26-203 : Erie Basin Marina - Request for Qualifications (RFQ)

This agenda item concerns the Erie Basin Marina - Request for Qualifications (RFQ). The Comptroller's office has formally requested that the process for authorizing a new contract for the marina be put on hold until longstanding audit findings, compliance failures, and contract management deficiencies are resolved.

Key issues highlighted include:

• Significant Underpayment: Since 2014, the City of Buffalo has been significantly underpaid rent, with prior operators allegedly manipulating fees and expenses. Over a ten-year period, the operator generated approximately $10 million in revenue, while the City received only $930 in total rent and profit-sharing.
• Lack of Competitive Process: The Department of Public Works (DPW) failed to issue an RFP for nearly three years after the previous contract expired in April 2024. The operator continued to run the marina without a competitive process, a valid contract, or documented oversight.
• Financial Reporting Issues: No rent payments have been recorded for the 2023, 2024, or 2025 boating seasons. The operator also failed to submit audited financial statements, instead providing compiled statements with questionable expense allocations.
• Combined Contract Concerns: The current RFQ contemplates a single contract for both marina and restaurant operations, which the Comptroller believes limits competition and may allow the same operator to continue under a new name. Previous audits recommended separating these functions to maximize City revenue.
• Unimplemented Recommendations: Audits have repeatedly recommended that the City develop a comprehensive plan for the Marina and strengthen contract management and oversight, but these recommendations remain unimplemented.

The Comptroller urges that before any new operator is approved, DPW must submit documented internal controls, policies, and procedures for contract oversight and revenue verification. The item was referred to Finance and subsequently Tabled.