Council: Not so fast on forgiving Braymiller loan

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Braymiller Market. Photo by Garrett Looker

The City of Buffalo could call in the $561,000 it loaned to Braymiller Market and reallocate the money for a different use, according to city officials and an Investigative Post review of records.

Some lawmakers want to know why the acting mayor, facing a financial crisis that threatens to starve city departments and initiatives of funding, seems reluctant to do that.

“I want to know why we wouldn’t require somebody who didn’t honor their commitment, who took money from the city, to at least pay it back,” Common Council Majority Leader Leah Halton-Pope said. 

Fillmore District Council Member Mitch Nowakowski agreed: If the city can claw the money back, “it’s something to deliberate,” he said.

Acting Mayor Chris Scanlon, however, has said his administration has no plans to ask for the money back. He said he doesn’t see a need to “penalize” owner Stuart Green.

Green, he said on Friday, “has done everything within his power to try and make sure this store was successful, so I’m not going to penalize him for that.”

Scanlon and Green announced Friday that downtown’s only grocery store would close sometime this week, just three years after it opened.

The $561,000 the city granted to Braymiller last year came from federal pandemic-era funds and was a last-ditch effort by officials to keep the struggling business open. Documents obtained by Investigative Post showed the store suffered steep revenue losses and was months behind on tax payments. Owner Green subsequently spent the loan money on payroll and paying off debts.

The funds were disbursed via the U.S. Dept. of Housing and Urban Development. The city and the Buffalo Urban Renewal Agency then gave the money to Braymiller in the form of a forgivable loan. 

That loan came with two conditions:

• A HUD requirement that Braymiller employ at least seven low-income people for one year. 
• A demand by the city and BURA that the business remain open for at least two years.

Scanlon said Friday that Green exceeded the employment goal with 36 people on payroll.

Baymiller fell short of keeping the store through December of next year, however.

Nonetheless, the city does not consider Green to be in default of the loan, Scanlon spokesman Michael Read said Tuesday.

The loan document between Braymiller Market and the Buffalo Urban Renewal Agency. Obtained via FOIL.

Because the money came from HUD, some officials initially speculated that, should the city call in the loan, the funds would have to go back to the federal government.

That’s not the case, Read said.

“The HUD requirements for use of the funds was met by Braymiller (creation/retention of jobs), so there is no requirement for the funds to be returned,” Read wrote in an email Tuesday to Investigative Post.

However, the Common Council and BURA board could demand the money back from Braymiller, according to loan documents . 

“If [the] borrower is in default and the loan is not forgiven subject to the conditions specified in the loan agreement, the principal balance and any accrued interest of this note will be due and payable immediately,” the loan document states.

The money could presumably then go towards another program or expense authorized by HUD. Cities have a wide latitude for how to use the funds as long as they primarily benefit “low- and moderate-income persons,” according to HUD rules.

The Council authorized the loan in July 2023. BURA’s board gave its approval that November.

Halton-Pope on Tuesday submitted a resolution calling on BURA to answer a number of questions about the market’s closure, including:

• Has Braymiller defaulted on the conditions of the loan?
• What efforts, if any, are being made to help the 36 employees who are losing their jobs?
• Does BURA intend to recoup any or all of the $561,000?

BURA’s nine-member board meets Dec. 19. Scanlon, as acting mayor, is the board chair. Three top administration officials are board members by virtue of their jobs: the executive director of the Office of Strategic Planning, currently a vacant position; Cavette Chambers, the city’s top attorney; and Ray Nosworthy, the city’s acting finance commissioner. A fifth member is a mayoral appointee from the community — currently Rashida Dowell, an M&T Bank executive appointed by former Mayor Byron Brown.

The other four board directors are members of the Common Council: Bryan Bollman, who is acting in Scanlon’s stead as Council president; North District Council Member Joe Golombek, chair of the Community Development Committee; Masten District Council Member Zeneta Everhart; and Nowakowski.

Bollman and Everhart did not immediately respond to requests for comment. Golombek told Investigative Post that he concurred with Halton-Pope’s concerns and would likely defer to her, since the market is in her district.

“I think that’s what the citizens of the city deserve, transparency,” Halton-Pope said. “ That’s all. Just tell us where the money is, how it works and why we feel like now they don’t need to pay it back.” 

Her resolution also asks BURA to tell the Council what plans, if any, are in the works for the soon-to-be vacant structure. Scanlon last week suggested the city would rent the building for a “public safety” use. Halton-Pope and Nowakowski both expressed reservations about that plan.

Executing a lease would require Council approval.

“That’s another question. How much is the lease agreement going to be? Can the city afford to pay a lease?” Halton-Pope said.

Nowakowski said the city should be involved in finding the “highest and best use” of the property, but shouldn’t lease the building for itself. 

He said he would like to see the city play middleman: Figure out what amenities the building has and what Green’s monthly costs are and then work to find an occupant or two.

“We should not be paying the lease,” he said. “We should find two private people to put the highest and best use in there.”

I'Jaz Ja'ciel