The Buffalo Urban Renewal Agency, which gets about $19 million a year in federal anti-poverty money for community development, housing and emergency shelters, has been engulfed in controversy before Wednesday's search of some Buffalo City Hall offices.
The Urban Renewal Agency, whose board of directors is chaired by Mayor Byron W. Brown, works closely with the city's Office of Strategic Planning, which is headed by Brendan R. Mehaffy.
Both offices appeared to be the focus of the search by federal agents Wednesday morning in City Hall.
The two offices are intertwined. Mehaffy serves as vice chairman of the Urban Renewal Agency board of directors in addition to being executive director of the Office of Strategic Planning, which oversees several city programs funded largely with federal money.
And both the Urban Renewal Agency and Office of Strategic Planning have been beset by past controversies.
Mehaffy's predecessor as executive director of the Office of Strategic Planning was sentenced to probation for stealing public funds. The Urban Renewal Agency, meanwhile, has been criticized for years by the federal government over how it spends federal dollars.
In April 2018, The Buffalo News reported that BURA spent $4.3 million over three years rehabilitating 10 dilapidated houses in the city that it resold to first-time homeowners for about $1 million, or less than one quarter of what Buffalo spent to rehab them. For instance, over on Fillmore Avenue, the City of Buffalo paid almost $400,000 to renovate a run-down, one-family house that it sold for $80,000.
"HUD has deep concerns about whether these costs are reasonable for the return they generate," Lynne Patton, the regional administration of the U.S. Department of Housing and Urban Development, told The News last year.
HUD also issued a scathing audit of BURA management in 2011.
The city's Division of Housing, where the FBI agents were posted Wednesday morning, is headed by Yvonne McCray, who reports to Mehaffy. The housing office is among those receiving federal funds for such things as housing rehabilitation programs in the city.
Mehaffy was appointed head of the Office of Strategic Planning in 2010. He was tasked with redeveloping the city’s economic development agency and restoring fiscal integrity to the Buffalo Urban Renewal Agency.
Before Mehaffy, the Office of Strategic Planning was led by Timothy Wanamaker. Wanamaker was hired in 2003, when Anthony Masiello was mayor, and was kept in the post when Brown became mayor.
Wanamaker, who resigned in 2008, was sentenced in 2012 to three years’ probation for using a City Hall credit card to finance more than $27,000 in personal expenses, including travel. Wanamaker had to repay HUD for the money he stole.
During the Brown years, the FBI launched an investigation into One Sunset, an upscale restaurant that closed a year after it opened and left $160,000 in unpaid government grants and loans. The One Sunset probe never led to criminal charges, but it did result in two unrelated but high-profile prosecutions. One involved Wanamaker, and the other former Common Council Member Brian C. Davis, a former president of the Community Action Organization of Western New York.
Not long after Mehaffy took over the Office of Strategic Planning, HUD released a scathing audit that went back several years, detailing mismanagement of BURA, and its use of federal funds. The audit resulted in HUD temporarily freezing federal funds to the city, and eventually requiring the money go through the city comptroller’s office, rather than directly to BURA.
In recent years, under Mehaffy’s leadership, BURA has reported its administrative and financial operation has greatly improved, and BURA last year announced a “clean audit,” meaning auditors did not find any violations.
News staff reporters Phil Fairbanks and Matt Spina contributed to this story.