Federal Lawsuit Accuses Buffalo Mayor of "Pay-to-Play" Scheme

June 7, 2011 Updated Jun 7, 2011 at 6:56 PM EDT

By John Borsa

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June 7, 2011 Updated Jun 7, 2011 at 6:56 PM EDT

BUFFALO, NY (WKBW) - A Cleveland developer has filed a $1 million lawsuit against Buffalo Mayor Byron Brown.

NRP Holdings accuses the mayor of corruption and racketeering stemming from the cancellation of a housing project.

Brown denied the allegations.

He said he canceled the rent-to-own housing project because it was a bad deal for the city and its residents.

"At the end of the day there were many things that I was uncomfortable with with the project," Brown said.

"But one thing that really stood out was a 30 year rent-to-own agreement with this project where they would have people renting houses for 30 years before they could become homeowners," he said.

Brown said he will "vigorously" defend himself against the lawsuit.

In court papers, NRP alleges that Mayor Brown orchestrated a pay-to-play scheme, ordering NRP to hire a friend and supporter in exchange for City Hall's approval of the project.

That friend is Richard Stenhouse of the Jeremiah Partnership, a community development organization.

NRP says it was told by the mayor to "make Stenhouse happy or the deal will not go through," according to court documents.

"This is a lawsuit from a Cleveland developer that is without merit," Brown said.

NRP was planning to build 50 housing units in the city's Colden Springs and Masten Park areas before the project was killed in March 2009.