Buffalo’s ‘power structure is the problem’

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Government policies pushed by the region’s traditional power brokers — real estate developers, bankers, law firms and other business interests — have been “a disaster for the people of Buffalo,” a new report concludes. 

Tax abatements and subsidies are contributing to “a deepening commercial real estate crisis” downtown, according to the report, released last month by Our City Action Buffalo, a progressive community advocacy group that is a frequent critic of the city’s elected officials. 

Opposition to affordable housing projects has exacerbated the city’s poverty problems, according to the report. 

What’s more, Buffalo is staring at a fiscal crisis engendered by a mayor and Common Council who for two decades embraced the business community’s distaste for raising taxes, even as the cost of providing essential city services increased.

“The ‘renaissance’ talk is increasingly unconvincing,” the report’s author writes, warning city residents against accepting more of the same from candidates for Buffalo mayor as they declare themselves in the weeks to come.

“We have to be crystal clear: the power structure is the problem, and the false solutions it advances will only further damage the city.”

“Who Rules Buffalo?” catalogs the individuals and business interests that hold sway over the region’s elected officials, government agencies, nonprofit boards and other influential entities, with a particular focus on the City of Buffalo. 

The report further outlines how those individuals and entities flock together in support of a shared agenda, which, according to the report, centers on “cutting taxes, reducing regulation, privatizing services, and providing major subsidies to the private sector.”

It’s an agenda embraced by former Mayor Byron Brown, who resigned last month after 19 years in office. 

Brown frequently measured his administration’s success by tallying the price-tags of downtown and waterfront real estate projects — almost all of them heavily subsidized with public dollars. He presented these as evidence of an economic renaissance, a narrative embraced and echoed by the city’s business elite.

The report, on the other hand, describes “an extraordinary disconnect between Brown’s story of Buffalo and the realities the city is facing.” 

Those realities include 40 percent of the city’s children living in poverty, a shortage of affordable housing, crumbling public infrastructure, an epidemic of lead poisoning, alarming rates of illiteracy, a stagnant political environment, and the city’s “mounting fiscal crisis, with a budget gap of up to $55 million looming next year.”

The region’s power elite, according to the study, encouraged Brown to implement policies that “largely ignored those crises and in many ways contributed to them” — in part by depriving the city of tax revenue. 

The region’s top 10 real estate firms control nearly $1 billion in city property, according to the study, but pay about two-thirds of the on-the-books tax rate. Those tax abatements deprive the city of nearly $6 million each year.

Among the report’s other findings:

• M&T Bank is among the region’s most influential and highly connected companies, as measured by its 34 representatives on boards of directors and elite club memberships. Rich Products is second with 26; the law firm Hodgson Russ is third with 24. 
• Jonathan Dandes, a Rich Products vice president, has 12 such board and club memberships all by himself. That puts him at the top of the study’s list of 50 most highly connected individuals.
• The region’s power elite, as defined in the report, are nearly two-thirds male, with a median age of 63. They tend to live in wealthy suburbs such as Williamsville, Snyder and Orchard Park, or in the affluent city neighborhoods surrounding Delaware Park.
• The elites organize privately through informal planning groups. The newest of these is the Downtown Roundtable, also called Downtown 2030, which is a successor to the 43 x 79 group, which was a successor to the Group of 18 founded in the 1980s by Robert Wilmers, the late M&T Bank chairman.
• The power elites organize publicly through the Buffalo Niagara Partnership, the region’s leading business advocacy organization, which annually publishes a legislative agenda that favors subsidies and tax abatements for private corporations, while discouraging spending on social safety net programs and combatting government regulation.
• The powerful underwrite the campaigns of elected officials. Carl Paladino’s Ellicott Development over the past decade gave nearly $1 million to local and state candidates. The law firm Phillips Lytle gave more than $900,000; the law firm Barclay Damon, more than $800,000; and M&T Bank, nearly $500,000.
• The leading beneficiaries of that largesse since 2015 were Gov. Kathy Hochul (more than $1 million in campaign contribution) and Brown, the former Buffalo mayor (close to $700,000).

The report contains few surprises for those who follow regional business and politics. Nonetheless, it provides a useful analysis of how the power players connect through interlocking boards of directors, memberships to private clubs, and shared financial interests. It names names and provides illuminating statistics in a digestible study.

“People have an intuitive sense that this kind of power structure exists. It just doesn’t often get mapped in detail,” Kevin Connor, the report’s author, told Investigative Post.

“I think it’s important to elevate these kinds of things in the public discourse, otherwise we have no hope of shifting things. And the power structure would rather we treat it as a fact of life, nothing to see here,” he said.

Connor is former executive director of the Buffalo-based Public Accountability Initiative, which studies and reports how corporate power bleeds into government circles and influences public policy decisions. He’s been an observer of Western New York’s elites and their influence since co-founding PAI in 2008. 

Our City Action Buffalo, founded in 2017, describes itself as “a grassroots, member-driven” advocacy  group that seeks “a more equitable and racially just Buffalo.” 

The organization supported India Walton’s campaign for mayor in 2021. The following year it unsuccessfully challenged the Common Council’s redistricting maps, which the group described as an “incumbent protection plan.” Its leadership earlier this year derided the Brown administration for expanding the size and cost of the mayor’s office “while basic public health concerns like lead abatement and fluoride in water are ignored, and snow removal is abysmal compared to our first-ring suburban neighbors.”

Kevin Connor, report author.

Connor, commissioned by Our City Action to produce the report, was taken aback by some of his findings, despite his familiarity with the subject.

“For instance, the fact that the Buffalo Club voted 403 to 71 against admitting women in the late 1980s,” he said. “That feels pretty recent for that level of opposition.”

Connor was also surprised by the growth in the number of locals reporting annual income in excess of $1 million. In just one year, between 2020 and 2021, Erie County’s million-dollar club jumped by 40 percent to 1,353 people, according to tax records. 

“Growth in that bracket outpaced many other parts of New York State,” Connor said. “Rich people here are doing well for themselves.”

The region’s billionaires have done well, too.

The net worths of Jeremy Jacobs, chairman of the Delaware North companies, and Terry Pegula, owner of the Bills and Sabres, has more than doubled since 2010. Robert Rich Jr.’s net worth more than tripled during that time. 

Connor also confirmed through tax documents what he’d been told anecdotally: Buffalo’s richest residents are not very charitable compared to their peers elsewhere. 

A 2019 study that analyzed philanthropic giving by high-income taxpayers ranked Erie County ranked 166th out of 200 U.S. counties. Among the 13 New York State counties on that list, Erie County ranked 12th, behind Monroe and Onondaga counties. Only the wealthy in Richmond County, home to Staten Island, were stingier.

Buffalo’s ruling class is not all impactful, Connor said. He found that, despite their outsized influence on elected officials like Brown, “the local elite appears marked by high levels of dysfunction, absenteeism, and lack of leadership and vision — perhaps one reason it has failed to achieve gains on par with the renaissance it professes.” 

“Who Rules Buffalo?” is accompanied by a supplemental report called “A Field Guide for Organizers,” intended to help non-elites make their voices heard in politics and public policy debates. The timing of the report — in the runup to next year’s mayoral election — is not coincidental.

“People have enormous power when they come together in solidarity and struggle, and that’s something these power players really fear, in part because they know their agenda is so unpopular,” Connor said.

“What politician runs on a platform of keeping wages low, handing out money to developers, and so on? They might have that agenda, but it is buried beneath a lot of other stuff, because it would never get them the votes.”

Geoff Kelly