The restaurant has closed, but the story keeps on going

On Sunday, the Buffalo News published on the front page the story of the restaurant One Sunset and the loans and grants its owner received from the Buffalo Economic Renaissance Corporation to get it up and running. All those loans and grants—$110,000 through city agencies and $50,000 from the Erie County Industrial Development Agency—are now in default. Factoring in other creditors, the restaurant, which closed in early December, owes more than $235,000.

The News story, written by Jim Heaney and Pat LaKamp, particularly excoriated BERC Vice President Michelle Barron, who pushed BERC and ECIDA to support One Sunset even as the venture was tanking. Barron did the restaurant’s books, negotiated with vendors, paid its bills, and even helped to decorate the bathroom. In a sidebar, Heaney unpacked her less-than-impressive qualifications for her $76,323 job and her checkered financial history.

The narrative that Heaney and LaKamp offer originates with the testimony of Sam Reda, a well-known chef and restaurateur. Reda was recruited by Barron and Ellicott District Councilmember Brian Davis to help basketball star Leonard Stokes get into the restaurant business, after his first attempt to secure a BERC loan was rejected by a committee of bankers. I know that Reda’s story was their jumping-off point, because Reda told me his story, too.

(This is the second time in recent months that Heaney has scooped me on a story we were both working on, using the same sources. Hats off to him and LaKamp.)

I learned that Heaney, LaKamp, and I were working the same avenues of the One Sunset story about two weeks ago, during a conversation with Kevin Brinkworth, the restaurant’s landlord. Brinkworth began eviction proceedings on Stokes twice—once in 2007 before the restaurant had even opened, and again last winter after Davis gave Brinkworth a bad check to cover a month of Stokes’s rent. Brinkworth told me that the News was trying to talk to Barron, and that it seemed to him that she was being set up to take the fall for what went wrong at One Sunset. But he didn’t think the buck stopped with her.

“Everybody was taking advantage of the Stokes kid,” Brinkworth said. “They ordered enough glassware for Rich Stadium.”

He said other vendors over-sold Stokes, too; it seemed to him that everyone was dipping into the river of money coming from BERC and ECIDA. (Another BERC employee told me that when he saw the first loan application for One Sunset, he assumed that the whole thing was a front, with Brinkworth the intended beneficiary.) He thought that both Heaney and I were being led to make Barron the scapegoat, when there was plenty of blame to go around—blame for the loan and grant of public funds to an unqualified borrower, and blame for the failure of the business.

Heaney and LaKamp reported that when Stokes’s initial application to BERC for a $120,000 loan was denied—the business plan was poor, and Stokes had bad credit—he returned and applied for smaller loans, which could be approved by BERC staff without having to pass through the loan committee made up of more skeptical bankers. Using this tact, BERC gave Stokes two $40,000 loans and a $30,000 grant.

A source at BERC told me a couple months ago that the order to break up the loan into smaller amounts, so as to bypass the BERC loan committee that had already rejected Stokes’s application, came directly from Mayor Byron Brown’s office.

Not from Michelle Barron, who works for BERC; not from Brian Davis, who sits on BERC’s board of directors. From the office of the mayor, who is chairman of BERC’s board of directors.

I asked Peter Cutler, the mayor’s communications director, if the Brown had suggested One Sunset apply for smaller loans. He told me categorically that the mayor had not done that. I asked Cutler if the suggestion had originated in the mayor’s office. “I really don’t know,” he replied.

On Tuesday, the mayor announced that an internal review of the One Sunset affair had been launched two weeks ago by Commissioner Brian Reilly of the Department of Inspection, License and Permit Services, who also serves as president of BERC. South District Councilmember Mickey Kearns is asking that City Comptroller Andy SanFilippo conduct an independent audit of the agency. I don’t imagine either of those investigations would divulge the full story here. So the question is, who else will investigate? The New York State Attorney General? The FBI? The Erie County District Attorney? HUD?

—geoff kelly