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Rod Watson: 'Subsidy Tour' underscores dangers of incentive abuse

Rod Watson

"When our communities are under attack, what do we do?"

"Stand up, fight back!"

That call-and-response was a rallying cry for the two dozen people on the bus for last week’s Subsidy Tour of some of Buffalo’s most notorious taxpayer handouts.

But it also could be a warning to city officials: Opposition to tax-exemption programs that benefit wealthy developers and upscale renters instead of average Buffalonians is not going to go away.

Not surprisingly, anything dubbed a "subsidy tour" would have to begin at One Canalside, the $32 million Benderson Development initiative that has become the poster project for subsidized abuse. Benderson converted a former state office building into a hotel, law offices and a restaurant – and a single apartment. That lone dwelling allowed it to qualify for $5.9 million in tax breaks under the state’s 485-a program, which is supposed to spur the conversion of old buildings into viable new enterprises.

The tour also stopped at Campus Walk, the $25 million Greenleaf & Co. student housing project next to SUNY Buffalo State that got $2.6 million in tax breaks under the same program, named for the section of tax law that makes the giveaways possible.

But in what could really be called a tale of two cities, the bus ride – organized by the Our City coalition of community groups pressing officials to respond to citizens instead of developers – also stopped in the Fruit Belt, where organizers said two Rose Street lots were just turned over to the area’s land bank.

And the tour wound up at the old School 77 on Plymouth Avenue, which was cited as an example of how tax credits can be used to benefit the community instead of the well-off and well-connected. PUSH Buffalo used historic tax credits, low-interest loans and grants to turn the school into a $14.8 million community hub that taps solar power while housing its offices plus affordable senior citizen apartments, new space for Ujima Theater Co., and space for the anti-poverty group Peace of the City.

The contrast between development efforts that work for those on the middle and lower rungs of the economic ladder and development that works for those at the top could not have been more clear.

"I’m not ‘marginal.’ I’m just straight-out poor," said Luz Velez, one of those on the lower rungs and co-founder of PUSH Silver, an offshoot of the organization that gives the elderly a voice. She said her Hoyt Street block has only three or four residents who were there 10 years ago as gentrification takes hold.

"We East Side and West Side homeowners held down the city when everybody did the white flight," she said.

Now they fear being priced out as taxes rise to make up for the giveaways, while higher rents in the subsidized high-end units raise the rent floor for everyone and make apartments unaffordable for many who need them.

The tour highlighting those issues was the latest response to last summer’s "Buffalo’s Costly Mistakes," the Public Accountability Initiative report detailing the subsidy abuses. Another response will come Saturday, when Our City holds an "anti-displacement summit" from 9 a.m. to 3 p.m. in East High School.

City officials – who opted into the state’s 485-a program – have said they followed the law in approving all applications. Developers, not surprisingly, say they couldn’t have built these projects without the help, given New York’s high taxes and Buffalo’s rental rates.

But Public Accountability Initiative's Rob Galbraith notes that the public handout doesn’t come until after the project is finished and assessors determine how much value was added to the property.

"It proves that these projects could happen without it," he said of the post-completion giveaways. As for developers factoring in this "if-come" aid before starting, "I would think that the bank would want something a little more concrete than that."

And if a project really can’t be built without such handouts, maybe it shouldn’t be. Maybe that aid instead should go to projects aimed more at solidifying Buffalo’s working and middle classes and that have more of a community benefit – like the School 77 venture – rather than to accelerating gentrification when legitimate development efforts already are luring people back to the city.

Public Accountability Initiative has several recommendations, from repealing the program to mandating more transparency so that residents at least know how much of the tax burden they’re picking up for developers. That, in itself, could have an impact, especially at the polls.

PUSH Buffalo’s John Washington notes that next year is a Common Council election year and activists need to combine their policy advocacy with voter registration, because that small group on the bus represents thousands of other struggling Buffalonians who are "paying to fill the gap that was created by 485-a" and similar programs.

In fact, their advocacy may already be paying off. Assemblyman Sean Ryan, one of the program’s most vocal critics, plans to talk with Council members and developers to see if there’s a way to draft meaningful reforms – something that may be more possible with Democrats’ takeover of the State Senate.

And Council President Darius G. Pridgen has a resolution that would mandate "some level of affordable housing" in any 485-a project, though the measure has yet to go anywhere.

That would be a form of "inclusionary zoning," which activists also have been pushing for to make sure affordable housing is a part of any new Buffalo development. In fact, a couple of developers – Ellicott Development and Sinatra & Co. on one project, and Park Grove Realty on another – recently announced affordable housing as part of their plans for high-priced units. That indicates some people are listening.

The only danger now is that critics of the need for reform will cite those voluntary efforts as proof that, "See, we don’t need a law. Now leave us alone."

But activists trying to reclaim Buffalo for the average resident aren’t going to leave them alone. Fortunately, it looks like they are going to keep fighting until one of their other chants becomes reality: Whose city? Our City!

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