Grains of Salt (v53): Community Gridlock (Pt. 3)

Part 1 of this Grains of Salt series provided some history on the I-81 project and discussed Justice Gerard Neri's decision to prevent work on the viaduct but allow work on turning I-481 into I-81. 

Part 2  looked at the Micron project implications, even though that project didn't exist until long after planning for the viaduct removal had been done.

Today, some final thoughts.

Economic development considerations.

• What if the Destiny USA developers suddenly make a few billion on crypto and decide to build the whole Erie Canal/golf course/theme park thing? Would Neri or another judge require a new "anticipated population and traffic growth" study? 

• What about the new $85M aquarium project, and its promised half a million visitors? Should we postpone replacing the viaduct until we get a separate traffic study for that? 

• And if a currently unforeseen major project when the Micron projections are underway, would that trigger a complete stop and restart? Or, can the new project be a supplement to the supplemental EIS? And who owns that decision?

Legal questions. 

• What, if anything, will prevent some other aggrieved party from filing the next delaying lawsuit? 

• Are we soon going to see ads for this project based on the "abused by a priest?" or "did you drink the water at Camp Lejeune?" approach? I can see them now: 

Do you like speeding through the city of Syracuse on the I-81 viaduct?  Are you against having to get up earlier to get to work? Hate having to drive through Dewitt? Are you a fan of a giant viaduct soaring high above the city's streets?

If you answered yes to any of those questions, you might be an Aggrieved Party eligible to file a lawsuit to prevent the I-81 viaduct removal project from going forward! Call now!

It won't cost you a thing if we don't win!

• Let's say someone, with the benefit of 15 years of study and tens of thousands of public comments, determines that a tunnel would now be scientifically and economically feasible. Is that a valid reason for a new lawsuit and review?

• After review of the supplemental EIS, let's say Neri or someone else decides we need the Harriet Tubman skybridge viaduct. Will there then be a whole series of discussions on the best design for the skybridge? And if someone doesn't like the answer, can they sue to have the decision reconsidered?

• Who gets to decide who it gets named after? I mean, sure, Harriet Tubman is an icon, but what about Donald 'Nobody in the History of this Country Has Ever Known More about Infrastructure Than Me' Trump? He's an icon, too - can I sue to have it named after him, or maybe after Barack Obama? What's more iconic than being the first - and likely only - Black president in our country's history?

Helpful studies.

• Can we demand northern business corridor merchants commission a study to determine what would happen if they spent money advertising their businesses, instead of relying on free newspaper coverage and endless lawsuits? Where is the comprehensive marketing study on how exit ramp signage, billboards, TV/radio, print, and online ads could be used to help drive customers to these businesses, whether they use the grid and the original I-81 footprint north of the grid, new I-81, or a combo of I-81, I-690, and BR-81? 

• Can we demand those businesses provide detailed sales and occupancy data, including where the customers came from and the route they traveled, and have that independently audited? Let's be sure to look at pre- and post-pandemic data so we know whether they're really going to be impacted by the community grid. This should be required ahead of the NYSDOT doing a supplemental EIS.

• Similarly, can we demand comprehensive impact data from the eastern and southwestern suburbs?  Not just barstool stuff and fear-mongering, but actual data on the specific impacts? This, too, should be required ahead of any NYSDOT supplemental EIS.

If you're asking why anyone should be able to force private companies and suburban communities to provide this kind of data, here's a better question: why can private companies and suburban communities repeatedly force the state to spend our tax dollars jumping through their endless hoops? 

At what point does this end?

From what we've seen, it ends when there's a decision to stop the community grid, unnecessarily tear down dozens of buildings, and erect a massive viaduct that towers over the city. 

It ends when proposed development and investment in Syracuse - technology, housing, business, education, health, and more - are ground to a halt.

It ends only with a decision that defies the wishes of most residents who'd have to live with the monstrosity and those in the greater Syracuse area who cared enough to comment before the community grid decision was made.

It ends when the naysayers win.

One last thing about winning.

In 2018, Syracuse Mayor Ben Walsh gave his first State of the City address. Here's part of what he said about how we could all win with the I-81 project.

Instead of pitting our communities against each other, what if we stood together, unified, with a plan that creates wins for all of our communities? I believe the decision before us can and should be a source of deeper collaboration and a way to reconnect the economic interests of our City and our suburbs. 

Wouldn't it be great if that had actually happened? 

Grains of Salt (v53): Community Gridlock (Pt. 1)

Interstate 81 runs through the middle of downtown Syracuse on an elevated viaduct.  In 2017, the elevated portion of the highway reached the end of its useful life.

Before and after the viaduct's 'death date, ' multiple solutions have been considered, including fixing the highway until it falls down; putting up a wider viaduct that meets current safety standards; digging one or more tunnels; installing a below-grade highway; creating a street-level grid; some combination of those options; or something else we've not yet considered. 

Perhaps a blessing of unicorns should be an option?

Over the years, we've 'considered' this to death. My last post on the project was nearly four years ago when the state issued its final recommendation; here's an excerpt.

After months and months of fits and starts, including a call for a do-over from our Sonofa Gov Andrew Cuomo to consider a tunnel option, we now have the recommendation from the state, and they believe a community grid is the best option for the Central New York area. 

Since that recommendation was made, there's been no shortage of arguing and complaining, some of which has spilled over into the courts. The current suit was brought by a group called You Can Tear the Viaduct Out from Under My Cold Dead Car, You Sons of Bitches!  The group (its name is shortened to Renew 81 for All in court papers), is led by former Syracuse Police Chief Frank Fowler, County Legislator Charles Garland, and folks from the east, west, and north suburbs.  

The plaintiffs want a giant skybridge, much wider and higher than the current viaduct. This solution would preserve the northern business corridor - a partially-empty mall that gets much of its tourist traffic from Canada, and several hotels even further north of the viaduct than the mall.  Notably, the mall and the hotels would still be reachable using the same road we call I-81 today, which will be rebranded as Business Route 81.

The skybridge would also preserve life as it's known in the eastern and western suburbs, where I-81 isn't; provide an opportunity to name the bridge after a historical figure (Harriet Tubman is the current choice); and require tearing down some 40-odd buildings in Syracuse forcing businesses, social service organizations, and more to relocate, or close. 

The @SyracuseHistory Instagram account featured the buildings that would be sacrificed in Tubman's name. 

Last November, state Supreme Court Justice Gerard Neri halted all work on the project; in December, he allowed paperwork - but not physical work - to proceed pending a January hearing. This week, we got his ruling. According to reporting from Syracuse.com, 

Neri agreed with Renew 81 that the environmental review of the project was incomplete. Among other details, the (justice) said DOT must account for traffic that will come from Micron Technology’s planned chip fab in Clay, which is expected to bring a surge of population growth to the area. He also ordered the state to study the potential for new air pollution along the suburban route of Interstate 481 if the viaduct is removed and traffic diverts to 481.

His decision allows work on I-481 (adding lanes, updating on- and off-ramps, etc.), which makes up the early phases of the project, to continue. But before the viaduct can come down in a few years, WAER reported, Neri wants a supplemental EIS that includes future traffic projections to reflect Micron’s "anticipated population and traffic growth," air quality monitoring on I-481, and a final plan for stormwater runoff submitted before the viaduct is removed.  

In Part 2, I'll look at the possible impacts of Neri's decision. 

Quick Takes (v67): He Wants to Be The Gov?

Today was a day of celebration in my neck of the woods.

President Biden came to town, along with Senate Majority Leader Chuck Schumer and Senator Kirsten Gillibrand, and Governor Kathy Hochul.

They were all here, along with Onondaga County Executive Ryan McMahon, business and labor organizations, education folks, and other community leaders and invited guests, who joined Micron President and CEO Sanjay Mehrotra to celebrate the chip company's long-term, $100B investment in Onondaga County that will bring some 40,000 jobs to the area over the next two decades. 

Rep. Lee Zeldin (R- Crime Stoppers Fan Club) the guy who wants to be governor of our state, was in Syracuse to talk about crime (what else?) and was asked about the Micron project. Here's what he had to say about it.

I think the Micron deal tells you a story of where the business climate is right now in this state. See in other states, they have businesses coming to the state because of low taxes, the regulatory environment, state agencies are run with a very pro-business approach. The business climates in other states are so much better, businesses just move to the state. There’s no way to get Micron to come to New York for low taxes. There’s no way to get Micron to come to New York because of the great regulatory environment. They’re not coming here because the state agencies are run by this great pro-business culture. They’re not coming here because we have one of the best business climates in the country. 

You have to look at why they’re coming here, how we got here, what it took to get them here, because the fact that we’ve reached the point where we essentially have to bribe businesses to come to New York with billions of dollars of tax breaks, who won’t come here otherwise, I think highlights this state is heading in the wrong direction. Because we want other businesses to come to New York. 

And on what will happen if he's elected, he added

We’ll work with Micron. We’ll do whatever we can to improve the business climate in this state, but as far as bringing other businesses to this state, we really have to get much smarter with our mindset.

Perhaps Rep. Zeldin should get his head out of the daily NYC crime reports (he tweets them regularly), and pay attention to what's required to secure deals like this. The truth is, they don't just fall from the sky and land in someone's lap. It's not like the opening of a hot dog stand, for Pete's sake. 

If you don't believe me, listen to the people in central Texas, who fought long and hard for the Micron deal. 

LOCKHART, Texas — On Tuesday, Micron Technology announced a new investment worth up to $100 billion in Central New York. The company had forced a bargaining battle between Clay, New York, and Lockhart, Texas.

"It was billions in tax savings, both ad valorem and sales tax. It was billions in our rates for electric and water, so all of those combined made the billions of dollars," Caldwell County Judge Hoppy Haden said. "The art of dealmaking is knowing when to, you know, say, 'That's my best offer. It's my best and final.'" 

Haden led the team offering the multibillion-dollar incentive package for the Lockhart area. 

I guess we should be happy Zeldin will "work with Micron" if he's elected, but I can't help wondering what would have happened had he been the governor already. Would we be welcoming the company to New York, or would we be waving goodbye to the Micron opportunity as it passed us by on the way to Texas? (Speaking of waving goodbye to opportunity, here's what Rep. Zeldin had to say when NYC lost the Amazon HQ2 project to Virginia.)

As governor, would he have collaborated with everyone - folks from both sides of the aisle - to ensure passage of the legislation that helped bring this deal to NY? Who knows - but there is one thing we do know. 

He didn't vote for it. 

Meanwhile Back in Albany (v41)

Nathaniel Brooks/NY Times

We've finally come to the end of Andrew Cuomo's 2021 State of the State address, a four-day extravaganza (you can read Days One, Two and Three if you missed them). The last day focused on building a "new New York."  Here's the premise he put forth.

History teaches us that, when the private economy is lagging, the public sector can spur activity; when unemployment is high, the public sector can create jobs; and when interest rates are low, the public sector should invest; that only the public sector can build the common economic platform for growth, the foundation that all businesses rely on to prosper: our transportation system, our infrastructure, our broadband and our education.

It's a long-taught lesson, he said, but without focus on the "ancillary" benefits - a collective lifted spirit, a belief in the future, and how those inspire economic confidence and stimulus. FDR, Cuomo said, understood that, and the Sonofa Gov wants us to understand that, too. And, don't forget, FDR was a New Yorker, and New Yorkers understand big ideas, and build big things.

Our country has lost its ambition, he said. Other countries "developed around us," and built the cool stuff - the largest high-speed rail network (China), the longest tunnel (Europe) and even the Middle East is "turning barren desert into economic engines."

Once a world leader, this country lost the vision and political willpower to build boldly and bravely. We lost sight of the connection between today's construction and the prosperity of a thousand tomorrows. We chose to kick the can down the road - a road that was crumbling before our eyes. 

Here, though, we've got projects out the wazoo: terminals at airports, train station in Buffalo, bridges, a fully-connected east-west and north-south trail across the state, new waterfront development, cashless tolling on the Thruway, and more. In all, it's "the largest infrastructure program in the nation" and we're not done yet.

We're working on multiple projects in and around NYC: improving or building new terminals for buses and trains, and adding mass transit tracks; adding convention and exhibit capacity; freeing up building sites for commercial and residential development; expanding public spaces; and more, worth tens of billions in investment and 196,000 jobs.

And it not just in NYC; the vast area called 'upstate' is also getting a facelift. - Rochester, Buffalo, Albany, the Mohawk Valley, the North Country, the Southern Tier, and Central New York will be getting (or losing) roads, bridges, parks, educational facilities, medical facilities, sports and recreational facilities, environmental projects, and transit projects.

Altogether, including the new airports and roads and bridges and parks and housing in every corner of the state, and the visionary new redevelopment of the West Side of Manhattan, we are expanding our infrastructure plan to invest $306 billion in the future of New York. That's not just the largest infrastructure plan in New York history. It's the largest, most ambitious plan of any state in the nation.

It's exhausting just thinking about it, I have to say - but it does give me a bunch of new places to visit around the state if everything gets completed.

In closing, Cuomo went back to FDR, quoting from a fireside chat.

There is an element in the readjustment of our financial system more important than currency, more important than gold, and that is the confidence of the people. Confidence and courage are the essentials of success in carrying out our plan. You people must have faith. Let us unite in banishing fear. We have provided the machinery to restore our financial system; it is up to you to support and make it work.

And then, he talked about New Yorkers, and how we respond when times ae tough. In the telling of our resilience, he recited the first entry in a new Poetry theme, EmpireVerse, which I'll share later.     

The message in all four days? We're going to be fine. We're going to spend a ton of money, and get others to spend a ton of money, and we'll be a healthier, working, brighter and shinier New York when - not if - all of the plans come to fruition.      

Make it so, Number One.                   

TGIF 1/3/20

Friday? Already?

Here are a few folks who had either a good week or a bad week, in no particular order.

NY State Assembly Minority Leader Brian Kolb warned folks back in December about the dangers of drinking and driving. He was charged with doing just that on New Year's Eve, after crashing his state SUV when he missed a turn that would take him home. Kolb has resigned his leadership position, but will remain in office at least for now. He's also "seeking professional help in order to heal, learn, and fully address the challenges" he and his family are facing. This, folks, is a bad week personified.

Senate Majority Leader Mitch McConnell (R-White House) and Minority Leader Chuck Schumer (D-NY) are having a bad week - or, I should say, another bad week. Both spoke to an empty Senate chamber today, with the former saying

We are content to continue the ordinary business of the Senate while House Democrats continue to flounder. For now. If they ever muster the courage to stand behind their slapdash work product and transmit their articles to the Senate, it will then be time for the United States Senate to fulfill our founding purpose.

Not only that, but McConnell reminded posterity of Things Chuck Schumer Said back in the time of the Clinton impeachment.

He voted against the articles both in the House Judiciary Committee and on the House floor. And a major part of his Senate campaign that year - listen to this - was literally promising New Yorkers in advance that he would vote to acquit President Clinton.

I had to fact check that, I did - because any time Mitch McConnell is giddy about something, I go looking for confirmation. And, yes, I found it probably the same place McConnell did -- in this CNN article from last month, which includes some history on Schumer's comments. Among the best of them was this line from a debate with Alphonse D'Amato, his opponent in 1998.

Senator D'Amato is the only person in America with no opinion on the matter. He should tell New Yorkers where he stands because his past actions show we cannot trust him to do what is fair instead of doing what is partisan. How can we trust Senator D'Amato to do the right thing on impeachment when he doesn't tell us how he eels and when time and time again he doesn't tell us the truth?

And people think that social media is bad? Heck, just roll the tape from 20 years ago - easy peasy, especially since so many of our Senators and Representatives have been around way to long.

Who else had a noteworthy week?  NY's Sonofa Gov, Andrew Cuomo, who has been releasing proposals in advance of his State of the State address. I can't tell if he's having a good week or a bad week - so status quo here in my neck of the woods.

He's up to 20 or so proposals already, including one dealing with the craft beverage industry. That proposal include getting rid of some Prohibition-era laws that are still on the books, and it also addresses the Sale of Alcohol in Movie Theaters.

With increased competition and diversification of video creating and consumption methods, movie theaters faced with competition have been investing in upgrades and advancements to the movie-going experience. While these investments are attracting new audiences, they have increased operating costs with many theaters struggling to pay for these upgrades without additional sources of revenue.

Listen, if you're a business and you're trying to fight the competition by making upgrades you cannot afford, I wonder if you've got the best business plan... maybe a consultant would be helpful? Or a generous local banker? But there's no need for that, when we've got the Sonofa Gov.

Under the Governor's proposal, adults holding tickets to movies rated PG-13 or higher could purchase alcoholic beverages, provided only one drink could be sold to a customer at a time. This proposal will provide theater operators with additional revenues, assist in the economic development of downtowns, and provide New York craft producers with additional retail outlets. 

This one I have to read in more detail when it comes out, if only to see how sending people to movie theaters, most of which are located in malls and suburbs, is going to assist in the economic development of downtowns.

TGIF, everyone.

Quick Takes (v46): A Victory Lap?

There's MATH, the Andrew Yang tag for Make American Think Harder, and then there's math, the kind that says that getting 6% of something is just as good as getting 100% of the same thing., which is the kind of math Alexandria Ocasio-Cortez is proudly trying to sell us.

AOC is tweeting about a "victory lap" because Amazon, which is not building its 25,000-job second headquarters in Queens in part because of her efforts, is instead is adding 1,500 employees in leased space in Hudson Yards. In the article linked above, we learn that

"The giant online retailer said it has signed a new lease for 335,000 square feet on the city’s west side in the new Hudson Yards neighborhood, where it will have more than 1,500 employees,” The Wall Street Journal reported. "Amazon is taking the space without any of the special tax credits and other inducements the company had been offered to build a new headquarters in the Queens neighborhood of Long Island City, the company said."

That's right: 1,500 jobs instead of 25,000; leased space instead of new construction, and no incentives - well, none that we no of for Amazon anyway.

The developers of the Hudson Yards project, however, are getting nearly twice what Amazon would have had for their HQ2, according to this piece in the New York Times.

But with far less public attention, the city government has for more than a decade been funneling even more aid to Hudson Yards, a 28-acre complex of gleaming office buildings and luxury residential towers that is one of the nation's' biggest real estate projects in recent years. 

In all, the tax breaks and other government assistance for Hudson Yards have reached nearly $6 billion, according to public records and a recent analysis by the New School.

And Amazon may still be able to get some breaks here if they qualify for a "discretionary tax credit" that three other companies mentioned in the article are eligible for; the credits, if fully realized, would be worth over $40M for those companies alone.

Also happy about this bullet-dodging announcement? State Senator Michael Gianaris, the guy who was put on a team that could kill the Amazon project, and when they pulled out, was abruptly removed from the group. From a NY Times article yesterday here's what he said in a statement.

Amazon is coming to New York, just as they always planned. Fortunately, we dodged a $3B bullet by not agreeing to their subsidy shakedown earlier this year. 

Gianaris and AOC seem convinced that the $3B would have gone to Amazon whether they had created 1 job or 1 million jobs, but that doesn't jive with multiple published reports, including this one in the Rochester Democrat and Chronicle.

As part of the deal, New York state taxpayers will be on the hook for up to $1.525 billion should Amazon meet its 25,000-job pledge, pay an average salary of $150,000 and occupy at least 4 million square feet of space within the next 10 years, as promised. That number would increase to $1.7 billion if Amazon exceeds its goal and gets to 40,000 jobs by 2032.

The D&C report is consistent with the Agreement which shows the job creation incentives are entirely dependent on the jobs actually being created within the specified timeframes.

And yet, even today, AOC was tweeting something completely different. Take a look.

While we’re here, let’s clear up some GOP disinfo: - “It’s 1500 jobs vs 25,000”: The 25,000 jobs figure was a 10-20 year fantasy # from Amazon, not a promise or agreement. In exchange for that lack of commitment, they wanted billions of public $. Their Y1 jobs projection was 700.

Those subsidies are a "10-20 year fantasy" if Amazon doesn't deliver the jobs, as far as I can tell. And of course I'm not an expert on how to read these things, but the table in the agreement seems pretty clear. 

And I get that economic development deals are messy and that there are always opposing viewpoints on them. I get that I live upstate not in Queens or in Hudson Yards, and so wouldn't have felt the pain of the HQ2 deal, even though I would have felt the benefits. But as a New Yorker, I'd like to see politicians doing less patting themselves on the back for killing a deal the size of Amazon's HQ2, and see them be a little more honest in their communications. 

There'll be plenty of time for patting themselves on the back when, for example, they fix the corporate tax code so that companies like Amazon don't get to pay $0 in federal taxes. 

Just a thought.

The Update Desk: Vending Machine Tax Breaks (Again)

Time for another update on the section 485-a tax exemption New York State offers to developers of historic buildings.

That's the one that's designed to get historic buildings repurposed into mixed use properties and back on the tax rolls. Here's the chronology of my posts on this subject, starting with this Meanwhile Back in Albany post back in July 2018.

Got a vending machine? Get a tax break!  Wouldn't that make a great billboard along the highways leading into all of the cities, towns and villages in upstate New York, instead of those silly signs we have on the Thruway?

Can you imagine anything so silly? Of course you can - it's economic development incentives we're talking about, and we're in New York.

State law created the tax break to help turn old and underused buildings into the kinds of places that filled downtowns in the old days. The idea was to restore the buildings with upper-floor apartments and street-level businesses - restaurants, offices and stores - to bring back the bustle of urban life.  

For Copper Beech Commons, vending machines did the trick. Without the tax break the owner would pay $560,000 a year in property taxes. With the vending machine incentive, the annual bill comes to less than $33,000.  

There were 39 properties in Syracuse getting the 12-year exemptions, the first eight years of which are fully exempt. Many of the properties here do have legitimate commercial enterprises, located in renovated historic properties - others, however, don't have commercial space and/or are in brand new properties built on land where historic structures were demolished.

In August of 2018, I had my first update on this, talking about Copper Beech Commons again.

A small office at the property has been cleaned up, with new doors added, to try and entice a small business to lease the space and preserve the tax break. Why? Well, as city assessment commissioner David Clifford noted,

Vending machines are not a commercial use, especially when they're owned and operated by the building owner. As far as I'm concerned, that's just like having a washing machine in the basement.

The assessors last warned the developer that the vending machines did not count for the exemption four or five years ago, so there should have been no surprise that there could be problems once the last (and only) tenant of the space moved out in 2015.

I wished the developer well in finding a tenant, but

More importantly, I hope we can count on city officials to consistently be good stewards of our tax dollars, and that our legislators can find a way to correct these 'good ideas gone bad' laws...

In the second update, I let you know that the NYS Assembly passed a bill submitted by local Assemblyman Bill Magnarelli to cut opportunities for abuses.  Among the changes?

• limits on the commercial purposes and uses that can quality, and they must be publicly accessible;
• at least 75% of the floor area of an eligible building must be a pure-existing structure;

• annual certification of properties to ensure the developer is in compliance; and

• revoking the tax benefits of non-compliant properties, as well as penalties if someone makes a material misstatement on their application for the tax break.

 And today, we learned (again from reporting by Knauss) that the Syracuse Common Council took action:

The council voted unanimously to amend local law by giving the assessor more explicit authority to reject applications for the so-called 485-a exemption, which the city first adopted in 2010. The amendment specifically aims to exclude projects that involve demolishing old building to make way for new construction. 

You know - projects like those brand new luxury student apartments, for which the developers get around $4M a year in 485-a tax breaks.

The amended Syracuse law says the assessment office should "narrowly construe" the 485-a exemption by excluding "projects that primarily consists of demolition of the existing real property (i.e. 60% or more of the existing building.)"

The second measure passed by the council Monday asks state legislators to further clarify the law on 485-a exemptions. 

This is a good step, even though it will only apply to new development, not the existing abusive properties. Mayor Ben Walsh is said to support the legislation; but won't make a final decision on the bill until after an upcoming public hearing.

Now, if the State Senate can get it passed (fingers crossed), we'll get this fixed for good.

Grains of Salt (v47): Seize the Delinquencies

Folks here in the Syracuse area have been hearing, for longer than I can remember, about the battle between Onondaga County and the owners of the now nearly-empty ShoppingTown Mall in Dewitt.

In a nutshell, the mall owes the county over $9M in taxes, and refuses to pay. Well, let me correct that - they refuse to pay what they owe, but offered $10,000 as a good-faith payment while discussions and court cases continue on what their assessment should be and how much they really owe us. The latest salvo? A bankruptcy filing for the property, which will tie things up even longer. It's a mell of a hess, if you know what I mean.

And they're not the only business that's behind in their tax payments - for example, there's Great Northern Mall, another once-thriving retail center, which owes over $3M for their 2018 and 2019 tax bills.

But now, the County Legislature has a new plan for dealing with delinquent commercial properties like the malls. According to multiple media reports, including this one from WAER,

Onondaga County lawmakers have thrown their support behind a new strategy that could lead to the seizure of certain tax-delinquent properties. The county executive's plan to create the Onondaga County Accountability and Reinvestment Corporation is seen as another tool to go after commercial properties with the goal of future development.

The new corporation will be responsible for seizing delinquent properties when all other efforts have failed, and would hold the title while the Onondaga County Industrial Development Agency works to get the property re-developed. Some properties would continue to be auctioned off following current guidelines.

There's about $45M outstanding on commercial properties, the report notes, even though we mainly hear about the big ones like the two malls. Or, we hear about the vacant, tax delinquent residential properties in the City of Syracuse, which we'll discuss in another post.

Legislators expressed some concern about taking property from a private owner, but ultimately, it comes down to fairness.  Here's Legislator Miles Bottrill:

I certainly believe in a property right, and this is a very significant issue relative to property rights.. However, this is really an abuse to the taxpayer and to this community.

One parcel has already been identified for transfer to the county - the former Syracuse Energy Power Corp. plant in Geddes, near the Fairgrounds. There's about $1M owed, and the county had to get a court order to make sure the out-of-state owner didn't dismantle any more of the property and sell it off for scrap. There are developers interested in the parcel, it seems, and that helped convince legislators that transferring this particular property is a good deal. Legislature Chair Dave Knapp noted

There have actually been some phone calls to the administration saying that, when the time comes, there could be some interest. It's in an industrial zone right off a railroad. It's an attractive piece of property for industrial use. 

No properties will be transferred to the new corporation without the legislature's approval. In addition to the Geddes parcel, there are others, including industrial sites, a hotel, and a marina, that could be transferred if there's no resolution to the delinquency. According to County Exec Ryan McMahon,

Many of (the delinquent parcels) are performing commercial properties that are receiving revenue that are just not paying taxes. So, that's why we look for a carrot and stick approach, but at this point we're coming down with a stick on these property owners to force their hands.

If you ask me, this is the kind of program we need to have, and be willing to use. I get that $45M may not seem like a lot of money out of a $1.3B budget, but it's a whole lot of unfairness for residents and businesses that have been paying their property taxes all along. Having this option in the county's toolbox is a good thing.

The Update Desk: Vending Machine Tax Breaks

On a couple of occasions, I've written about a nefarious tax break referred to as the 485-a. The first time was in this Meanwhile Back in Albany post from August of 2018, in which I noted

According to reporting by Tim Knauss of the Post-Standard and Syracuse.com, here's what vending machines have to do with anything.

Three vending machines at a Syracuse apartment building dispense candy, chips and soda. And they serve another purpose. They have helped the building owner avoid more than $3 million in property taxes. 

The vending machines are the only visible sign of commercial activity at Copper Beech Commons, a sprawling apartment complex for college students.

Here's why that matters: the property owner gets a lavish tax break that is available only to renovated buildings that have both commercial and residential space.  

That's right -  vending machines can be considered 'commercial space' under this really tasty tax break. And not only that, but vacant lots can be considered historic buildings. Honest, I couldn't make this stuff up if I tried.

A few of them, though, are brand new buildings, placed on lots where older structures were bulldozed, which is clearly (to anyone other than a lawyer or developer) not the type of projects the law was intended to help. There are others, in addition to Copper Beech Commons, that are student apartments, including the largest one, Theory Syracuse, which stands to save over $9 million over the 12 year term of the exemption.

The second time I talked about this, it was to report that the assessors in Syracuse were inspecting the properties to ensure that there really is a commercial operation in the building, or to tell the developers to get one.

For Copper Beech Commons, however, it seems the leaves have fallen, or something. In an article last week on Syracuse.com, Tim Knauss followed up on his original story and let us know that  Syracuse city assessors have been out inspecting properties claiming the 485-a tax break "where commercial operations were not readily evident from the street."

A small office at the property has been cleaned up, with new doors added, to try and entice a small business to lease the space and preserve the tax break. Why? Well, as city assessment commissioner David Clifford noted,

Vending machines are not a commercial use, especially when they're owned and operated by the building owner. As far as I'm concerned, that's just like having a washing machine in the basement.

The assessors last warned the developer that the vending machines did not count for the exemption four or five years ago, so there should have been no surprise that there could be problems once the last (and only) tenant of the space moved out in 2015.

I'm happy to do another update on this one: The NY State Assembly has passed a law designed to reign in abuses under section 485-a, as Bill Magnarelli, one of our local Assembly members (but not mine) announced on his Facebook page. Take a look:

Property Tax §485-a Property Tax Exemption Reform

Legislation passed the NYS Assembly today to stop abuses of the §485-a Property Tax Exemption Program. Assemblyman William Magnarelli, 129th District (D- Syracuse, Van Buren, Geddes) sponsored this legislation along with Assemblyman Sean Ryan, 149th District (D-Buffalo). Both Syracuse and Buffalo have seen some of the worst abuses under this program.

§485-a of the Real Property Tax Law allows municipalities to offer a 12-year exemption on property taxes to developers that renovate old buildings that include a mixture of commercial and residential space. However, localities have been granting exemptions to projects that should not receive them under the program. Examples of abuse include: projects with minimal or no commercial or residential uses, buildings that are nearly totally demolished and rebuilt, and projects built on vacant lots. These exemptions are costing participating localities millions of dollars each year and placing a heavier burden on other property taxpayers.

As the assessors have mentioned in the past, the law was so loosely written that they had very little guidance to go on, and at times felt their hands were tied. Going forward (assuming passage in the Senate and a signature by our Sonofa Gov), things will be different, according to Magnarelli.

The abuses under this program are egregious. §485-a exemptions should not be going to projects where the only commercial uses in the building are vending machines or storage units, or where the developer essentially demolishes the underlying structure for new construction. Local governments and assessors say the current law does not give them the authority to deny these applications. This bill gives them that authority. This program was developed to help our downtowns redevelop old buildings into useful mixed use structures. The bill passed today will return the §485-a program to this purpose. I also want to thank Assemblyman Sean Ryan for working with me to get this bill done this session.

Assemblyman Ryan echoed Magnarelli's thoughts.

Unfortunately, too often we've seen large development corporations take advantage of taxpayers by exploiting this program with facilities that clearly violate the intent of the original bill. The changes we've made will be instrumental in ensuring the redevelopment of our cities can continue, while protecting taxpayers from footing the bill for large developers who willingly misuse the program.

So, what's going to be different? Generally,

• there will be limits on the commercial purposes and uses that can quality, and they must be publicly accessible;
• at least 50% of an eligible building must be for residential units, and at least 15% of the space must have a commercial use;
• no 485-a exemptions will be given on land that was vacant prior to construction;
• at least 75% of the floor area of an eligible building must be a pure-existing structure;
• requiring the commercial portion of the building to be currently used as commercial, or to be 'in good faith contemplated' which would exclude the three vending machines in a room;
• annual certification of properties to ensure the developer is in compliance; and
• revoking the tax benefits of non-compliant properties, as well as penalties if someone makes a material misstatement on their application for the tax break.

These are common-sense changes that are needed to protect property owners in our aging cities, where local government economic development agencies and departments are too quick to offer huge property tax breaks with little regard to how that impacts residents.

Particularly here in Syracuse, where nearly 50% of our property is not taxable because the owners are eds, meds, and non-profits, we need all the help - and restraint - we can get. 

Splitting the Empire (Part 3)

The two previous posts in the 'Splitting the Empire' series offered very different solutions to address the lack of representation experienced by folks in 'upstate' New York in state government, particularly the state Senate. The first was to split New York into two states; the second was to formally keep us a unified state, but would create three completely autonomous regional governments, each with its own executive, legislative, and judicial branches. There would still be a state government structure, with severely limited authority and responsibility. Neither of those plans seems to me to make much sense.

Today, let's look at the simplest - and in my mind, anyway - the most logical approach: modifying the State Senate. First, some background.

The State Senate currently has 63 seats; 40 senators are registered Democrats, 22 are registered Republicans, and one seat is vacant. Each senator represents a district drawn to meet balanced population goals. Given the population density in New York City, this type of districting means that there are more representatives downstate than upstate.

As a result, many upstate senators represent wildly disparate districts encompassing multiple counties. The 51st district's James Seward, for example, represents all or part of nine counties. On the map below, his is the meandering, crazy cloud-animal district just below the 'New York' in the center of the state. Compare Seward's district to Brooklyn, for example - that's one county with nine senators.

The mess of green string that outlines the different districts in NYC helps illustrate the imbalance between upstate and downstate representation.

So -- the simple plan, proposed by Senator Joe Griffo of Rome and Assemblyman Mark Walczyk of Watertown, is to change the Constitution to allow each of NY's 62 counties to have one State Senator, no matter the county's population.

Crazy, right?

Splitting The Empire (Part 1)

As the New York State legislative session moves towards its June conclusion, conversations about the disparity between how upstate and downstate interests are represented in Albany will likely continue long after our representatives go home for the rest of the year.

You'll recall that in the 2018 election, the Republicans lost their majority in State Senate, which they had held only with support from the Independent Democratic Conference (IDC). The loss made New York a 'trifecta state' - one of 14 states fully controlled by Democrats, to go along with 22 fully controlled by Republicans. In New York, cities are blue across the state, but most upstate counties are solidly red.

Since the election, there has been renewed discussion on what can be done to allow folks north of Westchester County - that broad area that everyone buckets into a hot mess called "upstate" - so that we can regain some semblance of representation of our interests in state government, and to make it harder for the folks who represent NYC to ignore all of us up here.

The idea getting the most attention is the wrong one, I think -- splitting up the Empire State. And, to muddy the waters, there are two distinct ideas on how best to make the worst decision.

Let's take a look at one of them.

Grains of Salt (v44): The State of the County

New County Executive Ryan McMahon gave his first State of the County address at the end of last month, offering successes from the county and various departments, as well as outlining a fairly moderate vision for the future.

You can watch the speech here, with closed captioning that, let's just say, added an unintentional air of comedy.

The successes included a budget surplus, increased sales tax receipts, significant economic impact from the amphitheater, and increased revenue from the Turning Stone gambling compact payments. Property taxes are lower than ever, and there's a lot more collaboration across all jurisdictions, including with the City of Syracuse.

Here are a few of the initiatives he mentioned:

• Implementing a ThinkDifferently plan here. Developed by Dutchess County Executive Marc Molinaro, a ThinkDifferently program ensures residents with special needs - those on the autism spectrum, or who have mental health issues or physical disabilities, are given appropriate support and services. There's a new position for a Deputy Commissioner of Disability Services included here, too. 
• Creating a Chief Diversity Officer; expanding minority representation in the county workforce to 20% by 2022, and recruiting county workers from the poorest zip codes in the city, the suburbs, and rural areas.  
• Promoting a bill that will make all plot and burial services for veterans and eligible dependents free at the Onondaga County Veterans Cemetery.
• consolidating all of the waste water infrastructure under the county, so that we can "fix the pipes once for the next 100 years" instead of making incremental repairs over and over and over for the next 100 years.

The main points of his address centered on what he calls the PIE agenda, focusing on poverty, infrastructure, and economic development. Let's look at some of the details.

The Update Desk: Amazon in NYC

I wanted to provide some additional information on the Amazon/NYC deal, specifically what's been going on since the darn thing failed last month. The NY Post has been doing a lot of coverage, naturally, and so I'll share some of the updates they've been focusing on.

First, the Sonofa Gov has been working his tail off, trying unsuccessfully to get the giant company to reconsider its hasty decision to back out of the deal. He even called Jeff Bezos himself, and that wasn't enough to swing the deal.

Even the New York Times got into the aftermath, publishing a full page ad that was paid for by the Partnership for New York City and signed by a bunch of current and former politicians, labor leaders, business leaders, and educators.  That, too, will likely fall on deaf ears, but at least it shows other companies that the folks in NYS and Albany aren't complete idiots.

Noodling Around: The Failed Amazon Deal

I've been thinking about the Amazon deal that just went poof in NYC, coming to terms with why I supported this project even though I long have questioned the value of most economic development projects, and thinking about my utter frustration with politicians in New York State.

The deal would have provided performance-based incentives over the course of a decade, in addition to other incentives under local programs designed to encourage development in 'opportunity zones' as well as a Payment in Lieu of Taxes (PILOT) agreement on property developed for community use on the Amazon campus.

There was to have been a new school, job training, infrastructure improvements, and more. And yes, there would have been issues to deal with along the way - there's no question about that on a project of this size. But these incentives are not new - the state regularly offers these deals, and others, to companies large and small, for a variety of promises. Counties and cities across New York also offer their own incentive programs, with similar mixed results.

A deal of this significance falling apart? That's new for us, so I'm trying to understand what happened.

Right from the get-go, why did Amazon walk away so quickly? Lots of speculation there, including the possibility that they weren't really committed to Long Island City in the first place. I admit to some surprise that any location in New York was chosen; for better or worse, we're a blue state, after all. And our Sonofa Gov's protestations notwithstanding, we're not really a business-friendly state.

So, while questioning the company's haste in leaving is certainly valid, it seemed clear the local (and national) killer attack progressives didn't want to play with Amazon. I say that because, at least from their public comments, they were happy to see the deal fall apart and happy to criticize Amazon, Bezos, de Blasio and Cuomo, and not all that interested in running towards salvaging the deal. If I were Amazon, and wanted to expand into an area that said they wanted me to be there, only to find out that I'm going to be fought at every single turn by folks who seem uninterested in negotiating with me, and that apparently even doing the things that the opponents wish were going to be done wasn't going to be enough, I'd think hard and fast about putting down roots, too. And my answer would likely have been the same as Amazon's.

Meanwhile, Virginia, a more business-friendly state, has moved forward quickly to approve their (much smaller) incentive package, clearly showing a welcoming attitude and a willingness to participate fully to bring  HQ2's 25,000 $150K jobs to their neck of the woods. Similarly, things look pretty upbeat in Nashville, which will be getting another 5000 high-paying Amazon jobs.  And yes, the incentives are smaller, but they can be, because of the differences in the business climate, as well as the political climate.

Let's untangle a few more noodles.

The Update Desk: Please Say it Ain't So

I'd love to say it ain't so, but it is in fact so, according to these updates:

• The Associated Press tweeted  BREAKING: Amazon drops New York City as one of its new headquarter locations, will not search for another.
• Reuters tweeted BREAKING: Amazon says it will not build headquarters in New York after mounting opposition $AMZN
• J David Goodman tweeted AMAZON CANCELS PLAN TO COME TO NEW YORK "After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens" - Amazon spokeswoman Jodi Seth

And here is the statement released by Amazon, as published in the NY Times:

After much thought and deliberation, we've decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens. For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long term. While polls show that 70% of  New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.

We are disappointed to have reached this conclusion - we love New York, its incomparable dynamism, people and culture - particularly the community of Long Island City, where we have gotten to know so many optimistic, forward-leaning community leaders, small business owners, and residents. There are currently over 5,000 Amazon employees in Brooklyn, Manhattan, and Staten Island, and we plan to continue growing these teams.

We are deeply grateful to Governor Cuomo, Mayor de Blasio, and their staffs, who so enthusiastically and graciously invited us to build in New York City and supported us during the process. Governor Cuomo and Mayor de Blasio have worked tirelessly on behalf of New Yorkers to encourage local investment and job creation, and we can't speak positively enough about all of their efforts. The steadfast commitment and dedication that these leaders have demonstrated to the communities they represent inspired us from the very beginning and is one of the big reasons our decision was so difficult. 

We  do not intend to re-open the HQ2 search at this time. We will proceed as planned in Northern Virginia and Nashville, and we will continue to hire and grow across our 17 corporate offices and tech hubs in the US and Canada. 

Thank you again to Governor Cuomo, Mayor de Blasio, and the many other community leaders and residents who welcomed our plans and supported us along the way. We hope to have future chances to collaborate as we continue to build our presence in New York over time.

It will be interesting to see who, now, will be creating the 25,000 $150,000 promised jobs that would have helped create and support countless small businesses that would have spun off from this project, and how long it will take for those jobs and small businesses to materialize. And unionize, of course.  I'll wait patiently for that.

And I'll wait patiently for all of the politicians who proudly declare that they won't accept corporate money to similarly disavow union money.

And, I'll wait patiently for the Dems in the NY Legislature to immediately meet with NY's  Congressional delegation - Schumer, Gillibrand, and all the folks in the house, including AOC -  to demand legislation to update corporate tax regulations so that so that American companies like Amazon can no longer legally have a $0 federal tax liability - and I want them to do that FIRST, before they worry about taxing the rich businessmen who own and run the companies that they so desperately do not want here in the Empire State. 

Waiting patiently, but not holding my breath (I'm not an idiot).

Please, Say it Ain't So!

If you're a New Yorker like me, these can be crazy times.

• Our Sonofa Gov has his lowest favorability rating I think since he took office, even though we've now got a trifecta state government (single party control of the whole shebang) and the agenda is moving forward at a pace described by one member of the media as 'drinking from a firehose'; 
• Our senior senator suffers as well from poor ratings;
• Our our junior senator announced her candidacy for president and, in doing so, branded herself a liar; 
• We're doing our taxes and feeling the pain of the Christmas present the president and the Republicans gave us back in 2017; and
• We're maybe going to blow the Amazon deal. 

That's right - we're maybe going to blow the Amazon deal, which will bring one of the company's new headquarters locations to Long Island City (the other is being built in Arlington VA).

What does this Amazon HQ2 deal mean for the two areas?  Here's a snippet from CNN back in December. that touches on what the deal means, and what the selected cities need to be working on - now.

The to-do list for both locations includes making sure there's enough housing for new hires, improving the local transportation and infrastructure and adding nearby schools. The company says it will invest $2.5B in each place. Both will have more than 25,000 workers over time, and hiring starts next year. 

And, as that article noted, "there's still plenty of work ahead for New York and Northern Virginia."

So, Virginia is moving forward full steam ahead but what's happening in New York?

Meanwhile Back in Albany (v26)

Nathaniel Brooks/NY Times photo

Here in Syracuse, our mayor just delivered his second State of the City address (you can read about that here and here), setting the stage for what we can expect locally as we move into the new year.

Meanwhile, back in Albany, our Sonofa Gov Andrew Cuomo delivered his ninth State of the State address last week.

This is the first in a series of posts about the SOTS - because it never fits into only one. We're New York, after all.

It's important to know going in that, for the first time in quite a while, a single party controls the governorship, the State Assembly, and the State Senate -- and that party, of course, is the Democrats.  Almost uniformly, there's some salivating and chomping at the bit to get to work on a new, even more progressive agenda, and they are promising to waste little time in doing exactly that.

As is typical for this kind of speech (they honestly can't help themselves, I'm convinced), Cuomo started with introductions,  mentioning Tish James, our new Attorney General. James is the first African-American woman to win a statewide race. Also mentioned? The first woman - and the first African-American woman - to lead one of the legislative chambers, Senate Majority Leader Andrea Stewart-Cousins, and Carl Heastie, the Assembly leader. These two will be instrumental in helping push the agenda.

After the callouts to folks in the room, this was how Cuomo set the stage:

This year, we think it's the year to fully enact a justice agenda, in the broadest sense of the word 'justice.' Social justice, economic justice, and racial justice. And that this is the time to do it. We face real challenges in the state of New York. We have a federal government that is assaulting our values, our liberties, our rights, and our economy. Literally our economy. The federal cuts to our budget would be devastating and the federal effect on the values and liberties of New Yorkers would be devastating. And this is the moment in government that we are leading. And it is up to us to bring this state forward. We have no allies who are going to help us. The federal government is not going to help us. It's up to this legislative body to lead this state at this crucial time. 

He then turned to several 'good news' items, including having a "functional government" that is "competent" and "accomplishment oriented" - in fact, he said, "we're the most progressive government in the United States of America."  Social accomplishments mentioned include:

• NY as the first big state to pass marriage equality
• being the first state to pass $15 - the highest minimum wage
• having the most aggressive building agenda
• being a national champion for organized labor
• implementing the first free college tuition program
• having the best paid family leave program in the nation and
• being a leader on gun safety

But there's more, much more, in the look-back.

The Update Desk: Cross-town Development

Back in October 2016, I wrote about a successful local company and their approved request for economic development money. Here's some background, from that post.

BlueRock Energy Holdings, a local company started by a guy who used to work for Niagara Mohawk (now National Grid), sells energy to commercial and residential customers in New York and, in December 2014 announced they were expanding into Pennsylvania and Connecticut. They also created a second company, one that focused on "energy efficiency consulting." All good stuff, right? Local guy, home-grown company, and a growing business - expanding from 47 to 87 employees "over the next two years" they said back in 2014.

In September of this year, they announced that they had outgrown their office space in Syracuse's Franklin Square and would moving to larger space in what's now called Barclay Damon Tower (the old Marine Midland Tower on Warren and Jefferson). They're going to have around 13,800 square feet of space in their new location, compared to around 8,600 in their old space. We also learned that the company now has 67 employees and "expects to create at least 13 more jobs over the next five years."

And here's what they asked for, and received, in tax breaks for that move:

BlueRock has applied to the Onondaga County Industrial Development Agency for an exemption from sales taxes on the $485,000 it expects to spend on furniture and fixtures and other equipment and materials for the new office (emphasis added). The sales tax exemption, if approved, would save the company $38,800 though it would have to pay the agency $5,850 in fees.

So a successful business, an awarded business, a business that supports multiple professional sports teams, is moving less than a mile driving distance, and we're paying them $32,950 to do it?

Why yes, yes we did. And now, two years later, we learn that the company is again making some changes:

Syracuse's BlueRock Energy has sold a big piece of its electric and natural gas business but says it will continue operating with a new focus. BlueRock sold all its electric and natural gas customer contracts in New York and some in New Jersey and Pennsylvania to Marathon Energy, of Queens.  

BlueRock founder, President and CEO Philip VanHorne said the company is refocusing on selling solar energy and providing energy services, such as LED lighting, building controls and HVAC upgrades. He said the company will keep its headquarters in downtown Syracuse. 

Why the change? Well, for starters, NY's Sonofa Gov Andrew Cuomo has set a pretty high goal for the Empire State and how we use renewables. As part of his Reforming the Energy Vision initiative, he's asking that NY achieve a 40% reduction in greenhouse gas emissions from 1990 levels; requiring that 40% of electricity come from renewable sources, and looking for a 600 trillion BTU increased in statewide energy efficiency. And, according to VanHorne,

Solar is definitely a growth area for us. There's lots of opportunity here.

The sell-off of the electric and gas business was "strategic" VanHorne said, but made it clear they're sticking around.

We're continuing in business. We're not shutting down. We're changing focus.  

There was no announcement on how much the contracts were sold for, or how many were sold.

So what does all of this mean for the company's employees?

The good news? Marathon is hiring 24 BlueRock folks, in both sales and operational roles, and they'll be opening an office in Salina in January, their first in upstate NY. Jerry Drenis, the company's President, noted

We're fully committed to the upstate ares. We're very happy with the people we've hired there. This was a natural acquisition for us.

I've not seen anything on whether Marathon is going to be seeking taxpayer assistance for their new office, or whether they've committed to any additional hiring. For their part, BlueRock  now has 30 people, instead of the 67 it had back in 2016 when they got the tax breaks for moving to their larger headquarters.

Obviously I want local companies to be successful, but I also want our elected officials to be good stewards of our tax dollars - and I can't help thinking (again) that there has to be a better way to do economic development than we do it around these parts.

An easy starting point seems to be not giving companies money for furniture, fixtures and other equipment; maybe then we could work up to outlining the things that are deserving of our incentives.