Wednesday, February 07, 2018

Downtown Hospital: Local Leaders Seriously Out of Touch With Reality . . .

There are a couple stories in the "out of touch with reality" category and they both relate to the proposed Downtown Hospital:

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?  

15 comments:

Chivas Dudley said...

Those businesses within the footprint are being offered ample time and money to move for the progress of the City and County. I am surprised they are even given any money. More than adequate space exists within the City for hem to establish a new business and some already have.

Anonymous said...

For better or worse, the new hospital will rise or fail in Utica's downtown. That has been decided by the political and medical community and it is far too late for public opinion to alter that decision.

Anonymous said...

There's a large behind the scenes push here to spend a bunch of other people's money.

After the emails revealed these people are full of themselves and calling everyone else idiots why aren't people asking for them to resign?

This may be the biggest play on UTica in some ways it has more repercussions than that fake nano deal these morons hatched.

Anonymous said...

Anonymous, resign? These are the same people the voters have elected time and time again. The EDGE has not changed in over 20 years. The people you expect to rise up just do not care. That is why change does not occur here.

Anonymous said...

Can we ask Picente how NANO is moving along? Or won't he talk about another one of his fails like the "International Airport" in Rome another bottomless pit of taxpayer money. A fiasco costing millions even though a commercial airliner hasn't touched down in Rome in over 20 years! Lol!

Are plans still in the works for Tony's "CraftvBeer Museum"? Maybe someone should tell Tony that the craft beer industry has peaked! But would it master?

Anonymous said...

If he hadn't said it publicly, people would have thought the craft beer museum idea was a spoof on museums. How many people would travel here or if here would care about the history of any kind of beer. The only way it would work is for the county to offer the Picente Special at the museum which would provide for unlimited free beer. The city could then make a ton of money transporting by Fire Department ambulance the fallen down drunks to the new hospital around the corner featuring a state of the art detox unit. City court could then impose a heavy fine on the drunks post hospital drying out. It's brilliant, a win, win, win situation.

Anonymous said...

Something this big, that will impact the City for perhaps the next hundred years or so, should be put up to a public referendum.

Anonymous said...

In Picente's way of thinking, because there's a few joints on Varick St. that offer craft beer people will flock to a museum to stare at, what? Beer tanks, kegs, memorabilia, beer bottles?

I guarantee that this beer museum will in a few short months turn into another white elephant. It's the most ridiculous idea to ever come out of the County Building!

Anonymous said...

In the pre EDGE days, the industrial development agency that issued bonds and tax incentives had strict guidelines regulating types of projects. The eligible projects were industrial and industrial commercial projects that provided incentives for the increase of primary jobs. Retail was not permitted since retail jobs are secondary and non profit projects were also ineligible. It appears that over the years, standards have been altered to include just about anything "new." But, if the conclusion is that a new hospital will in fact reduce overall permanent jobs, the bond agency is way out of line. Legislators should at least examine the application and the public ought to see it.

Anonymous said...

Any reading of current successes in the rebuilding of declining cities results in one common denominator, the success is found in creating new, private sector jobs and developments that result in a rebuilding of the city's tax base and population. Utica seems to be on course that is essentially backwards. Other than some new eating and drinking establishments, Utica's emphasis is on expanding tax exempt uses and lower level jobs that do not lend to either residential population growth or private sector job expansion. The hospital and other elements of discussed or planned projects such as a beer museum and municipal authority sports center are other examples of public expansion projects that do not lend to city goals which should be as said but worth repeating the expansion of residential occupancy, the expansion of high level private sector jobs and a resulting increase in the city's tax base, in other words, positive growth. Rather than take sides, or brand opponents to the city's current path as negative, city fathers of both the public and private sector ought to have a "real" discussion of goals and objectives while not being forced into decisions by the allure of public money thrown at projects.

Anonymous said...

There's no graft, or no show jobs for gweedo cousins in the private sector.

Anonymous said...

The ethnic name calling does not lend to anything positive. Eating well off of the public trough is not limited to Italian Americans. The larger point that whatever the impetus for the downtown project, it has become far from a medical project. Public monies are being used for urban renewal type activities not medical. A new hospital is part of a larger effort which will is involving government jobs and time, legal expenses, most likely court actions, demolition contracts, relocation of some activities and large new public debt among other activities that would not be present in a pure medical project for a hospital built on hospital land. I do agree that $300 million is an attractive pot that government interests swarm over to feast on.

Strikeslip said...

I agree, Anonymous 1116, ethnic name-calling does not lend to anything positive. However, Older folk in the Utica area have a long memory of the corruption that made Utica "famous" to the point where "Utica" became a dirty word. Italian-Americans were behind a lot of that. That's not a slur but a known fact that, unfortunately, reflected poorly on an entire ethnic group. Most had hoped that those activities were a thing of the past and Utica could move on. But when decisions are made behind closed doors that do not make sense (For healthcare, why remove the hospital to Downtown? For economic development, why destroy existing businesses that supply jobs and why destroy tax base?), and when the public has been entirely cut out of the process, some people will draw the conclusion that a new generation is playing the same games.

Anonymous said...

Strikeslip, you raise an extremely interesting topic that could make for a book. This site does not lend to an in-depth discussion of it. The main point of my scolding of the raising of the ethnic issue is that insider/elite control of government money and decision making is sure not limited to Italian Americans and that raising the issue of ethnicity advances nothing positive. Look at the Beltway and control of nearly $5 trillion. Decisions are made in circumstances that would even make East Utica Italians blush.

Strikeslip said...

Anonymous 730 you will get no argument from me on that point!