City loan has not stabilized Braymiller Market

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Story updated 10:34 a.m. Oct. 24.

A year after the City of Buffalo threw Braymiller Market a half-million dollar lifeline, the downtown grocery store continues to struggle financially.

For a third year in a row, records show that owner Stuart Green is months behind on his city tax payments. 

That failure to pay $8,119 in taxes, half the annual bill, prompted the Erie County Industrial Development Agency to warn him Sept. 10 and again last week that the property tax abatement it granted him in 2019 could be revoked.

On Wednesday, IDA leaders said they were prepared to begin the process to revoke the property tax breaks.  John Cappellino, IDA president and CEO, said he spoke earlier to Green, who indicated he would pay his overdue bill by the end of the day.

“If the payment is not made, we would move forward to revoke,” Cappellino said.

If the tax abatements are revoked, Braymiller would be liable to pay 100 percent of its property taxes rather than the present 20 percent. 

The Erie County IDA Thursday morning said Green made the tax payment by the end of the workday Wednesday.

Braymiller’s current struggles are a continuation of problems that date to the store’s opening in the fall of 2021: Steep revenue losses each month, unpaid taxes and outstanding vendor bills.

Buffalo stepped in last summer with a $561,000 forgivable loan intended to stabilize the business. 

“Those dollars probably could have been spent somewhere else,” said Rasheed N.C. Wyatt, one of the Buffalo Common Council members who was critical of the loan when it was approved.

Wyatt said he would request a formal review of how the store has spent the city’s money.

When a Buffalo Urban Renewal Agency official examined the store’s financial records over the summer, they found that January to March revenue was down $70,000 compared to past quarters — a loss of $23,000 per month on average — according to an email from Tracy Cooley, BURA’s finance director.

BURA finance director Tracy Cooley provides a July update on Braymiller’s financials.

Cooley also found that much of the city’s money was spent on payroll and debt, leaving the store with $45,000 on hand, equivalent to two weeks of payroll. 

The BURA official further found that $170,000 of the city’s money went to paying off debts, mostly to Braymiller Market’s vendors, who had gone unpaid for months.

One of those vendors, Eden Valley Growers, confirmed to Investigative Post that Green is often slow to pay his bills.

“He needs a reminder every so often, let’s leave it at that,” one of the co-op owners said.

This story is based on a review of more than 400 pages of documents obtained from the city under the state Freedom of Information Law and interviews with more than a dozen people familiar with the project. Investigative Post first requested the documents from the city in June 2023 but only received them in August, 14 months later. Officials refused to explain the delay.

Green, owner of Braymiller Market, did not respond to repeated requests for an interview for this story.

The downtown grocery store includes food stuffs and a deli. Photo by Garrett Looker.

Braymiller Market’s financial struggles, before and after the city’s bailout, now have some questioning whether former Mayor Byron Brown’s administration erred in placing a grocery downtown before the market existed to support it. 

The project raises a key question: Can the efforts of City Hall counteract the structural forces holding back further downtown revitalization — namely a lack of downtown residents, workers and tourists and high interest rates and construction costs?

The records paint a picture of a city administration that believed it could seed a revitalization of the central business district by luring a grocery store to downtown. When the pandemic disrupted those plans, the records show officials scrambling to intervene.

“Please keep confidential: Braymiller’s Market downtown is struggling,” Alex Carducci, a real estate analyst in the city’s Office of Strategic Planning, wrote to a member of Brown’s staff in May 2022, more than a year before the Common Council approved the loan.

In an interview with Investigative Post, Brendan Mehaffy, executive director of the city’s Office of Strategic Planning, argued that but for the COVID-19 pandemic, Braymiller Market would be thriving today. He pinned the business’s financial struggles on the fallout: thousands of fewer office workers downtown and stalled residential projects. 

Braymiller Market has made some changes to its business model since receiving the city’s cash. The store now has a license to sell beer and has sought to participate in the Double Up Food Bucks program to attract more users of federal food stamps. Both changes came after the city officials helped Braymiller Market write a new business plan, records show.

Yet, the store has continued to struggle.

Between May 2022 — about eight months after opening — and April 2023, records show Braymiller Market lost an average of $32,000 each month. Additional records show it took a warrant from the state Labor Department, filed with the Erie County Clerk, for Green to pay a $1,500 bill related to state unemployment insurance.

A profit and loss statement for Braymiller Market covering May 2022 to April 2023.

He was also months behind on paying back his loan to Evans Bank, Investigative Post learned.

Mehaffy said he and the Brown administration pushed for the forgivable loan because they believed the project to be important for downtown, and because Green did not have access to other pandemic-era assistance like the federal Paycheck Protection Program.

After the Common Council’s initial rejection of a bailout for Braymiller, emails show the administration lobbying aggressively for the funding. Brown enlisted his top officials, including Chief of Staff Michael Marcy, as well as a coalition of investors and executives dubbed the “Downtown Roundtable” to help save the store.

“It is imperative that we, as a community, lend a hand to a business in need that is crucial to downtown’s overall health,” read a letter from Brown’s office circulated to downtown business leaders.

Under the terms of the final deal, the loan converts to a grant if Braymiller Market stays open for two years.

Common Council members initially balked at the administration’s request. Why support a downtown grocery store when businesses in other neighborhoods could also use the assistance, some argued. Residents at the neighboring apartment building even signed a petition against the funding request, arguing that the store’s prices were too high.

Mehaffy acknowledged Evans Bank was “certainly concerned” about Braymiller’s struggling and falling behind on the loan. Emails show that Green, City Hall and Evans Bank began discussing how to address the situation during the summer of 2022. Meetings about Braymiller, the emails show, eventually included Dave Nasca, the bank’s president. 

“At some point he did [fall behind on loan payments]. I do not know when that started,” Mehaffy said. 

Eventually, discussions turned to using city pandemic aid to help the grocery store.

“Evans was waiting to see if this could be stabilized through that type of a commitment,” Mehaffy said.

Kathleen Rizzo Young, an Evans Bank spokesperson, refused to make Nasca available for an interview citing “client confidentiality.” She also declined to comment on the status of Green’s loan payments.

The Erie County IDA warns Braymiller Market it could lose its tax abatements.

A decade ago, when the Brown administration originally sought a developer for the 201 Ellicott project, city officials believed downtown Buffalo was on the brink of a resurgence. Several residential projects were in the pipeline, Mehaffy said, and the city felt the time was ripe to turn a parking lot into affordable housing and a grocery store.

It was a project that would fulfill a decades-old City Hall vision: turning downtown from an offices-only business district to a thriving neighborhood. The key, officials believed, was a grocery store.

So what went wrong?

For one, city officials knew at the time of planning that a grocery store would struggle to turn a profit at that corner, Mehaffy said. Even pre-pandemic, it wasn’t clear if enough people lived or worked downtown to support a grocery store, some developers told Investigative Post.

“We knew … there was a risk that was involved,” Mehaffy said. “It was, again, recognizing the risk of the grocery component, not necessarily understanding, because we didn’t have something like that, what the ultimate result might be at the end of the day.”

But the promise of downtown’s momentum led Brown to announce Tops Friendly Markets as the “preferred operator” of the project’s grocery store in February 2016, though Tops never officially committed. The Amherst-based chain reportedly explored placing an upscale “Orchard Fresh” store on the corner.

The plans fell through, in part, Mehaffy said, because Tops would have required a significant subsidy, akin to an up-front cash grant.

By 2019, Stuart Green’s Braymiller Market had committed to the project. He would take out a $4.6 million loan from Evans Bank to buy the store from builder Ciminelli Real Estate, according to IDA records. He ultimately mortgaged his Hamburg store as part of the arrangement, loan records and emails show.

Green and City Hall felt the project could work, Mehaffy said, because Braymiller Market would be part grocery store, part wholesaler to restaurants. Rather than a cash grant, Green would only need the $765,000 in tax breaks it received from the Erie County IDA, Mehaffy said.

“We felt that we had identified somebody who had a lot of experience in this space, and he was willing to take that risk with the various components of the business that he was offering,” Mehaffy said.

The Braymiller Market’s rocky financial situation has some developers and officials wondering if the city made a mistake.

“It wasn’t a mistake. Don’t even put it that way,” said Jim Militello, a downtown real estate investor since 1989. “It’s an opportunity that should be made to work. Find a way to make this thing work.”

Developer Carl Paladino thinks otherwise.

“There’s not enough business downtown. I think it’s a harebrained idea,” he told investigative Post. “And for the city to invest money and subsidize the creation of a grocery store in downtown Buffalo is absolutely insane.”

J. Dale Shoemaker