I. Rome Sentinel a couple days ago:
Environmental review process begins on Utica hospital project
While the headline focuses on environmental review, the significance is what was actually done. MVHS applied to the Oneida County Local Development Corporation for financial assistance in the form of $175M of tax exempt bonding and mortgage recording tax abatement in the proposed Downtown Hospital Project. OCLDC unanimously accepted this application. BUT here is the OCLDC's mission statement from its website:
The mission of the Oneida County Local Development Corporation (OCLDC) is to assist in the enhancement and diversity of the economy of Oneida County by acting in support of projects in Oneida County that create and/or retain jobs and promote private sector investment utilizing the statutory powers of the Local Development Corporation as set forth under the provisions of the of the laws of the State of New York.Isn't the OCLDC Board aware that the hospital consolidation will result in a reduction of hospital jobs? Isn't the OCLDC Board aware that putting the hospital Downtown will destroy private sector jobs and destroy the value of private sector investments in the businesses that will be taken?
How could OCLDC have accepted MVHS' application given its mission statement? Ignorance? Corruption? Speculative information?
II. WKTV Yesterday:
MVHS Offers relocation assistance to downtown property owners
One Million Dollars sounds like a lot of money until you consider that it will be spread out over many entities. Using the article's number of businesses it will be about $40K each. If spread over all the entities that would be forced to move (although most will simply close) it would be closer to $25K per business. Does that still sound like a lot? How does the total amount MVHS proposes to assist these businesses compare with Mr. Perra's salary for only one year? Does $1M sound so generous now?
We see a lot of leaders in the group who fancy themselves as "economic development" experts -- much like we have elected state officials (including the governor) and various bureaucrats who profess that "economic development" is a priority. But do they really understand what is required to take a concept from an idea to a profit-making business that creates market value and can provide jobs for people?
Like private investors in the stock market, the State is learning the "hard way" (well hopefully it is learning) that merely spending money on what may seem like good ideas rarely produces the anticipated benefits -- as a little "cocktail-napkin" math will illustrate:
- The state has spent about $250 million on Utica Nano. Originally it was expected to produce around 750 jobs -- or around $333,000 per job.
- With the site finally in use by Danfoss, it is expected to produce around 350 jobs -- if that company's efforts prove successful -- or around $700,000 per job.
- The actual result so far, however, years after Utica Nano was announced, is about 13 jobs -- or about $19 MILLION PER JOB!
So far State expenditures on the Buffalo Billion project have produced a humongous solar panel plant tended to by a skeleton crew -- failure perhaps due to Chinese competition in the industry, but with the potential to turn around not due to NYS policies but with TRUMP's proposal to tax panel imports. $90M was spent on a lighting plant in Syracuse - zero jobs, and a $15M film industry "hub" also in the Syracuse area - zero jobs.
Simply put, there are too many variables to make valid predictions on what particular public "investments" will produce in jobs and economic benefits -- so, should the government even be involved in this?
The bigger question is should the government be involved in destroying "this" - i.e., destroying what we already have?
There is a community of businesses and not-for-profits in the footprint of the Downtown Hospital that will be destroyed (and we know they will be destroyed from all prior government projects that required businesses to "move" -- whether they be arterial projects, urban renewal projects, government office buildings, or Ft. Stanwix National Monument). When you take a business, you take not only all the personal investment and sweat put into the business by the business owners, but also that of all the trial-and-error efforts that came before at that location.
When you take the jobs associated with these businesses, what amount of NEW investment will be required to get EACH of them back? $333,000? $700,000? $19 MILLION? That kind of investing will be needed just to stay even.
What are the chances we will come out ahead?