Tag Archives: Lawsuit

Max v. Ward, et al.: Transcript of Judge Chimes’ Decision

25 Jan

Judge Chimes’ Decision on Max v. Ward, et al. by

Stenhouse Settles (How Not to Run a Poor City)

15 Jan
Buffalo City Hall

Buffalo City Hall by Flickr User Alex Fisher Photography

The corruption lawsuit brought by NRP, a Cleveland developer, against some city bigshots just got itself an empty chair to which the other defendants can point. It’s alleged that the Rev. Richard Stenhouse and his Jeremiah Partnership conspired with Byron Brown, Steve Casey, and others to shut NRP out of a proposed east side housing development project unless it would retain Stenhouse’s unwanted services.

No one who pays even passing attention to Buffalo politics was surprised by it. The only surprise is that an out-of-town plaintiff with little else to lose was willing to go to war over it.  Racketeering, Buffalo style: city government fails even at that.

Stenhouse’s insurance company reportedly paid $200,000 to settle the case. That leaves city officials still litigating the case, and Stenhouse is free and clear but could still be subpoenaed to testify at trial. That Stenhouse’s insurer chose to dump the case at this stage for a hefty six-figure sum is indicative of a thought there that the facts and law weren’t shaping up all that favorably. And instead of paying Stenhouse $80,000 for unwanted “services”, NRP itself got paid for enduring the insult.

But I’ll take note of something else that troubles me about Stenhouse and his Jeremiah Partnership. The east side, as we all know, is not at a loss for housing; it’s at a loss for habitable housing. There are thousands of vacant homes blighting the city, abandoned to the clinging remnants of once-thriving neighborhoods. To modernize each one costs a small fortune – especially if one is poor. New windows, new siding, lead paint remediation, structural repairs, updating the utilities – these cost loads of money that are seldom justified by a concomitant rise in home value. That’s why land banking is a viable option for much of Buffalo, and why the state passed a land banking law, and why Empire State Development is accepting land banking bids.

This program permits municipalities to apply for and create land banks in their communities.  Pursuant to Article 16 of the New York State Not-for-Profit Corporation Law, signed into law by Governor Cuomo in July 2011, certain municipalities are permitted to create land banks upon approval of ESD.  Land banks are not-for-profit corporations created to take control and redevelop vacant or abandoned properties to where they can better serve the public interest.

Program Highlights

  • In order to combat the problem of vacant and abandoned properties, the program permits local communities to create land banks to be utilized by communities to facilitate the return of vacant, abandoned and tax-delinquent properties to productive use.
  • The primary focus of land bank operations is the acquisition of real property that is tax delinquent, tax foreclosed, vacant and/or abandoned, and to use the tools of the program to eliminate the harms and liabilities caused by such properties.
  • Ten land banks will be permitted to be created within New York State.

Eligibility, Criteria & Additional Program Information

Eligibility, criteria and additional program information, can be found in the Land Bank Program Guidelines. For additional information, please review the Land Bank Act (Article 16 of the Not-for-Profit Corporation Law).

And what is the Stenhouse track record of improving and lifting up the community? David Torke at the FixBuffalo blog will tell you all about it. Take, for instance, 38 Ada Place. A quaint little one-block street of once-tidy homes, Ada Place has loads of rehabilitation potential, given its proximity to Main Street and  Canisius.

Torke writes:

Rev. Stenhouse’s organization Bethel Community Development Corporation purchased 38 Ada Place in 2002. Three years ago I included a post about 38 Ada Place in a six part series about a failed neighborhood housing plan.  Rev. Stenhouse wanted to be part of that plan.  38 Ada Place  looked like this in March 2009.

Rev. Stenhouse was invited to Housing Court for his failure to properly maintain a string of houses across the street from his Bethel AME Church, near the corner of East Ferry and Michigan and directly across the street from one of the City’s newest school renovations – Performing Arts.   He later resigned from the Buffalo Fiscal Stability Authority when he plead guilty in Buffalo’s Housing Court in 2007.  He’d been appointed by Governor Pataki to be the Control Board’s Secretary and Treasurer in 2004.

What happened to that failed neighborhood housing plan?  It’s dead.  Rev. Stenhouse and his now defunct Jeremiah Partnership are defendants in a Federal “Pay-to-Play” lawsuit.  Here’s a copy of that lawsuit filed on behalf of a Cleveland Ohio based developer NRP Group in June 2011.  According to public records the Jeremiah Partnership failed to file the required 990’s for three consecutive years. The IRS has revoked its exempt status.

It would seem to me that the Rev. Stenhouse is already in water far too deep for his own abilities, and that he ought to concentrate on the structures he already owns, rather than allegedly conspiring with city officials to clumsily strong-arm developers into a job or a contract.

It’s indicative of the fact that the city isn’t about governing, per se, it’s about enrichment through money and the use of power. Through land banking and a strong homesteader program with grants and no-interest loans for people to fix up old homes, we can shore up what’s good, land bank what’s not, and try to rebuild communities block by block using existing home stock, rather than vinyl ranch homes that look more at home in Cheektowaga than a few blocks from the central business district.

Stenhouse's Contributions as per the BOE

Also, a Buffalo News headline claimed that Mayor Brown, in a Friday court filing, “took the offensive” and “countersues”. The case docket with the District Court reveals that the defendants have filed no counterclaim. In fact, what was filed on Friday is a Federal Rule 12(b)(6) motion to dismiss; in this instance, it’s been filed in lieu of a formal Answer to the Complaint, because the defendants argue that the plaintiff has no case. In the old days, it was called a “demurrer“.  But no counterclaim or “countersuit” has been filed, and the headline author was incorrect on that point. 

In its papers, the defendants say that the “pay to play” allegations are untrue because Stenhouse never made a contribution to the Mayor. That’s true, as far as we know. However, the Jeremiah Partnership is a faith-based organization, and as such may be exempt or legally barred from making political contributions. However, it’s not Stenhouse or Jeremiah that’s alleged to have “paid” to play, but that they conspired with city officials to make NRP pay Jeremiah Partnership to secure a lucrative development contract.

You can read the relevant parts of the Mayor’s and Steve Casey’s motion below. Defendant Demone Smith filed a similar motion on Friday. Much of what’s written there is bluster and public relations about NRP’s own reputation.

Amended Complaint NRP v. Brown et al//

12(b)(6) Motion to Dismiss NRP v. Brown et al//

Memorandum of Law in Support of Brown’s Motion to Dismiss//

About that Facebook Lawsuit

13 Oct

Paul Ceglia might be playing games with the lawyers and judge as far as discovery is concerned, but I’m hearing from multiple sources that he has effectively sold shares in his lawsuit to various people who were willing to “invest” in his litigation and “own” a piece of his supposedly anticipated judgment or settlement recovery.

It also helps a reputed grifter fund a very costly hail Mary of a litigation.

Apparently, that’s not illegal, or a violation of a lawyer’s ethical rules. I think it’s unfortunate when the direction of a lawsuit is directed by someone who is neither a party nor his attorney. It may also explain why this apparent disaster of a case is still kicking.


What’s Good for the Goose is Good for the Gander Mountain

26 Jul

There will come a time for a blog post that laughs at the fact that obstructionist lawsuits are continually brought in Buffalo by the same, small roster of professional obstructionist plaintiffs.  This is not that time.

Instead, this is a post about hypocrisy.

Yet another lawsuit has been brought in Buffalo to block a massive construction project.  In this instance, a lawsuit brought by, among others, Mark Goldman, Scot Fisher, Bruce Fisher, and others.  (Artvoice seems to have a disproportionately high number of its columnists end up as named plaintiffs in these types of laws…. oh, I forgot that this isn’t the time for that post).

This group of local progressive types are using the same legal rationale as Jim Ostrowski’s pending lawsuit that just got permission by the Court of Appeals to hop the pre-Answer “motion to dismiss” hurdle. Namely, that the state constitution prohibits outlaying public money to a private entity for any reason whatsoever – public or private.

But Scot Fisher, one of the named plaintiffs in the case, is the CEO of Ani DiFranco’s Babeville syndicate.  Babeville is the new name for the renovated Asbury Delaware Church, which is a privately owned structure, which now houses a wholly private corporate entity.  The church’s renovation, incidentally, came at a price for taxpayers.

The total project cost approximately $12.4 million and created 30,000 square feet of commercial space. Financing was achieved through a complex mix of public and private streams with HSBC as the equity investor. Project lenders included the Buffalo Economic Renaissance Corp. and Delaware Lender, LLC. Sources of funding included:

  • $4.55 million in New Markets Tax Credits including historic tax credits made possible after the building was placed on the National Register for Historic Places in 2003.
  • $2.7 million from the City of Buffalo
  • $440,000 for interior renovations raised from Hallways independently
  • New York State Empire Zone incentives, such as sales tax exemptions and utility rate savings
  • Thirty year “Payment in Lieu of Taxes” which allows for all new real estate tax generated by the property to be channeled back into the project.
  • $350,000 from the EPA for geothermal heating and cooling technology

Because Babeville is associated with Ani DiFranco, a trendy, successful Buffalo export, no one ever bothered to complain – much less file suit – against Babeville or DiFranco for taking public money for a private purpose.  Now, someone will undoubtedly make the argument that the preservation of an historically significant downtown church accomplished an equally significant public purpose, thus justifying the outlay of public money.  That may very well be true.  But the same “public benefit” argument can be made for Canal Side and Bass Pro.  But because Bass Pro is not a lefty folk singer, but a Southern big-box fishing and hunting retailer, it does not enjoy the support of the Scot Fishers of the world.

The point is that the whole affair is quite palpably hypocritical.