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Judge rejects controversial plan to label Gates Circle 'blighted'

A controversial plan to accelerate private development at the site of the former Millard Fillmore Gates Circle Hospital complex was blocked Friday by a State Supreme Court judge, raising new questions about the future of the 6.7-acre parcel immediately adjacent to the Elmwood Village.

The plan, first proposed in February 2019, would have used an obscure state law to create a special economic zone around the former hospital, providing extra property tax breaks to TM Montante Development as the firm seeks to revive a beleaguered $150 million development project there. But that state law, Judge Mark Montour ruled last week, was intended for use on formerly city-owned land in “blighted” areas – which Gates Circle does not appear to be, Montour wrote in his decision.

City officials are currently reviewing the decision, a spokesman said in a statement, and have not yet decided whether to appeal. A spokesman for Montante Development could not immediately be reached for comment.

The suit was filed in April by neighborhood resident and activist Daniel Sack, and has become emblematic, among some progressive activists, of pro-development biases in city government.

“It’s frustrating,” said Sack’s attorney, Arthur J. Giacalone. “I would love to think (the city) would learn something from this. I’m just not confident they will, based on past experience."

While unconventional, the Gates Circle plan earned early support from city officials and Montante executives who argued it would support the completion of an ambitious, mixed-use redevelopment project on several largely vacant lots. That project, proposed shortly after TM Montante bought the site from Kaleida Health in 2013, has repeatedly stalled over financing concerns – to the vocal annoyance of nearby residents.

Under the city's plan, the site would have become a special “urban development action area,” or UDAA, making Montante eligible for up to 20 years of property tax abatement. In exchange, Montante agreed to meet certain affordable housing and hiring targets.

"These projects are very difficult to complete in this market because of the reality of market rents and construction costs," Montante president Christian Campos told The News in February. "The incentives are critical for these new construction projects to be viable."

But the proposal raised eyebrows among critics like Sack, who questioned how the UDAA provision could apply to Gates Circle. The law specifies that it's aimed at redeveloping “blighted,” formerly city-owned properties acquired through processes like abandonment or foreclosure. 

Only one former city-owned building was acquired through tax foreclosure in the proposed economic zone, Montour ruled. State law also requires that 60% of land in a UDAA be publicly owned; the judge questioned the inclusion of city streets and rights of way to get to that minimum, writing that both were included "in a gerrymandered fashion to achieve a threshold measurement."

Montour also cast doubt on Gates Circle’s designation as a “blighted” area, pointing out that the Common Council has acknowledged it sits in a wealthy neighborhood.

“If the (UDAA) is in the middle of a ‘vibrant and affluent neighborhood’ considered to be a ‘prominent area’ of the City,” he wrote, “then it begs the question how the area can be a ‘slum’ in danger of further deterioration.”

The ruling comes at a time of heightened scrutiny for the Buffalo Urban Renewal Agency, which initially sponsored the Gates Circle plan. On Nov. 6, FBI agents seized two carts of files from BURA’s City Hall offices, though no programs or funding streams have since been suspended.

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