Restaino: Preferred housing developer still in play

Feb. 4—Mayor Robert Restaino's administration has not yet decided to cut ties with a Western New York businessman who was chosen by the city to lead a $2.5 million housing renovation project that would be eligible for up to $1 million in reimbursement through a state grant program.

During an interview with the newspaper on Friday, Restaino said he met with the project's preferred developer, Rod Davis, earlier this week and asked him to provide the administration with additional information about his company's finances and more details about its relationship with two prominent Western New York firms listed in his company's original project application.

The administration's endorsement of Davis' firm, Power City Ventures, LLC, as the project's preferred developer drew criticism from residents during this week's city council meeting following the publication of a Niagara Gazette investigation that raised questions about Davis and his past business dealings.

Restaino stressed that while the city council did, in a unanimous vote in October, agree to sell 12 city-owned properties to Davis for $50,000 so they could be renovated as rental units or owner-occupied homes, the transaction has not been completed and none of the properties have been transferred to Davis at this point.

In addition, Restaino noted, that while the project is eligible for up to $1 million in reimbursable Restore New York grant funds, none of those dollars have been expended or distributed to Davis by the city or the state.

"It's under review by all of us," Restaino said, referring to the project. "No checks are issued. No deeds are assigned. It's under review by not just the local government but by Empire State Development. This is a state-funded program."

As part of its investigation, the Niagara Gazette interviewed the owners of two local companies — T-Mark Heating, Plumbing and Cooling in Buffalo and Nix Construction and Property Management in the Falls — who said Davis failed to pay for services their companies rendered while doing housing renovation work for Davis in the Falls.

In addition, the Gazette obtained records on file with the Niagara County Clerk's Office that showed two other firms owned by Davis — Buffalo Niagara Realty Group Properties, LLC and BNRG Properties, LLC — were named as defendants in a June lawsuit filed by a Woodside, New York company that owns six rental properties in the Falls. The company, NP Twin Sister, Inc., alleges that Davis' firms collected $39,785.61 in rent but failed to turn the money over in keeping with their property management agreement.

In another case, county records show one of Davis' business partners, Roswell Park Cancer Institute physician Dr. Yasar Shad, asked the courts last year to dissolve his partnership with Davis in a company called Power City, LLC.

In his court filings, Shad described Power City's one and only investment — a boarded-up rental property at 320 Cedar Ave. in the Falls — as "rapidly" diminishing in value and in such a state of disrepair as to render it "uninhabitable."

Jane Harrington, a West Seneca attorney representing Shad, told the Gazette that her client spent $160,000 in what was supposed to be the rehabilitation of the Cedar Avenue building but did not receive any return on his investment or an explanation from Davis about where those funds went.

During his interview on Friday, Restaino said the issues identified in the newspaper's report do not necessarily preclude the city from moving forward with the housing project with Davis and Power City Ventures.

"From my perspective, those two items standing alone don't necessarily say that that particular developer will be disqualified," he said, referring to the Twin Sisters' lawsuit and Dr. Shad's request for the dissolution of his business partnership with Davis.

The mayor said "many developers find themselves in the midst of those types of disputes" and are still able to remedy them while continuing to invest in or work on other projects.

"You can walk and chew gum. You can be in court and fight that fight, but if you've got the resources to do that project, then great," Restaino said.

Restaino said the administration has asked Davis for assurances that he has the financial capacity to address the issues in question while continuing to advance the proposed housing project in keeping with the city's best interests.

In addition, Restaino said he has also asked Davis to provide more details about his current working relationship with the local redevelopment firm TM Montante and the local engineering firm Wendel. Davis referenced both companies as part of his company's application for the project, according to Restaino.

"The companies that were listed in the letter of intent have done business in Western New York and are well known in Western New York and throughout the community, but there's a difference between listing partnership and having partnerships set so we're just exploring all of that to ensure, again, the integrity of the project continues," Restaino said.

"My comment to him was that we all want the project to succeed, but in order for us to maintain the integrity of the project, I need to see these things and know these things," Restaino added.

As to a timeframe for complying with the administration's requests, Restaino said he did not give Davis a specific deadline but made it clear that the city will need satisfactory responses to its requests for additional information sooner than later or it will need to explore "the next option."

"I've expressed urgency without putting a deadline on it," Restaino said.

The mayor said, at this stage, he wants to be sure that the integrity of the project remains intact before the city moves forward.

"The reality is, No. 1, I'm not going to jeopardize our opportunity to obtain $1 million for a project if the project isn't viable," he said.

On a related matter, Restaino said he had no contact with Davis prior to the arrest of Demetreus Nix, owner of Nix Construction and Property Management, on charges that he unlawfully entered a home where his company performed renovation work for Davis.

Nix provided the newspaper with a series of text message exchanges with Davis in which Nix sought payment for services his company rendered and Davis indicated that he intended to pay.

Nix, who denied the charge that he illegally entered one of Davis' properties on Pierce Avenue, told the newspaper that, despite his promises, Davis did not pay him more than $13,000 he owes for various housing renovation work.

In one of the text message exchanges, Davis told Nix to "never call him again" and that he was "letting chief of police and mayor handle this now."

When asked if Davis ever reached out to him prior to the Falls police investigation and Nix's arrest, Restaino said: "I had no contact with the developer on that issue."