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Though much of the reporting around Andrew Cuomo’s Buffalo Billion project has focused on Buffalo construction firm LPCiminelli, relatively little attention has been paid to another major beneficiary of Buffalo

Though much of the reporting around Andrew Cuomo’s Buffalo Billion project has focused on Buffalo construction firm LPCiminelli, relatively little attention has been paid to another major beneficiary of Buffalo Billion spending: Ciminelli Real Estate.

Owned by Paul Ciminelli, the brother of LPCiminelli chairman & CEO Louis Ciminelli, Ciminelli Real Estate has been involved in four Buffalo Billion projects to date, three of which were awarded while its executives held governance positions at state agencies and donated generously to Governor Cuomo’s campaigns.

While these projects were procured by Fort Schuyler Management Corp (FSMC), a non-profit affiliate of SUNY Polytechnic, their funding came from Empire State Development. Ciminelli Real Estate’s president, CEO, and sole owner Paul Ciminelli sat on the Empire State Development board from 2010 through 2014. The land for the SolarCity project was sold to Fort Schuyler by the Buffalo Urban Development Corporation, where Ciminelli Real Estate Executive Vice President Dennis Penman is vice chair.

Though Ciminelli recused himself from votes that benefitted his and his brother’s companies, he did not leave the room during the deliberation and voting process. Penman raised his affiliation with Ciminelli Real Estate, but was permitted to participate in voting and discussion without recusing.

Neither executive disclosed their participation in LPCiminelli’s bid to the boards they sat on as they were making decisions on the project.

Ciminelli Real Estate was part of LPCiminelli’s team in its winning SolarCity bid

Ciminelli Real Estate donations to Andrew Cuomo

Executives of Ciminelli Real Estate and their companies have donated at least $20,000 to Andrew Cuomo’s campaigns since 2010.

In the SolarCity project, the winning bid submitted by LPCiminelli names Ciminelli Real Estate Corp (CREC) and four of its executives as participants.

Fort Schuyler Management Corp issued a request for proposals in October 2013 calling for developers to partner with the state to develop an unspecified “strategic research, technology outreach, business development, manufacturing, and education and workforce training partnership.” According to Fort Schuyler, LPCiminelli received the RFP on October 17, attended a November conference call, and submitted its proposal on December 10, 2014.

LPCiminelli’s proposal identified a team – consisting of LPCiminelli, Ciminelli Real Estate Corp, and the law firm Hodgson Russ – to develop the manufacturing hub. Among the CREC team members included in the proposal were Executive Vice President Dennis Penman, the vice chair of the public entity that sold the land for SolarCity to Fort Schuyler, and President & CEO Paul Ciminelli, who was sitting on the board of Empire State Development.

Ciminelli Real Estate’s access to RiverBend weighed in LPCiminelli’s favor when Fort Schuyler was considering SolarCity bids

While the LPCiminelli/CREC/Hodgson Russ team was developing its proposal for Fort Schuyler, Gov Cuomo announced his intention, on November 21, 2013, to build a “high-tech manufacturing innovation hub” at RiverBend, a brownfield site in south Buffalo owned by the Buffalo Urban Development Corporation (BUDC), where Dennis Penman was vice chair. LPCiminelli’s proposal for Fort Schuyler indicates that, after Cuomo’s announcement, but before the contract was awarded, Ciminelli Real Estate made contact with BUDC about developing RiverBend. From the proposal: “Subsequent to the announcement, we made initial contact with the Buffalo Urban Development Corporation office to begin planning for site preparation. Our in-house planner has prepared an initial review and we are ready to put it on a critical path for development.”

On March 27 2014, Cuomo announced that Fort Schuyler had selected LPCiminelli as its partner in developing the manufacturing hub. According to Fort Schuyler documents, one criteria for LPCiminelli’s selection was the list of potential sites in its proposal, which included several properties owned or managed by Ciminelli Real Estate Corp as well as the still-publicly-owned RiverBend site.

The next day, Empire State Development approved a $118,000,000 grant to Fort Schuyler to be used towards “site planning and design and machinery and equipment” for the RiverBend project. Paul Ciminelli recused himself from the vote, though he did not disclose his involvement in the winning bid for the development. He also remained in the room as the motion passed unanimously. Curiously, this meeting was Ciminelli’s last on the ESD board, though there was no mention of his stepping down in the minutes.

Ciminelli Real Estate executive Dennis Penman participated in the vote to sell RiverBend to Fort Schuyler after LPCiminelli had been designated developer

Other Buffalo Billion projects have benefitted Ciminelli Real Estate

  • AMRI
    FSMC bought the 7th floor of CREC’s Conventus building for a headquarters for AMRI, a drug development company. Paul Ciminelli also recused himself from the ESD vote to fund that project, which occurred at the same meeting as the RiverBend vote.
  • Key Center
    CREC manages the Key Center for the New York City-based company that owns it. The Key Center was selected to house an information technology hub for IBM. The ESD vote to fund this project happened after Ciminelli left the board.
  • Athenex
    FSMC is leasing the 6th floor of CREC’s Conventus building to house the drug manufacturer Athenex. The vote for this project also occurred after Ciminelli left the ESD board.
  • In April 2014, the real estate committee of the Buffalo Urban Development Corporation voted to sell the first parcels of its RiverBend property to Fort Schuyler. According to the meeting minutes, Penman told the committee that “he is employed as Executive Vice President of Ciminelli Real Estate Corporation, and that LP Ciminelli Inc. was recently retained by Fort Schuyler Management Corporation (FSMC) as designated developer for the construction of the RiverBend project.”

    Penman also “indicated that he is not an equity owner in either LP Ciminelli or Ciminelli Real Estate Corporation, and that Ciminelli Real Estate Corporation is not party to the designated developer agreement with FSMC.” Penman did not disclose that Ciminelli Real Estate generally, and that he specifically, were part of the proposal leading to LPCiminelli’s retainer as designated developer.

    The committee secretary, Hurwtiz & Fine attorney Kevin Zanner, opined that Penman’s interests did not pose a conflict and, after an executive session, the vote to sell the property passed unanimously.

    Though meeting minutes reflect that Ciminelli recused himself from the Empire State Development votes that benefitted his company, Ciminelli Real Estate’s involvement with LPCiminelli’s bid for the RiverBend project and Penman’s role on the Buffalo Urban Development Corp’s board raise serious questions about the bidding process:

    Other facets of Ciminelli’s service on the Empire State Development board also raise questions, which we will explore in a forthcoming post.

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