Council debates Erie Basin Marina RFQ after audits flag missing rent and weak controls

Buffalo’s Common Council finance committee on Thursday heard a contentious presentation on a proposed operator agreement for Erie Basin Marina after the comptroller’s office and city auditor detailed years of outstanding audit recommendations and apparent contract compliance failures.

Deputy comptroller and audit staff told the committee the marina’s prior operator generated roughly $10 million in revenue over the last decade while the city received little or no rent for several seasons, that contract monitoring was inconsistent and that multiple audit recommendations remain unimplemented. "We have outstanding audit recommendations," City Auditor Sam Bruno said, and he described a 2014 contract that expired in 2024 with operators continuing to run the marina without a competitive, documented agreement for multiple seasons.

DPW Commissioner Nolan Skipper and the proposed operator, Marina Management Group, responded with a programmatic vision and a draft contract that would direct a growing share of net revenue into an escrow account for marina and upland (pedestrian) improvements. Commissioner Jessica Brown summarized the financial terms in the draft: year 1 contributions of 20% of net revenue (split 10% marina/10% upland), year 2 at 25% (15%/10%), and year 3 and beyond at 30% (20%/10%). The draft sets a nominal guaranteed rent of $1 per year while directing the escrowed net revenues to capital and operational improvements, requires an agreed‑upon procedure or similar review of the operator’s financials (paid for by the operator and approved by the budget office), and includes an immediate termination clause for failure to provide financial information.

Auditors and several council members pushed back on relying on "net revenue" calculations produced by the operator, arguing that a percentage of gross receipts or a fixed rent would better protect the city against misreported expenses. "We have to rely on the operator's financials," the city auditor said, adding that without strong internal control policies the city risks repeating past losses. The comptroller's office recommended separating marina operations and restaurant services into distinct solicitations and insisted that DPW provide documented internal control policies and contract‑management procedures before awarding a new multi‑service contract.

The proposed vendor leaders, John Nash (Marina Management Group) and restaurateur Jason Davidson, described infrastructure needs (docks, electrical, pump‑out) and community‑facing programming, projected initial slip revenue under current rates at several hundred thousand dollars and estimated hospitality sales could reach $1 million in a few years. The vendor pledged initial private investment (the operator estimated about $100,000) and said future capital improvements would be funded from the escrowed net revenues with DPW approval.

Council members asked for clear MWBE hiring and procurement plans, a written budget and projection of anticipated revenues and capital costs, and a process for monitoring compliance and monthly reporting. Several members and audit staff urged a joint meeting of administration, comptroller and interested council members to resolve procurement and control questions before final approval.

After discussion, the committee closed the item "without recommendation" to allow follow‑up between council staff, the comptroller's office and the administration; no final contract award was approved at the meeting.