New York State Office of Homes and Community Renewal

There are “several interested developers” working with Sam Savarino, president of the now-defunct Savarino Companies, after he announced closing about a month ago, City Manager Rachael Tabelski says.

In response to a request for an update, Tabelski said Tuesday that Savarino and banking institutions have been involved in talks with those developers, though she did not have or divulge anything “official.” 

“As of last week, the construction leading bank confirmed there were no liens on the project, meaning (subcontractors) were paid up to that point,” she said.  

When asked about the role of the state Office of Homes and Community Renewal, the agency that granted Savarino $5.7 million of low-income housing tax credits for the project, Tabelski said that “HCR is actively working with any/all developers interested in the project and has promised flexibility in their approach with AMI’s, etc.”

The city had hoped to negotiate the current AMI — area median income level — that had been set at a low to very low versus a higher workforce level, and it appears that it will fall to the next developer to take on that task.

Areas of concern for any construction project would include preserving the structural integrity so that nothing deteriorates or is damaged during the pause in work, and Tabelski said that “the City would like to see the investment winterized first and foremost and remain secured while the project is unwound.”

Savarino Companies celebrated a groundbreaking last year, and chose tenants for the 50 Ellicott St. site in May. It was to open up 55 homes between December of this year and February 2024.

Later this year, Savarino announced financial difficulties stemming from a deal gone wrong at Alfred State College, and shut down operations of his Savarino Companies, with the stipulation that Savarino Management would remain open. He did not contact city officials about the announcement or provide details about what that would mean for Ellicott Station, Tabelski said. Since then, the construction trailer was seen getting hauled off the property. 

Since the project is not merely a privately funded one, and involves county and state funding, the process will likely start over with a new developer, which will also likely delay the entire timeline. It’s not up to the city as to who and how it proceeds from here.

“We do not have a say as to who the developer will be to take on the project; it’s a private transaction,” Tabelski said. “This is a complex project and complex situation, and whoever takes on the project will need to be a seasoned and skilled developer who can make the project and finances work. The City remains encouraged by the interest.”

The state Office of Homes and Community Renewal has and will be involved with the Batavia-based Ellicott Station project, which has been thrown into some doubt recently after developer Sam Savarino announced he was shutting down his development firm, Savarino Companies.

An agency spokesperson responded to The Batavian’s request for comment, given that HCR initially awarded Savarino $1.2 million per year of low-income housing tax credits for 10 years based on his ability to secure investors, and more recently awarded Savarino $5.7 million in low-income housing tax credits for the downtown apartment project.

"HCR has been actively monitoring the progress of the construction of Ellicott Station and will continue to do so as we work to ensure completion of this critical project and deliver 55 affordable homes to Batavia,” the spokesperson said Friday. 

The Batavian had asked HCR about its role in the Ellicott Station project, the requirements of receiving the tax credits and if they could be transferred to another developer if Savarino walked off the job. 

The agency further added that:

• No tax credit funds are disbursed until a project is 100 percent completed.
• As with any HCR-financed affordable housing development, a new sponsor will be required to implement the terms of affordability in the existing regulatory agreement. 

It is unclear as to whether the apartment complex will remain in the current very low to low-income level, as per application guidelines on the Ellicott Station website, as city officials have been discussing the possibility of getting those levels raised to include workforce income levels. 

City Manager Rachael Tabelski said Thursday that city officials will be meeting with HCR to further discuss the current situation of Savarino’s company closing and the apartment complex’s income levels and future at a meeting in September. 

Savarino has not responded to requests for further comment since issuing a statement regarding the closing on Tuesday. As is posted on the company website, Savarino Companies, LLC, a full-service construction firm located in Buffalo, New York, will be winding down and ceasing operations.

"The primary factors governing the firm’s decision are ongoing and increasing costs related to a project the company’s surety was forced to complete at Alfred State College, a recent termination of work and the company’s inability to obtain surety bonding or acceptance of alternative performance guarantees for $110 million of 2023 work which the company would otherwise have had underway at this time," the site states. "Without that work, it would not be possible for the company to operate profitably.

"Savarino Properties, LLC, which is an independent company and provides property management services throughout Western New York, will not be impacted."

As of late Thursday afternoon, no one from Savarino Companies had reached out to the city about the fate of Ellicott Station, though there has been some apparent work activity noted at the 50 Ellicott St. site.