Sunday, January 17, 2016

Auditorium Authority "Competition" for the Whitesboro St. Property ...

Per the OD: The Aud authority offers $500,000 for Whitesboro St. property.  The article reports that Utica now has two bidders vying for the same property with bids separated by a mere $10,000. While this competition for a piece of property in Downtown Utica suggests that Utica has turned a corner, the picture is not that simple.  Something about that dollar amount rang a bell . . .

$500,000 . . . Wasn't that the amount that the Aud Authority received every year from the Mohawk Valley Water Authority -- an amount which came out of our water billsCould the Aud Authority be using some of the money that we pay for water to bid on this piece of property?  

Such is the crazy world of New York State Public Authorities and Utica/Oneida County politics. When the City of Utica spun off its water system to the "regional" MVWA (actually TWO entities: a finance authority and a water board), as part of the same deal the ownership and control of the Aud was also spun off to a public authority, the Upper Mohawk Valley Memorial Auditorium Authority. Because the City of Utica had previously been using revenue from the water system to offset losses at the Aud, the practice was institutionalized as part of the law that created the water authority.  What was once $500,000/year paid to the Aud out of water revenue is now $665,500/year. See MVWA Report at page 107.  If you look at the Aud Authority's most recent Budget Report filed with the Public Authorities Reporting Information System, you will note that after state subsidies and grants and proceeds from the issuance of debt are excluded, the revenue from the water system is the Aud Authority's primary source of income, such revenue being substantially more than three times what the Aud Authority actually earns from its operations. (A more in-depth look at the Aud Authority's budget is available on their website).

At this point, the loss of control by the people actually footing the bills -- the captive customers of the MVWA -- should be noted.  Unlike the City Council which once ran both the water system and the Aud, members of these authorities are not subject to voter approval but, rather, are chosen through political connections.  Of the 7-member Auditorium Authority board, three are appointed by the Oneida County Executive (CE) and four are appointed by the Oneida County Board of Legislators -- of which most rubber stamp the recommendations of the CE and almost half "have no skin in the game" because they represent areas that have no MVWA customers. Is it any wonder that the OD quotes the CE stating that "we would look at that entire area as a possible sports and entertainment district . . .”  Why is the CE looking at this? When was planning for the City of Utica turned over to Oneida County? Just like the proposed Downtown hospital that came out of a politically-inspired and funded nowhere, the city's Master Plan saw no need to designate this area as a possible sports and entertainment district.  But I digress . . . Back to the "competition" for that piece of property on Whitesboro St.

The Aud Authority is unfair competition for potential private developers of the Whitesboro St. property.  
  •  Private developers will not be subsidized out of people's water bills.
  •  Private developers cannot issue tax-exempt bonds to raise money like the Aud Authority can.
  •  Private developers would have to pay property taxes or PILOTs.
  •  Private developers are unlikely to have the "inside track" with local decision-makers that the politically connected Aud board has.
For the same reasons, the Aud Authority and the entities associated with it are also unfair competition for nearby private businesses.

When Utica was in its heyday there were few publicly-owned entertainment venues.  Theaters, opera houses, etc., were privately owned. Large gatherings took place at the Armory on Culver Avenue -- a structure built for a military purpose. It was not until the late 1950s, when the Utica population was at its peak and industry was booming, that we thought we could afford to build the Aud for large events. . . And we did. But then the region went into decline.  Both Utica and Oneida County have each lost about 40,000 people from their peak populations.  We have also lost an air force base, most of our large industry, and the money that came from those operations.  While there is now hope for recovery, re-attainment of the population, wealth, and disposable income that we once had is many years off.   The public also now has the newly renovated and financially struggling Stanley to support.  Also, there is now competition for disposable income from Turning Stone (which operates free from many of the constraints applicable to private businesses). So while "hats are off" to the Aud management for making the beautiful new and nationally acclaimed changes to that venue, expansion of those facilities beyond the current footprint will likely come at the cost of private businesses that currently subsist on the region's limited disposable income. 

Lastly, an expansion of the Aud Authority's footprint is competition with City of Utica taxpayers.

Utica was gutted of hundreds of parcels of taxable property in the last half of the 20th Century by highway, government building, and urban renewal projects, supposedly to meet public needs.  That trend has continued into this century with 70+ parcels taken for the Arterial remake, parcels for the public bus terminal, and parcels for new county parking lots.  Waiting in the wings is another taking of up to 34 acres for the proposed Downtown hospital.  And now this sports/entertainment proposal?

How much tax exempt property should Utica taxpayers have to bear? 

Utica is already overburdened with almost a third of its properties tax-exempt, which leaves a tax rate for the remainder that discourages private investment in the city. Utica needs to "get to work" and put property back on the tax rolls to lower tax rates for everyone.  Exempting the Whitesboro St. property for more "bread and circuses" only makes it harder for Utica to do this, and undermines, rather than contributes to, Utica's long-term fiscal sustainability.


Anonymous said...

What is the contractual agreement between the Mohawk Valley Gardens and the Auditorium Authority? Where can we view this? Isn't it public information? It is public ally funded no?

Anonymous said...

As soon as I realized that Picente was involved in this project I knew that Utica taxpayers were in for a screw job. The guy just oozes sleaze.

Anonymous said...

The amount the MVWA "funds" the Aud Authority is almost $750,000