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Senior housing and apartment development firm to face racial discrimination lawsuits

Jerry Zremski May 7, 2023

Updated May 11, 2023

Clover Group, a real estate development firm headquartered in Lancaster, is about to get hit with two federal lawsuits that accuse the firm of deciding where to build senior housing on the basis of race.

According to a legal complaint expected to be filed this week in federal court in Buffalo, a former executive at Clover Group's local headquarters charges that, as a matter of policy, the company avoids building senior housing in neighborhoods where the Black population exceeds 20%. Another former Clover employee who was based in North Carolina told The Buffalo News that he plans to file a similar lawsuit

Housing Opportunities Made Equal (HOME) has announced on its Facebook page that it has joined with six other fair housing organizations across four states in filing a federal lawsuit against Clover Group, a real estate company headquartered in Williamsville.

A 24-page legal complaint to be filed this week by Peter C. Rizzo, the firm's former director of development, does not accuse Michael Joseph, president of Clover, of personally espousing racist views. But Rizzo said he witnessed other Clover executives openly acknowledging the company's racist housing policies.

"Clover Entities’ executives and employees referred to Black people by the derogatory term, 'Canadians,' " according to the lawsuit. "Clover Entities’ executives referred to the unwritten site selection criteria concerning the percentage of Black people living within both a three-mile radius and a five-mile radius of a prospective development site as the 'Canadian Factor,' and regularly rejected development of prospective sites when the reported Black population percentages were at or near 20 percent."

In a statement, Clover denied those charges.

"I think that my dad would most definitely happily give up his life to bring light to a dangerous situation and save somebody else's life," the daughter of one of the accident victims said.

“Peter Rizzo, an angry and disgruntled former employee, has made meritless, baseless, and misleading allegations," the statement said. "Clover does not make business decisions on the basis of any unlawful criteria. The company intends to defend itself vigorously."

In doing so, it may well have to fight allegations against Richard A. Greenspan, the vice president of Clover. In Rizzo's lawsuit, Greenspan emerges as the key figure accused of enforcing a race-based policy Clover is accused of using to evaluate potential new sites for market-rate senior apartments.

Greenspan referred to Black people as "Canadians," as well as a racist Yiddish term, and told Rizzo that Clover would not develop projects in what Greenspan called "heavily Black areas," Rizzo claims in the lawsuit.

Neither Greenspan nor Joseph returned messages for comment.

"The Canadian factor"

Rizzo arrived at Clover in August having just weathered big trouble in his former government job. He was one of two Department of Veterans Affairs executives who fought for safety improvements at the new Western New York National Cemetery, only to see his suggestions dismissed and to see himself removed from the project.

Read the full story here.

Two veterans died in a crash at that intersection, but Rizzo was later partially vindicated when the state and the VA agreed to make modest safety improvements there.

For Rizzo, though, it was time to move on to the private sector. In August, he joined Clover, which says on its website that since 1989 it has developed $1.5 billion in affordable senior housing not just in metro Buffalo, but also in seven other states.

One of Rizzo's duties was to find promising sites for new Clover apartment complexes. In doing so, he said in the lawsuit, he discovered that the company collects racial demographic data on such proposed sites and rejects proposals in areas with significant Black populations.

Recordings of internal conversations between Rizzo and other Clover executives, which were obtained by The Buffalo News and quoted in the lawsuit, show Greenspan and other Clover executives using the term "Canadians" to describe Black people when discussing potential sites for senior housing.

The two federal employees who pushed for a safe redesign of the intersection near Western New York's new veterans cemetery are now in what one supporter described as "professional purgatory."

For example, one Clover executive is heard on an audio recording discussing a potential Clover development near East St. Louis, Ill., which has a population in which 96.2% of the people are Black, according to census figures.

"There are a ton of Canadians, if I'm using the term correctly, immediately to the west in East St. Louis," the Clover executive says in the recording.

Shortly thereafter, Rizzo asks his then-colleagues: "What is it about the quote 'Canadian factor' that drives kind of our decisions and where we're going? How does it affect our business?"

Robert Jack, executive vice president for development at Clover Entities, then replies: "Man, that's an uncomfortable question."

That conversation took place Jan. 4.

James R. Metcalfe II, the director of the Western New York National Cemetery in Pembroke, has filed a civil suit, accusing the VA and its leaders of discrimination and retaliation that stripped away many of his responsibilities.

Jack terminated Rizzo three weeks and two days later, saying, according to the lawsuit: "The financial situation of Clover is not good."

But Rizzo's court complaint claims that his dismissal was "a blatant and illegal act of retaliation." He is seeking $15 million in damages and a jury finding that Clover broke both state and federal fair housing laws.

In response, Clover said in its statement: “We believe that these allegations constitute a malicious effort by Mr. Rizzo to defame and disparage the company and its management in order to garner an unwarranted monetary payment."

According to the Wayback Machine web archive, Clover added a diversity, equity and inclusion mission statement on its website March 6.

"One of the core tenets of Clover’s mission is the company’s commitment to building in all communities that fit our 55+ age demographic," the statement says. "This commitment is not a new initiative for Clover, but we continue forward in this work with a more deliberate focus. We believe in providing housing to all people, representing all forms of diversity."

A growing presence

While the Clover name isn't as well-known as that of some other Buffalo-area developers, the company has been a growing presence in the region and elsewhere for three decades. And Joseph, the company's founder, has grown in influence, along with his company.

Clover owns 11 senior housing complexes in the Buffalo area, stretching from the Transit Pointe Senior Apartments in East Amherst to the South Pointe Senior Apartments in Hamburg.

Joseph has remained a prominent figure in the Buffalo community, even after he and his wife purchased a $15.9 million mansion in West Palm Beach, Fla., in 2021.

Joseph serves as chairman of the board at Roswell Park Comprehensive Cancer Center, a position he has held at least as far back as 2013. He serves on the board of the Buffalo AKG Art Museum, also sitting on the AK360 project committee that led the transformation of Buffalo's leading art museum. He has donated large sums to Gov. Kathy Hochul, Erie County Executive Mark C. Poloncarz and other prominent politicians, most of them Democrats.

He chaired Poloncarz's transition team after the Democrat won his first race for Erie County executive in 2011.

According to state records, Joseph, his wife, Roberta, and Clover have given a total of $380,410 to state and local politicians in New York since 2000. Nearly half of that money went to Andrew M. Cuomo, a Democrat who served as governor from 2011 until August 2021, but $55,000 went to Hochul, some of it when she was lieutenant governor and some after she succeeded Cuomo. The Josephs also gave $25,000 to George Pataki, a Republican who served as governor from 1995 to 2007.

The Josephs also donated $127,775 to federal politicians since 2000, with former Democratic presidential nominee Hillary Clinton, now-Senate Majority Leader Charles E. Schumer and Rep. Brian Higgins of Buffalo among their major recipients.

Under the agreement, Clover will spend $6.3 million to improve handicapped accessibility at the senior housing properties, located across the Northeast and Midwest.

Prior – and future – trouble?

Even as Michael Joseph built his company, a sign of trouble emerged last year.

In August, Clover agreed to pay $7.1 million to settle a lawsuit brought by Buffalo's Housing Opportunities Made Equal (HOME) and other fair-housing organizations in New York, Pennsylvania, Ohio, Indiana, Kentucky and Missouri. Those organization charged that Clover operated housing that was not accessible for the disabled. In the settlement, Clover agreed to pay for millions of dollars in renovations.

“It was something we just decided to settle, rather than litigate,” Joseph told The Buffalo News at the time. “We did what we thought made sense.”

Clover soon could face the same question – settle or litigate – as the company faces Rizzo's lawsuit and another one expected to be filed by Shane Forrest, a former Clover development director in North Carolina. Forrest told The News on Friday that he, too, plans to file a lawsuit against Clover. Like Rizzo, Forrest claims he was terminated without just cause, and that he, too, heard Clover executives refer to Black people as "Canadians" during meetings at Clover's Buffalo-area headquarters.

"I have heard that term used, yes," by Greenspan and other Clover executives, Forrest said.

Like Rizzo, Forrest said he proposed locations for new Clover apartment developments, only to be turned down "based on their (racial) profile and internal requirements."

If Clover did that, it could be a violation of both federal and state law. Passed in 1968, the federal Fair Housing Act bars housing discrimination on the basis of race and charges the Department of Housing and Urban Development with enforcing the law by bringing civil charges. New York's Civil Rights Law also bars housing discrimination.

Told of Rizzo's and Forrest's expected lawsuits, Clover declined to provide any more details of what the company's response will be.

"Because this is an anticipated litigation that has not yet been commenced in court, prudence requires us to not make any further statement at this time,” the statement said.

In a recorded conversation in which Rizzo challenged Clover executives to define the "Canadian factor," the company's land acquisition manager, Russell Caplin, appears to acknowledge that the policy could cause the company problems in court.

"Let's just all hope we never get deposed on that," he says.

News staff reporter Stephen T. Watson contributed to this report.

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