News	Selling Us Out by Peter Koch

The hulking orange excavator at 454 Rhode Island Street stands ominously atop the mountain of rubble and snow that comprises the only remains of the house that’s stood on that site for the past hundred years. These lumbering machines are not uncommon on the West Side, where they frequently sound the death knell for a distressed neighborhood. Here on Rhode Island Street, however, this tractor doesn’t signify a community in decline—the opposite is true, in fact. Here it’s a symbol of what local activists say is a pattern of willful neglect by the city’s real estate division.

The demolition, carried out last Friday, caught the attention of a couple of nearby neighbors, Kevin Bowen and Lucy Yau. The couple, who lives a few blocks away on Essex Street, has been heavily promoting the burgeoning area of late, and saw the unique brick house at 454 as a prime opportunity for a new homeowner. Only the weekend before, in fact, the couple had organized a neighborhood open house tour as a sort of guerilla marketing scheme for their community, which they dubbed the “Essex Corners Arts District.” “It was our response to what we saw as poor marketing by realtors in our area,” says Yau. Indeed, several homes were coming up for sale in the immediate neighborhood, and they were being promoted as “excellent income properties” and “Section 8 ready.” The couple is not against Section 8 tenants, it’s just that such marketing schemes usually attract neglectful absentee landlords where they would like to see decent homeowners who are dedicated to the West Side and the immediate neighborhood.

And the neighborhood is improving, both on the ground and on paper. Essex Corners is anchored by the Left Bank and Prime 490, Big Orbit Gallery, the Essex Street Pub, Quaker Bonnet Bakery and now Urban Roots Cooperative Garden Center. Over the past year, vacancies have decreased by as much as three percent, as measured by the US Postal Service. Recent sales data shows that the average price of housing per square foot is increasing on every street in the neighborhood. Bowen can walk you around the neighborhood, as he did with me, and point to half a dozen houses within a half-block radius of his home that are undergoing, or have recently undergone, major renovations. People are moving into the neighborhood from far away locales. Here a family’s moved in from Austin, Texas; there’s a house renovated by a fellow from San Francisco, and on. A block away, a couple moved back into the city from Orchard Park and invested $600,000 into what is now a fine, upscale manor. And Bowen and Yau believe it’s only the beginning of large-scale investment in the area.

So they hosted the tour of Essex Corners on Saturday, December 8, showcasing its recent successes and currently available real estate opportunities. Three dozen people came out, and oohed and ahhed their way around the neighborhood, led by housing activist Harvey Garrett.

To Yau’s surprise, one house, in particular, stood out to many of the folks on the tour—454 Rhode Island Street. The house was on the city’s demolition list, but had been for years. They dutifully jotted it down and moved on. One person who was impressed by it was local blogger Newell Nussbaumer of Buffalo Rising. He posted to the blog about the house that Monday morning. The blog quickly generated many negative comments about the city’s real estate division. Four days later, coincidentally or not, the excavator rumbled to life at 454 Rhode Island and went about the ugly work of tearing it to pieces at taxpayers’ expense. Bowen and Yau tend to think that it wasn’t a coincidence at all, but real estate director John Hannon carrying out a personal vendetta against Harvey Garrett and all the other meddlers in that neighborhood. Coincidence or not, it was at least the third chance the city had missed to sell that house to willing and able homeowners.

Although the house’s story goes back roughly a hundred years, for our purposes we’ll take up the tale nearly five years ago, on a bone-chillingly cold Valentine’s Day when its luck took a turn for the worst. According to neighbors, a single foster mother occupied the house at the time, where she was caring for five children. That afternoon, two of them were playing with fire and accidentally started a small blaze in the rear of the house. It was extinguished quickly and without causing much structural damage, but not before firefighters had torn off a lot of the roof, in order that its cedar shingles wouldn’t ignite and spread the fire to the rest of the house. The damage totaled $40,000 altogether. That was far more money than the uninsured owner had, and the house was abandoned.

Alone and empty it sat for two years—exposed to the elements and quickly deteriorating—before the city got around to foreclosing on it. That’s when construction contractor and local activist Jeff Brennan happened upon it. He thought its appearance and layout were unique, and therefore historically significant—as a board member of the Erie County Preservation Coalition, he tends to think of such things—and he decided he’d like to fix it up and move in.

Brennan’s initial assessment of the building’s condition was bleak. “Basically, it had no roof, it had water damage and mold throughout, and the renovation required to make it livable was going to far, far exceed—by 100 percent exceed—the value that it would be worth in the end, because of the neighborhood it’s in,” Brennan explains.

He knew he’d have to spend as much as $200,000 to get it into a condition where he’d want to inhabit it, but he was ready to make the commitment. Since the city was foreclosing on it (an act that would send it to auction), Brennan struck a deal with Niagara Councilman Nick Bonifacio and Tax Commissioner Bruna Michaux that the city would start the bidding on the house high to deter buyers. They asked the maximum for it—the sum of its unpaid property taxes, garbage fees and water bills, which came to nearly $5,000. Nobody bid on it, so the city took title to the property, essentially clearing the deed of any liens. Brennan offered $1 on the house, and then he waited for a response from the city’s division of real estate.

And waited.

A whole year later the director of that division, John Hannon, responded to Brennan, offering the house to him for the “fair market value” of $5,700. Brennan was floored. “He said the land it’s on is worth that much. I’m like, ‘What are you, nuts?’ These kinds of lots go for $500 around here.”

A great deal of jockeying ensued, where Hannon argued it was worth thousands and Brennan countered that the house was actually a liability to the city, holding negative value. Brennan was right. The city owned a heavily blighted house that was in tatters and headed for the landfill via an expensive demolition. The demolition alone cost an estimated $15,000-20,000. “Even if the city sells the vacant lot, it’ll only bring in, at most, $150 each year,” Brennan says. “At worst, they have to maintain it at an average cost of $1,000 a year.”

Before negotiations ended, Brennan even went so far as to offer the city $1,000. But Hannon and his real estate department ignored Brennan, and its first chance was lost.

Then, last winter, Peter and Rosanne Roetzer tried to buy 454 Rhode Island for their kids. Peter’s in construction, and he estimated it would take at least $80,000-90,000 to make the house livable, and as much as $160,000 to restore it to its original grandeur. He took the time to go through the house to estimate and itemize repair costs before he contacted Hannon with an offer of $3,000 for the house. He waited five months before contacting Harvey Garrett, who contacted Hannon’s boss, Commissioner of Economic Development, Permits and Inspections Richard Tobe. In the end, though, Hannon and his real estate department never got back to the Roetzers, and finally they bought a house in Amherst.

According to local activists, this is nothing new for the real estate division. “City Hall’s still full of people who’ve been there for decades,” says Garrett, “and there’s been a bad culture that has resulted from previous administrations that’s certainly still an issue. But if you run into a problem with someone, you can usually escalate, and someone will say to the problem person, ‘What the hell are you doing?’ and they’ll put some pressure on ’em and whatever you’re doing gets done.

“This department is immune to all that. It’s the only department I still have any kind of trouble at all dealing with.”

By trouble, Garrett means more of the same. For instance, Urban Roots approached the city this summer to buy two vacant lots next to its garden center. After waiting three months for a simple purchase offer, and being treated like dirt in a phone conversation with Hannon, board member Blair Woods finally went over his head to Tobe and Director of Strategic Planning Tim Wanamaker. As soon as Wanamker put pressure on Hannon, via an email that Woods also received, the real estate division responded. According to Woods’ account, “About three minutes after that email, Jay called me back and said, ‘You’ll have a purchase offer by Friday.’”

That’s admirable, but you shouldn’t have to put pressure on superiors just to get action. The real estate division’s job is marketing and selling property.

Granted, it’s not always an easy task. The city owns thousands of properties, but many of them are in severely distressed neighborhoods and in terrible condition. As was the case with 454 Rhode Island, that means they would cost much more to rehabilitate than they would ultimately be worth. A tough sell, by any measure. But with those market conditions, you’d think that the real estate division would jump at a willing and able buyer approaching them. The situation is bleak when they don’t. First of all, the city is self-insured, so every piece of property it owns increases its risk. Second, it’s hard to auction properties with extremely low values, because an auctioneer wouldn’t waste his time for the percentage of sales he would receive. So what’s left when the city doesn’t sell to these people is a $15,000 demolition, an empty lot that is a blight on the neighborhood and a $1,000-a-year upkeep bill. And the examples are manifold: 11 Fargo, 366 West Ferry, 16 Harwood Place, on and on.

When AV tried calling the real estate division on Tuesday morning, using the phone number it has published on the city Web site (851-5261), six times we were greeted by the same dead-end message: “You have reached the Verizon voice messaging service. To enter your mailbox, press pound. Otherwise, please re-dial the number you are calling.” Finally we dug up another number (851-5277) and left a message. Hannon returned our call on Wednesday, but said we should talk to spokesperson Melanie Gregg. “That’s the proper channels to go through,” he said.

He did admit that he’d heard about the blogging controversy surrounding 454 Rhode Island, but said, “Don’t believe everything you read.” When asked to clarify himself, he simply said, “No comment on that.”

We can’t say that we’re surprised. After all, silence is becoming routine from that office.