Monday, July 17, 2017

The Aud: Still Using Your Money . . .

Saturday's OD celebrated "Multimillion dollar Aud renovations adding suites, boxes, restrooms." It is good to see the Aud brought up to current standards. We can be excited by its modern design and amenities and take pride in having a facility that competes with the best of them in the American Hockey League (AHL).  But there are still some troubling aspects to this deal that we need to think about.

First, it was disappointing that the construction started with no renderings in the media (until now), no public outreach, and little opportunity for public engagement and involvement over the 3+ years the project was being considered (see Aud Authority Minutes).  The Aud is, after all, (1) a building paid for by the Utica taxpayers, (2) an engineering landmark with its cable-suspended roof, and (3) involuntarily subsidized by the customers of the Mohawk Valley Water Authority (MVWA) to the tune of $732,000 annually as a matter of state law with mandated increases into the 2030s.  Reports by Aud Authority accountants make clear that the Aud cannot survive without this subsidy.

Second, luxury suites may be a staple of the AHL, but they seem out of touch for an area that has been in decline, bears some of the highest levels of taxation in the country, and where water-users have no choice but to pay for this.   Like the County's luxurious terminal at Griffiss for the owners of private planes that taxpayers are paying for, it seems that average Joes and Janes are expected to pay for the accouterments of our local elite.

Third, when we were lucky enough to get information on the financing of the project, we were not given the full story.  The OD reported the project as being "helped" by a $5.5M County bond plus a state grant. The Sentinel reported that
The county executive explained it is cheaper for the county to borrow the money than if the Aud obtains the funding on its own. Payments to the county by the Aud will cover the debt service, he said.
We are left with the impression that the County got involved to save the Aud money. We are not told that the Aud Authority has a limitation on bonded indebtedness of no more than $2,000,000 which this project will easily exceed.  So the County is assisting the Aud in exceeding its debt limit! To make matters worse, official documents on the subject seem to be written to conceal this fact.

Read the Board of Legislators' resolution authorizing the bond and County Executive's cover letter (at left). The letter makes one believe that the project is needed to meet building codes and that the suites, etc. are just thrown in as extras. The debt limitation isn't mentioned. The resolution does not mention payments from the Aud Authority at all, but instead speaks of an annual assessment on "lots and parcels of land within said District" without ever identifying the lots, parcels or "District."  Is this just poor draftsmanship, or concealment?

Fourth, the Aud Authority's contracting day-to-day management functions to people who also USE the facility may have allowed a conflict-of-interest. 

It seems that we have created a local government structure which responds more to special interests than to the average person.

Sunday, July 02, 2017


No doubt NYSDOT will claim that we experienced an "unprecedented" storm event to excuse the flood-FAIL near the newly opened Court St. interchange yesterday where cars were literally abandoned in 4' of water and people had to be rescued with ladders. Maybe the storm event WAS unprecedented. . .

But FAILURE IS NOT AN OPTION when you are talking about THE main N-S traffic artery in Utica. 

Those poor people in cars on the Arterial entered a flood zone and were TRAPPED there. They could not turn around against oncoming traffic, access to the lanes going in the opposite direction was blocked by a Jersey Barrier, and cross-streets had been cut off.

The City of Utica and its Common Council is as much to blame as the State. Only worried about securing the $63M project, they allowed the State to further disrupt Utica's street grid -- a grid with built-in redundancies so that when one street is blocked for whatever reason you can simply go over a block to use the next one.

Luckily no one died this time.

Time for the State to stop ignoring the negative impacts its projects have on City Streets. (Your proposed 5-S remake is a bunch of the same garbage, NYSDOT!)

Time for the City to stop worrying about losing the $$$ value of State projects, and to start defending its street system, and the interests of its residents and businesses. (Allowing the cut-off of streets crossing 5-S further damages the grid and makes businesses that much harder to get to).

City and State need to stop operating as if they are in separate silos. 

Thursday, June 29, 2017

Don't Be Misled!

It has been a burning contention of  some "Downtown Hospital" proponents that the proposed new hospital MUST be in Utica or even in Downtown Utica or the area would lose the $300M grant from the State.

Don't be misled!

Here is the relevant portion of the actual legislation with the operative words put in red-bold:


Don't be confused by the words "located in the largest population center in Oneida County."  Apply a little common sense  (and maybe a common rule of statutory construction).

"Expressio unius est exclusio alterius" or "expression of one thing is the exclusion of another." Every word of a law is presumed to have been used for a purpose and every word excluded from a law is presumed to have been excluded for a purpose.

The legislature was geographically specific when it referred to "Oneida County," so if it wanted to limit sites to "Downtown Utica" or the "City of Utica," it would have said so. Since it did not, the legislature clearly intended to NOT limit sites to Downtown Utica or Utica. The legislature did, however, intend to limit sites to "the largest population center in Oneida County" as opposed to all other population centers.

Imagine that you have a large map of Oneida County and a bunch of push-pins.  You stick a pin in the map where each person in the county lives (about 230,000 pins!).  You would notice several groupings of pins -- population centers -- and that the largest grouping would be over southeastern Oneida County.  THAT GROUPING represents the "largest population center of the county."   With about 60,000 pins in Utica; 20,000 in New Hartford; 20,000 in Whitestown; 10,000 each in Marcy and Deerfield; and none to the east of Utica (because that would be off the map), if you were to pick out the middle of that grouping it would probably fall somewhere just west of Utica . . . perhaps near the St. Luke's Hospital Campus!

If anyone wants to actually do this map exercise to determine the middle of the largest population center, be my guest and send me a picture of it!  The simple point I want to make is that the location specified in the law includes the St. Luke's Campus and that the Campus is convenient to everyone in the area. 

So, if a public or hospital official or anyone else tries to tell you that the grant will be lost if the hospital is not located in Downtown Utica, you now know better.  They are either deliberately trying to mislead you to achieve purposes outside the scope of the legislation or they themselves have been mislead.   The purpose is neither "economic development," nor "blight removal," nor "Downtown revival," nor "infrastructure repair," nor any other "purpose" that could be remotely claimed to justify tapping into the tempting big pot of money, but, rather, "strengthening and protecting continued access to health care services in communities."  

One group that appears NOT to have been misled is the MVHS Board.  They had the presence of mind to designate the St. Luke's Campus as their "backup" should the Downtown site prove infeasible -- an acknowledgment, as the applicant for the funds, that the St. Luke's Campus both qualifies under the law and meets their needs.

Once the true costs of the Downtown site become known (site acquisition; condemnation/legal proceedings; historical/environmental/archeological studies; asbestos removal and other remediation; water/sewer line replacement; designing and constructing a facility within the architectural/historical context of Utica; etc.) and are compared with the practically shovel-ready St. Luke's site, it should be concluded that choosing the St. Luke's site would produce more healthcare "bang for the buck" and best promote the purposes of the state's legislation.

MVHS is urged to obtain an estimate of the true costs of the Downtown site ASAP before proceeding further, and to obtain it from a contractor having no connection with EDGE, the project, or anyone else from the region who may have something to gain from placing the project downtown.   

Wednesday, June 28, 2017

Economic Nonsense and Keeping Up Appearances

On Monday "No Hospital Downtown" and "Better Utica Downtown" sponsored a symposium called "Battle for Our City" which featured the presentations of two planners from Strong Towns and Urban3 [video links will be posted if they become available].  Too bad only one elected official (Mike Galime) out of dozens of our area officials saw fit to attend. 

From the County Executive, Mayor, Assemblyman and Senator on down, they passed on a golden opportunity to learn something about economic development and economic reality from nationally renowned experts.  

Per WKTV, Mr. Picente wasn't interested, stating:
"Mohawk Valley Health System made a decision on the location of a new hospital in conjunction with the state, county and city, and I have always supported that decision. While I respect the opinion of others and their right to oppose that decision, the point of debating its location has passed. All of this energy would be better spent working together so that we can see a new hospital and new development in downtown Utica."
The fact there was never a point when the public was allowed to debate the hospital's location (even though the public will have to live with that decision for the next 60 years) is concerning enough. However,  after seeing the presentations, it became abundantly clear that to proceed on this and other "silver bullet" projects (like the "U-District" and Harbor Point) in ignorance of strategic pieces of information would recklessly expose the City of  Utica and its taxpayers to a risk of financial harm. Simultaneously, the lack of this information denies Utica, its taxpayers, and entrepreneurs opportunities of significant returns for modest investments.

Through a series of examples using actual data from cities across the continent, including Syracuse and Rome, the planners demonstrated that large-scale economic development projects often leave their communities in worse shape financially because the revenues from the new projects may not cover the costs of the projects or their maintenance. They also demonstrated through calculating taxable value and jobs on a per-acre basis that "poor" or even "blighted" areas of communities often have more value than areas of booming new development because they produce more revenue than they consume. This hidden value can be multiplied many fold by encouraging more private investment with things as cheap as new sidewalks, lighting, and street trees. For example, on a per acre basis, Armory Square is much more valuable than Destiny USA, which has extensive non-productive parking lots.  

Regarding the Downtown Hospital (but applicable to other projects, too) the planners urged decision-makers to ask "Where is the model?" and to "do the math."

So far Downtown Hospital proponents from MVHS, to political officials, to EDGE and various consultants have shown the public NO model with real numbers to demonstrate that placing a hospital downtown will generate a positive economic return for the City of Utica.  Like the now decaying "urban renewal" projects that traded hundreds of  old revenue-generating going businesses for new revenue-consuming public buildings and subsidized housing, the public is given only the appearance of a positive outcome while actually suffering negative economic consequences.

What we do know about the Downtown Hospital is that about 40 going businesses will be taken. These are not just any businesses but Proven Winners because they beat the 1-in-5 odds of surviving 5 years to actually last decades -- businesses who pay their taxes and provide jobs -- businesses which should be cherished, not pushed aside, in spite of their modest appearance,  because they produce a positive economic return for the city. Based upon the numbers of what happened in Rome when land was taken for the "Fort" and "Living Bridge" projects, Utica would be lucky if even 4 of these businesses remain in town following the project. Their property taxes, sales taxes, jobs and income will be forever lost to the local economy and replaced with a decrease in hospital jobs (because hospitals are consolidating) and virtually ZERO taxable value and revenue (because the hospital is tax exempt). Utica will give up in perpetuity the chance of ever generating revenue over the entire 34 acres to be taken. Utica taxpayers will be particularly hard hit because Utica will be responsible for police and fire protection of an additional hospital campus (because the others aren't going to disappear overnight). With no plans for the two campuses to be left behind, the potential for long-term blight (like that experienced at the CNY Psychiatric site on York St. after most of its facilities were closed) will be visited on two good neighborhoods. There is already talk about saddling taxpayers with a $41 Million parking garage. You can be sure that when ancient water lines, sanitary and storm sewers prove to be inadequate, the costs of improvements will be passed on to the local rate-payers in the form of higher water bills.

Meanwhile, MVHS' 64-acre St. Luke's Campus has plenty of room for the New Hospital and is served by major 4-lane traffic arteries, a new co-generation facility, and relatively new water and sewer lines. Parking is already on site and would only have to be incrementally augmented. No businesses would be taken, no revenue would be lost to local government, no private jobs would be lost, and one less site would be abandoned to potential blight. Since the site is already owned by MVHS and nearly shovel-ready for expansion, more money from the state's $300M gift can go toward a better hospital and equipment. The need for taxpayers or rate-payers to kick in extra money to improve public infrastructure will be virtually eliminated.  Furthermore, the St. Luke's site has already been approved by the MVHS board as its "backup," eliminating the argument that the site does not meet MVHS' needs.

Simply put, placing the New Hospital Downtown as opposed to St. Luke's campus makes no economic sense.  It buys less healthcare, while putting Utica at risk.  

Where are the economic models for the "U-District" and Harbor Point? Uticans are presented with pictures of dazzling buildings and promises of attracting tourists, but what will Uticans pay? Pay to build, pay to maintain, pay to protect? And what will they receive in return? Will revenues cover costs?   Where is the math?  The fact that these projects do not happen without the public risking substantial funds suggests that maybe the math does not work. If private ventures have only a one in five chance of  financial success, why should we expect that government officials can do better? Maybe it would be better to leave the "U-District" and Harbor Point as is, undeveloped, and wait for development to come the old-fashioned way -- the way Utica was originally built -- the way Utica became wealthy at one time: through trial-and-error efforts by entrepreneurs risking their own money. They are already doing it in Baggs Square, and are prepared to do it within the Downtown Hospital footprint.

The Downtown Hospital, U-District, and Harbor Point -- like the old Urban Renewal Project #1 -- are more about keeping up appearances than real economic development.    

Monday, June 19, 2017

vs. Downtown Hospital: Grassroots Mobilization!

Per WIBX: "No Hospital Downtown Group To Hold Event On June 26th"
The group opposed to putting a hospital in downtown Utica will be holding a day-long event next Monday, June 26th. It’s being called “Battle For Our City” and will include public two sessions at the Radisson Hotel from 9:00 to 11:00 and 2:00 to 4:00. Two internationally acclaimed urban planners from Urban 3 and Strong Towns will share their knowledge of city and neighborhood development.
In addition, the Landmarks Society will be conducting "Walks and Talks" in the Columbia-Lafayette Neighborhood (the site of the proposed hospital) at 6PM.

There is also another group that holds regular open meetings on the topic of improving the Columbia-Lafayette Neighborhood, BUD: Better Utica Downtown.

These developments are really something new for Utica.  Instead of complacently swallowing what politicians and our regional "elite" want to shove down the public's throat, the public is organizing itself and fighting what it knows is a bad idea.  And it is arming itself with professional help.

Welcome to the New Utica: being rebuilt by its people, one step at a time.

For the latest on this event and more, check out No Hospital Downtown, and BUD.

Wednesday, May 17, 2017

Bread and Circuses . . .

Or in Utica's case, beer and hockey.  Such thoughts went through my mind when I read about the County Executive's plans for the "U District."

The County Executive wants to turn Downtown Utica into a combination Theme Park and Hospital District -- a strange combination. Neither is compatible with the nacient private development currently transforming the Baggs Sq. W. and Varick St. neighborhoods nearby; and this proposal seems to provide government-sponsored competition for the latter. The proposal also creates lots of parking lots and more public spaces (and maybe even buildings) for the taxpayers to maintain. The CE offers no study to demonstrate that this project will be self sustaining. We the taxpayers have had millions of our dollars risked on crazy ideas from our politicians.

If these are such good ideas then the private sector would be taking on the risk. . . .

But the private sector won't take on risks when government taxes the heck out of it, seizes its property, and/or goes into competition with it.

Beer and hockey . . . or  "bread and circuses."  According to Wikipedia:
"Bread and circuses" (or bread and games; from Latin: panem et circenses) is metonymic for a superficial means of appeasement. In the case of politics, the phrase is used to describe the generation of public approval, not through exemplary or excellent public service or public policy, but through diversion; distraction; or the mere satisfaction of the immediate, shallow requirements of a populace,[1] as an offered "palliative". . .
Isn't this the perfect description of what is going on here? Local elected officials seek public approval not through exemplary or excellent public service or public policy, but through diversion, distraction, or the mere satisfaction of the immediate, shallow requirements of a populace.

Tuesday, April 18, 2017

The Anti-Utica Chamber of Anti-Commerce . . .

Long ago (but well within memory) Mayor Hanna called the local Chamber of Commerce the "Chamber of No-Commerce" because it seemed to do little to actually promote commerce. Said chamber went on to drop "Utica" from its name due to apparent distaste for the region's prime city -- only to have to reclaim the name "Utica" a decade later, realizing that without "Utica" no one could find the chamber on a map.

Today, the Greater Utica Chamber of Commerce (GUCC) again demonstrates its antipathy to both Utica and commerce by passing a resolution (left) filled with rah-rah political regional gobbledygook to support the Downtown Hospital concept.

While most people don't object to a wad of money being dropped on the region to build a new hospital, the problem comes in when "Downtown" is appended to the "hospital" concept.

Placing the hospital Downtown will require the taking of some 40 businesses -- businesses that provide jobs and businesses that pay both property and sales taxes.  It certainly is odd for a Chamber of Commerce to support a project that destroys jobs and tax base in a region where lack of jobs and high taxes are longstanding complaints.

Chambers of Commerce usually look out for the well-being of their members. Here, however, the only recognition GUCC gives to that responsibility is the statement ...
"Whereas, the Mohawk Valley Health System has assured our board of directors that our member businesses located within the new facility's footprint will receive fair market value for their properties . . .  
Big Deal! MVHS merely acknowledged its legal obligations, so inclusion of the acknowledgement in the resolution is a meaningless gesture.  As an organization of business people, GUCC knows full well that "fair market value for property" will not replace the "sweat equity" people have invested in their businesses -- which most likely will mean that people will simply discontinue their businesses.

In other words, far from lifting a finger to protect the investments of its business members, GUCC cheer leads their destruction.

Adding insult to injury, the GUCC is now supporting a concept that directly opposes the will of the people and businesses of Utica for a mixed-use, walk-able Downtown as codified in the duly enacted Utica Master Plan -- a Plan that took 3 years of community study as to what would "work" to revive Utica -- a Plan in which Chamber members participated -- and a Plan that the Chamber did little to implement.  The closures of portions of Lafayette and Cornelia Streets and dedication of 34 acres to a single use will ensure that the negative impacts of this project will be felt by businesses and Chamber members located blocks away, including those in the Brewery District and Baggs' Square.

GUCC has gone from being a Utica-hating do-nothing organization to one that is actually bent on destruction! It should rename itself:

The Anti-Utica Chamber of Anti-Commerce!

Monday, April 03, 2017

Destroying Value to Create an "Aura" . . .

Who is more dangerous to the taxpayers of Utica?  County Executive Picente? or Mayor Palmieri?  That was the thought that crossed my mind when I read the OD's  "Big plans near Utica Aud, but what about Insight House?" about how Insight House might be incompatible with their plans for a sports and entertainment district.

Here it seems that Mayor Palmieri thinks a baseball stadium in place of Insight House would be a better fit for the neighborhood in order to create an "aura of a large city appeal driving over 12 North, the Arterial, looking down" about the City of Utica.

So that's what this is all about . . . auras . . . illusions . . . smoke and mirrors . . . to make people think that things are better than they really are?

No, Insight House, a treatment center for chemical dependency, is probably not a good fit for a sports and entertainment district that will include a gambling casino. But will the value of an "aura" from a stadium on Route 12 (minus the expense to create the stadium and minus the negative impact to the existing stadium a couple miles south also on Route 12) outweigh the value that will be lost to the community if Insight House has to be uprooted and moved?

It took many years and many injections of taxpayer dollars through grants for Insight House to develop its current facility and capabilities.  Market value for that property will not cover the actual cost of duplicating the facility's capabilities elsewhere.  This means that a relocated Insight House will either have reduced capabilities, or more money will have to be invested to recreate them.  The difference between market value and actual cost is a value that will be lost to the community at large.  Do you think that the lost value is a fair price for an "aura?"

Whether it is the "Sports and Entertainment District," the Downtown Hospital, Griffiss "International" Airport, various EDGE projects, or the Utica Urban Renewal projects of old, values were, are being, or will be destroyed.  

The lost values from these projects never seem to get calculated. . . and what is actually gained seems elusive . . . like an "aura."

Tuesday, March 21, 2017

Can the GOP Congress Save Upstate NY?

In an indirect way, national healthcare reform may make this a possibility. 

Ever since the reapportionment of the State Senate circa 1970, which gave Downstate interests control of state government, most places in Upstate NY have seen their populations, job numbers, and economic well-being decline. Upstate NY counties have long dominated the top 25 slots of the most-taxed counties in the nation when property tax is calculated as a percentage of property value. Yet interestingly, on that same list, Kings (a/k/a Brooklyn) and New York (a/k/a Manhattan) Counties in New York City ranked in the mid-1500's (no that is not a typo) -- among the lowest in the nation.

The cost of Medicaid, a health insurance program for people of lower income or means, is shared by the Federal Government and the States. The States manage the programs and determine the levels of benefits. New York State, unlike most other states,  passes a portion of the cost of its share down to the Counties (an "unfunded mandate") who pass it along to their tax payers usually via property taxes. Medicaid has driven much of the high taxation Upstate.

Now, as part of the GOP plan to reform health insurance, it is proposed that NYS will be prevented from passing its costs on to localities outside of New York City.

In Oneida County, for example, the county's Medicaid costs account for more than 80 percent of the county's total tax levy. In Oswego County, Medicaid accounts for more than 44 percent of the tax levy.
In another article:
Medicaid is Onondaga County's most significant financial burden, accounting for 70 percent of the property tax levy -- one of the highest rates in the state.
While NYS has been generous in handing out Medicaid benefits, the method of financing these benefits has created harm to upstate localities but not to New York City (where real estate values are very high and there are many absentee foreign landowners.)  Since the NYC metro area controls the state legislature, it is unlikely the Medicaid burden will be lifted from Upstate without pressure from the Federal government.

The GOP healthcare reform, if it contains this provision, may be just what is needed to lift the Medicaid burden from local government and bring Upstate property taxes closer in line to those in other parts of the country with which we compete.  

If successful, Reps. Collins, Tenney, and other supporters of this provision would have contributed more to make Oneida County and Upstate NY more competitive with other parts of the country than perhaps all the local and state economic development efforts of the last 20 years combined.

Of course, there is much more to consider about healthcare reform than just this provision. Reform will require a careful weighing of the issues. As usual, partisanship will get in the way, and many will be tempted to dismiss the possibility of any reform. Per the OD:
Rep. Louise Slaughter, D-N.Y., called the GOP plan "a political sleight of hand" that seeks to buy GOP votes — and pay for tax cuts for the wealthy — at the expense of New Yorkers.
The Medicaid provision, however, would not be "tax cuts for the wealthy" because Upstate is poor compared to Downstate, and all this provision does is prevent the State from passing its share on to Upstate Counties.  At a potential $244 per Oneida County resident, (see Empire Center) savings could just be enough to to make Oneida County attractive to job creators.  Again, Medicaid and how it is funded is just one issue among many, but since this area has already sacrificed its economy at least in part for New York's generous Medicaid benefits, the issue of Medicaid funding vs jobs should not be dismissed as "political sleight of hand." 

The Big Question is whether the County Executive, Sen. Griffo, and Assemblymember Brindisi will get on board to support this Medicaid provision, since the state is unlikely to do it on its own. If so they will finally do something meaningful for area economic development, if only to make it an issue to be put on the State's agenda. 

Saturday, February 25, 2017

Stalling the "Economic Engine?"

Following Sunday's  Utica OD editorial touting the "Workforce Development Board," on Thursday Lawrence Gilroy and Dustin Swanger penned an editorial touting Gov. Cuomo's Regional Economic Councils (REDCs): "Guest View: Don't stall economic engine.
“The council used its knowledge of the region's strengths to develop long-term economic plans and create jobs. 
"These new efforts are working, and the success of REDCs is undeniable." (emphasis supplied)

If one defines “success” as spending billions of taxpayer dollars, then, I suppose, “the success of REDCs is undeniable.”

If success means creating an economic environment where businesses are self-sustaining and the numbers of good jobs and population are growing, the “success” of the program is highly debatable.

While our Mohawk Valley REDC seems to take credit for a drop in unemployment rate from 8.7% to 5.2% locally over the last 6 years (NYS Labor Dept Statistics show a drop in annual unemployment from 7.8% average in 2010 to about 5.3% in 2016 in the Utica-Rome MSA), will it also take credit for. . .

  • the drop in the Labor Force from 143,800 in 2010 to 131,083 in 2016 (a loss of almost 13,000 persons)?
  • the drop in the number of persons actually employed from 132,500 in 2010 to 124,667 in 2016 (a loss of almost 8,000 jobs)? 
  • the drop in population from 299,397 (census) to 295,600 in 2015 (estimate Bureau Economic Analysis, US Dept. Commerce) (or 299,281 in 2010 to 296,987 per  
  • the drop in US Metro area population ranking from 160 to 163?

Locally the economic engine is not just stalled, it is running backward!

When people and jobs stop moving from here to other parts of the country, then maybe people will believe claims of “success.”