Legal action, unpaid bills tied to developer behind $2.5M Falls housing plan

Feb. 1—Ryan Miller's company, Buffalo-based T-Mark Heating, Plumbing and Cooling, spent eight days installing a new heating system and ductwork inside a property located at 714 Eighth St. in Niagara Falls.

When they finished the job, Miller said the total cost for services rendered came to $6,372.

Miller said the person who hired his company for the job, a Western New York businessman named Rod Davis, still hasn't paid the outstanding bill.

He also said Davis stopped responding to his company's attempts to find out why.

"We have recorded calls where he said he already made out the check," Miller said, referring to Davis. "He told us three times he mailed the check and we never got it."

Davis and one of several firms he owns, a company called Power City Ventures, LLC, are now involved in what has been billed as a $2.5 million effort to restore 12 houses in Niagara Falls as vacation rentals or owner-occupied homes.

Davis has said that he plans to invest $1.5 million in the properties, which would be sold to him by the city for $50,000. As announced in December by Gov. Kathy Hochul's office, Power City Ventures is now also in line for the reimbursement of additional project costs of up to $1 million under the state's Restore New York grant program.

An investigation by the Niagara Gazette shows Miller and T-Mark are not the first individuals or companies to raise concerns about past dealings with Davis or his businesses.

The Gazette interviewed a Falls contractor who says Davis owes him thousands of dollars for home repair and renovation work.

In addition, records on file with the Niagara County Clerk's Office show a Woodside, NY, company with properties in the Falls sued two of Davis' firms for failing to turn over $39,000 in collected rent funds as required under their property management agreement.

In another case, records show one of Davis' business partners, Roswell Park Cancer Institute physician Dr. Yasar Shad, asked the courts to dissolve his partnership with Davis in a company called Power City, LLC.

In his court filings, Shad described his sole joint investment with Davis in Power City, LLC — a boarded-up building at 320 Cedar Ave. — as "rapidly" diminishing in value and "in such a state of disrepair as to render it uninhabitable."

"My client just poured a ton of money into this," said Jane Harrington, an attorney from West Seneca who is representing Shad in his ongoing efforts to cut business ties with Davis. "They bought the Cedar Avenue property and nothing got done."

Neither Davis nor his attorney Matthew Lazroe responded to multiple requests for comment from the newspaper.

MONEY SQUABBLE WITH LOCAL CONTRACTOR

In an interview with the newspaper, Demetrius T. Nix, owner of Nix Construction and Property Management in the Falls, told the newspaper that Davis owes him more than $13,000 for outstanding services, including chimney removal, window repairs and other work.

Nix provided the newspaper with a copy of an invoice he sent to another one of Davis' companies, Akeed, Inc. Nix also provided copies of text messages between him and Davis, several of which suggest Davis agreed to pay Nix by check.

"He acted like he was going to pay me and he never did," Nix said.

In a final text exchange after Nix asks "Brother, where is my check," Davis responds: "Don't ever call my phone again. I am not your brother. Letting chief of police and mayor handle this now."

"Three days later, I was in jail," Nix said.

Nix was, in fact, arrested last week on a warrant from the Niagara Falls Police Department accusing him of unlawfully entering one of Davis' properties at 1117 Pierce Ave. Following his arraignment, Nix was released on his own recognizance.

Nix admits he has been inside the property where Falls police allege he broke the law. He said was there in the past to do renovation and repair work for Davis, but he did not break in as Davis has alleged.

"Of course my fingerprints are over there," Nix said. "I did all the work on that house."

PROPERTY MANAGEMENT CASE

Records on file with the Niagara County Clerk's Office also show two companies owned by Davis — Buffalo Niagara Realty Group Properties, LLC and BNRG Properties, LLC — were sued last year by a company called NP Twin Sister, Inc., located in Woodside, NY.

The legal claim alleges that Davis' firms were hired by Twin Sisters to provide management services for various properties the company owned in Niagara Falls. In its lawsuit, Twin Sisters alleges that Davis' companies collected a total of $39,785.61 in rent but never turned the money over to the properties' owners as stipulated in their property management agreement.

Robert Friedman, the attorney representing Twin Sisters, said Davis did not respond in writing after being served notice about the lawsuit. Friedman said he now intends to ask the court to schedule a default hearing where he plans to ask the judge to issue a summary judgement on behalf of his client.

"He collected rents and never turned it over for six residential properties," Friedman said.

BUSINESS DISSOLUTION PAPERWORK

Court records on file with the Niagara County Clerk's Office show Dr. Shad, a physician with Roswell Cancer Institute who was identified as co-owner of business named Power City, LLC, took legal action last June to dissolve his partnership in the company with Davis.

In his formal request to sever business ties, Shad indicates that two men "reached an impasse" regarding operations while indicating that Davis has "controlled the business operations" and would not cooperate "in the process of winding up its business affairs."

Records obtained by the Niagara Gazette show Shad identified Power City's "primary asset" as an apartment building located at 320 Cedar Ave. In his court filing, Shad described the property as being "in such a state of disrepair as to render it uninhabitable" and as "suffering from ongoing vandalism."

An order in the case signed in December by New York State Supreme Court Justice Frank Caruso notes that the court previously ordered Davis to pay Shad $158,000 by Nov. 10 as part of the resolution of the matter.

Harrington, the attorney from West Seneca who represents Shad, said the court has now appointed a referee to oversee the ongoing legal matter.

According to Harrington, Dr. Shad invested about $160,000 with Davis on what was supposed to be the renovation of 320 Cedar Ave. as a rental property. To date, Harrington said, Davis "hasn't done a darn thing" and "there's no explanation" as to where those funds went.

"I can't even figure out what he was doing," she said.

Harrington said her client had no knowledge of Davis' $2.5 million housing renovation plans with the city, adding that while her client was in investor in Power City, LLC he is not an investor with Power City Ventures, LLC.

Harrington said she found it "kind of alarming" that the city or state would give Davis funds of any kind.

"Nobody should give him any money because I haven't seen him do a stitch of work," she said.

WHY POWER CITY VENTURES?

So how did Power City Ventures, LLC end up becoming a partner with the city on a $2.5 million project that includes the potential for up to $1 million in reimbursement in state grant funds?

State officials said the recommendation came from the city through Mayor Robert Restaino's administration, which submitted the necessary paperwork to position the housing project to be eligible for Restore New York funds.

They also noted that Restore New York grants are doled out as reimbursements, meaning in order to qualify for any of the state funding Davis would first have to prove that he actually performed the rehabilitation work. Under program guidelines, all grant funds would be transferred to the developer from the city after reimbursement has been approved by the state.

As of press time, Restaino's office did not respond to requests for comment.

Since the announcement about the housing rehabilitation project, Councilman Donta Myles said he has received information from constituents who encouraged him to take a closer look at the past business dealings of Davis and his various companies.

Myles said he intends to discuss the matter during tonight's council meeting and, under the circumstances, believes it would be in the city's best interest to take another look at the project and the preferred developer.

"It definitely needs reconsideration," Myles said.