The Buffalo Common Council on Thursday voted to approve a package of funding for small businesses across the city, a pot of money Mayor Byron Brown’s administration conjured out of pandemic relief aid to make a $563,000 forgivable loan to a downtown grocery store more palatable to lawmakers.
Under the plan, Council members will each have $389,000 earmarked for small business grants in their districts, with an additional $2 million in loan funding also available. That $5.5 million package passed Thursday alongside a plan that reallocates $59.9 million of federal American Rescue Plan Act funding from various proposed community programs to plugging holes in the city’s annual budget.
Both packages rankled residents, and the reallocation prompted a coalition of community groups Monday to ask the U.S. Treasury Department to investigate how Buffalo has handled its pandemic relief aid.
The city grant for Braymiller Market amounts to yet another subsidy for the downtown wholesaler and grocer, which opened in 2021. The business has already benefited from some $8.3 million in tax breaks, state loans and other assistance. The cost to build the store was listed at $6.9 million when the enterprise sought tax breaks from the Erie County Industrial Development Agency.
The Buffalo Urban Renewal Agency has final say over the funding for Braymiller Market. That agency canceled its July meeting but is scheduled to meet again August 24. The board is controlled by mayoral appointees and approval is all but certain.
Owner Stuart Green has called the loan “a much-needed financial bridge” to help his store recover from the pandemic. The city offered the $563,000 in the form of a forgivable loan, meaning Green will not have to pay back the money if he stays open for at least two more years.
Green did not respond to a request for comment Thursday. He was not present at the Council’s meeting.
His loan, however, will likely be more than any of the other small businesses eligible for the new program will receive. The $5.5 million program includes $3.5 million in grants from Buffalo’s COVID-19 relief funds and $2 million in loans from the National Development Council, a national nonprofit that will contract with the city.
Common Council members, who approved the program unanimously, will each receive $389,000 to help businesses in their districts. Council members last month rejected a proposal to supply Braymiller Market with the grant before Brown’s administration lobbied to have them reconsider it.
The Council intended to approve the funding package Tuesday, but delayed a vote until Thursday after North District Council Member Joseph Golombek raised concerns that the city’s proposed contract with NDC violated the city’s own rules for the use of the federal dollars.
He argued that the city’s request for applications — which led to its selection of NDC to run the small business grant program — stated that the bid winner had to be located in Buffalo. NDC is headquartered in New York City. Two other contractors, the Buffalo Urban League and the Exchange at Beverly Gray, are based in Buffalo, but Council members tabled a vote until city lawyers could offer an opinion on the legality of contracting with NDC.
By Thursday, the city’s Corporation Counsel had determined that its contract with NDC, Buffalo Urban League and the Exchange at Beverly Gray was legal. Council members on Thursday claimed the package of legislation as a victory for getting pandemic relief dollars to the public.
Brown on Wednesday refused an interview request to discuss the Braymiller Market loan and small business assistance. City spokesperson Michael DeGeorge said Brown pushed so hard for the Braymiller funding because he believes a grocery store is essential for downtown’s resurgence.
“As the mayor has said from the beginning, a downtown market is critical for the health of downtown and for food access for people in and around the downtown area,” DeGeorge said in a statement.
But some residents, as the Council debated funding the store, contended Braymiller Market was not a true grocery store, as the majority of its business was a wholesale operation. Some complained that the market offered limited grocery options and others argued prices were too high.
“You have families, you have elderly people … who need medication, they need a pharmacy, they need a full-line grocery store,” Archie Brooks, who lives next door to the market, told Council members last week. “What you have right now is a step above 7-11 and it’s called Braymiller Deli.”
Green previously told the Erie County Industrial Development Agency that his business was 60 percent wholesale and 40 percent retail.
Council President Darius Pridgen and University District Councilor Rasheed N.C. Wyatt had called on Green to transform his downtown enterprise into a traditional grocery store to better serve residents and offer lower food prices.
“The business model as it is right now … is part of the problem,” Pridgen said.
Thursday’s approval did not include any requirements that Braymiller increase its grocery offerings. At a hearing last week, Brendan Mehaffy, executive director of the city’s Office of Strategic Planning, said Braymiller would seek a license to sell beer, lower prices on some items and offer additional delivery options.
DeGeorge cited those adjustments as Green’s way “to keep the business open until he receives additional support.”
Pridgen on Thursday argued that he and other Council members are not grocers and didn’t want to mandate specific changes to Green’s business.
“I don’t know if that will work, but at the end of the day it’s Braymiller that’s on the line for half-a-million dollars and the other loans he owes,” Pridgen told reporters. “I’m not guiding anybody’s business model because I’m not a grocer.”
In addition to keeping the doors of Braymiller Market open, Thursday’s vote also helped Brown’s administration avoid a black eye from one of its major downtown renewal projects in recent years. Doing so has cost taxpayers nearly $60 million to date.
Beginning in June 2015, Brown sought to transform a 2.5-acre, city-owned parking lot at the corner of Ellicott and Clinton streets into affordable housing and downtown’s first grocery store.
By 2021, the joint project had landed $58.9 million in tax breaks, grants and other subsidies, in addition to $16 million in discounted loans. Construction costs were listed at $76 million.
Most of those funds went toward the more than 200 affordable apartments at 201 Ellicott Street. But Braymiller Market benefitted from $8.3 million in subsidies, including $765,000 in tax breaks, a $2 million grant and $5.5 million in discounted loans.
Green, the owner, has said he’s struggled to keep his store open due to reduced downtown traffic. And because he opened in 2021, he couldn’t qualify for a forgivable Paycheck Protection Program loan, a federal program that assisted many businesses during the height of the pandemic.
In response, Brown and his administration advocated heavily for additional public assistance, arguing that a grocery store was essential for downtown. The Council, at first, rejected the proposal unanimously. Then came a press conference, a “cash mob” and a pledge by Paul Ciminelli, the developer who built the complex, to match funds the city granted to Braymiller.
Those efforts drew criticism from Council members, who questioned why the mayor was pouring so much effort into securing $563,000 for a single business. In exchange, Council members said, small businesses in their districts should benefit, too.
“If the administration is serious about helping small businesses, I want to see the same campaign,” Pridgen said. “It doesn’t happen for the small business that’s struggling … but it sure happened when it came to getting a half-million dollars out that door. It’s unfair, it’s unfortunate.”
In response to the criticism, Brown’s administration pledged to give each Council member pandemic relief funds to spend on small businesses in their districts. Mehaffy told Council members that a program offering both grants and loans to small businesses could be up and running by October.
The money for Braymiller comes from a special $1.5 million pandemic-era pot of Community Development Block Grant funds. The city doled out around $1 million of those funds to various small businesses before closing the program. Officials later said they had run out of applicants and adjusted the program’s guidelines to make more businesses eligible for the funding. Lisa Hicks, director of development in the city’s Office of Strategic Planning, said the city didn’t change the rules for Braymiller specifically.
With Thursday’s forgivable loan, Braymiller has now benefited from $8.83 million in public assistance.