There are events and projects that happened in Batavia years ago that folks talk about, question, and criticize to this day. Urban Renewal and the destruction of downtown’s grand buildings in lieu of more modern structures such as Genesee Country Mall has been a big one.
Ellicott Station, the four-floor apartment complex that has been stalled now since summer of 2023, is another of those projects begging questions of how it came to be a visual doorstop in the middle of downtown Batavia.
And The Batavian has attempted to conduct forensic research and interviews to look back at all that took place leading up to the standstill, not to belabor the point but to establish and document the transactions as matters of historical importance, just as records about the mall-turned-Batavia City Centre are important to understand for anyone wanting to move forward.
The Batavian first assembled a timeline based on public documents of involved agencies -- the city of Batavia, Genesee Economic Development Center, and NYS Housing and Community Renewal. In addition to contracts and reports, The Batavian received hundreds of emails from key stakeholders such as City Manager Rachael Tabelski, GCEDC CEO Mark Masse and former CED Steve Hyde, HCR officials, and Ellicott Station property owner Sam Savarino. After the publication of those findings, The Batavian requested interviews with Tabelski, Masse and Savarino about the project, and Tabelski and Masse declined to discuss the issue further.
“Thank you for your inquiry. I have no further comments on the timeline. Right now, the City is doing its job to address code violations on the property and doing all we can to see this parcel redeveloped,” Tabelski said. “Along with the BDC, we continue to try to connect interested developers, not only with the stalled apartment building but also the DellaPenna building, which is a separate parcel.”
Masse appreciated The Batavian reaching out and our interest in this story, he said.
“The GCEDC is no longer involved in this project, and I have no comment on the story,” he said.
Savarino did answer a few questions and provided a document with additional details regarding a prior communication with GCEDC that he believes further validates his claim that the agency cost him and the community the project’s timely completion.
So where are we now is that Ellicott Station is swinging in the wind, so to speak? City officials have said a couple of developers have expressed interest, and The Batavian is aware of an unofficial list of prospective developers.
Are you or have you been working with any developers about potentially taking over the project? "Yes,” Savarino said. “Ellicott Station LLC has communicated and continues to communicate with potential successor sponsors for the residential portion of the project.”
What do you think went wrong with this deal? And who do you believe bears the responsibility for that complex sitting idle? “As your recent reporting indicates, the actions of the GCEDC disabled the project. The Ellicott Station project – both the commercial and residential components – are not feasible without the GCEDC benefits,” Savarino said. “The sponsor and funders would not have proceeded with the project without the GCEDC inducement. The GCEDC’s breach of its agreement preceded and precipitated any alleged non-performance of the sponsor.”
Do you have hindsight about what you could have done differently for another outcome? “No.”
Do you think GCEDC could have done something different? “Yes – not disable the project,” he said.
Was it a matter of a misunderstanding or something deeper? If so, what? “The documents and correspondence between the parties speak for themselves,” he said.
Do you agree that themisusage of low income, workforce and affordablemay have played a part in all of this for a misunderstanding between you and GCEDC/Batavia? “There ought not to have been any misunderstanding,” Savarino said. “The documents and correspondence between the parties and the GCEDC’s own documents make clear the nature and details of the project (in particular the residential component) approved by GCEDC — whatever brand or description someone may attach to it.”
Where are you currently with the project, and are you working with HCR, other agencies/municipalities and developers to get Ellicott Station moving again? “Yes; however, the actions of the GCEDC have presented significant hurdles, disabled and impeded the project and added significant cost,” he said.
Savarino has stood by his sign-off to GCEDC then-President Steve Hyde in March 2023 in that “we are committed to making this project a success by every measure,” and contends that the only reason that has not happened to date is because EDC pulled back its offer, hamstringing Savarino’s financial abilities and overall efforts to move forward.
He provided The Batavian with his own copies of documents received by The Batavian in its Freedom of Information Law requests as proof that he complied with every request from the industrial development agency, such as demographics about the 102 applicants — 82 were from Genesee County, eight from Orleans County, three from Erie, two from Wyoming, one from Bronx, two from Queens, and one each from Livingston, Monroe and out of state counties — to the number of 20 people receiving disability benefits, 31 people being 55 or older and 19 being 62 or older.
There were details about how actual tenancy would work, including orientation and that it would cover an explanation of the terms and conditions of the lease agreement, rules and regulations, a demonstration of how appliances and equipment operate, information about community services, medical facilities, shopping areas, public transportation and such, explanation about energy conservation measures and about resident participation/cooperation in operational programs with trash and recycling, fire safety drills, snow removal, etc.
There were also topics for employees about how to handle grievances on site, termination of leases and evictions, security, insurance, locks and keys, utilities, payment of rent, criminal activity and smoking, routine inspections, and pets.
One letter from consultant Divitta Alexander to both Hyde and Savarino, dated Nov. 22, 2019, cited income ranges of $9 to $15.55 per hour for a one-bedroom apartment and $10.26 to $17.64 per hour for two-bedroom units. These hourly rates “would qualify for the project at the rents that both HCR and the market analyst expressed comfort with,” Alexander said.
“I think the project is properly characterized as mixed-use workforce housing,” Alexander said.
In an example used by The Batavian for a prior article published after the income levels were publicized by Ellicott Station LLC, two people each earning minimum wage, $14.20 an hour, were not eligible for a two-bedroom apartment at Ellicott Station because they would be earning too much (the maximum household income for two people in a two-bedroom apartment is $34,600, and two people working full-time at $14.20 would gross $59,072).
So, the numbers seem off in 2019. At $9 per hour, that could arguably be reasoned as lower income, with a $17,550 gross income per year, given the 37.5 hours per week, according to Alexander. Savarino has maintained that his understanding of the project’s target audience had not changed since the beginning, even though he used the term workforce with a reporter at least once.
As Savarino and Hyde continued to communicate about the project, Hyde expressed concern about the following issues:
Will the updated brochure-ware better emphasize “Workforce Housing” and de-emphasize “Vouchers Accepted” in future communications all while remaining compliant with Fair Housing Laws?
What does the on-site property management staff’s work schedule look like given domestic disturbance problems tend to occur in the evening after normal working hours?
Is there any night coverage or ability to have a property manager live at Ellicott Station?
It appears from the Tenant Selection Plan (attached) that fairly rigorous requirements will be effectuated that will confirm applicant incomes (hence, being employed) but discussion of preferences toward Genesee County residents weren’t addressed. Can you please clarify if that is a possibility?
Will Savarino Companies commit to providing the Batavia City Manager and GCEDC President and CEO a copy of its annual report each year that includes housing achievements and occupancy statistics?
“I can confirm for you that there will be an office on-site that will be staffed for the day-to-day management of the facility, including timely responses to tenant needs for any maintenance as well as quality of living issues. During non-business hours when staff is not on site, there will be a direct, toll-free phone number and email for tenants to contact management with any off-hour issues or concerns,” Savarino said. “A safety plan will be developed that will meet all regulatory requirements and city codes in order to secure a certificate of occupancy for the building. Emergency exit signs, fire extinguishers and no smoking signs will be just some of the safety and health measures that will be installed and easily accessible and visible throughout the building. We will have interior and exterior video surveillance security cameras on the property at locations yet to be determined. The management office will have monitors to observe surveillance video in real time as well as record video for use if ever necessary. In addition, a state-of-the-art access system for tenants only will allow management to closely monitor who is entering the building.
“Savarino Companies will do all we can to make sure that Ellicott Station provides a safe and welcoming environment for residents and visitors, especially as we complete the construction of the retail structure and continue our efforts to secure a retail tenant or partner(s) to help make Ellicott Station a destination that is vibrant and has a positive economic impact on the City and region,” he said. “As you know, we are now advertising and accepting applications from individuals interested in tenancy. All applicants will be screened and will go through a rigorous vetting process within the bounds of New York State and federal law and regulation. Information on third party tenant screening systems that will be utilized for Ellicott Station were recently provided to GCEDC. As you may be aware we have conferred with the Genesee County Job Development Bureau and G.L.O.W. Workforce Development to actively reach out to prospective entry level workforce tenants who can take advantage of the quality, safe and proximate housing offered by Ellicott Station. Efforts will include revamped informational literature and participation in regional job fairs. We are also planning outreach to the senior community as Ellicott Station has much to offer independent seniors. We will share with you evidence of such outreach. (There was a color brochure with photos of workers and information about Ellicott Station distributed.)”
“You have requested specific information related to Savarino projects that are directly comparable to the Ellicott Station project. While Savarino has developed and constructed many mixed-use and residential projects including affordable housing projects and some providing affordable housing to senior, elderly, and special needs tenants we do not have a project that would directly to the Ellicott Station project,” he said. “We are happy to provide you what information we can on projects currently under Savarino management to the extent we can obtain sufficient formal assurance of confidentiality for any information provided and subject to approval of our counsel.”
There are several other documents, many of them quoted in the prior story, and Savarino believes that they put the blame squarely on the shoulders of GCEDC.
File Photo of Ellicott Station in downtown Batavia by Howard Owens
City Manager Rachael Tabelski clarified how Batavia Police ended up sweeping the Ellicott Station property at 50-56 Ellicott St. on Monday, resulting in the location of a person wanted on a misdemeanor charge.
“The city found evidence of a squatter Friday at the Della Penne building during a (Batavia Development Corp.)-lead hard hat construction tour, so it looks like property was accessed even before the fence came down,” Tabelski said about a perimeter fence that was removed early Monday at the downtown premises.
Tabelski further said that, per a rumor she has heard, “the fence company was not paid by Savarino, so that is why the fence was removed,” clarifying that it was removed for that reason rather than for a third-party subcontractor performing landscaping maintenance on the property.
Property owner Sam Savarino did not respond to The Batavian's requests for comments on Monday regarding the maintenance work, the removal of the fence and potential concerns about safety on the property.
As for the excessive weeds in need of trimming at the stalled apartment complex, Tabelski said that the “codes department will be issuing violations to the owner and mortgage holder.” She has confidence in the police department’s ability to do its job when called for, but she does not want to expend unnecessary resources due to the property owner’s negligence.
"I was on scene when the police swept the entire apartment building this morning and they did a great job,” Tabelski said. “With that said, we don’t want to tie up city resources to sweep the building because of lack of property security! We certainly don’t want anyone on the property who should not be there. Savarino needs to keep the site mowed, secured and safe so citizens can’t access the site.
“We continue to await the investors, the bank and (the state Office of Home and Community Renewal’s) decisions on the property and would appreciate the back due taxes being paid,” she said. “The city has to make the county and school whole for any back taxes, so not only do we have an unsafe eyesore in the middle of the city, we are supplementing their tax bill.”
To date, Savarino owes $20,000 in unpaid taxes for the property that is assessed at $2,892,500. The original deal with Genesee County Economic Development Center had it on a payment in lieu of taxes agreement, but Savarino Companies/Ellicott Station LLC was declared in default on the tax-abatement contract for an alleged failure to meet workforce housing promises. That is a claim Savarino disputes. He now must pay all of the regular full taxes. (See: Documents reveal Ellicott Station built on foundation of misunderstood housing terms)
The Batavian asked when the city might consider a tax-lien foreclosure on the property, and Tabelski said the matter would have to be discussed with the City Council and that Savarino would have the opportunity "to cure and pay the taxes" before it ever reached that point.
Ellicott Station left unprotected after the fencing was removed on Monday. Photo by Howard Owens
The fencing has been removed around Ellicott Station in downtown Batavia and a small work crew was spotted Monday on the premises performing some landscaping -- weed-whacking and the like -- to remove overgrown grass and weeds on the Ellicott Street property.
City Manager Rachael Tabelski has recently said that property owner Sam Savarino would be cited for lack of property maintenance as the area "is an eyesore" with overgrown weeds and grass. She did not respond to The Batavian's request for further comment Monday about the fencing being removed, and whether there's any concern about anyone getting onto the property during the time period the fencing is down, including later this year when the weather turns colder and the vacant site might be a tempting resting spot for transients.
Savarino likewise did not return a request for comment about the fencing, how long it was expected to be down, concerns about anyone getting onto the property, and how secure the building is at this point.
The Batavian will update this article when/if responses are received.
May 3, 2022, the groundbreaking for Ellicott Station. Photo by Howard Owens.
What is mixed-income housing? Workforce housing? Low-income housing? Affordable housing? Market-rate housing?
These terms appear frequently in thousands of documents obtained from government agencies by The Batavian for an investigation into how the 55-unit apartment building under construction at Ellicott Station transformed from “luxury” units to apartments eligible for Section 8 rental vouchers.
How did this once promising project go from a complex where all tenants hold down jobs to one where potentially as few as 36 percent of the potential tenants are gainfully employed, and finally, one where the project's actual completion is in doubt?
As it turns out, the terms bandied about were seemingly often interchangeably in many cases over the years by the developer, Sam Savarino, and representatives of the city of Batavia, the Genesee County Economic Development Center, and NYS Office of Housing and Community Renewal.
In fact, Savarino, in an email about a prior story by The Batavian, suggested the reporter didn’t understand the terms.
"This journalist doesn't seem to realize that workforce, affordable and low-income housing are all pretty much the same thing," Savarino wrote in an email to GCEDC CEO Steve Hyde on Feb. 23, 2023.
But Joanne Beck’s reporting in The Batavian was correct. The terms are not interchangeable; perhaps this is why this critically important community project has become a concern for residents and local government officials.
Housing and Urban Development, the Federal agency that determines which housing projects are eligible for various levels of development and occupancy assistance, has specific definitions for each of these terms.
Affordable Housing is housing with a monthly rent or mortgage that does not exceed more than 30 percent of a household's income. The definition of “affordable” is entirely dependent on a household's monthly income, whether $2,500 or $5,000.
Very low income is a term for housing intended for households earning 30 percent or less of the Area Median Income.
Low income is a term for housing intended for households earning from 30 to 50 percent of the AMI.
Workforce housing is housing intended for people earning 80 to 120 percent of the AMI. HUD programs are available to subsidize workforce housing.
Market-rate housing has no income limit and no government assistance. The property owner sets the rent based on the landlord’s assessment of a unit’s worth in a particular market.
Mixed-income housing is a housing development that aims to accommodate households with income levels from very low income to those who can afford market-rate units without assistance. In a multi-unit complex, there would be tenants with a household income at or below the AMI, those earning 50 percent, 80 percent or more of the AMI, and those potentially with earnings off the charts.
May 3, 2022, Sam Savarino and GCEDC CEO Steve Hyde, now retired, at the Ellicott Station groundbreaking ceremony. Photo by Howard Owens.
Who are the key players?
Sam Savarino, CEO of Savarino Companies
Steve Hyde, the now-retired CEO of the Genesee Economic Development Council
Rachael Tabelski, currently City Manager for Batavia, but was marketing director of GCEDC when the project first started, then director of the Batavia Development Corporation during much of Savarino's efforts to obtain financing for the project
Jim Krencik, marketing director for GCEDC
What the records show Here is a timeline of how the project came to fruition, concentrating on the terms used by officials as they discussed the project and in their promises to others and the community. We've included links to The Batavian's coverage to help provide context to how the project was proceeding.
June 1, 2017, GCEDC board minutes, the board approved a resolution to authorize a public hearing on the project, described as "48 modern market-rate apartments."
In July 2017, Batavia's Zoning Board of Appeals approved an area variance for the project, which states that the apartment complex will consist of market-rate units.
Nov. 16, 2017, A memo prepared for a Restore NY grant states the project will be funded in part by a New Market Tax Credit ($9.6 million). The total project cost at that time is $17,745,667. The plan then was for 47 apartment units, not 55.
Aug. 29, 2018, email from Rachael Tabelski, BDC, as a follow-up to a previous day's meeting. "We knew that the Batavia market was untested in terms of a 'market rate' residential development projects of this scale, but we felt there was enough anecdotal evidence, pent-up demand, and small scape comparable upper floor new apartments that we were renting at what we considered market rate (or in this case, around 90 percent of AMI) to support the Ellicott Station Projects rents." She asks for a copy of the market study completed on behalf of Savarino. She would like to set up a meeting to address the $1.8 million funding gap. She offers help with the HCR process and would like to better understand the new potential income mix and rental rates.
Aug. 29, 2018, email from Steve Hyde to Sam Savarino. Hyde notes that there are modest two-bedroom apartments in Batavia of 1,100 square feet in the town of Batavia that are renting for $1,250 a month. "There would be a willingness to pay that more for a brand new contemporary apartment in downtown," Hyde writes. He thinks there might be a way to challenge HCR's market-rate assumptions. "We may need your team's help in interpreting the study as we are by no means housing experts, but I am not sure Lenny's (Lenny Skrill, with HCR) market rate assumptions apply here if the housing stock you are proposing is significantly different than what the basis of housing that was used to calculate market rate rents per study."
Sam Savarino speaks during the groundbreaking for Ellicott Station on May 3, 2022. Photo by Howard Owens.
Oct. 3, 2018, email from Sam Savarino to Steve Hyde and Vincent Esposito, Empire State Development, references a summit meeting where all parties agreed a unified application for funds should be made to Homes and Community Renewal. "The HCR requirements, related loss of New Market Tax Credit allocation and attendant leverage debt mean that the project requires $5.4 million of HCR debt. The HCR programs we would be applying for have an aggregate limit of $4.4 million. This leaves us $1 million short. We need a gap filler." There is an attached memo from Savarino CFO Melissa Acquard noting "HCR wanted lower rents," which means "we lost debt service coverage as well as the ability to support the debt." She's estimating there is still a $1 million funding gap.
October 2018, GCEDC board minutes note the complex is being increased from 51 units to 55 units. The square footage has increased from 26,011 square feet to 73,000 square feet. The minutes also discuss the difficulty in making the project viable, given that Batavia's market rents "are depressed compared to nearby metro areas." It states, "Given this, business case adjustments have been made recently, which is impacting the final funding piece of the project. Despite an exceedingly complex capital stack needed to fund this project, all pieces of the funding finalized but one."
Oct. 18, 2018, email from Rachael Tabelski to City Manager Marty Moore, noting there is still a $1.5 million funding gap that Savarino must close to start the project. She says BDC will work on communication to the community that the project "still remains a high-end 'market-rate' or near 'market-rate' project."
Update in October 2018, a memo from Sam Savarino outlining a possible application to HCR for $3 million, which, if granted, would still leave a $1.5 million funding gap. Savarino's equity is $3.2 million, which includes a discount for construction costs. Savarino is providing guarantees on loans totaling $7.7 million. Resurgence Brewing has stuck with the project up to this point despite the delays.
Oct. 11, 2018, email from Sam Savarino to Steve Hyde, noting that his equity investment in the project is up to $3.8 million. There is still a $1.5 million funding gap.
Nov. 1, 2018, GCEDC board meeting agenda, Ellicott Station is described as "55 new upscale modern near market-rate apartments."
Nov. 19, 2018, Rachael Tabelski, BDC, to Sam Savarino in preparation for a closed session with the City Council about the HCR funding application. Tabelski covers anticipated income levels, which at that point include three market-rate apartments. "This is not a Section 8 'very low-income' project," Tabelski writes.
Nov. 26, 2018, email from Sam Savarino to Steve Hyde and Rachael Tabelski. The memo covers efforts to close the funding gap for the Ellicott Station project. The initial funding gap was $6,154,935. Empire State Development grant of $2.4 million and New Market Tax Credits raised the "gap fillers" to $5.2 million. Savarino's equity investment increased to $850,000 and that was mostly in money already spent or committed. The annual cash flow (profit) has fallen to $42,688, a fraction of what was previously anticipated. Savarino is seeking approximately $3 million from Homes and Community Renewal. Savarino Companies is providing "bridge" financing on all grant funding and full guarantees on all loans.
Feb. 12, 2019, email from Earl Wells with E3 Communications, to Rachael Tabelski, noting that Steve Hyde is concerned about Savarino having the "financial wherewithal to finish the project." He suggests a media strategy of rolling out the project in stages, starting with Phase I, groundbreaking for the brewery. That would be predicated on a meeting Savarino was having with the owners of Resurgence that day.
Feb. 12, 2019, email from Sam Savarino discussing Resurgence (the brewery once slated to occupy the brick building on the west of the property). He has two primary concerns. First, a "drop dead comment date of November, which will be difficult to meet. Second, the project will be 65 percent complete before the Resurgence lease starts. Items he thinks he can offer the owners in return for changes in the lease, such as an opaque temporary barrier wall to minimize construction disturbance from the residential building and offering additional work, such as shade trees, in the beer garden.
March 19, 2019, letter from Sam Savarino to Steve Hyde requesting consideration for a $925,000 Downtown Revitalization Grant. "As you are aware," Savarino writes, "there have been several challenges to getting this project closed and underway. The most recent -- and most considerable -- challenge has been the provision for funding for the residential project. This has forced us to subdivide the project to allow a separate site for the residential project and forced us to abandon the New Market Tax Credit."
May 31, 2019, email from Jim Krencik to Steve Hyde summarizing a conversation about plans for Ellicott Station. Income levels from $30,000 to $51,000, $36,000 to $61,000, and $43,000 to $61,000, depending on unit size, with three units carrying no income restriction. "No knuckleheads," it states. "No subsidies to housing/HUD (all direct pay), no supportive mental health/substance abuse units (already served in public and supportive housing modes), a 'no tolerance' policy for drug use/malfeasance." The goal is to attract and retain talent. The target market is millennials, young professionals, and downsizing empty nesters. "The folks who will be enjoying an IPA at Resurgence!"
Sometime before July 2019, memo planning for groundbreaking from Steve Hyde. The memo describes the housing as mixed between 50 to 60% AMI, 60 to 80%, and three units at market rate. Hyde states that the main factors in communicating to local leaders, "Project is not a low-income development -- has income minimums," and that "renters are direct pay -- no subsidized payments/vouchers from government."
On or about July 22, 2019, Joe Quinn, an intern with Savarino Companies, supplies a sample letter of support for local officials to send to HCR that describes the project as "mixed-income" with a "predominance tragedy at low and moderate-income tenants." The background informs officials, "Our project will include funding from Low-Income Housing Credits, State Low-Income Housing Credits, Housing Trust Fund, and Middle Income Housing Program. It also describes the project as "mixed-income/workforce housing."
July 22, 2019, an email from Steve Hyde to Savarino Companies said, "Guys, who is Joe Quinn? This email he just sent flies right in the face of the position we've talked about all along and the reservations over more affordable housing in Batavia. Hyde notes prior conversations said the complex would include market-rate housing, is mixed-income, and "is not open to certain populations has income minimums."
July 23, 2019, email from Sam Savarino to Rachael Tabelski, and Steve Hyde. "Not sure who was contacted but I recognize the timing is bad on this. Joe is following the direction of the HCR consultant and is gathering pro forma letters of support required for the application."
July 23, 2019, email from Jim Krencik to Courtney Cox, Krenick seeks clarification on income levels, stating that his notes from a May conversation, the majority of the one-bedroom suites were set for a minimum income of $30,000 and a maximum of $51,000, with two-bedroom suites set for $36,000 to $61,000 in annual income.
July 24, 2019, email from Rachael Tabelski to stakeholders, including all council members, and states, "The rent plan has been carefully crafted, with the assistance of HCR, utilizing professional third-party market analysis to meet the affordability needs of the broader Batavia community, not just those that earn the most, and to ensure the long-term success of the project." The average rent will be $897 a month. Income levels:
Fall 2019. A report by Joseph Sievert, a senior appraiser with Newmark Knight Frank Valuation & Advisory, a company based in Buffalo. The project is described as mixed-use, 55 apartments, targeted to households at or below 50 and 60 percent AMI. The project will "replace blight with affordable workforce housing." It states that the IDA (GCEDC in this case) has advised the projects are consistent with its economic development plan, which involves the creation of jobs paying $15 to $18 an hour. The report states Batavia needs more affordable housing. It states that 45 percent of renters pay more than 30 percent of their gross income in rent. "There remains an extensive unmet demand for affordable housing for the income groups and population served by this project," the report states. "All of the existing affordable options in the PMA have extensive waitlists, limited turnover and extended wait times. (NOTE: A prior housing study by the County found there is also a shortage of market-rate housing).
Fall 2019, Savarino application to HCR. The application narrative refers to the project as "workforce housing." It states, "The project will create affordable workforce housing to serve the unmet housing needs of the low-income/entry-level workforce." And that it "affords ordinary workers (an opportunity) to live near jobs." It notes that the IDA advises that rent is set at levels consistent with the local economic development plan, with pay in the range of $15 to $18 an hour (note: for a full-time job, that is $31,200 to $37,440 annually).
Sept. 4, 2019, in an email, Steve Hyde informs city officials that "GCEDC is actively engaged with Savarion Companies in support of efforts to secure HCR funding for the mixed-income housing portion of Ellicott Station."
Oct. 9, 2019. Courtney Cox, with Savarino Companies, requests a waiver from Michael DeBonis with HCR for the size of two-bedroom units. The completed architectural plans call units that will exceed HCR's 970-square-foot limit. "These units exceed the maximum allowable area because the building was originally designed as market-rate housing over a year ago," Cox wrote. "During the course of the development, the program shifted to affordable housing as we recognized the need for new, quality affordable housing in this Downtown Revitalization Area."
Nov. 5, 2019. In an incentive proposal document, Savarino Companies lays out project costs, which total $19,852,873. That includes $60,000 for property purchase, $13 million for construction and renovation, $2.6 million for site work, and $3.7 million in other project costs.
Nov. 26, 2019. In a certified mail letter to Batavia City Manager Martin Moore, Sam Savarino informs the city of his company's intention to apply to HCR for assistance. He states the company will seek assistance under the Low-Income Housing Credit Program and the NYS Low-Income Tax Credit Program. He notes that under IRS rules, Savarino can't make the application without notifying the local jurisdiction's chief executive officer and notes that the local jurisdiction has an opportunity to comment on the project.
Nov. 27, 2019. HCR approved the request for a waiver on the size of the two-bedroom apartments.
Dec. 6, 2019. A letter from Steve Hyde to Sam Savarino. The letter notifies Savarino that the GCEDC board of directors has approved $3.25 million in tax incentives for Ellicott Station. This includes a 30-year PILOT for the workforce housing portion of the project and a 10-year PILOT for the commercial portion of the project. The letter acknowledges that Savarino Companies is applying to Homes and Community Renewal for 9 percent multifamily housing assistance.
Dec. 10, 2019. In a letter from HCR marked "confidential," Hunt provides Savarino with a letter of agreement to form a partnership. Hunt would receive 99.99% of the new corporation. Hunt would acquire financing for Federal Low-Incoming Housing Tax Credits ($12 million), State Low-Income Housing Tax Credits ($5 million), and State Brownfield Tax Credits ($2.3 million).
March 5, 2020, the GCEDC board approves a resolution authorizing an agreement with Savarino Companies to build 55 mixed-income multifamily residential apartments.
June 2020, GCEDC board meeting minutes refer to Ellicott Station as "55 new modern workforce housing apartment units (max incomes $32,000 to $38,000)."
July 8, 2021. HCR is notified of a project delay. Because of COVID-19, there is market uncertainty and the original equity investor, Hunt Capitol, was unable to secure an investor at the monetary amount described in the HCR application. No investor was willing to buy Brownfield Tax Credits at all.
Nov. 17, 2021. According to a document obtained from HCR, the total development cost is $20,597,736, with a total construction cost exceeding $14 million. It lists a developer fee of $2.3 million and working capital of $209,620. HCR financing is $5,691,573 from the Low-Income Housing Trust Fund Program, an ESD Restore NY loan of $500,000 at 3% interest, and a state Downtown Revitalization grant of $425,000. It states there are to be 16 one-bedroom units for residents with an income not to exceed 50% of the AMI, 19 one-bedroom with income not to exceed 60% of the AMI, and 20 two-bedroom with rent to not exceed 50% of the AMI.
May 3, 2022, a statement by Sam Savarino at the groundbreaking: "We discovered the hard truth. We went out and did a market study, which indicated that, well, people in Batavia are not going to be able to come out here and spend over $3,000 a month in rent for apartments. And on top of it, those aren't the types of apartments that are needed. A lot of time, attention and resources are being directed to bringing jobs to this community. But it's not going to mean half as much if the people that come and work at those jobs and then have to go to Buffalo or have to go to Rochester to find a place where they can afford to live. Better to keep them in this community participating in this community."
In a separate interview with The Batavian, he said, "It’s difficult for people to afford to house, and then there’s a shortage of quality, affordable housing. In any event, the market study showed that there was a top end of the market that people could afford to pay in this area; otherwise, it wouldn’t be successful.” He said tenants would be making $20 an hour and below. “The idea being that nobody should be expected to pay more than a third of their income for occupancy that includes rent, or a mortgage, and their utilities,” he said. "Part of the idea was if you’re creating jobs here, you want to have safe, modern quality housing for those workers that they can afford.”
Oct. 24, 2022. Jim Krencik to Courtney Cox at Savarino Companies, asking if the AMI levels for the projects can be increased. She responds that the limits "remain the same as when the project agreements were approved."
Jan. 13, 2023, email from Jim Krencik, marketing director for GCEDC, to Tammy Hathaway, BDC director, with guidance on how to answer questions from The Batavian's Joanne Beck. Beck was trying to clarify, after getting a bit of a runaround from local officials, what kind of housing was planned for Ellicott Station, whether it was a workforce or low-income. She asked specifically if it would be subsidized housing. The narrative, he says, is that students graduating from Cornell in High School, new at a company, will be among the tenants, and they won't be kicked out when they get promoted. He shares that income will be based on Area Median Income, with 60% for 30 units and 50% for 25 units being the income levels. "Focus on that, not technical terms," he writes. "It's hard to 'see it' until your friend, your niece or nephew, your co-worker is living there."
Jan. 31, 2023, minutes from a meeting of local officials with Sam Savarino. Tammy Hathaway, Batavia Development Corp., provides background on Section 8 housing and affordable housing. Steve Hyde raises the issue of whether "affordable housing" becomes low-income housing, noting GCEDC has worked to promote workforce housing. Courtney Cox, with Savarino, notes that rental rates are set at 2021 income levels, and can't change until one year after the complex is operational. Jim Krencik, with GCEDC, wanted to know how the agencies and Savarino can work cooperatively with new, young workers. Sam Savarino suggests a collaborative effort to tell the story of what the building is, to use "poster child" tenants. Sam apparently notes, "can't afford to stub our toe." Also present, Rachael Tabelski, city manager.
As it turns out, a single person living alone making $18 an hour is making too much to qualify for an apartment at Ellicott Station, though that same person with two or three dependents, meaning no additional income, would qualify.
Whereas two people each earning minimum wage, $14.20 an hour, are not eligible for a two-bedroom apartment at Ellicott Station because they would be earning too much (the maximum household income for two people in a two-bedroom apartment is $34,600, and two people working full-time at $14.20 would gross $59,072).
Feb. 19, 2023, email from Rachael Tabelski to Sam Savarino. Tabelski notes The Batavian's coverage and the concern it has raised among community leaders. "They believe this will be run-down 'project' housing in no time, and we're sold workforce housing and got extremely low income, not middle income."
Feb. 19, 2023, email from Steve Hyde to Sam Savarino with a screenshot of the flier being used to market Ellicott Station. Hyde states, "Nothing about workforce housing ... implies largely the opposite in many respects."
Feb. 19, 2023, email from Steve Hyde to Sam Savarino. Hyde notes that weeks before, there was a meeting to discuss managing the narrative of the rental marketing. "That opportunity has come and gone with info published recently on the state website about the project that characterizes this project completely differently than how I understood it." He says that several GCEDC board members are feeling misled. He hopes the project can be reframed to be truly workforce housing. "The first I heard of Section 8 vouchers was at our meeting two weeks ago."
Feb. 19, 2023, email from Sam Savarino to Steve Hyde. Savarino says he and his colleagues hear Hyde "loud and clear." He says, "We will do what we can to ensure that the project is accurately portrayed. "I would also note that Ellicott Station is no different than any other property/landlord when it comes to complying wth fair housing laws and Section 8 vouchers."
Feb. 23, 2023, in a letter from Sam Savarino to Steve Hyde, he states, "The fact that incomes have recently risen dramatically and income restrictions are static to 2019 -- and cannot be updated until next year -- might be evident in a detailed analysis of the income restrictions versus potential workforce tenants."
Late February 2023 (letter undated), from Steve Hyde to Sam Savarino. The letter addresses some requests from area officials that there will be on-site management, that there be a preference in selecting tenants from Genesee County, the renting process includes background checks, an annual report on whether the project is meeting workforce housing goals, and statistics on occupancy. The letter states, "The current flier and website, along with the HCR brochure, have not effectively messaged the strong commitment you've shared to accomplish a workforce housing model for working residents. This has created some real concern for several elected officials and community leaders who were expecting a powerful marketing effort to attract working residents with modest incomes to Ellicott Station."
March 7, 2023, Sam Savarino responds to Steve Hyde's letter. Savarino says the project is important to the community and to his company and states, "We remain confident that Ellicott Station will be a true asset to the community and help address identified housing needs and demands in the marketplace." He states all tenants will be screened and go through a "rigorous vetting process within the bounds of New York State and federal law and regulations." He states the company has been diligent in trying to get the word out about the complex to lower-income workers and that the company will produce an annual report on meeting workforce housing goals. He attached the "Ellicott Station Apartments Tenant Selection Plan." The plan discusses advertising and "postings at Section 8 rental assistant offices and that it will be listed in "Affordable Housing Opportunities," which is distributed widely in Erie and Niagara counties. For applicants, income will be verified, credit history will be reviewed, and criminal background history will be included. Reasons for rejection of applications include not meeting income requirements, conviction for product meth, and lifetime registrant on the state sex offender registry.
March 13, 2023, City Council sent a letter to RuthAnne Visnauskas, commissioner and CEO of HCR, asking HCR to modify the income requirements for Ellicott Station, expressing the view that it was the council's understanding that when Savarino turned to HCR for financial assistance, it was to construct a mixed-income complex but that HCR directed Savarino to provide a low- and very-low-income complex. The letter states that Savarino said this income level would align with the area's emerging manufacturing workforce, college students, and active seniors. "The city of Batavia supported the application of Savarino Companies to HCR as a mixed-income workforce housing project that closely aligned with the City's DRI strategy." It states that HCR required changes to the project, and the project no longer aligns with that vision. The letter notes rising wages as a further barrier to attracting workforce tenants. It also notes that other HCR-backed projects in other communities in Upstate New York have been allowed to set rents at 80 to 120 percent of AMI. "We feel this (income level) will encapsulate the workforce housing that we were promised," the letter states.
March 15, 2023, Steve Hyde emails city and county officials along with GCEDC board members a copy of a letter signed by City Council members petitioning HCR to modify that calculation of Area Median Income so that inflation is taken into account. Hyde writes, "... capping incomes at pre-pandemic levels for a workforce housing project just limits the ability of our working residents with modest incomes to meet the criteria to live there. That undermines the nature of the project, which was to target and provide quality workforce housing for entry-level workers for area manufacturers."
April 6, 2023, Rachael Tabelski's email to Sam Savarino to ask for a conference call that would include other stakeholders, including Lenny Skrill from HCR, to explore options for increasing the project's AMI. She said she would also like to hear how Savarino can "keep your promise that all tenants will be employed." She also expresses concern that there have been material changes to the building, such as eliminating ceramic tile, washers and dryers, and metal ramps into showers for handicapped residents.
May 3, 2023, email from Steve Hyde to Kylie Gordon, development operations manager for Savarino. Hyde requests information on lottery winners, including total number of applicants, a blind list of addresses of lottery winners, numbers per household, number of disabled and not working, number retired, wages of employed and self-employed winners, lottery winners currently unemployed, and number of winners eligible for Section 8 assistance.
May 17, 2023, Sam Savarino informs Rachael Tabelski in an email that HCR has informed him that they will not agree to reset the AMI.
May 22, 2023, email from County Manager Matt Landers to Steve Hyde. "Vicky and Tammie participated in the monthly Genesee County Housing Initiatives Committee meeting this morning, and the representative for Ellicott Station participated and definitely wasn't giving answers that made the group feel good. My understanding was that there would be a genuine attempt to get Genesee County residents into Ellicott Station, where Kylie was adamant that they cannot and will not give Genesee County residents priority. Secondly, I was under the impression there would be a real attempt to vet candidates before the lottery process to try and get people that were gainfully employed and Kylie said any type of vetting would be done AFTER the lottery."
May 23, 2023, email from Steve Hyde to Sam Savarino. Hyde had previously requested information on the lottery winners and found the response insufficient. "We are trying to determine if the large majority of 'lottery winners' are gainfully employed and the related demographics. That information, he says, would help him report to his board and the city if the project is meeting the goals of 'workforce housing' as portrayed in the Savarino project description of Dec. 20, 2019.
June 21, 2019, an email from Kylie Gordon to Steve Hyde provided some demographic information on lottery winners. Of the 53 winners who are still interested, 42 are from Genesee County.
June 2023, GCEDC board minutes. The board approved a resolution directing attorneys to send a demand letter to Savarino for information previously requested about lottery winners. It passes unanimously. The discussion notes the project morphed from market-rate to mixed-income to workforce and that workforce would mean "affordable housing for those at the 50-60% of area median income, essentially those working at our Main Street businesses and entry-level manufacturing positions."
June 23, 2023, email from Steve Hyde to Sam Savarino on residential application status. Savarino notes that 79 percent of the lottery winners are Genesee County residents and mostly from Batavia. Only 10 percent are from outside the GLOW region. Hyde characterizes this as "good news." There are 13 applicants on disability. Hyde would like to know how many of those on disability were also employed.
July 13, 2023, letter to Sam Savarino from GCEDC attorney Russell E. Gaenzle. It is a notice of default for not complying with the terms of the project agreement to provide workforce housing and provide GCEDC-requested documentation related to the composition of potential tenants who were selected in the lottery.
July 31, 2023, letter from Sam Savarino to GCEDC attorney Russell E. Gaenzle. Savarino makes the following assertions:
"Our examination of the documents you have provided us indicates that we are developing and constructing exactly what we applied for, and that was considered, approved, and resolved by GCEDC and what was formally provided and received by the city of Batavia."
"We have followed regulations and laws in advertising for and selecting tenants who have yet to go through the screening and vetting process."
"That we actively solicited 'workforce' tenants in conjunction with local workforce development agencies and targetted advertisements."
"That we ought not to be held to arbitrary and malleable standards to determine whether the goals have been met."
"That we cannot impose restrictions or standards for selecting tenants that do not comply with regulation and law."
August 2023, GCEDC board minutes recapping a June 29 board action on Ellicott Station. The board declared the project in default for failing to provide sufficient information about the housing lottery. The board also found that the information that Savarino provided on July 31 indicates there is an insufficient number of lottery winners that meet GCEDC's definition of workforce housing, "which is aligned with the industry definition as well."
Aug. 23, 2019, letter from Russell E. Gaenzle, attorney for GCEDC, to Sam Savarino. It is a second notice of default under terms of the project agreement. It alleges that Savarino Companies are not meeting the goal of providing quality workforce housing for working residents of Batavia. "The term 'workforce' generally includes those who are not typically the target of, or eligible for, affordable housing projects (such as those at or above the median income). This usually includes essential workers in the community, such as firemen, nurses, and medical personnel." The letter notes only about 36 percent of the lottery winners are gainfully employed. GCEDC intends to recapture incentives under terms of the agreement "when 'the company has made a materially false or misleading statement, or omitted any information which, if included, would have rendered any information in the application or supporting documentation false or misleading in any material respect." The letter demands that Savarino cure the default by petitioning HCR to increase the AMI to 80% to 120% of AMI, and if that isn't feasible, demand HCR increase the AMI so the 50% to 60% threshold includes higher wage earners.
Sept. 19, 2023, email from Douglas Randall, city code enforcement, to Sam Savarino about concerns that "defects in the building envelope may result weather deterioration of the wood frame structure and freezing damage to plumbing and/or mechanical systems."
Nov. 20, 2023, notice of recapture sent to Ellicott Station, LLC by GCEDC, stating the agency seeks to recapture $831,577.23 and $281,518.40 in incentives.
Dec. 1, 2023, letter from Sam Savarino to Steve Hyde, objecting to the "recapture" proceedings and termination of the agreements between Savarino Companies and GCEDC. He says there is "no basis for the termination." He denies Savarino Companies is in default and rejects the assertion that his company made "materially false or leading" statements. He states, "... the 55-units were to be 'workforce' housing, which the agency claims 'generally includes those are are not typically the target of, or eligible for, affordable housing programs" and with income of 80% to 120% of AMI.
"The agency cannot credibly claim that the company made a false or misleading statement in its application. Numerous emails between you and myself or Oxford Consulting reflect your and the agency officials' knowledge and agreement that the 55 units of housing would be limited to occupants with income below 60% of the area median income." Later, he states, "The agency's awareness and acquiescence to this income restriction is further reflected in the Low-Income Housing Regulatory Agreement, dated April 15, 2022, among the company, the agency, and DHCR." Later, "Nor could any such promise be made or enforced. As you are well aware, the company cannot legally discriminate against unemployed applicants who otherwise meet the income requirements or otherwise ensure that the units go to a certain percentage of employed occupants."
He notes that the project's income levels cannot be increased to 80% to 120% of AMI and still qualify for housing tax credits. He concludes, "There is simply no basis to contend that the company in any way misled the agency, which is the only claimed cause for termination of the agreement. we respectfully request that the agency reconsider the termination of the agreements and revoke its demand for recapture of benefits thereunder."
July 3, 2024. The Ellicott Station project is on indefinite hold after Saravrino Companies completed requested work to button up the building. Photo by Howard Owens.
July 3, 2024, an incomplete Ellicott Station apartment complex, in limbo during legal disputes and the announced closure in 2023 of Savarino Companies. Photo by Howard Owens.
2023 File Photo of a construction trailer being removed from the premises of Ellicott Station on Ellicott Street, Batavia as it sits uncompleted and in limbo. Several contractors have filed mechanics liens against businessman Samuel Savarino for nonpayment of goods and/or services. Photo by Howard Owens.
A recent peek at legal filings in Genesee County shows that five contractors have filed mechanics liens against Ellicott Station Commercial LLC, owned by Samuel Savarino, for labor and materials totaling more than $243,000 as of early September of 2023.
Ellicott Station, the four-story, 55-apartment complex at 56 Ellicott St. in downtown Batavia, has been left idling since Savarino shut down his Savarino Companies this past summer. Tenants were chosen, tax credits were promised, and paperwork was signed, yet he walked away from the deal, leaving the unfinished property in limbo.
One of those liens, filed by Carter Lumber Co. of Pennsylvania for $49,015.79, was later discharged or dropped. The lien was filed for several supplies, including framing lumber, Tyvek house wrap, anchor bolts, Simpson Hangers, and other framing materials that were installed beginning in September 2022, according to lien documents.
As of Sept. 13, the lienor, Carter Lumber Co., “does hereby consent that any notice of pendency/Lis Pendens filed against the private improvement be discharged of record,” a document states.
Available documents indicate there is a remaining $194,094.10 unpaid to the other contractors, including:
Truax & Hovey, Limited, of Liverpool,which filed a lien for $63,000. The unpaid sum was for labor performed on Gypsum Cement underlayment.
AmBuild Supply, LLC, of Fairport, for $89,746.30. The company provided materials valued at $235,974.89, of which $146,228.59 was paid for, documents state.
The remaining unpaid amount was for “labor and materials were performed and furnished for and used, and that the professional services rendered in the improvement of the real property hereinbefore described.” The date when the first time of material was supplied was Aug. 4, 2022, up to the last item being supplied on May 19, 2023, documents state.
Triton Mechanical, Inc., of Rochester, for $39,118.40. The company provided its first labor or materials on Sept. 20, 2022, up to Aug. 8, 2023, it states in related documents.
The contract was for HVAC installation with Savarino Companies LLC, and the lien is against Ellicott Station LLC.
DV Brown & Associates, Inc. of Tonawanda, for $2,229.40. The company supplied materials that were installed in the building on July 20, 2023, for linen chutes and carts, according to documents.
Documents also include a signed and notarized copy of Samuel Savarino’s agreement as grantor, to “hold the right to receive such consideration as a trust fund to be applied first for the purpose of paying the costs of the improvement and will apply the same first to the payment of the cost of improvements before using any part of the total of the same for any other purpose.”
That agreement was signed on April 25, 2018. Savarino was grantor of the merged properties of 40 and 56-70 Ellicott St., which he completed with a quitclaim process for a dollar.
“The intent of this deed is to combine the described parcels into one tax map parcel,” which merged the former utility and Della Penna properties under Savarino’s ownership for what was originally described to be a microbrewery, restaurant, office/retail and market-rate-turned-affordable apartment project on the two commercial lots.
Due to wide gaps of delay before the project began, Savarino said his intended tenant from Buffalo for the brewery backed out. Savarino Companies would either find a replacement vendor or do it themselves, he said. That did not materialize, along with the anticipated completion of Ellicott Station by the summer and then the end of 2023.
Since the stalled apartment construction, officials from Genesee County Economic Development Center and the city have hinted that there are developers interested in picking up where Savarino left off, and Steve Hyde, CEO of the EDC, has promised that a good ending is possible.
“And you know, what I could say about Ellicott Station is I've been in the middle of discussions with the developer, general partner, the investors, and state housing. That's all in the sorting-out phase. But what I can say to you is it's likely we'll see a different general partner coming in at some point,” he said during a county meeting in September. “And I think what we'll end up with is a project that will be better than what we currently had or what was previously designed.
"I think there's some additional willingness by the housing HCR to work with us and be a little more flexible. It may not be perfect, but we'll end up with a better situation than we had," he said. "I can’t say any more than that right now. But at least it's in the sorting out phase, and there's quite a bit of interest.”
Toward the end of November, EDC officials severed their ties with Savarino Companies and asked for more than $1 million of tax benefits back.
The lien documents were obtained by The Batavian through December 2023.
Although the date is a bit late in the construction season, Buffalo developer Sam Savarino nonetheless is relieved that the New York State Office of Homes and Community Renewal finally has scheduled the financial closing for the Ellicott Station project.
Ellicott Station, part of the City of Batavia's $10 million Downtown Revitalization Initiative program, is the name given for the redevelopment of the former Soccio & Della Penna and Santy’s Tire Sales properties on Ellicott Street.
“On Thursday, the HCR board met and approved the closing date for October 15th,” Savarino said this morning.
When asked if he was hoping for a summer date, he said yes, but quickly pivoted to a “here’s what comes next” mode.
“We’re making our plans to get going, so the day we close, we’re out there working,” he said. “I’m hoping that we get our remediation done in the fall, which is a big step for us. We’re planning to do that right now.”
The closing with HCR involves filing of the documents pertaining to the low-income housing tax credits and additional subsidies awarded to the project.
Savarino said the state agency is providing $1.2 million per year for 10 years in low-income housing tax credits – incentives that are tied to the developer securing an investor or investors to back the project.
As previously reported, the apartments are geared toward a mixed-use workforce with a $30,000 to $40,000 salary range for tenants.
HCR also has granted subsidies of around $5 million.
“We make what’s called a unified funding application with the state. The state assesses your request and they grant it,” he said. “You’re asking for the low-income housing tax credit (based on a formula) and you’re asking for additional subsidies that the state has to approve to aid those projects because the low-income housing tax credits are not enough. When you get the award, you get both of those.”
Savarino said he would like to get on the site prior to the closing date to start some of the abatement in anticipation of the demolition work, but that is subject to HCR approval.
He also confirmed a July 21st closing date with the Genesee County Economic Development Center to finalize the tax exemption and Payment in Lieu of Taxes agreements.
The GCEDC Board of Directors approved nearly $3.7 million in benefits for the $22.4 million DRI project, which calls for renovation and construction of more than 72,000 square feet on 3.3 acres in the Brownfield Opportunity Area.
Plans include the development of 55 apartments as well as office, retail and entertainment space, leading to the creation of an estimated 30 full-time equivalent jobs.
Incentives from the industrial development agency include $850,000 in sales tax exemptions, $200,000 in mortgage tax exemptions, and $2,105,952 in property tax exemptions.
Additionally, the project will be receiving an estimated $529,492 in Batavia Pathway to Prosperity PILOT increment financing related to cleanup and site work investments on the targeted brownfield site.
GCEDC Marketing Director Jim Krencik said that the project will generate $6.10 for every $1 of public investment, including DRI funding.
Contacted this morning, Batavia City Council President Eugene Jankowski Jr. said, "Understanding the delays with COVID and various other funding delays, I'm glad to see that it's finally going to move forward. I think everybody in the community is glad to see that it finally is going to move forward."
Batavia Development Corp. President Lori Aratari could not be reached for comment.
