Genesee County Economic Development Center officials have severed their ties with Savarino Companies and asked for more than $1 million of tax benefits back, Senior Director of Marketing and Communications Jim Krencik says. 

An email was sent out from Savarino Companies to those 55 tenants selected this past May for one of the Ellicott Station homes that had been in progress until a month or so ago. 

And, no, it was no longer congratulatory in nature about the tenants’ good luck in being chosen for one of the safe, quality, affordable rentals on the city’s Southside.

It was one of regret.

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.” 

Suffice it to say that the name Savarino will be the word of the day for some time to come, as working through the recent company’s closure and what that means for Ellicott Station will be “a long process,” City Manager Rachael Tabelski said Thursday.

The Batavian had reached out to Tabelski late Tuesday about any updates on the closure of Savarino Companies and how that may impact the work-in-progress at the Southside apartment complex known as Ellicott Station. 

Tabelski responded on Thursday to say that company President Sam Savarino has not been in touch with the city since the publication of the news and that city officials are continuing to work on the situation. 

This is another story exclusive to The Batavian about the Ellicott Station project. To stay on top of the latest news in Genesee County, sign up today for Early Access Pass.

Savarino sent The Batavian a four-page outline detailing

The next steps are yet to be determined.

That seems to be the ongoing response from city and county officials in the aftermath of an announcement by CEO Samuel Savarino that his company will be ceasing operations and laying off its employees.

Savarino is the developer of Ellicott Station, the four-story apartment complex touted as an economic lifesaver for downtown Batavia and for working individuals and families in need of an affordable, quality and safe place to live.

That economic vision was blurred earlier this year when the online rental application indicated income requirements of very low to low ranges, seemingly squelching the notion that the units would indeed be for workforce individuals. The Batavian had reached out to Savarino requesting details about a lottery that awarded rentals to 55 tenants. He wasn’t privy to such information, he had said at the time.

The Batavian was the first and only news source to report on the apparent requirements and changes in income at Ellicott Station. You can help community-minded local reporting continue by joining Early Access Pass.

As Ellicott Station, the four-story apartment complex in Batavia’s downtown Southside, remains unfinished and behind schedule of what was previously announced for a summer opening, Samuel Savarino of Savarino Companies confirmed Tuesday that the 23-year-old company “will be winding down and ceasing operations,” according to The Buffalo News. 

Savarino said that the company would be laying off 30 employees after being unable to overcome significant financial losses following its dismissal from a state-funded SUNY construction project, the article states.

The Batavian called City Manager Rachael Tabelski and Samuel Savarino for comment and received an emailed response from Savarino confirming that the company will be "winding down and ceasing operations," however, it offered a thin promise for Ellicott Station's future completion.

UPDATED 4:12 p.m.: "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. Without that work, it would not be possible for the company to operate profitably," the email stated. "Savarino Properties, LLC, which is an independent company and provides property management services throughout Western New York, will not be impacted.

"Savarino Companies, LLC is actively working to achieve the best outcomes for its employees, clients and vendors. The firm is working with its clients, and in some cases, its surety to complete work on active projects and, where needed, is making arrangements with replacement contractors for upcoming work the company was slated to perform," the company stated. "The status of several initiatives and development projects that Savarino Companies was affiliated with has yet to be determined."

City Manager Rachael Tabelski said that the city had not been contacted by Savarino Companies before the announcement and is, therefore "reviewing and evaluating all information as it comes forward."

"Over the past month, the City has worked with the Genesee County Economic Development Center (GCEDC) to demand Savarino Companies provide workforce housing at Ellicott Station as promised in their applications to the State and City.  The City will be meeting with regional and state partners to seek assistance to move the Ellicott Station Project forward," Tabelski said Tuesday. "As more details become available, we will update the community.”

Savarino also emailed reports of the many charitable organizations that the company has supported over the years of its existence.

Photos by Howard Owens.

Tuesday’s lottery drawing was the next step in the process of filling Ellicott Station with tenants, the new housing complex in downtown Batavia.

The drawing happened in Savarino Companies’ Buffalo office, and The Batavian followed up with company President/CEO Sam Savarino for details about how it went.

All eight City Council members signed a letter Monday night requesting that state Homes and Community Renewal officials work with the city to bump up a portion of the current Area Median Income levels at Ellicott Station.

“The city of Batavia is requesting that HCR work with us to present a better mix of incomes on the property with apartments that rent for 80 percent and 120 percent AMI,” the letter states. “We feel that this will encapsulate the workforce housing that we were promised, better align with the city’s vision of the DRI strategy, and still provide affordable housing for residents.”

Earlier Monday, during council’s business meeting, City Manager Rachael Tabelski referred to a letter that she had provided for council members to review. Apparently, they reviewed and revised the letter after the meeting. The Batavian has asked for additional details about that process and will update this article once responses are received.

Since the first application went in for Ellicott Station, local folks were excited about the prospects of longtime vacant and toxic property along the south side street getting cleaned up, renovated and repurposed. But since its inception in 2016, as City Manager Rachael Tabelski has described it, the project became fairly fluid.

“Ellicott Station has been a moving target over the last several years as the developer made various and multiple overtures to funding entities with regards to making the project financially viable. In 2019, the City supported the project’s housing component as being mixed-income that would provide housing for residents that were employed in local manufacturing in an application submitted to New York State Homes and Community Renewal from the developer,” Tabelski had said. “Furthermore, in 2020, it was confirmed that people living at Ellicott Station must be employed and not receiving government assistance."

City leaders had expressed disappointment about the apartment project’s income levels after The Batavian’s exclusive coverage published on Feb. 18. Application materials made available at Ellicott Station’s website outlined the qualifications for one- and two-bedroom units, many of which had maximum annual salaries at or below minimum wage and seemingly requiring Section 8 assistance.

One example is that 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).

Developer Sam Savarino has said, in a follow-up interview with The Batavian, that he expects the housing complex to be filled with gainfully employed people, though he had no thorough rationale for the low maximum income levels. He said that the numbers were set a couple of years ago and can be reset once everything is up and operational at Ellicott Station if current salaries have increased.

Here in Batavia, “we would like to be known for innovative housing that has a mix of incomes to preserve our most vulnerable neighborhoods, help citizens, and provide for housing for entry-level manufacturing, service workers, and students,” the city’s letter states. “The City of Batavia, New York State, Brownfield Opportunity Area, and the Downtown Revitalization Initiative (DRI) strategy both define the need for downtown housing, including infill construction, upper floor apartments, and a demand for higher income housing, including market-rate housing.”

“When Ellicott Station Project was proposed by Savarino Companies, it was originally a market-rate housing project, however, through several financing iterations, Savarino Companies worked with HCR to finance the project. The city discovered that at the time of application, Savarino Companies applied to HCR for a mixed-income housing model but was directed by local HCR representatives to only allow residents with 50 percent to 60 percent AMI,” the letter states. “While workforce housing is the goal for the Ellicott StationSavarino Development, that is not the type of tenants that this housing will attract.”

The letter further lays out the compounding issues of the capped 50 to 60 percent Area Median Income and  inflationary wage increases that will not allow working citizens to qualify to live at Ellicott Station, and “only vouchered Section 8 residents will now be able to access this property.”

“This is a fundamental change from the goals for the Ellicott Station project and does not match the BOA or DRI strategies for development of our downtown,” it states.

As a result of this fundamental change, city leaders said they are concerned that:

• Drastically increased wages for entry-level manufacturing and service jobs pay more than what would qualify for this housing complex;
• The project no longer aligns with the City’s DRI and BOA strategies, and it won’t fulfill the City’s need for market rate and workforce housing as determined from various studies;
• Low and very low-income housing — versus mixed-income housing — could set the project up for potential issues contrary to community objectives, including drug, gang, and criminal activity, per proven studies;
• Other DRI communities across the state have received HCR tax credits and rents were allowed to be 80 to 120 percent AMI in some cases — so why not here?

Photo of Ellicott Station in progress at 50 Ellicott St., Batavia, by Howard Owens. 

While city officials have expressed surprise and disappointment about the details of Ellicott Station, developer Samuel Savarino and Steve Hyde, CEO of the county’s Economic Development Center, remain enthusiastic about the possibilities to come along with the 55-unit, low-income apartment complex in Batavia.

During an interview with The Batavian, Savarino was steadfast about tenants being employed and able to pay their rents at the 50 Ellicott St. site.

“Our project is one- and two-bedroom, which I think could be said fits the profile of young workers or working couples,” he said.

The Batavian asked about the maximum income qualifications, per the Ellicott Station application, which in some cases means people making minimum wage wouldn’t qualify for a two-person apartment. Savarino said that those numbers were fixed in 2019, per 50 to 60 percent of the area median income at the time. And they’re not set in stone.

“When things change every year, the income restrictions are reset, just as there are changes in the area median income and what people earn. So, you know, that changes over time. But, I think it really does set at some are 50 and the majority are 60 percent of AMI, right? And that's back in 2019 numbers,” he said. “And the project has to be up and operating before it gets reset. So if wages have gone up in that time, then the income restrictions will go up, and if they’re going down, the income restrictions will go down.”

He isn’t sure why city officials are upset about the low-income qualifications and Section 8 availability, he said, since the project has been geared toward what’s affordable for the Batavia area per a market study from the project's inception. It is true, he said, that Home and Community Renewal’s involvement — which happened when the state entity granted him more than $5 million in tax credits to get the project going — also meant a market study review and conclusion about what would be considered affordable.

“I think we had a market study which looked at … I mean, everybody can maybe look around things and draw their own conclusions. And, you know, a market study is a little more detailed … it's a little more refined, and more scientific with determining what the achievable rents would be and whether there would be people to rent at certain levels. Any market study will do that,” he said. “And if you looked at the application that went in to the unified funding application to Home and Community Renewal, which provides the tax credits, which an investor purchases, and then they provide some financing for the projects, that it was workforce housing, affordable workforce housing.

“And that's consistent with what everybody was saying. It can be reset, but that's what we need to follow … at the suggestion of HCR after they examined the market study. My recollection was that they said, that's where the market was. And that was where the need was.

“I’m not quite sure if there's an Oxford dictionary definition of what is affordable as opposed to workforce, as opposed to low income. You know, it depends. And it may mean different things in different communities,” he said. 

Those terms are used interchangeably, he said. Above all, he envisions working singles and couples, or perhaps seniors on a fixed income, living at Ellicott Station. Given the low-income levels, what’s the chance that many would also require government assistance to make the rent if they qualified for those income levels? Savarino wasn’t familiar with how Section 8 works, he said, but it does work the same as with any other rental. It's illegal to discriminate against a tenant with Section 8 requirements, he said.

His management will be screening applicants to ensure they have a job and can pay rent, he said. Furthermore, he believes they will be “good tenants” living in a good, quality residence with plenty of security cameras, and secured access to the building. The Batavian asked him why the playground was built and promoted if he didn’t think the apartments had the space for children — which he had said during the interview — and it is a mandated requirement, he said.

As for the meanings of workforce, affordable and low income, The Batavian had previously published an article citing the definitions, per the Housing and Urban Development site. Though, in talking to various people regarding this project, those words did seem a bit murkier. Savarino disputed a statement in a prior Batavian article that he had quoted specific, ideal wages of $18 to $20, and also $20 and below. He didn’t recall having said that, though it was captured on a recorder. None of the maximum incomes allow for those wages or even $14 in some cases.

The calculations worked out to take 30 percent of one’s salary for rent and utilities, he said, and leave the remaining 70 percent for other expenses. That means tenants could potentially have disposable income to dine at downtown restaurants or do some shopping, which was one of the original goals of the project, he said.     

The other goals were to include commercial and retail projects at the site, and, due to the lengthy time it took to get going, Resurgence Brewing “timed out” and completed a project in its own neighborhood, Savarino said. He has some interested prospects and is committed to following through with a brewery/restaurant with either an outside company or Savarino Companies itself.

Steve Hyde, president and CEO of Genesee County's Economic Development Center, focused on another aspect of the project — the longstanding and dilapidated defunct buildings at 30-50 Ellicott St. Ellicott Station was designed initially “and continues to contribute to helping achieve the goals of the Batavia Brownfield Opportunity Area (BOA) and the Downtown Revitalization Initiative (DRI),” he said.

He pulled an excerpt from the DRI application for the Build Ellicott Station Project:

“The DRI program will be a comprehensive approach to boost Batavia’s economy by transforming the downtown into a vibrant neighborhood where the next generation will want to live, work and raise a family.  A key component of the DRI program is to advance strategic private and public investments that will provide catalytic impacts to facilitate downtown revitalization.”

“I believe the Ellicott Station Project, in its current form, continues on this path by making public/private investments, revitalizing a blighted parcel which is helping to transform our downtown into a vibrant neighborhood that offers opportunities for our young adults in the community to live, work, play and raise a family in a significantly upgraded area of downtown Batavia,” Hyde said. “We continue to work closely with Developer Sam Savarino and his team to deliver upon his commitment to construct new, modern, and affordable workforce housing for working residents who have modest incomes across our community.  This is a critical element to downtown revitalization efforts because not only does Ellicott Station renovate a blighted parcel in our downtown but it is building workforce housing units for working residents in the heart of our downtown many of whom would have the opportunity to work at our area businesses which are sorely needed.”

Hyde and Savarino also pointed to the benefit of having nearby housing for employees that businesses are seeking. Without local residents, it has been difficult at times for employers to fill vacancies, Savarino said. It also equips downtown with tenants within walking distance, Hyde said.

“This further strengthens the opportunity for greater success for our Main Street businesses and our local economy.  I confirmed with Developer Sam Savarino last week that his commitment to deliver workforce housing for working residents is priority #1.  The incentives provided by GCEDC to support the comprehensive re-development of this mixed use project did comprehend the 60 percent or less AMI and associated range of incomes contemplated for the workforce housing facility as reflected in our public hearing minutes, the board memoranda and final resolution from our March 2020 Board meeting,” he said. “The net of this is: The GCEDC Board of Directors trusted in Sam Savarino to deliver workforce housing for working residents in an effort to incentivize considerable investment and improvements to transform the biggest eyesore in our downtown into a new mixed-use development.  They continue steadfast in their expectation of Mr. Savarino to honor his commitment to provide high-quality workforce housing for working residents across our community.

He and Savarino look forward to the project’s completion, and neither seems to believe that the income qualifications are too low to bring prosperity to the city of Batavia, per questions asked by The Batavian and the focused answers.

“I personally continue to look forward to the positive benefits provided by the Ellicott Station project which includes offering new apartments to our working residents priced in an affordable fashion that would allow them to live, work and play downtown,” Hyde said. “This will, in my view, help to elevate the staffing availability and success of our area businesses – our Main Street businesses in particular.  That is the promise we continue to expect and the main premise why GCEDC has participated actively in this project over the course of the last eight years.”

Photo: File photo of Sam Savarino at the Ellicott Station groundbreaking by Howard Owens