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City Bungling Creates Showdown in Days Park

Two elementary charter schools are fighting over the closed School #36 on Days Park.  The Elmwood Village Charter School (EVCS) signed a purchase agreement with the City for the vacant property in February.  Not so fast says the West Buffalo Charter School (WBCS), a startup school that also wants the site.  Caught in the middle is developer Sam Savarino who is EVCS’s current landlord on Elmwood Avenue while also working with WBCS to find a home. 
 
Savarino, in court documents, says his offer for the school was not only ignored, but was higher than the agreed upon purchase price between the City and EVCS.  Savarino is seeking to reverse the deal in a recently filed Article 78 proceeding.  The sale of the property is a look at City Hall dysfunction, or worse.
 
The Buffalo City School District made a decision to close School No. 36 and ‘abandon’ the property back to the City at the conclusion of the 2008-2009 school year.  In early-2009, Savarino formally expressed, through a letter and email, his interest in purchasing the property for its appraised value (as established by a third party) and renovating it for use by the West Buffalo Charter School.  Savarino was assured that his offer would be considered in the sale process.
 
The WBCS has an approved charter for 270 students and is scheduled to open this fall.  The school will open with 162 students in grades K-2. It will grow one grade level each year to K-4, reaching a total enrollment in year three of 270 students.  Its founders– Buffalo Hearing and Speech Center and D’Youville College– have created a  local school with a focus on language and literacy that will be connected to and meet the needs of the West Buffalo community. According to WBCS founders, they had been looking for a location for the school for well over two years and that School 36 is not only the best location for the school, it is the only location available to them.
 
Last July, following the Common Council’s adoption of a resolution introduced by then Ellicott District Councilman Brian Davis, the City leased the Days Park school to Tapestry Charter School for one year.  Unbeknownst to Savarino, and contrary to representations made to Savarino by City officials, a codicil had inexplicably been added to the Tapestry lease resolution stating that if the school was to be sold to EVCS in the future it could be sold at appraised value and would not require further approval from the Common Council.  The assessed value at that time was listed as $891,600.
 
Later that month, Savarino again informed the City of his interest to purchase the property.  John Hannon, the City’s Director of Real Estate, advised Savarino that the City had not determined what they were planning to do to dispose of the property, despite the Common Council having already adopted a resolution to potentially sell the Property to EVCS.  Hannon suggested Savarino submit a written proposal, purchase offer and good faith deposit.  All three were submitted in August 2009.
 
City officials told Savarino at an October meeting that EVCS had expressed an interest in purchasing the property and the appraised value of the property was $725,000.  Savarino was also told the City was reviewing and considering all proposals.  At the meeting, Savarino notified the City that he would be willing to purchase the property at the appraised value of $725,000 and later submitted a revised proposal with a purchase offer at the fair market value of the property, assumed to be at least $725,000.

school36two.bmpEnter the Appraisal Review Board.  Its job is to review submitted appraisals and determine whether the appraisals meet the standards and format requirements set by the Appraisal Review Board.  Within ten days, the Board is required to issue a report to the Common Council including the results of the appraisals and its recommendations.
 
A meeting of the Appraisal Review Board was held in early December.  Savarino was not provided with notice of the meeting.  Several EVCS officials attended however and reportedly lobbied the Appraisal Review Board to sell the Property to EVCS for less than fair market value.
 
At that meeting, the Appraisal Review Board was presented with an appraisal commissioned by EVCS indicating that the fair market value of the property was $325,000.  Apparently the Review Board was not informed of Savarino’s competing offer to purchase the property for at least $725,000 or completely ignored his interest in purchasing the property.  The Appraisal Review Board determined that a fair market value for the Property was $15.00 per square foot, which calculated out to a value of $540,000, coincidentally, that amount is approximately the average of the two appraisals.
 
On December 7, 2009, and in response to his request for an update, Sam Savarino received a voice message from John Hannon stating that the City had decided to sell the property to EVCS.  In January, Savarino advised the City that he was willing to purchase the property for “the greater of appraised value or $800,000” and submitted a non-contingent offer for the property along with a non-refundable deposit of $25,000.
 
In March, it became apparent that the City was intending to sell the property to EVCS for at least $260,000 less than fair market value.  At its March 16, 2010 meeting, the Common Council was scheduled to consider the sale of the property.  The Common Council was not provided with a report from the Appraisal Review Board relating to either the Tapestry appraisal or EVCS appraisal. 
 
A report from the Office of Strategic Planning to the Council did not disclose that Savarino had submitted a non-contingent offer to purchase the Property for at least $800,000.  Instead, it stated “the City of Buffalo Appraisal Review Board determined that the appraised value of the former School 36 property is $540,000” and recommended that the property be sold to EVCS for that amount.
 
It gets more interesting.
 
As set forth in Section 18-43 of the City Charter, the Appraisal Review Board consists of four members, and three ex-officio members; at least one member of the Appraisal Review Board must be appointed, and confirmed by the Common Council, every year. 
 
A search of the minutes of the meetings of the Common Council for the past four years shows the Common Council has not confirmed any members to the Appraisal Review Board.  For at least the past four years, the Mayor also has not appointed any members to the Appraisal Review Board.
 
With the terms of the purported members of the Appraisal Review Board all expired, there is no properly constituted Appraisal Review Board.  The Common Council apparently was without power or authority to sell the property through the appraisal method set forth in Section 27-5 of the City Charter.
 
The comedy of errors continues.  The Appraisal Review Board never provided its report or recommendations to the Common Council as required.  The only item that was submitted to the Common Council was the report from the Office of Strategic Planning.
 
The Appraisal Review Board is required to “report the results of said appraisals” to the Common Council.  In addition, the Appraisal Review Board does not have the power or authority to determine the value of a property.  It vets appraisals.  The Appraisal Review Board ignored both appraisals and made its own “determination” that the fair market value of the property amounted to $540,000. 
 
On March 16, 2010, the Common Council adopted the Resolution to accept and confirm “the Appraisal Review Board’s value of $540,000.”  However, the Common Council ignored the fair market value of the property.  Savarino was willing to pay $800,000 and invest between between $200,000 – $300,000 in improvements to bring the facility up the State Education Department standards and to and to spruce up the school grounds.
 
Savarino is asking the Court to overturn the sale to Elmwood Village Charter School.  EVCS has not yet applied for State approvals to double the size of their school and utilize a split campus.  Meanwhile, a new charter school is homeless.  An injunction blocking the transfer of title is already in place.  Stay tuned.

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