Ryan urges Benderson to return $6 million in incentives used for One Canalside project

Sep 28, 2018

A state lawmaker says a local developer used millions of dollars in tax breaks for a construction project improperly and should give them back.


Assemblyman Sean Ryan joined Partnership for the Public Good executive director Sam Magavern outside One Canalside, on the 100 block of Main Street at Scott Street. Ryan said they're happy with construction and new uses for old buildings. The problem in this case, he contends, is the acquisition of $5.9 million in tax breaks through New York State's 485-a program.

One Canalside in downtown Buffalo. Assemblyman Sean Ryan and Partnership for the Public Good executive director Sam Magavern say the project improperly used tax incentives from a state program. Ryan is urging the developer, Benderson, to return the money.
Credit Michael Mroziak, WBFO

That program provides incentives to projects which redevelop old, unused buildings into mixed-use spaces. Ryan says One Canalside is home to a hotel, restaurants and offices of one of Buffalo's largest law firms. But it's quite lacking in the residential space required for the tax breaks.

"One tiny apartment unit," he declared. "It seems obvious that the one tiny apartment unit was added for one purpose only. That was to collect generous subsidies from taxpayers."

According to Ryan, that lone apartment represents half of one percent of the building space. He has written a letter to Benderson Development urging them to refund the 485-a dollars. He noted that this tax break was in addition to an estimated $13 million in other incentives including brownfield and remediation dollars. 

The City of Buffalo has been opted into the 485-a program since 2002, the year it was adopted. Magavern suggested the city opt out. He also suggested New York State either repeal the program or reform it.

"Even if it's technically legal, it certainly seems like a cynical misuse of the program to put one little apartment in a big office and hotel building and call it residential," Magavern said. "We agree with Assemblyman Ryan that Benderson should return the funds that they've received under the 485 program."

Ryan says the program previously worked successfully to repurpose many downtown buildings. He said 20 projects were approved for 485-a dollars between 2007 and 2014 but in 2015, things changed.

"It seems word got out to the developers that there was a program that would allow them to avoid paying much or all of taxes for a 12-year period," he said. "In 2015, the number of applications skyrocketed, as has the cost to taxpayers."

Ryan complained that many Buffalo residents are being gentrified out of neighborhoods and are being asked to pay an extra tax burden so that developers are given tax breaks. He also pointed to a report released by the Public Accountability Initiative which identifies several local projects that, according to the report, did not use the 485-a program appropriately.

Ryan also emphasized One Canalside's tenants are not accused of any wrongdoing.