Apr 22
2025
Scanlon considers ‘privatization’ of Kleinhans
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Kleinhans Music Hall. Photo by J. Dale Shoemaker
The Scanlon administration has been talking about unloading city-owned cultural institutions as part of its efforts to shore up Buffalo’s short- and long-term finances.
Since taking office, Acting Mayor Christopher Scanlon and his aides have discussed selling Kleinhans Music Hall, perhaps to the Buffalo Philharmonic Orchestra, which is the venue’s principal user.
They also have discussed shifting the maintenance costs of city-owned cultural venues — including Kleinhans, Shea’s Buffalo Theater, Sahlen Field, the Buffalo History Museum, the Buffalo Museum of Science and the Buffalo Zoo — to Erie County.
Erie County Executive Mark Poloncarz threw cold water on that idea, saying the acting mayor has not included him in those discussions and the county has “no interest” in paying more to underwrite those institutions than it already does.
Scanlon has not advanced any specific plans. Nonetheless, he has discussed possibilities in meetings with aides and members of the private sector, according to copies of his daily calendar, which Investigative Post obtained through the Freedom of Information Law.
The most recent meeting on the subject, on the afternoon of Feb. 11, specifically concerned the “privatization” of Kleinhans.
One attendee of that meeting was Earl Wells III, a consultant who worked with Kleinhans on its recent capital campaign. Wells is president of e3communications, the public relations and lobbying firm that has long employed Deputy Mayor Brian Gould.
“At the end of the meeting the idea about the city possibly looking to not [own] Kleinhans came up, but no specific details were discussed,” Wells told Investigative Post.
“We left it at, once there was something more specific to discuss we would get together for another meeting. That has not occurred yet.”
Donate to support our nonprofit newsroomAlso in attendance was Daniel Hart, director of both the BPO and Kleinhans, who said most of the February meeting focused on filling vacant board seats.
“Privatization was not a word I remember being used at all, but [Scanlon] did talk about looking at ways to deal with the cost of city-owned properties and posed the question if the BPO might want to own Kleinhans,” Hart told Investigative Post. He said he “has not heard a word” on the subject since.
Attorney Jeremy Olczek, the Kleinhans board chair, also attended the meeting. He did not respond to a request for comment.
But other board members confirmed that the idea of the city relinquishing ownership of the venue had been discussed but that no specific plans were yet in the works. One board member, Tania Werbizky, said that any plan that comes to fruition must make sure to “preserve that landmark.”
“Any future discussions of its use as a fabulous theater, fabulous space for concerts has to be done with the utmost care,” she said.
Deputy Mayor Brian Gould Tuesday morning told Investigative Post the administration was assembling “a cabinet” to discuss whether and how the city’s cultural institutions, or the foundations that support them, might take ownership of the city-owned properties they use. He said the cabinet will comprise principals from the cultural institutions and be led by Jonathan Dandes of Rich Products. The Buffalo Bisons, which operates the ballpark, are owned by Robert Rich, Jr..
“These are jewels of the city,” Gould said. “They are also financial liabilities.”
Looking for fast cash
Scanlon has already telegraphed that his administration was looking for new ways to pay for upkeep of the city’s cultural institutions.
During his State of the City address in March, Scanlon pitched his proposed 3 percent hotel bed tax as a stream of revenue that could pay for maintenance and improvements at Shea’s, Kleinhans and the Zoo.
“Visitors should help us offset the cost of maintaining our historic institutions. Revenue from this tax will help sustain capital improvements to city-owned cultural assets like Shea’s, Kleinhans Music Hall and the Buffalo Zoo,” he said.
That proposal so far has gone nowhere in Albany. Assembly Majority Leader Crystal Peoples-Stokes has sponsored a bill to implement the tax but has found no co-sponsors.
The same is true for a Peoples-Stokes bill that would authorize the creation of a public authority to purchase city-owned parking ramps, which in recent years have pumped between $4 million and $6 million in annual revenue for the city’s general fund. Scanlon says selling the ramps would bring in between $40 million and $60 million — money that would help keep the cash-strapped city solvent over the next few years. The new authority would share profits with the city, according to Scanlon, after paying operating costs and debt service.
Scanlon’s 2025-2026 budget proposal counts on $28 million from the sale of the ramps and $3.5 million from the bed tax. Without that money, he says, the city will have to lay off employees, reduce services and raise property taxes even further than the 7.5 percent hike included in his proposed budget.
Buffalo’s state senators, Sean Ryan and April Baskin, so far have declined to sponsor companion bills in their chamber.
Ryan is challenging Scanlon in June’s mayoral election, and Scanlon has accused Ryan of “playing politics” with the city’s financial health by failing to support the two proposals. Ryan has dismissed that claim, saying he and Baskin want to see further analysis of the parking ramp proposals and hear more from stakeholders regarding the hotel bed tax.
In an interview, City Comptroller Barbara Miller-Williams said she wondered whether Scanlon’s bid to offload the parking ramps would lead to discussions about other city-owned properties.
“I did sit back and contemplate and think, ‘Is this opening Pandora’s Box? Is this the beginning [where] we start with one asset and we begin to see what else is available?'” she said.
She said she has not discussed unloading the cultural buildings with Scanlon, but added that putting some of those venues back on the tax rolls would be “ideal.”
“That then would generate some type of revenue that could flow back into the city coffers,” she said.
Unloading operating costs
The idea to move Kleinhans and other cultural properties off city books appears to have originated last year with Schuyler Banks and Gerald Kelly, both members of the Citizen Planning Council. That’s the volunteer body that helps the city draft its annual capital budget.
In an interview, Banks said that in his review last year of the requests for capital budget dollars, it seemed logical to try to sell some of the cultural properties.
“I just said, ‘From the piece of the pie that I see, should we be thinking about selling some of these assets?’” Banks, a SUNY Erie Community College professor, said.
Banks said he wasn’t sure if selling the buildings would make financial sense — he said, for example, that he didn’t know whether or not the city earned income from any of the entities — but that it was an idea worth exploring.
“What things can we maybe not do the way we’ve been doing for 30 years?” he added. “But it’s hard for me to say if that’s right or wrong.”
Kelly, a real estate investor, then took the idea to Scanlon. According to Scanlon’s calendar, he accepted a meeting with Kelly, Banks and city finance director Ray Nosworthy on Nov. 26.
“We should itemize the city’s regional attractions,” Kelly wrote in an email about the meeting obtained by Investigative Post. “Then we should help our new City Hall leadership initiate discussions with the County to transfer ownership and responsibility for capital improvements.”
“These regional attractions are all clearly used by our county-wide population which should be responsible for them,” Kelly added.
“No one has discussed this with me,” Erie County Executive Mark Poloncarz told Investigative Post, adding he was open to discussing the issue with Scanlon.
Poloncarz said that the county is currently “the primary provider of operating revenue” for the BPO, the Buffalo History Museum, the Buffalo Museum of Science and the Buffalo Zoo.
“Without the county’s assistance none of them would exist,” he said. “At this time the county has no interest in putting in additional dollars.”
Miller-Williams told Investigative Post that the city earns no revenue from the cultural buildings. Data provided by her office shows that the city has spent $1.9 million in operating costs on Kleinhans, the zoo and the history museum over the past decade, with the zoo receiving the majority of those funds.
Dating back to 1925, Buffalo has spent $78 million on capital projects at those venues along with Shea’s, the science museum and Sahlen Field.
Selling Kleinhans
Scanlon’s administration took Kelly’s idea seriously enough to have a second meeting about it, this time with the leadership of Kleinhans Music Hall. On Feb. 11, Scanlon met Hart, Oczek, and Wells, the consultant. Scanlon aide Michael Marcy was also in attendance.
“There are two agenda items – appointments to the KMH board and privatization of KMH,” read a note attached to the calendar entry.
The city pays Kleinhans Music Hall Management Inc. $50,000 a year to run the facility. Niagara District Council Member David Rivera, who serves on the venue’s board of directors ex officio, sends the company another $10,000 each year from his pot of discretionary money.
But the majority of the city’s costs for Kleinhans come in the form of maintenance and capital improvements.
The city in recent years spent nearly $1.6 million to put a new roof on the building, according to financial records. About a third of that was paid for with federal pandemic relief dollars. The city borrowed the rest.
The Kleinhans board last year issued a report that said its recent capital campaign had raised $18 million to fund improvements to the building and establish an endowment. Half that money came from New York State, a third from individual donors and foundations.
The city committed $2.3 million to the campaign, including the money for the roof repairs, as well as investments in the boiler system and other improvements. Erie County kicked in $625,000.
To help with the fundraising, Kleinhans hired Wells’s e3 communications, the firm that long employed Brian Gould, Scanlon’s deputy mayor. Gould assisted Kleinhans in its campaign.
In 2021 the city extended its lease with Kleinhans Music Hall, Inc. through June 30, 2031. For a decade before that, the lease had continued on a month-to-month basis. The lease doesn’t obligate either party to perform capital repairs, though the city “agrees to work in good faith with [Kleinhans] to provide minor capital and maintenance repairs of a nature substantially similar to the repairs and maintenance provided by the City in the recent past.”
The lease also allows the city to hold public events in the hall with five days’ notice. It obligates Kleinhans to strive to meet diversity goals in hiring employees and vendors, and to provide 300 concert tickets each year to school-age public housing residents, as well as a number of free tours of the building for the city’s recreation department and the Police Athletic League.
The facility’s 2023-24 budget year resulted in “a slight surplus on revenue of $1.7 million” generated by 153 events attended by 158,000 patrons, according to the report.
So far, it appears City Hall has only discussed privatizing Kleinhans. Leaders of Shea’s said they were not aware of any ideas to transfer ownership of its properties or sell them to a private owner. A spokesperson for Rich Products did not return a request for comment.
Melissa Brown, executive director of the Buffalo History Museum, said she has not had any discussions with City Hall about removing the museum from city books. But, she said, she was open to talking.
“I think we’re open to having reasonable conversations that advance the property for public stewardship, no matter what that looks like, and long-term sustainability,” she said.
The museum, she said, receives only capital funding from the city. Most recently, that’s included a project to “keep the building watertight,” costing around $300,000. Brown said she’s primarily looking for straight answers as to where future museum funding may come from, noting that state, federal and private foundation sources are all currently undergoing changes.
“There’s a lot changing right now,” she said. “So it’s hard to model out plans for multiple years when, you know, there’s a lot of moving parts.”
