in Kenmore. The rest of the tax debts are less than $1,000 each, including 18 of them that are less than $50.

Maciejewski's office, which cross-referenced all properties in the county database against an ownership mailing address of 617 Main St. in Buffalo, found an even larger total debt that initially exceeded $800,000.

In all, before the county payment and city payments, Sinatra owed at least $1.2 million in back taxes to both the city and county.

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