We’ve been told that Mayor Byron Brown’s administration recently has been trying to negotiate a settlement with NRP Development, the Cleveland-based development firm that claims the mayor spiked a deal to build 50 single-family, rent-to-own, low-to-moderate-income houses on the city’s East Side because the company would not give a minority hiring consulting contract to the Reverend Richard Stenhouse, an ally of the mayor.

The project was called East Side Housing Opportunities Phase II and was developed in partnership with the Buffalo-based Belmont Shelter Corporation and the city’s Office of Strategic Planning. The city was meant to direct $1.6 million in federal housing funds to the project, leveraging a $12 million investment by NRP. The Brown administration approved the plan and its funding in February 2008, but by April 2009 the project had fallen apart; the city simply stopped processing documents and approvals for the developers.

In a July 2009 letter to Brown, Liz Huckabone, president of Belmont Housing, accused the city of backing out of the project because NRP had refused to hand a no-bid minority hiring consulting contract to Stenhouse and the Jeremiah Partnership, a group of church-affiliated housing developers. (The minority hiring consulting contract was instead put out to bid and awarded to the UB Center for Urban Studies and J. W. Pitts Planning.) Huckabone wrote:

As has been communicated to your office and Rev. Stenhouse, of the Jeremiah Partnership, the Project cannot engage the Jeremiah Partnership or any principal or affiliate of the Jeremiah Partnership or Rev Stenhouse with respect to the Project due to the manner in which the Jeremiah partnership has been suggested to the Development Team. Specifically, the statement from elected officials that the proposal to address minority concerns needs to “make Stenhouse happy” prior to the Project being presented for Common Council action at a minimum creates and appearance of impropriety (since Rev. Stenhouse, who is not an elected official, must apparently approve certain development details) and is, according to our counsel, arguably a violation of Article 200 of the New York Penal Law.

Brown quickly fired back a letter strongly disputing Huckabone’s claim; later, he said the project had been allowed to die because he’d decided, more than a year after agreeing to direct federal funds to the project, that rent-to-own housing was a poor strategy for neighborhood redevelopment. Last summer, NRP filed a notice of claim with the city, essentially announcing its intent to sue the City of Buffalo, Mayor Byron Brown, Deputy Mayor Steve Casey, and Masten District Councilman Demone Smith if the city would not compensate the company for the money spent in developing the project and profits lost. We’re told that the first number is close to $500,000, the second number is close to $2 million, and that the city has offered NRP $350,000 to relinquish its claim.

—geoff kelly