NIAGARA FALLS CITY ATTORNEY: It Was Not A Legal Sale

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By: Frank Parlato

Perhaps the biggest controversy this election season centers around the sale of an old, vacant house in Niagara Falls, NY – at 424 Memorial Parkway.

The public debate over this property has been intense.

The dispute centers around the role that Seth Piccirillo, who heads the Niagara Falls Community Development (NFCD), played in the sale.  Seth is running for mayor, being the handpicked successor of Mayor Paul Dyster.

Here is what happened:

In 2017, the city put 424 Memorial Parkway, a 3,100-square-foot, five-bedroom house, assessed for $48,000, up for sale.  It was run down and in need of extensive repairs.

The NFCD advertised a Request for Proposals (RFP) for the purchase and renovation of this property.

There were two bids. 

After getting community input, the City Council chose to sell the property to Ryan Cali and Matthew Melcher for $1,000. They turned down a higher offer of $7,500, from Mark, Michael and Matthew Valle, because the Valle brothers did not plan to live in the home.

On July 26, 2017, the city sold 424 Memorial Parkway to Cali and Melcher.

As a condition of the low [$1,000] price, the city required the couple to renovate the house and live there, or else the property would “revert” back to the city.

The deed itself recited that Melcher and Cali “must rehabilitate the property up to Code within one year of the date of this deed and must reside in the home for not less than five (5) years from the date of completion of rehabilitation; THE PREMISES shall revert to Grantor upon failure of Grantees to comply with these conditions.”

Mayor Dyster signed the deed.

 

Please see the supporting document article:http://niagarafallsreporter.com/supporting-documents-regarding-memorial-parkway-home-giveaway-by-piccirillo/

 

After closing, Cali and Melcher started renovations, but it soon became apparent that renovations were more difficult than expected.  They did not fix the house. They did not live there.  In fact, they broke up.

Cali said, “We had big plans at the time for that home, but as many people are unfortunately aware, sometimes life has another idea. In our case, it did.”

The one-year period to renovate the home ended on July 27, 2018.

On this date, Piccirrilo, as head of NFCD, should have enforced the contract’s reverter clause and took possession of the property.  

Instead, when Cali and Melcher asked Seth if they could try to sell the property to someone else, Seth said he “wanted to help find a solution for the renovation and the purchasers” – in violation of the terms of their contract.

He authorized the owners, he said, to “look for a new purchaser, with the understanding that it would need to be approved by the city council.”

But somehow the city council was not told about a sale until after the house was sold and closed to someone else- who happened to be a Dyster supporter.

Cali and Melcher sold the house to Karen Mock– a Dyster supporter –  for $10,000 – 10 times more than what they paid for the house – in December 2018.

Cali said, “This was the transfer of the property to someone who we met during our process with the house, who shares the same passion for the street and the city as we did. Someone who is going to put their heart and soul into it and stay there, for years to come.”

After the sale, NFCD was contacted by Mock, who lives across the street from 424 Memorial Parkway. She informed Seth she purchased the house.

Seth did not object, although he admitted, “The department did assume that it would be notified before sale, rather than after.”

The whole thing looked pretty suspicious.

Multiple parties had expressed interest and inquired about buying the property, seeking to learn when it would be rebid so that they might compete to buy it.  

Seth downplayed this saying that those other people interested in the property were owners/operators of short term rentals.

The property however was never rebid. It was purchased by Mock on December 6, 2018 from Cali and Melcher – who did not have clear title.

Mock told Seth that her son, Noah Munoz, would live in the house for five years and renovate it within one year – just as Cali and Melcher had agreed to do.

In order for the purchase to have been legal, the City Council had to approve a deviation from the contract.

The sale to Mock might have gone unnoticed, but members of the Memorial Parkway Block Club found out that the property had been transferred without anybody else getting a chance to bid.  They were upset.  After all, Mock had gotten more than her fair share of sweetheart deals.

She was a member of Dyster’s Healthy Community Committee. Seth was also on the committee.

A few years ago, Seth helped arrange a city-owned Chilton Avenue apartment house be sold to Mock, or a company owned by her, for $500.  The Chilton Ave. property had an assessed value of $37,260. And came with a $40,000 reimbursable grant for renovations.

Seth said at the time that it was natural that someone on his committee should get an almost free house from the city.

“It doesn’t surprise me that someone involved in the group was interested in that vacant property,” he told the Gazette. “But I don’t think there’s a headline —member gets a sweetheart deal — that’s really not the case.”

Before that, Mock purchased a property on Memorial Parkway for $500 from the city. 

According to a neighbor, Mock failed to remedy code violations on a structure on a lot she owned adjacent to her home.  The city demolished it and she failed to pay the bill for demolition. The city then took the property then put it up for sale and Mock actually purchased it from the city at a much lower price than what it would have cost her for the original demolition.

In short, she got a free demolition.

Seth insists he has no relationship with Mock “outside of this situation and other community meetings.”

Meantime, as the controversy over 424 Memorial Parkway expanded, Seth realized it wasn’t going away.  Seth, backtracking, went to the council and proposed, after the fact, that the council approve the sale to Mock.

If they would not do that, he then proposed that the city re-purchase the home, using public money, to make sure Mock did not lose any money. He wanted taxpayers to pay Mock $10,000 for a home the city had sold for $1,000.

When questioned, Seth explained that his department had done this before when he decided someone faced “undue hardship.”

Leaders of the Memorial Parkway Block Club became more incensed with the idea that taxpayers should bail out Mock for the illegal sale. They sent complaints to the State Comptroller’s Office and the U.S. Department of Housing and Urban Development, demanding an investigation into Piccirillo’s alleged “inconsistencies.”

“We would appreciate your investigation into this matter,” the Block Club wrote to authorities.

Then, when the media found out, Seth became defensive.

“We have not violated any of our procedures,” Piccirillo told the Buffalo News.

Piccirillo claimed the Niagara Reporter “published false information about me” and, suggesting he had the moral high ground, added, “I do not think it is fair to assist one person with a hardship and not another, even if it triggers personal attacks. Being written about in your paper is not a reason to change a process that was fair to others.”

Mock declined to answer questions about the case. “It’s being handled legally,” she told the Buffalo News.

But an internal email sent by city attorney Craig Johnson reveals that city officials knew there was no question regarding the legality.  This was an illegal sale.

After he got caught, Seth asked the city attorney to give him cover for the illegal sale.  Johnson could not oblige. He wrote to Seth, copying the city council and others, on Feb. 4, 2019, two months after the illegal sale to Mock,

Johnson wrote, “The proposed letter was prepared as a defensive strategy so that when the media or Memorial Park Block Club members question how this transfer in December took place and what the City planned to do about it, I had an answer….

 “The fact of the matter is that the City Council approved the sale of 424 Memorial Parkway [to Cali and Melcher] and as part of that sale, imposed certain conditions which were among your home ownership auction conditions. The City Council is the only entity that can grant a reprieve from complying with conditions that it imposed.

“Therefore, prior to the December, 2018 transfer from Cali and Melcher to Mock and Munoz, proper protocol would have been for a request to have been made to the City Council to amend its prior approval of this transfer based upon the extenuating circumstances of one of the parties …  That did not happen here which has resulted in certain neighbors in the vicinity of 424 Memorial Parkway to crying ‘foul.’

“At this point it appears that a request should be made to the City Council to determine whether or not it will approve this transfer/sale from Cali and Melcher to Mock and Munoz nunc pro tunc. In the event the City Council approves this transfer/sale on a nunc pro tunc basis because of extenuating circumstances, I do not see this office having any further involvement in this matter. If however the City Council does not approve this transfer/sale nunc pro tunc, then I do not see this office having any choice other than to proceed to enforce the City’s right of reverter.”

As it stands today, the Council will be asked by Seth to decide between allowing Mock to keep the property or buying the property from Mock for the alleged price she paid of $10,000.

As Johnson indicated, it’s not the Council’s only option. They may elect to direct the enforcement of the contract and have the city take possession of the property, as it should have done on July 27, 2018.

Critics of paying Mock or allowing Mock to keep the property say it violates:

1.     Fair and equal competition (other parties were interested)

2.     Public resources (the public is entitled to receive the best possible price for their property and this can’t be known without bidding)

3.     Separation of Powers (allowing Seth to exceed his authority sets a precedent that administration official may supersede the council.

A decision to enforce the contract and take back the property is the only option that does not violate principles of good governance.  Mock should not be rewarded for circumventing the process to gain the property from the public.

The council seems to have little appetite to buy the property from Mock.

Councilman Kenny Tompkins said it is not going to happen.

“There is not one councilmember willing to vote to buy the property back for $10,000 or at any price. We are going to consult with legal counsel,” he said.

Council Chairman Andrew Touma said of Seth’s violation of law, “He made a mistake. He didn’t go through the proper protocol and he needs to. The council is going to make sure that we make this right.”

In the end, Seth had as much authority to tell Cali and Melcher they could sell the property at Memorial Parkway as I would have to tell you to sell the Statue of Liberty.

Sometimes it seems to me that Seth shoots before he aims.  It’s always ‘ready, shoot, aim” with him.

But to hear him tell it, he did nothing wrong. It’s all the Reporter’s fault – making up stories about him when, in reality, this young man runs his department like it was his own fiefdom.

I wonder if he will act the same way in the ungodly event that the people of this city chose to elect him as mayor.  

 

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