Gotham Gazette Gotham Gazette is an online publication covering New York policy and politics as well as news on public safety, transportation, education, finance and more. http://www.gothamgazette.com/component/tags/tag/economic-development 2017-10-21T12:27:34+00:00 Webmaster webmaster@gothamgazette.com Top City Electeds Skip Letter Wooing Amazon 2017-10-19T04:00:00+00:00 2017-10-19T04:00:00+00:00 http://www.gothamgazette.com/?id=7266:top-city-electeds-skip-letter-wooing-amazon Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/wtc-orange-amazon-via-edc.jpg" alt="wtc orange amazon via edc" width="600" height="400" /></p> <p>One World Trade Center lit up orange for Amazon (photo via NYC EDC)</p> <hr /> <p>New York is laying out the red carpet to entice online retail giant Amazon to locate its new corporate headquarters in the state. Governor Andrew Cuomo promised a slew of incentives to support four official proposals from different regions that were submitted to the company on Wednesday, and New York City Mayor Bill de Blasio lit up the city in orange at night as a fawning branding appeal.</p> <p>New York City’s own <a href="https://www.dropbox.com/s/omgt5ywmgzundkv/Amazon%20Deck%20for%20Press%20-%2010.18.2017.pdf?dl=0&amp;utm_source=Press+Release&amp;utm_campaign=5db591fe9c-2017_10_18_NYC_Submits_Amazon_Proposal_PA&amp;utm_medium=email&amp;utm_term=0_b804b7ba34-5db591fe9c-102476565" target="_blank" rel="noopener noreferrer">bid</a> -- which included four possible business districts -- was backed by about 70 elected officials that represent the city, including members of Congress, state Senators and Assembly members, City Council members, borough presidents, and Public Advocate Letitia James. But at least four notable elected officials were conspicuously absent from the letter of support sent by the mayor’s office to Amazon CEO Jeff Bezos.</p> <p>Assembly Speaker Carl Heastie, of the Bronx, City Comptroller Scott Stringer, and City Council Members Corey Johnson and Donovan Richards, both contenders to become the next Speaker of the City Council, did not sign on to the letter.</p> <p>“No city embodies the American traditions of innovation and creativity quite like New York City,” <a href="https://www.dropbox.com/s/fa1bvw2m82molqv/Amazon%20Elected%20Letter.pdf?dl=0&amp;utm_source=Press+Release&amp;utm_campaign=5db591fe9c-2017_10_18_NYC_Submits_Amazon_Proposal_PA&amp;utm_medium=email&amp;utm_term=0_b804b7ba34-5db591fe9c-102476565" target="_blank" rel="noopener noreferrer">the letter</a> reads. “It has transformed from a Dutch settlement, to the nation’s first capital, to a booming industrial center. It became a port of hope for millions of immigrants looking for a better life, and a model for urban revitalization. From Broadway, the Bronx Zoo and the Brooklyn Bridge, to Citi Field and the shores of Staten Island, New York City is a place where history is made every day. Our tradition of reinvention matches yours, and we invite you to join us in writing our next chapters together.”</p> <p>A spokesperson for Stringer declined to comment. Multiple messages and emails sent to spokespeople for Heastie were not returned.</p> <p>“We’re excited about the prospect of new businesses coming to New York City,” said Jordan Gibbons, a spokesperson for Council Member Richards, “but before we support the plan, we need more information about job standards and impact on local businesses.”</p> <p>Council Member Johnson wrote in a text that he “didn’t sign on to [the] letter because I have concerns about Amazon’s labor record but also recognize 50K jobs would be good for the city.” &nbsp;</p> <p>As Johnson noted, Amazon’s second headquarters is expected to create 50,000 jobs and bring in roughly $5 billion in investment. One of the proposed areas for Amazon’s headquarters, Midtown West, falls in Johnson’s Manhattan district. City Council members representing other proposed sites for the headquarters signed on to the letter.</p> <p>Amazon’s announcement and request for proposals triggered a mad dash by dozens of cities across the country to lure the multi-billion-dollar company. To bolster their bids, some cities and states have promised enormous tax breaks while others have pledged infrastructure investments around a potential Amazon campus. Most have hedged their bets on being able to provide the optimum balance of tech talent, affordable and ample real estate, and an appealing quality of life. One municipality in Georgia even went so far as to <a href="https://www.usatoday.com/story/tech/news/2017/10/03/city-aims-name-new-town-company-amazon-georgia/727765001/" target="_blank" rel="noopener noreferrer">propose</a> creating an entirely new city named for the online retailer.</p> <p>Short of naming a new business district after Amazon, New York City’s pitch includes all those aspects. Culled from more than two dozen proposals from across the five boroughs, the New York City Economic Development Corporation, in collaboration with the Empire State Development Corporation, decided on four city areas that met Amazon’s criteria -- Midtown West, Long Island City, Lower Manhattan, and the Brooklyn Tech Triangle. The city is banking on many factors, including its pool of 2.3 million residents who hold a bachelor’s degree and above -- a number higher than the combined comparable workforce of Boston, Philadelphia, San Francisco, Los Angeles and Washington D.C.</p> <p>The city has 296,000 workers in the tech industry and is growing rapidly in sectors of the economy where Amazon is diversifying, including media, advertising, fashion, and manufacturing.</p> <p>And the city is already an attractive destination for Amazon, which has a distribution and fulfillment center, corporate offices and retail space in the city with plans to expand in Manhattan. Amazon’s website says it has 1,000 employees in New York, plus seasonal additions around the winter holidays.</p> <p>An EDC spokesperson said the city cast a wide net seeking support for the proposal. “Considering how hard it is to get New Yorkers to agree on anything, the fact that we got so many signatures in such a short time was pretty impressive and overwhelming,” the spokesperson said, expressing optimism that New York would outmatch other cities with its bid.</p> <p>Asked at an unrelated Thursday news conference about his pursuit of Amazon when he has been opposed to Walmart opening in the city, de Blasio called it “apples and oranges.” “Amazon, there are some issues that need to be addressed with labor, there’s no two ways about it. But, at the same time, this is a company talking about potentially fundamentally changing the economy in New York City. Adding 50,000 jobs is a game-changer. And it’s something we need and we need more high-quality jobs for the people of New York City. So we can work on those labor issues and I’m happy to work on those labor issues, but no, I’m convinced that Amazon will be a net gain for New York City, unquestionably.”</p> <p>Responding to Johnson’s concerns, the EDC spokesperson said that Amazon’s presence in New York would afford the city an opportunity to engage directly with the firm and “work with them to advance our shared values.” Pointing out that it was premature to evaluate a deal that hasn’t yet been approved, the spokesperson said the city would be able to negotiate down the line to add guarantees to ensure the number of jobs created, salary levels and that jobs go to New Yorkers. “It’s pretty clear to us that they want to build the headquarters with the community, not in the community,” the spokesperson said.</p> <p>“It’s puzzling, I don’t know why you’d want to turn down a shot at 50,000 good-paying jobs,” said Jonathan Bowles, executive director of the Center for an Urban Future, when asked why leaders like Stringer, Heastie, and Johnson would not sign on. He conceded that concerns about corporate subsidies are valid, but that the Amazon opportunity is too good to pass up. “It’s a big win for New York City if we can get it.”</p> <p>

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/wtc-orange-amazon-via-edc.jpg" alt="wtc orange amazon via edc" width="600" height="400" /></p> <p>One World Trade Center lit up orange for Amazon (photo via NYC EDC)</p> <hr /> <p>New York is laying out the red carpet to entice online retail giant Amazon to locate its new corporate headquarters in the state. Governor Andrew Cuomo promised a slew of incentives to support four official proposals from different regions that were submitted to the company on Wednesday, and New York City Mayor Bill de Blasio lit up the city in orange at night as a fawning branding appeal.</p> <p>New York City’s own <a href="https://www.dropbox.com/s/omgt5ywmgzundkv/Amazon%20Deck%20for%20Press%20-%2010.18.2017.pdf?dl=0&amp;utm_source=Press+Release&amp;utm_campaign=5db591fe9c-2017_10_18_NYC_Submits_Amazon_Proposal_PA&amp;utm_medium=email&amp;utm_term=0_b804b7ba34-5db591fe9c-102476565" target="_blank" rel="noopener noreferrer">bid</a> -- which included four possible business districts -- was backed by about 70 elected officials that represent the city, including members of Congress, state Senators and Assembly members, City Council members, borough presidents, and Public Advocate Letitia James. But at least four notable elected officials were conspicuously absent from the letter of support sent by the mayor’s office to Amazon CEO Jeff Bezos.</p> <p>Assembly Speaker Carl Heastie, of the Bronx, City Comptroller Scott Stringer, and City Council Members Corey Johnson and Donovan Richards, both contenders to become the next Speaker of the City Council, did not sign on to the letter.</p> <p>“No city embodies the American traditions of innovation and creativity quite like New York City,” <a href="https://www.dropbox.com/s/fa1bvw2m82molqv/Amazon%20Elected%20Letter.pdf?dl=0&amp;utm_source=Press+Release&amp;utm_campaign=5db591fe9c-2017_10_18_NYC_Submits_Amazon_Proposal_PA&amp;utm_medium=email&amp;utm_term=0_b804b7ba34-5db591fe9c-102476565" target="_blank" rel="noopener noreferrer">the letter</a> reads. “It has transformed from a Dutch settlement, to the nation’s first capital, to a booming industrial center. It became a port of hope for millions of immigrants looking for a better life, and a model for urban revitalization. From Broadway, the Bronx Zoo and the Brooklyn Bridge, to Citi Field and the shores of Staten Island, New York City is a place where history is made every day. Our tradition of reinvention matches yours, and we invite you to join us in writing our next chapters together.”</p> <p>A spokesperson for Stringer declined to comment. Multiple messages and emails sent to spokespeople for Heastie were not returned.</p> <p>“We’re excited about the prospect of new businesses coming to New York City,” said Jordan Gibbons, a spokesperson for Council Member Richards, “but before we support the plan, we need more information about job standards and impact on local businesses.”</p> <p>Council Member Johnson wrote in a text that he “didn’t sign on to [the] letter because I have concerns about Amazon’s labor record but also recognize 50K jobs would be good for the city.” &nbsp;</p> <p>As Johnson noted, Amazon’s second headquarters is expected to create 50,000 jobs and bring in roughly $5 billion in investment. One of the proposed areas for Amazon’s headquarters, Midtown West, falls in Johnson’s Manhattan district. City Council members representing other proposed sites for the headquarters signed on to the letter.</p> <p>Amazon’s announcement and request for proposals triggered a mad dash by dozens of cities across the country to lure the multi-billion-dollar company. To bolster their bids, some cities and states have promised enormous tax breaks while others have pledged infrastructure investments around a potential Amazon campus. Most have hedged their bets on being able to provide the optimum balance of tech talent, affordable and ample real estate, and an appealing quality of life. One municipality in Georgia even went so far as to <a href="https://www.usatoday.com/story/tech/news/2017/10/03/city-aims-name-new-town-company-amazon-georgia/727765001/" target="_blank" rel="noopener noreferrer">propose</a> creating an entirely new city named for the online retailer.</p> <p>Short of naming a new business district after Amazon, New York City’s pitch includes all those aspects. Culled from more than two dozen proposals from across the five boroughs, the New York City Economic Development Corporation, in collaboration with the Empire State Development Corporation, decided on four city areas that met Amazon’s criteria -- Midtown West, Long Island City, Lower Manhattan, and the Brooklyn Tech Triangle. The city is banking on many factors, including its pool of 2.3 million residents who hold a bachelor’s degree and above -- a number higher than the combined comparable workforce of Boston, Philadelphia, San Francisco, Los Angeles and Washington D.C.</p> <p>The city has 296,000 workers in the tech industry and is growing rapidly in sectors of the economy where Amazon is diversifying, including media, advertising, fashion, and manufacturing.</p> <p>And the city is already an attractive destination for Amazon, which has a distribution and fulfillment center, corporate offices and retail space in the city with plans to expand in Manhattan. Amazon’s website says it has 1,000 employees in New York, plus seasonal additions around the winter holidays.</p> <p>An EDC spokesperson said the city cast a wide net seeking support for the proposal. “Considering how hard it is to get New Yorkers to agree on anything, the fact that we got so many signatures in such a short time was pretty impressive and overwhelming,” the spokesperson said, expressing optimism that New York would outmatch other cities with its bid.</p> <p>Asked at an unrelated Thursday news conference about his pursuit of Amazon when he has been opposed to Walmart opening in the city, de Blasio called it “apples and oranges.” “Amazon, there are some issues that need to be addressed with labor, there’s no two ways about it. But, at the same time, this is a company talking about potentially fundamentally changing the economy in New York City. Adding 50,000 jobs is a game-changer. And it’s something we need and we need more high-quality jobs for the people of New York City. So we can work on those labor issues and I’m happy to work on those labor issues, but no, I’m convinced that Amazon will be a net gain for New York City, unquestionably.”</p> <p>Responding to Johnson’s concerns, the EDC spokesperson said that Amazon’s presence in New York would afford the city an opportunity to engage directly with the firm and “work with them to advance our shared values.” Pointing out that it was premature to evaluate a deal that hasn’t yet been approved, the spokesperson said the city would be able to negotiate down the line to add guarantees to ensure the number of jobs created, salary levels and that jobs go to New Yorkers. “It’s pretty clear to us that they want to build the headquarters with the community, not in the community,” the spokesperson said.</p> <p>“It’s puzzling, I don’t know why you’d want to turn down a shot at 50,000 good-paying jobs,” said Jonathan Bowles, executive director of the Center for an Urban Future, when asked why leaders like Stringer, Heastie, and Johnson would not sign on. He conceded that concerns about corporate subsidies are valid, but that the Amazon opportunity is too good to pass up. “It’s a big win for New York City if we can get it.”</p> <p>

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.

</p>
On New York’s Amazon Wishlist? More Homegrown College Graduates 2017-10-18T04:00:00+00:00 2017-10-18T04:00:00+00:00 http://www.gothamgazette.com/?id=7262:on-new-york-s-amazon-wishlist-more-homegrown-college-graduates Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/amazon-go-via-amazon-dot-com.jpg" alt="amazon go via amazon dot com" width="600" height="400" /></p> <p>(via&nbsp;<a href="http://amazon.com/" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=http://amazon.com&amp;source=gmail&amp;ust=1508445639021000&amp;usg=AFQjCNGzdWvPfi1qr_0QZZij-aevUuSbWg">amazon.com</a>)</p> <hr /> <p>Bids are due today for Amazon’s new headquarters and it seems cities across North America have joined the fray. The suitors are lining up with billion-dollar bouquets, and with good reason. What mayor could resist the promise of 50,000 well-paying jobs and all the economic energy that comes with the headquarters—a massive boost to the tax base, new cafes and food trucks, spin-off companies, and a legion of happy vendors? New York City alone has nearly two dozen neighborhoods vying for Bezos’ bounty.</p> <p>Pundits have frequently written off the five boroughs as Amazon’s second home because of the exorbitant cost of living. Some are pointing to the subway meltdown. Yet an even greater obstacle may be the city’s underprepared workforce.</p> <p>While New York has always been a beacon for titans of industry, striving immigrants, and the creative cognoscenti, for too long, the city has failed to develop enough local talent into the kind of smart, savvy employment base a modern company like Amazon demands. Just 36 percent of New York City residents have a bachelor’s degree or higher, according to the latest Census data, compared to 45 percent in Denver, 46 percent in Austin, and 55 percent in Washington, D.C. In Amazon’s current home base of Seattle, it is a whopping 59 percent.</p> <p>New York’s ability to lure the world’s fourth largest corporation, or even its 40th or 400th, will hinge on whether its workforce is primed and ready. By that measure, the city has a long way to go.</p> <p>More than 3.3 million city residents over age 25 lack an associate’s degree or higher level of college attainment. Residents with a bachelor’s degree or higher are largely concentrated in Manhattan, where the attainment rate stands at 62 percent, followed by just over 30 percent in Brooklyn, Queens, and Staten Island. In the Bronx, it is a distressing 18 percent.</p> <p>Amazon should still see boundless potential on the Hudson. New York boasts a booming and entrepreneurial tech sector with more than <a href="https://nycfuture.org/data/nycs-tech-profile" target="_blank" rel="noopener noreferrer">115,000 jobs</a> today, an unparalleled smorgasbord of arts and culture, and the brand new Cornell Tech campus, alongside other world-renowned educational institutions.</p> <p>But if New York succeeds in attracting Amazon, or any large company for that matter, whether GE, Aetna, or Tesla, it will be in spite of the city’s education and training systems, not because of them. New York can do so much more to ensure that its residents can access the opportunities that an Amazon would bring, while offering employers a much larger pool of homegrown talent.</p> <p>Yes, New York is full of tech talent today. This is true, in part, because the city has become increasingly successful at attracting engineering and computer science graduates from Stanford, Carnegie Mellon, and other top universities around the world. But in an economy where technically skilled workers are prized—not just on Silicon Alley but in nearly every large and mid-sized company—demand is through the roof. New York needs a much bigger pipeline, not just for Amazon, but for blue chip companies and local start-ups alike.</p> <p>Even if the vast majority of Amazon’s 50,000 new hires were imported from other places, New York would still be better off with them here than in Denver or Chicago or Atlanta. But no company—and certainly not a company with so many hiring needs—is going to make locational decisions that are completely dependent on bringing in outside talent. It is simply not realistic, or sustainable. Meanwhile, if half those workers or more were born, raised, and educated in New York, the benefits would be far broader—allaying the fears of those who see Amazon as more of an economic development trophy than an opportunity generator.</p> <p>Such an achievement today would be almost impossible.</p> <p>While New York City has done an increasingly impressive job of getting students through high school, it continues to struggle with college success, leaving students without the credentials an employer like Amazon demands. Today, fewer than half of all four-year college students at the City University of New York (CUNY) graduate with a degree in six years. Just 22 percent of CUNY’s community college students earn a degree in three years.</p> <p>CUNY’s highly successful <a href="https://nycfuture.org/impact/cuf-report-inspires-funding-for-cuny-asap-program" target="_blank" rel="noopener noreferrer">ASAP</a> initiative, which provides supports to full-time community college students, and the CUNY Start program, which provides intensive preparation for students with remedial needs, are important steps in the right direction. But New York has a long way to go to achieve true college success for all.</p> <p>Beyond the classroom, the city’s workforce development system still functions too much like a cumbersome placement agency. The de Blasio administration has laid out an impressive new vision with its <a href="https://nycfuture.org/research/building-the-workforce-of-the-future" target="_blank" rel="noopener noreferrer">Career Pathways initiative</a>, aimed at developing career trajectories through skills building and education. But after more than three years, there is too little to show for it. The city needs to double down on proposed investments in bridge programs, career exploration, and on-the-job training, while strengthening and expanding partnerships with nonprofit providers, employers, and the public education system. &nbsp;</p> <p>There’s no doubt that New York City is a formidable competitor in the quest for Amazon’s HQ2. No other city offers so expansive a world of culture and commerce in a single place, a paragon of urbanism and urbanity animated by an astonishingly diverse population. But if Amazon heads elsewhere, policymakers should not just blame cost and congestion. They should look to the serious shortcomings in the city’s human capital development system, which remains far from meeting its full potential.</p> <p>***<br /> Matt A.V. Chaban is the policy director and Fisher Fellow at the Center for an Urban Future. On Twitter <a href="https://twitter.com/MC_NYC" target="_blank" rel="noopener noreferrer">@MC_NYC</a> and <a href="https://twitter.com/nycfuture" target="_blank" rel="noopener noreferrer">@nycfuture</a>.</p> <p>

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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<p><img src="http://www.gothamgazette.com/images/graphics/2017/amazon-go-via-amazon-dot-com.jpg" alt="amazon go via amazon dot com" width="600" height="400" /></p> <p>(via&nbsp;<a href="http://amazon.com/" data-saferedirecturl="https://www.google.com/url?hl=en&amp;q=http://amazon.com&amp;source=gmail&amp;ust=1508445639021000&amp;usg=AFQjCNGzdWvPfi1qr_0QZZij-aevUuSbWg">amazon.com</a>)</p> <hr /> <p>Bids are due today for Amazon’s new headquarters and it seems cities across North America have joined the fray. The suitors are lining up with billion-dollar bouquets, and with good reason. What mayor could resist the promise of 50,000 well-paying jobs and all the economic energy that comes with the headquarters—a massive boost to the tax base, new cafes and food trucks, spin-off companies, and a legion of happy vendors? New York City alone has nearly two dozen neighborhoods vying for Bezos’ bounty.</p> <p>Pundits have frequently written off the five boroughs as Amazon’s second home because of the exorbitant cost of living. Some are pointing to the subway meltdown. Yet an even greater obstacle may be the city’s underprepared workforce.</p> <p>While New York has always been a beacon for titans of industry, striving immigrants, and the creative cognoscenti, for too long, the city has failed to develop enough local talent into the kind of smart, savvy employment base a modern company like Amazon demands. Just 36 percent of New York City residents have a bachelor’s degree or higher, according to the latest Census data, compared to 45 percent in Denver, 46 percent in Austin, and 55 percent in Washington, D.C. In Amazon’s current home base of Seattle, it is a whopping 59 percent.</p> <p>New York’s ability to lure the world’s fourth largest corporation, or even its 40th or 400th, will hinge on whether its workforce is primed and ready. By that measure, the city has a long way to go.</p> <p>More than 3.3 million city residents over age 25 lack an associate’s degree or higher level of college attainment. Residents with a bachelor’s degree or higher are largely concentrated in Manhattan, where the attainment rate stands at 62 percent, followed by just over 30 percent in Brooklyn, Queens, and Staten Island. In the Bronx, it is a distressing 18 percent.</p> <p>Amazon should still see boundless potential on the Hudson. New York boasts a booming and entrepreneurial tech sector with more than <a href="https://nycfuture.org/data/nycs-tech-profile" target="_blank" rel="noopener noreferrer">115,000 jobs</a> today, an unparalleled smorgasbord of arts and culture, and the brand new Cornell Tech campus, alongside other world-renowned educational institutions.</p> <p>But if New York succeeds in attracting Amazon, or any large company for that matter, whether GE, Aetna, or Tesla, it will be in spite of the city’s education and training systems, not because of them. New York can do so much more to ensure that its residents can access the opportunities that an Amazon would bring, while offering employers a much larger pool of homegrown talent.</p> <p>Yes, New York is full of tech talent today. This is true, in part, because the city has become increasingly successful at attracting engineering and computer science graduates from Stanford, Carnegie Mellon, and other top universities around the world. But in an economy where technically skilled workers are prized—not just on Silicon Alley but in nearly every large and mid-sized company—demand is through the roof. New York needs a much bigger pipeline, not just for Amazon, but for blue chip companies and local start-ups alike.</p> <p>Even if the vast majority of Amazon’s 50,000 new hires were imported from other places, New York would still be better off with them here than in Denver or Chicago or Atlanta. But no company—and certainly not a company with so many hiring needs—is going to make locational decisions that are completely dependent on bringing in outside talent. It is simply not realistic, or sustainable. Meanwhile, if half those workers or more were born, raised, and educated in New York, the benefits would be far broader—allaying the fears of those who see Amazon as more of an economic development trophy than an opportunity generator.</p> <p>Such an achievement today would be almost impossible.</p> <p>While New York City has done an increasingly impressive job of getting students through high school, it continues to struggle with college success, leaving students without the credentials an employer like Amazon demands. Today, fewer than half of all four-year college students at the City University of New York (CUNY) graduate with a degree in six years. Just 22 percent of CUNY’s community college students earn a degree in three years.</p> <p>CUNY’s highly successful <a href="https://nycfuture.org/impact/cuf-report-inspires-funding-for-cuny-asap-program" target="_blank" rel="noopener noreferrer">ASAP</a> initiative, which provides supports to full-time community college students, and the CUNY Start program, which provides intensive preparation for students with remedial needs, are important steps in the right direction. But New York has a long way to go to achieve true college success for all.</p> <p>Beyond the classroom, the city’s workforce development system still functions too much like a cumbersome placement agency. The de Blasio administration has laid out an impressive new vision with its <a href="https://nycfuture.org/research/building-the-workforce-of-the-future" target="_blank" rel="noopener noreferrer">Career Pathways initiative</a>, aimed at developing career trajectories through skills building and education. But after more than three years, there is too little to show for it. The city needs to double down on proposed investments in bridge programs, career exploration, and on-the-job training, while strengthening and expanding partnerships with nonprofit providers, employers, and the public education system. &nbsp;</p> <p>There’s no doubt that New York City is a formidable competitor in the quest for Amazon’s HQ2. No other city offers so expansive a world of culture and commerce in a single place, a paragon of urbanism and urbanity animated by an astonishingly diverse population. But if Amazon heads elsewhere, policymakers should not just blame cost and congestion. They should look to the serious shortcomings in the city’s human capital development system, which remains far from meeting its full potential.</p> <p>***<br /> Matt A.V. Chaban is the policy director and Fisher Fellow at the Center for an Urban Future. On Twitter <a href="https://twitter.com/MC_NYC" target="_blank" rel="noopener noreferrer">@MC_NYC</a> and <a href="https://twitter.com/nycfuture" target="_blank" rel="noopener noreferrer">@nycfuture</a>.</p> <p>

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Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

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Murky Definitions for Government Entities Undermine Transparency 2017-05-03T04:00:00+00:00 2017-05-03T04:00:00+00:00 http://www.gothamgazette.com/?id=6909:murky-definitions-for-government-entities-undermine-transparency Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/15148467608_52cf785b4f_z.jpg" alt="15148467608 52cf785b4f z" width="600" height="400" /></p> <p>Gov. Cuomo in Buffalo (photo: The Governor's Office)</p> <hr /> <p>When Rockland County Democratic Party Chair Kristen Zebrowski Stavisky fills out her annual state disclosure forms, she consults her husband for question six, which requires the listing of contracts held with a state or local agency held by the filer, filer’s spouse, or unemancipated child.</p> <p>Evan Stavisky, a partner in the prominent Albany lobbying firm The Parkside Group, after checking with the firm’s lawyer, has told his wife that his company does not represent any government entities. So, for the past six years, Kristen has entered “none” for the question, according to the disclosure documents obtained from the Joint Commission on Public Ethics (JCOPE).</p> <p>At the same time, between 2010 and 2016, Parkside pulled in more than $1 million from representing quasi-public entities, including four foundations affiliated with city and state universities, three New York City-based public library systems, and a local economic development corporation, according to the lobbying firm’s disclosure filings that can be viewed on the JCOPE website.</p> <p>One of these contracts, on behalf of the Queens Economic Development Corporation -- which is <a href="https://www.abo.ny.gov/paw/paw_weblistingLDC2.html" target="_blank" rel="noopener noreferrer">treated</a> by state law as a public authority -- expired in 2010, so according to filing instructions, Kristen Stavisky was not required to declare it on her <a href="http://www.jcope.ny.gov/forms/Guide%20to%20Filing%20a%20NYS%20Annual%20Statement%20of%20Financial%20Disclosure%204.2016.pdf" target="_blank" rel="noopener noreferrer">JCOPE form</a> for that year. But the other clients -- foundations associated with the CUNY Graduate Center, Queensborough Community College, Queens College, CUNY Creative Arts Team, and SUNY’s University at Buffalo, as well as Brooklyn Public Library, New York Public Library, and Queens Public Library -- fall into an ambiguous zone, defined as local or state agencies in some statutes of New York State law, but not others.</p> <p>Kristen Stavisky became Rockland County party chair <a href="https://patch.com/new-york/newcity/women-in-polictics-kristen-zebrowski-stavisky-rocklan1c976f11d7" target="_blank" rel="noopener noreferrer">in February 2011</a>, so her first required JCOPE form covered 2010. Political party chairs play a significant role in deciding which candidates run for local and state office, so they are held to the same disclosure standards as elected officials. Meanwhile, Evan Stavisky’s company is paid big money to lobby those same city and state officials on policy and funding matters that impact their clients.</p> <p>“The reason that party committee chairs are required to disclose potential conflicts of interest because they wield considerable power in relation to elected officials, and they provide the political apparatus to get people elected,” said NYPIRG Executive Director Blair Horner.</p> <p>As the Stavisky filings show, there is a multitude of quasi-governmental entities that exist in grey area of New York law, and how to classify these entities has been the subject of some debate. A rudimentary search pulled up at least a dozen different definitions for “state agency” and “local agency” in New York State law.</p> <p>A lawyer for Parkside pointed to the state’s public officer’s law, which defines a state agency as a “state department, any public benefit corporation, public authority or commission at least one of whose members is appointed by the governor, or the state university of New York or the city university of New York.”</p> <p>While each of the aforementioned Parkside clients rely to some degree on government funding (<a href="http://www.queenslibrary.org/about-us" target="_blank" rel="noopener noreferrer">Queens Library</a>, for example, draws 94 percent of its revenue from city, state and federal sources), have board members appointed by city or state officials, and may serve a public function, as independent 501(c)(3) nonprofits, one could argue these entities do not qualify as a public authority or public benefit corporation. But like more typical government agencies, they are subject to Freedom of Information Laws, according advisory opinions issued by the New York State Committee on Open Government.</p> <p>A person who willfully files financial disclosure forms incorrectly could face a penalty of up to $40,000 from JCOPE. A spokesperson for the ethics agency -- who is prohibited by law from discussing the disclosure forms of a particular filer -- declined to offer clarification on whether nonprofits associated with CUNY and SUNY were considered government entities according to the public officer's law, but said JCOPE reviews filings and pursues investigations when there appears to be a discrepancy. In other words, the only person who can request an opinion on how a particular filer should answer question six on the JCOPE disclosure form is the filer.</p> <p>There is also is a lack of consensus on the definition of a “public benefit corporation” and a “public authority,” terms sometimes used interchangeably.</p> <p>According to Comptroller Tom DiNapoli’s office, public authorities -- which range from transportation agencies like the MTA to bodies created to spur economic development like Empire State Development -- are typically run by boards of directors and are not subject to the same transparency and disclosure as other branches of government. They are also able to borrow money without voter approval, as is constitutionally required of government agencies, a habit that has put the state in fiscal jeopardy.</p> <p>Public authorities are increasingly enmeshed with state and local government operations, according to the comptroller. They do most of the state’s borrowing and supply revenue streams for the state budget. Sometimes these entities spawn subsidiary public authorities, which are subject to even fewer restrictions. The state’s first public authority, Port Authority of New York and New Jersey, was created in 1921, and more than 1,000 State and local public authorities, and subsidiaries of authorities, have been <a href="http://osc.state.ny.us/pubauth/reports/pub-auth-num-2017.pdf#search=%20public%20authorities%20by%20the%20numbers" target="_blank" rel="noopener noreferrer">authorized since</a>.</p> <p>In 2004 and 2009, in response to a number of investigations into mismanagement, irresponsible borrowing, and questionable financial practices on the part of public authorities and their subsidiaries, <a href="https://publicauthorities.wordpress.com/2011/09/20/public-authorities-reforms-in-new-york-and-elsewhere/" target="_blank" rel="noopener noreferrer">attempts were made</a> to streamline the definition and oversight of public authorities.</p> <p>Then-Comptroller Alan G. Hevesi, raising concerns about “backdoor borrowing,” joined with then-Attorney General Eliot Spitzer to introduce <a href="https://www.osc.state.ny.us/reports/pubauth/pubauthoritiesreform.pdf" target="_blank" rel="noopener noreferrer">the Public Authority Reform Act of 2004</a> “to capture all of these entities in one place and impose new rules to govern the conduct of public authorities and their representatives.” The proposed legislation compiled a list of “more than 640” entities, classifying them in A,B, C, and D classes. Class A and B public authorities would be required to adopt specific principles of corporate governance and fiscal integrity. They recommended Queensborough Community College Auxiliary Enterprise Association and the CUNY Research Foundation (two organizations that hired Parkside within the past six years) be classified as “Class B” public authorities.</p> <p>Based on these recommendations, the Legislature and Governor George Pataki enacted the Public Authorities Accountability Act of 2005, later amended by the Public Authorities Reform Act of 2009, which established the Authorities Budget Office (ABO) and an official definition for “public authority.” The legislation also directed the ABO to maintain a list of state and local authorities, <a href="https://www.abo.ny.gov/publicauthoritydata/PublicAuthorityDataDirectoryofAuthorities.html" target="_blank" rel="noopener noreferrer">a list that currently</a> does not include CUNY and SUNY foundations, the New York City library systems, or other quasi-governmental nonprofits.</p> <p>But while the ABO’s office lists 578 authorities, a recent count by the state comptroller’s office found 1,192 state, local, and interstate or international authorities. A footnote in <a href="http://osc.state.ny.us/pubauth/reports/pub-auth-num-2017.pdf#search=%20public%20authorities%20by%20the%20numbers" target="_blank" rel="noopener noreferrer">the comptroller’s report</a> addresses this discrepancy: "Due to statutory, regulatory and administrative differences between the Office of the State Comptroller and the ABO, the ABO’s list does not identify certain entities included in this count, such as subsidiaries (which ABO includes with the parent authority), inactive authorities, and college auxiliary corporations."</p> <p>Government reformers say this ever-morphing patchwork of definitions only serves to confuse the public and obscure conflicts of interests, rather than increase transparency.</p> <p>“Complexity defeats accountability and complexity defeats democracy. One of the reasons I’m a reformer is to simplify how things work,” said SUNY New Paltz professor Gerald Benjamin. “The purpose of disclosure is for the person who is letting sunshine in to hold people accountable. If the detail of the law prevents transparency from doing its job, then it’s getting in the way of good government.”</p> <p>While the Staviskys' situation is somewhat unique, this murky territory around what constitutes a government entity creates pitfalls for elected officials and others filing annual disclosure forms.</p> <p>Furthermore, lax guidelines surrounding CUNY and SUNY nonprofits have led to wasteful spending and, in worst case, exploitation by bad actors. The state is currently facing a crisis of trust in government, according to public opinion polls. In the last year, both the CUNY and SUNY systems were rocked by allegations of financial impropriety involving related nonprofits. Now, more voices are calling for increased oversight of these nonprofits, which, like public authorities and public benefit corporations, are financially intertwined with government agencies and serve a public function.</p> <p>Notably, two privately-run, deep-pocketed nonprofits affiliated with SUNY Polytechnic Institute -- Fort Schuyler Management Corporation and Fuller Road Management Corporation -- were at the center of federal and state investigations into Governor Andrew Cuomo’s Buffalo Billion economic development program. Former SUNY Poly president and CEO Alain Kaloyeros and Cuomo’s ex-executive deputy secretary Joe Percoco, along with six others, will face trial later this year <a href="http://www.gothamgazette.com/state/6544-federal-corruption-charges-confirm-systemic-flaws-in-state-economic-development-system" target="_blank" rel="noopener noreferrer">on charges of bid-rigging, bribery, and extortion</a>.</p> <p>Parkside’s business with CUNY Research Foundation factors into another ongoing investigation into widespread misuse of funds by CUNY-tied nonprofits by State Inspector General Catherine Leahy Scott. An interim report by the inspector general released last year highlights presidential discretionary funds doled out by the research foundation that are frequently tapped for housekeeping costs, and parties, personal drivers, and club memberships. <a href="https://ig.ny.gov/sites/default/files/pdfs/CUNYInterim.pdf" target="_blank" rel="noopener noreferrer">The report</a> also notes that CUNY-affiliated foundations spent a significant amount of money on lobbyists “engaged in questionable and seemingly redundant tasks,” even though the system employs its own centralized and school-based government relations staff.</p> <p>“These costs are significant to CUNY, and while they may be warranted in certain situations, appear to be duplicative in several cases. Even at this early stage of the Inspector General’s investigation, it seems clear that these activities warrant scrutiny and that centralization of these services should be explored,” wrote Leahy Scott.</p> <p>Of $842,275 spent on outside lobbying by the CUNY Research Foundation during the report’s 2013-2015 review period, nearly 20 percent went to Parkside Group, and another 50 percent went to two lobbying firms founded by former Parkside executives, according to year-by-year comparison of the report and JCOPE lobbying disclosure forms. The firms were hired to lobby the Legislature and New York City Council on funding as well as policy matters.</p> <p>When the report was released in November 2016, Governor Andrew Cuomo, who had been dealing with blowback for the scandals tied to his economic development programs, seized on the news of the CUNY investigation as an opportunity to push for sweeping reform across the state and city university systems, vowing to expand the jurisdiction of the state inspectors general to cover the university-based nonprofits, and calling for these entities to embrace good government practices. Language in the enacted 2017 budget expands the inspector general’s jurisdiction to include CUNY nonprofits, particularly, the research foundation, but notably it does not restore the state comptroller’s oversight over procurement through SUNY non-profits -- a power that was stripped in 2011 to expedite Cuomo’s economic development programs.</p> <p>When reached by phone, Evan Stavisky, joined by his lawyer, offered a series of evolving explanations for their determination on whether Kristen Stavisky would disclose Parkside contracts, but noted that it was immediately obvious to them that as nonprofits, these clients were not government entities. He did not seek advice from JCOPE.</p> <p>“Each year, our firm completes 12 separate filings for every single client for city and state regulators, a total of more than 500 annually. Since Kristen Stavisky became chair of the Rockland Democratic Party, our firm has filed 3,000 lobbying disclosures and not a single one has been for a government agency. It is false to suggest otherwise,” said Dan Katz, executive vice president and a general counsel to The Parkside Group, in a statement.</p> <p>While political party chairs are not prohibited from lobbying the New York State Legislature themselves, they are barred from offering “goods or services having a value in excess of twenty-five dollars to any state agency” and from working on “the adoption or repeal of any rule or regulation having the force and effect of law,” according to <a href="http://www.jcope.ny.gov/advice/ethc/92-09.htm" target="_blank" rel="noopener noreferrer">a 1992 advisory opinion</a> from New York State Ethics Commission, the first incarnation of JCOPE. <a href="https://ag.ny.gov/sites/default/files/pdfs/bureaus/public_integrity/public_officers_law_sec_73.pdf" target="_blank" rel="noopener noreferrer">The law</a> does not necessarily extend to household members of the chairperson, but filers must indicate government contracts exceeding $1,000 held by a spouse or unemancipated child.</p> <p>The decades-old regulation, along with most of the state’s modern government ethics law, sprang from a 1986 corruption probe that rocked Mayor Ed Koch’s administration, which landed a Bronx Democratic Party chair in prison, and was marked by suicide of Queens Borough President Donald Manes, who was also implicated in the scheme. The party chair, Stanley Friedman, was a stockholder in a company called Citisource Inc., which benefited from a $22.7 million contract with the city’s Traffic Violations Bureau for traffic agents' handheld computers.</p> <p>The reforms implemented in the Ethics in Government Act of 1987, which were hailed as a major turning point for government accountability in New York, were intended "to enhance public trust and confidence in our governmental institutions [by strengthening] prohibitions against behavior which may permit or appear to permit undue influence or conflicts of interest,” according to then-Governor Mario Cuomo. Many amendments have been signed into law since.</p> <p>This question of whether a political party chair can lobby government entities is likely to resurface over Keith Wright, currently the Manhattan Democratic Party chair, who earlier this year <a href="http://www.gothamgazette.com/state/6702-now-a-lobbyist-democratic-power-broker-faces-restrictions-in-new-job" target="_blank" rel="noopener noreferrer">accepted a position</a> at Davidoff Hutcher &amp; Citron, LLP, a lobbying and government affairs firm which represents The North Shore Board of Education, a government entity, and NYC &amp; Company, a government-funded nonprofit. Wright, who left his seat in the Assembly in an unsuccessful 2016 congressional bid, was not listed in the firm’s January–February JCOPE filings. A spokesperson for the&nbsp;New York County Democratic Committee said Wright does not perform lobbying duties as part of his new role; he advises clients on government affairs.</p> <p>The Staviskys maintain that Parkside’s business interests are kept separate from Kristen’s duties as Democratic committee leader and that there is no evidence that Evan or his company has benefited monetarily from the arrangement. Critics <a href="http://www.nydailynews.com/new-york/queens/pol-sees-no-conflicts-son-lobbyist-state-senator-article-1.372554" target="_blank" rel="noopener noreferrer">actually point</a> to other members of the Stavisky family who wield the type of power likely to attract clients like libraries and SUNY and CUNY foundations. Policy and funding matters concerning these institutions fall under the purview of the Senate’s Higher Education Committee, where Democratic Senator Toby Ann Stavisky of Queens, the mother of Evan Stavisky, is the ranking member.</p> <p>Parkside’s government-affiliated nonprofit contracts picked up in 2009-2010, the last time Democrats held a ruling majority in the Senate. Toby Ann, a former social studies teacher, chaired the Senate’s Higher Education Committee that year.</p> <p>At the time, Toby Ann, seeking an advisory opinion, wrote to JCOPE that though she was not required to, she would prohibit her son, but not his partners, from lobbying members of the Senate. Despite calls for a probe from ethics watchdogs, a 2009 advisory opinion from the state's Legislative Ethics Commission deemed the arrangement “appropriate,” <a href="http://www.nydailynews.com/news/ethics-probe-sought-pol-kin-lobbying-article-1.376620" target="_blank" rel="noopener noreferrer">the New York Daily News reported</a>.</p> <p><em>Correction: A previous version of this article misidentifed the source of a 2009 advisory opinion. In 2009, the ethics advisory agency for state legislators was the Legislative Ethics Commission.The article has also been updated to include a comment from&nbsp;New York County Democratic Committee.</em></p> <p>

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/15148467608_52cf785b4f_z.jpg" alt="15148467608 52cf785b4f z" width="600" height="400" /></p> <p>Gov. Cuomo in Buffalo (photo: The Governor's Office)</p> <hr /> <p>When Rockland County Democratic Party Chair Kristen Zebrowski Stavisky fills out her annual state disclosure forms, she consults her husband for question six, which requires the listing of contracts held with a state or local agency held by the filer, filer’s spouse, or unemancipated child.</p> <p>Evan Stavisky, a partner in the prominent Albany lobbying firm The Parkside Group, after checking with the firm’s lawyer, has told his wife that his company does not represent any government entities. So, for the past six years, Kristen has entered “none” for the question, according to the disclosure documents obtained from the Joint Commission on Public Ethics (JCOPE).</p> <p>At the same time, between 2010 and 2016, Parkside pulled in more than $1 million from representing quasi-public entities, including four foundations affiliated with city and state universities, three New York City-based public library systems, and a local economic development corporation, according to the lobbying firm’s disclosure filings that can be viewed on the JCOPE website.</p> <p>One of these contracts, on behalf of the Queens Economic Development Corporation -- which is <a href="https://www.abo.ny.gov/paw/paw_weblistingLDC2.html" target="_blank" rel="noopener noreferrer">treated</a> by state law as a public authority -- expired in 2010, so according to filing instructions, Kristen Stavisky was not required to declare it on her <a href="http://www.jcope.ny.gov/forms/Guide%20to%20Filing%20a%20NYS%20Annual%20Statement%20of%20Financial%20Disclosure%204.2016.pdf" target="_blank" rel="noopener noreferrer">JCOPE form</a> for that year. But the other clients -- foundations associated with the CUNY Graduate Center, Queensborough Community College, Queens College, CUNY Creative Arts Team, and SUNY’s University at Buffalo, as well as Brooklyn Public Library, New York Public Library, and Queens Public Library -- fall into an ambiguous zone, defined as local or state agencies in some statutes of New York State law, but not others.</p> <p>Kristen Stavisky became Rockland County party chair <a href="https://patch.com/new-york/newcity/women-in-polictics-kristen-zebrowski-stavisky-rocklan1c976f11d7" target="_blank" rel="noopener noreferrer">in February 2011</a>, so her first required JCOPE form covered 2010. Political party chairs play a significant role in deciding which candidates run for local and state office, so they are held to the same disclosure standards as elected officials. Meanwhile, Evan Stavisky’s company is paid big money to lobby those same city and state officials on policy and funding matters that impact their clients.</p> <p>“The reason that party committee chairs are required to disclose potential conflicts of interest because they wield considerable power in relation to elected officials, and they provide the political apparatus to get people elected,” said NYPIRG Executive Director Blair Horner.</p> <p>As the Stavisky filings show, there is a multitude of quasi-governmental entities that exist in grey area of New York law, and how to classify these entities has been the subject of some debate. A rudimentary search pulled up at least a dozen different definitions for “state agency” and “local agency” in New York State law.</p> <p>A lawyer for Parkside pointed to the state’s public officer’s law, which defines a state agency as a “state department, any public benefit corporation, public authority or commission at least one of whose members is appointed by the governor, or the state university of New York or the city university of New York.”</p> <p>While each of the aforementioned Parkside clients rely to some degree on government funding (<a href="http://www.queenslibrary.org/about-us" target="_blank" rel="noopener noreferrer">Queens Library</a>, for example, draws 94 percent of its revenue from city, state and federal sources), have board members appointed by city or state officials, and may serve a public function, as independent 501(c)(3) nonprofits, one could argue these entities do not qualify as a public authority or public benefit corporation. But like more typical government agencies, they are subject to Freedom of Information Laws, according advisory opinions issued by the New York State Committee on Open Government.</p> <p>A person who willfully files financial disclosure forms incorrectly could face a penalty of up to $40,000 from JCOPE. A spokesperson for the ethics agency -- who is prohibited by law from discussing the disclosure forms of a particular filer -- declined to offer clarification on whether nonprofits associated with CUNY and SUNY were considered government entities according to the public officer's law, but said JCOPE reviews filings and pursues investigations when there appears to be a discrepancy. In other words, the only person who can request an opinion on how a particular filer should answer question six on the JCOPE disclosure form is the filer.</p> <p>There is also is a lack of consensus on the definition of a “public benefit corporation” and a “public authority,” terms sometimes used interchangeably.</p> <p>According to Comptroller Tom DiNapoli’s office, public authorities -- which range from transportation agencies like the MTA to bodies created to spur economic development like Empire State Development -- are typically run by boards of directors and are not subject to the same transparency and disclosure as other branches of government. They are also able to borrow money without voter approval, as is constitutionally required of government agencies, a habit that has put the state in fiscal jeopardy.</p> <p>Public authorities are increasingly enmeshed with state and local government operations, according to the comptroller. They do most of the state’s borrowing and supply revenue streams for the state budget. Sometimes these entities spawn subsidiary public authorities, which are subject to even fewer restrictions. The state’s first public authority, Port Authority of New York and New Jersey, was created in 1921, and more than 1,000 State and local public authorities, and subsidiaries of authorities, have been <a href="http://osc.state.ny.us/pubauth/reports/pub-auth-num-2017.pdf#search=%20public%20authorities%20by%20the%20numbers" target="_blank" rel="noopener noreferrer">authorized since</a>.</p> <p>In 2004 and 2009, in response to a number of investigations into mismanagement, irresponsible borrowing, and questionable financial practices on the part of public authorities and their subsidiaries, <a href="https://publicauthorities.wordpress.com/2011/09/20/public-authorities-reforms-in-new-york-and-elsewhere/" target="_blank" rel="noopener noreferrer">attempts were made</a> to streamline the definition and oversight of public authorities.</p> <p>Then-Comptroller Alan G. Hevesi, raising concerns about “backdoor borrowing,” joined with then-Attorney General Eliot Spitzer to introduce <a href="https://www.osc.state.ny.us/reports/pubauth/pubauthoritiesreform.pdf" target="_blank" rel="noopener noreferrer">the Public Authority Reform Act of 2004</a> “to capture all of these entities in one place and impose new rules to govern the conduct of public authorities and their representatives.” The proposed legislation compiled a list of “more than 640” entities, classifying them in A,B, C, and D classes. Class A and B public authorities would be required to adopt specific principles of corporate governance and fiscal integrity. They recommended Queensborough Community College Auxiliary Enterprise Association and the CUNY Research Foundation (two organizations that hired Parkside within the past six years) be classified as “Class B” public authorities.</p> <p>Based on these recommendations, the Legislature and Governor George Pataki enacted the Public Authorities Accountability Act of 2005, later amended by the Public Authorities Reform Act of 2009, which established the Authorities Budget Office (ABO) and an official definition for “public authority.” The legislation also directed the ABO to maintain a list of state and local authorities, <a href="https://www.abo.ny.gov/publicauthoritydata/PublicAuthorityDataDirectoryofAuthorities.html" target="_blank" rel="noopener noreferrer">a list that currently</a> does not include CUNY and SUNY foundations, the New York City library systems, or other quasi-governmental nonprofits.</p> <p>But while the ABO’s office lists 578 authorities, a recent count by the state comptroller’s office found 1,192 state, local, and interstate or international authorities. A footnote in <a href="http://osc.state.ny.us/pubauth/reports/pub-auth-num-2017.pdf#search=%20public%20authorities%20by%20the%20numbers" target="_blank" rel="noopener noreferrer">the comptroller’s report</a> addresses this discrepancy: "Due to statutory, regulatory and administrative differences between the Office of the State Comptroller and the ABO, the ABO’s list does not identify certain entities included in this count, such as subsidiaries (which ABO includes with the parent authority), inactive authorities, and college auxiliary corporations."</p> <p>Government reformers say this ever-morphing patchwork of definitions only serves to confuse the public and obscure conflicts of interests, rather than increase transparency.</p> <p>“Complexity defeats accountability and complexity defeats democracy. One of the reasons I’m a reformer is to simplify how things work,” said SUNY New Paltz professor Gerald Benjamin. “The purpose of disclosure is for the person who is letting sunshine in to hold people accountable. If the detail of the law prevents transparency from doing its job, then it’s getting in the way of good government.”</p> <p>While the Staviskys' situation is somewhat unique, this murky territory around what constitutes a government entity creates pitfalls for elected officials and others filing annual disclosure forms.</p> <p>Furthermore, lax guidelines surrounding CUNY and SUNY nonprofits have led to wasteful spending and, in worst case, exploitation by bad actors. The state is currently facing a crisis of trust in government, according to public opinion polls. In the last year, both the CUNY and SUNY systems were rocked by allegations of financial impropriety involving related nonprofits. Now, more voices are calling for increased oversight of these nonprofits, which, like public authorities and public benefit corporations, are financially intertwined with government agencies and serve a public function.</p> <p>Notably, two privately-run, deep-pocketed nonprofits affiliated with SUNY Polytechnic Institute -- Fort Schuyler Management Corporation and Fuller Road Management Corporation -- were at the center of federal and state investigations into Governor Andrew Cuomo’s Buffalo Billion economic development program. Former SUNY Poly president and CEO Alain Kaloyeros and Cuomo’s ex-executive deputy secretary Joe Percoco, along with six others, will face trial later this year <a href="http://www.gothamgazette.com/state/6544-federal-corruption-charges-confirm-systemic-flaws-in-state-economic-development-system" target="_blank" rel="noopener noreferrer">on charges of bid-rigging, bribery, and extortion</a>.</p> <p>Parkside’s business with CUNY Research Foundation factors into another ongoing investigation into widespread misuse of funds by CUNY-tied nonprofits by State Inspector General Catherine Leahy Scott. An interim report by the inspector general released last year highlights presidential discretionary funds doled out by the research foundation that are frequently tapped for housekeeping costs, and parties, personal drivers, and club memberships. <a href="https://ig.ny.gov/sites/default/files/pdfs/CUNYInterim.pdf" target="_blank" rel="noopener noreferrer">The report</a> also notes that CUNY-affiliated foundations spent a significant amount of money on lobbyists “engaged in questionable and seemingly redundant tasks,” even though the system employs its own centralized and school-based government relations staff.</p> <p>“These costs are significant to CUNY, and while they may be warranted in certain situations, appear to be duplicative in several cases. Even at this early stage of the Inspector General’s investigation, it seems clear that these activities warrant scrutiny and that centralization of these services should be explored,” wrote Leahy Scott.</p> <p>Of $842,275 spent on outside lobbying by the CUNY Research Foundation during the report’s 2013-2015 review period, nearly 20 percent went to Parkside Group, and another 50 percent went to two lobbying firms founded by former Parkside executives, according to year-by-year comparison of the report and JCOPE lobbying disclosure forms. The firms were hired to lobby the Legislature and New York City Council on funding as well as policy matters.</p> <p>When the report was released in November 2016, Governor Andrew Cuomo, who had been dealing with blowback for the scandals tied to his economic development programs, seized on the news of the CUNY investigation as an opportunity to push for sweeping reform across the state and city university systems, vowing to expand the jurisdiction of the state inspectors general to cover the university-based nonprofits, and calling for these entities to embrace good government practices. Language in the enacted 2017 budget expands the inspector general’s jurisdiction to include CUNY nonprofits, particularly, the research foundation, but notably it does not restore the state comptroller’s oversight over procurement through SUNY non-profits -- a power that was stripped in 2011 to expedite Cuomo’s economic development programs.</p> <p>When reached by phone, Evan Stavisky, joined by his lawyer, offered a series of evolving explanations for their determination on whether Kristen Stavisky would disclose Parkside contracts, but noted that it was immediately obvious to them that as nonprofits, these clients were not government entities. He did not seek advice from JCOPE.</p> <p>“Each year, our firm completes 12 separate filings for every single client for city and state regulators, a total of more than 500 annually. Since Kristen Stavisky became chair of the Rockland Democratic Party, our firm has filed 3,000 lobbying disclosures and not a single one has been for a government agency. It is false to suggest otherwise,” said Dan Katz, executive vice president and a general counsel to The Parkside Group, in a statement.</p> <p>While political party chairs are not prohibited from lobbying the New York State Legislature themselves, they are barred from offering “goods or services having a value in excess of twenty-five dollars to any state agency” and from working on “the adoption or repeal of any rule or regulation having the force and effect of law,” according to <a href="http://www.jcope.ny.gov/advice/ethc/92-09.htm" target="_blank" rel="noopener noreferrer">a 1992 advisory opinion</a> from New York State Ethics Commission, the first incarnation of JCOPE. <a href="https://ag.ny.gov/sites/default/files/pdfs/bureaus/public_integrity/public_officers_law_sec_73.pdf" target="_blank" rel="noopener noreferrer">The law</a> does not necessarily extend to household members of the chairperson, but filers must indicate government contracts exceeding $1,000 held by a spouse or unemancipated child.</p> <p>The decades-old regulation, along with most of the state’s modern government ethics law, sprang from a 1986 corruption probe that rocked Mayor Ed Koch’s administration, which landed a Bronx Democratic Party chair in prison, and was marked by suicide of Queens Borough President Donald Manes, who was also implicated in the scheme. The party chair, Stanley Friedman, was a stockholder in a company called Citisource Inc., which benefited from a $22.7 million contract with the city’s Traffic Violations Bureau for traffic agents' handheld computers.</p> <p>The reforms implemented in the Ethics in Government Act of 1987, which were hailed as a major turning point for government accountability in New York, were intended "to enhance public trust and confidence in our governmental institutions [by strengthening] prohibitions against behavior which may permit or appear to permit undue influence or conflicts of interest,” according to then-Governor Mario Cuomo. Many amendments have been signed into law since.</p> <p>This question of whether a political party chair can lobby government entities is likely to resurface over Keith Wright, currently the Manhattan Democratic Party chair, who earlier this year <a href="http://www.gothamgazette.com/state/6702-now-a-lobbyist-democratic-power-broker-faces-restrictions-in-new-job" target="_blank" rel="noopener noreferrer">accepted a position</a> at Davidoff Hutcher &amp; Citron, LLP, a lobbying and government affairs firm which represents The North Shore Board of Education, a government entity, and NYC &amp; Company, a government-funded nonprofit. Wright, who left his seat in the Assembly in an unsuccessful 2016 congressional bid, was not listed in the firm’s January–February JCOPE filings. A spokesperson for the&nbsp;New York County Democratic Committee said Wright does not perform lobbying duties as part of his new role; he advises clients on government affairs.</p> <p>The Staviskys maintain that Parkside’s business interests are kept separate from Kristen’s duties as Democratic committee leader and that there is no evidence that Evan or his company has benefited monetarily from the arrangement. Critics <a href="http://www.nydailynews.com/new-york/queens/pol-sees-no-conflicts-son-lobbyist-state-senator-article-1.372554" target="_blank" rel="noopener noreferrer">actually point</a> to other members of the Stavisky family who wield the type of power likely to attract clients like libraries and SUNY and CUNY foundations. Policy and funding matters concerning these institutions fall under the purview of the Senate’s Higher Education Committee, where Democratic Senator Toby Ann Stavisky of Queens, the mother of Evan Stavisky, is the ranking member.</p> <p>Parkside’s government-affiliated nonprofit contracts picked up in 2009-2010, the last time Democrats held a ruling majority in the Senate. Toby Ann, a former social studies teacher, chaired the Senate’s Higher Education Committee that year.</p> <p>At the time, Toby Ann, seeking an advisory opinion, wrote to JCOPE that though she was not required to, she would prohibit her son, but not his partners, from lobbying members of the Senate. Despite calls for a probe from ethics watchdogs, a 2009 advisory opinion from the state's Legislative Ethics Commission deemed the arrangement “appropriate,” <a href="http://www.nydailynews.com/news/ethics-probe-sought-pol-kin-lobbying-article-1.376620" target="_blank" rel="noopener noreferrer">the New York Daily News reported</a>.</p> <p><em>Correction: A previous version of this article misidentifed the source of a 2009 advisory opinion. In 2009, the ethics advisory agency for state legislators was the Legislative Ethics Commission.The article has also been updated to include a comment from&nbsp;New York County Democratic Committee.</em></p> <p>

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p>
Comptroller Examines Uneven Economic Growth in Gentrifying Neighborhoods 2017-04-25T04:00:00+00:00 2017-04-25T04:00:00+00:00 http://www.gothamgazette.com/?id=6890:comptroller-examines-uneven-economic-growth-in-gentrifying-neighborhoods Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/stringer-presser.jpg" alt="stringer presser" width="600" height="431" /></p> <p>Comptroller Stringer (photo: Samar Khurshid/Gotham Gazette)</p> <hr /> <p>The 15 neighborhoods that experienced the highest rates of gentrification in the city between 2000 and 2015 showed a monumental increase in new businesses and job growth but with an inequitable distribution of the accompanying benefits, according to a <a href="https://comptroller.nyc.gov/newsroom/comptroller-stringer-releases-first-of-its-kind-neighborhood-by-neighborhood-economic-analysis-and-proposes-new-strategies-to-empower-local-residents/" target="_blank" rel="noopener noreferrer">new analysis</a> released Tuesday by Comptroller Scott Stringer.</p> <p>Stringer’s first-of-its-kind report, titled “The New Geography of Jobs: A Blueprint for Strengthening NYC Neighborhoods,” looked at economic activity in 15 gentrifying neighborhoods and examined trends in employment and entrepreneurial activity by industry, age, racial and ethnic groups. The neighborhoods were those identified by the NYU Furman Center in <a href="http://furmancenter.org/research/sonychan" target="_blank" rel="noopener noreferrer">an analysis</a> of 55 “sub-borough areas” in 2015. Of these, 22 were classified as lower income and 33 as higher income. The gentrifying neighborhoods were those that were lower income in 1990 and had experienced rent increases beyond the median neighborhood.</p> <p>“We need to create an economy based on fairness,” Stringer said, speaking at the Chinese-American Planning Council on the Lower East Side. Stringer cited CPC’s work in the Lower East Side Employment Network, a successful workforce development approach that he said should be the model for other neighborhoods. “We want to be able to lift up all groups of people and everyone in our communities. I believe this is about the need to support the idea of local wealth creation and we can only do that with innovative, collaborative and community-centric solutions,” the comptroller added.</p> <p>As economic activity increases in previously under-developed and lower-income neighborhoods, Stringer believes, the resulting opportunity, profits, and benefits should be experienced more evenly by all groups of residents.</p> <p>The number of businesses in the city grew from 203,698 to 237,198 in the 15-year period, the report found, with increased activity in the boroughs outside Manhattan. In Downtown and Midtown Manhattan, which have traditionally seen large concentrations of the city’s economic activity, the share of total businesses fell from 39 percent to 31 percent. But in the 15 gentrifying neighborhoods -- which include East and Central Harlem, Bedford-Stuyvesant, Crown Heights, Prospect Heights, Bushwick, Sunset Park, Brownsville and Ocean Hill -- there was a 45 percent increase in the number of businesses from 29,132 in 2000 to 42,261 in 2015.</p> <p>Although lower income communities saw greater growth than higher income districts across myriad industries, that growth was unevenly distributed. The report notes that while people of color own 34 percent of the city’s businesses, an uptick from years past, their share in the city’s overall economy, 16 percent of revenue and 21 percent of employment, remains relatively low. Black New Yorkers remain massively underrepresented, accounting for 22 percent of the city’s population but only owning 3 percent of businesses.</p> <p>The report also found that 17.2 percent of young adults, between 18 and 24 years old, were out of school and out of work (OSOW) in 2015, with racial and ethnic disparities in those numbers. Among OSOW youth in gentrifying neighborhoods, black and Hispanic youth represented 21 percent each, while white youth made up 12 percent.</p> <p>Stringer makes a number of recommendations in the report, aimed at connecting economic growth in a neighborhood to its residents. These include creating local network coordinators at workforce development providers to connect businesses with local job seekers; creating uniform assessments to evaluate and prepare job-seekers for the labor market; and assisting entrepreneurs and startups in scaling up their operations and setting up brick-and-mortar establishments; among other proposals.</p> <p>“My message today is this: skylines change, creation is a good thing,” Stringer said. “But we have to do a better job of harnessing this economic power in a way that serves everyone. We need to focus not on prices and not just on rent, but we also need to work on wealth creation, on linking long-term residents with new emerging jobs.”</p> <p>The comptroller noted, in response to a reporter, that housing affordability is still a crucial component of gentrification but emphasized the need to recognize changing demographics and economic challenges in those same neighborhoods. “What we need is a much more forceful workforce development plan because our data shows that there’s real possibility,” Stringer said, “but right now, for many communities, for many people, there’s a real disconnect between some of the benefits of changing neighborhoods, and it’s not filtering down to long-term residents.”</p> <p>Stringer said this more robust city response to workforce development issues should be part of proposed rezonings that are being studied across the city. The de Blasio administration and local communities are in the process of developing plans to add development, population density, housing -- including affordable units, and neighborhood-specific changes like additional school seats and new parks, for example, to a variety of areas throughout the city. One plan, for East New York, was passed a year ago and is in the process of implementation. Others have moved slowly or stalled, though several, including for East Harlem, may be moving ahead more quickly soon.</p> <p>Stakeholders in the East New York rezoning, including local Council Member Rafael Espinal, pushed strongly for workforce development initiatives to be included in the final plan, particularly the establishment of a city-run Workforce1 career center that opened in December. Similar efforts are also underway in other neighborhoods facing proposed rezonings, with community advocates insisting that jobs created by development should go to local residents.</p> <p>Asked by Gotham Gazette about Mayor Bill de Blasio’s recently announced plan to create 100,000 “good paying jobs” in the next ten years, Stringer had some cutting advice. “Anytime you want to say, ‘I can create 100,000 jobs,’ sure that’s OK, that’s a good thing,” he said, “but now we have to look at our emerging economies in the boroughs and what kinds of jobs are being created and are we matching good jobs with the citizens in those communities. And if we’re not, and we’re clearly not with communities of color in some of these neighborhoods, well what will you do about it? Can’t just say we’re gonna create jobs for people who can’t access those jobs? That’s not right.”</p> <p style="text-align: center;">[Related: <a href="http://www.gothamgazette.com/city/6664-part-of-rezoning-plan-city-opens-new-career-help-center-in-east-new-york" target="_blank" rel="noopener noreferrer">Part of Rezoning Plan, City Opens New Career Center in East New York</a>]</p> <p>

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/stringer-presser.jpg" alt="stringer presser" width="600" height="431" /></p> <p>Comptroller Stringer (photo: Samar Khurshid/Gotham Gazette)</p> <hr /> <p>The 15 neighborhoods that experienced the highest rates of gentrification in the city between 2000 and 2015 showed a monumental increase in new businesses and job growth but with an inequitable distribution of the accompanying benefits, according to a <a href="https://comptroller.nyc.gov/newsroom/comptroller-stringer-releases-first-of-its-kind-neighborhood-by-neighborhood-economic-analysis-and-proposes-new-strategies-to-empower-local-residents/" target="_blank" rel="noopener noreferrer">new analysis</a> released Tuesday by Comptroller Scott Stringer.</p> <p>Stringer’s first-of-its-kind report, titled “The New Geography of Jobs: A Blueprint for Strengthening NYC Neighborhoods,” looked at economic activity in 15 gentrifying neighborhoods and examined trends in employment and entrepreneurial activity by industry, age, racial and ethnic groups. The neighborhoods were those identified by the NYU Furman Center in <a href="http://furmancenter.org/research/sonychan" target="_blank" rel="noopener noreferrer">an analysis</a> of 55 “sub-borough areas” in 2015. Of these, 22 were classified as lower income and 33 as higher income. The gentrifying neighborhoods were those that were lower income in 1990 and had experienced rent increases beyond the median neighborhood.</p> <p>“We need to create an economy based on fairness,” Stringer said, speaking at the Chinese-American Planning Council on the Lower East Side. Stringer cited CPC’s work in the Lower East Side Employment Network, a successful workforce development approach that he said should be the model for other neighborhoods. “We want to be able to lift up all groups of people and everyone in our communities. I believe this is about the need to support the idea of local wealth creation and we can only do that with innovative, collaborative and community-centric solutions,” the comptroller added.</p> <p>As economic activity increases in previously under-developed and lower-income neighborhoods, Stringer believes, the resulting opportunity, profits, and benefits should be experienced more evenly by all groups of residents.</p> <p>The number of businesses in the city grew from 203,698 to 237,198 in the 15-year period, the report found, with increased activity in the boroughs outside Manhattan. In Downtown and Midtown Manhattan, which have traditionally seen large concentrations of the city’s economic activity, the share of total businesses fell from 39 percent to 31 percent. But in the 15 gentrifying neighborhoods -- which include East and Central Harlem, Bedford-Stuyvesant, Crown Heights, Prospect Heights, Bushwick, Sunset Park, Brownsville and Ocean Hill -- there was a 45 percent increase in the number of businesses from 29,132 in 2000 to 42,261 in 2015.</p> <p>Although lower income communities saw greater growth than higher income districts across myriad industries, that growth was unevenly distributed. The report notes that while people of color own 34 percent of the city’s businesses, an uptick from years past, their share in the city’s overall economy, 16 percent of revenue and 21 percent of employment, remains relatively low. Black New Yorkers remain massively underrepresented, accounting for 22 percent of the city’s population but only owning 3 percent of businesses.</p> <p>The report also found that 17.2 percent of young adults, between 18 and 24 years old, were out of school and out of work (OSOW) in 2015, with racial and ethnic disparities in those numbers. Among OSOW youth in gentrifying neighborhoods, black and Hispanic youth represented 21 percent each, while white youth made up 12 percent.</p> <p>Stringer makes a number of recommendations in the report, aimed at connecting economic growth in a neighborhood to its residents. These include creating local network coordinators at workforce development providers to connect businesses with local job seekers; creating uniform assessments to evaluate and prepare job-seekers for the labor market; and assisting entrepreneurs and startups in scaling up their operations and setting up brick-and-mortar establishments; among other proposals.</p> <p>“My message today is this: skylines change, creation is a good thing,” Stringer said. “But we have to do a better job of harnessing this economic power in a way that serves everyone. We need to focus not on prices and not just on rent, but we also need to work on wealth creation, on linking long-term residents with new emerging jobs.”</p> <p>The comptroller noted, in response to a reporter, that housing affordability is still a crucial component of gentrification but emphasized the need to recognize changing demographics and economic challenges in those same neighborhoods. “What we need is a much more forceful workforce development plan because our data shows that there’s real possibility,” Stringer said, “but right now, for many communities, for many people, there’s a real disconnect between some of the benefits of changing neighborhoods, and it’s not filtering down to long-term residents.”</p> <p>Stringer said this more robust city response to workforce development issues should be part of proposed rezonings that are being studied across the city. The de Blasio administration and local communities are in the process of developing plans to add development, population density, housing -- including affordable units, and neighborhood-specific changes like additional school seats and new parks, for example, to a variety of areas throughout the city. One plan, for East New York, was passed a year ago and is in the process of implementation. Others have moved slowly or stalled, though several, including for East Harlem, may be moving ahead more quickly soon.</p> <p>Stakeholders in the East New York rezoning, including local Council Member Rafael Espinal, pushed strongly for workforce development initiatives to be included in the final plan, particularly the establishment of a city-run Workforce1 career center that opened in December. Similar efforts are also underway in other neighborhoods facing proposed rezonings, with community advocates insisting that jobs created by development should go to local residents.</p> <p>Asked by Gotham Gazette about Mayor Bill de Blasio’s recently announced plan to create 100,000 “good paying jobs” in the next ten years, Stringer had some cutting advice. “Anytime you want to say, ‘I can create 100,000 jobs,’ sure that’s OK, that’s a good thing,” he said, “but now we have to look at our emerging economies in the boroughs and what kinds of jobs are being created and are we matching good jobs with the citizens in those communities. And if we’re not, and we’re clearly not with communities of color in some of these neighborhoods, well what will you do about it? Can’t just say we’re gonna create jobs for people who can’t access those jobs? That’s not right.”</p> <p style="text-align: center;">[Related: <a href="http://www.gothamgazette.com/city/6664-part-of-rezoning-plan-city-opens-new-career-help-center-in-east-new-york" target="_blank" rel="noopener noreferrer">Part of Rezoning Plan, City Opens New Career Center in East New York</a>]</p> <p>

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by Samar Khurshid, City government reporter, Gotham Gazette
     

Read more by this writer.

</p>
Ramped Up Economic Development Funding, Less Transparency in New State Budget 2017-04-16T04:00:00+00:00 2017-04-16T04:00:00+00:00 http://www.gothamgazette.com/?id=6875:ramped-up-economic-development-funding-less-transparency-in-new-state-budget Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2017/9679095845_cd060f4b01_z.jpg" alt="Cuomo Buffalo" width="600" height="400" /></p> <p>Gov. Cuomo in Buffalo (photo: The Governor's Office)</p> <hr /> <p>The new state budget, passed nine days into the fiscal year, is by many accounts a win for New Yorkers, with the inclusion of, among other things, significant new funding for education and affordable housing, college affordability measures, billions for clean water infrastructure, and important criminal justice reforms.</p> <p>The agreement hammered out by Governor Andrew Cuomo and the Legislature also included major provisions central to what is perhaps the governor’s top ongoing priorities. When he realized they would miss the April 1 deadline for a new spending plan, Cuomo squeezed into the state’s emergency budget extender bills funding for all of his signature economic development programs and splashy infrastructure projects, forcing lawmakers to accept them or risk a government shutdown.</p> <p>The nearly $1.8 billion in funds remained when the deal was then reached for a full fiscal year budget, which overrode the extender bills a week later. This money includes $150 million for the state’s 10 Regional Economic Development Councils (REDCs); $500 million for the next phase of Cuomo’s “Buffalo Billion” investments; and $700 million for the creation of a new wing of Manhattan’s Penn Station.</p> <p>The Legislature <a href="http://www.gothamgazette.com/state/6862-cuomo-announces-153-billion-state-budget-deal" target="_blank" rel="noopener noreferrer">also agreed</a> to a provision that would allow Cuomo the discretion to make mid-year changes to the budget in the event of major federal cuts to New York, though the governor conceded that the Legislature could have 90 days to come up with an alternative plan, which would override the executive’s plan. Citing uncertainty from the federal government, Cuomo made clear early on that he would not agree to a budget that did not include this type of flexibility.</p> <p>“I want to make sure we do not overcommit ourselves financially. We have never been in this situation before, where you basically have a federal government that has said that, in both their rhetoric and their actions, that there will be a financial cost to the state of New York,” Cuomo explained on April 5, two days before he announced a budget deal.</p> <p>But while it forges full speed ahead on the governor’s signature economic development and infrastructure programs and gives him additional budgetary powers, the final spending plan fails to beef up disclosure and oversight measures on the governor’s ambitious spending agenda. It also lacks any procurement reform and removes at least one crucial disclosure requirement previously attached to the governor’s Start-Up NY business development program that runs on tax incentives.</p> <p>Critics say lax oversight and limited transparency requirements for state-run nonprofits, through which the state funnels tens of millions of dollars each year, make Cuomo’s economic development programs ripe for abuse. Last year, nine associates of Cuomo -- including top former aide Joe Percoco and economic development leader Alain Kaloyeros -- were arrested on federal charges for their roles in an elaborate pay-to-play scheme involving the governor’s signature programs. The charges center around bid-rigging, kickbacks, and bribes and laid bare gaps in contract review and oversight.</p> <p>In the wake of these scandals, Comptroller Tom DiNapoli released six recommendations for procurement reform, beginning with the restoration of the comptroller’s independent oversight of SUNY, CUNY, and Office of General Services contracts. The governor and Legislature stripped the comptroller’s office of this power in 2011 as they sought to speed the economic development process.</p> <p>Other recommendations made by DiNapoli include prohibiting the use of non-profits to avoid procurement transparency laws, requiring state officials to follow the same procurement requirements as state agencies, creating tighter ethics requirements, implementing steeper penalties for those who abuse the procurement process, and requiring state agencies and their affiliates to make public all potential business opportunities in order level the playing field for all potential vendors.</p> <p>In a statement after the new state budget was passed, DiNapoli expressed disappointment that procurement reform was not included.</p> <p>“Hopefully before the end of session, the procurement reforms my office has advanced will be addressed,” said DiNapoli. “With heightened risks to federal aid, a clear understanding of the impact of spending, revenue and policy decisions in this budget is especially essential. My office will provide more detailed analysis of the enacted budget in the coming weeks.”</p> <p>While it was immediately evident that procurement reforms -- like other government ethics, campaign finance, transparency, and voting reforms -- <a href="http://www.gothamgazette.com/state/6862-cuomo-announces-153-billion-state-budget-deal" target="_blank" rel="noopener noreferrer">were not included in the budget</a>, it will take time to unpack what is included, as DiNapoli indicated, in part because the budget was rushed through the Legislature over the weekend of April 7. Cuomo issued “messages of necessity” in order to waive the otherwise-necessary three-day bill review period.</p> <p>One indication that reform measures were not likely to be included in the budget was how they were dealt with in the budget outlines put forth by Cuomo and each legislative majority. In their on-house budget resolutions, the Democratically- controlled Assembly and Republican-controlled Senate both called for Cuomo’s 10 REDCs, which lawmakers have accused of self-dealing, to adhere to the Code of Ethics and FOIL requirements in the Public Officers Law, abide by the open meetings law, and mandate members file annual financial disclosure statements. However, the legislative houses rejected the governor’s proposals to require legislators to file conflicts of interest disclosure notices regarding their involvement in the spending of lump sum funds and to subject the Legislature to FOIL, among other reforms.</p> <p>Ultimately, the governor and Legislature agreed upon more unspecified spending than before and fewer accountability measures at a fiscally uncertain time for New York State and in the wake of corruption scandals.</p> <p>Since 2011, both the executive and legislative branches have been home to scandal, often featuring people on the inside seeking to exploit this unchecked cash flow for personal gain.</p> <p>Cuomo’s executive budget proposal, unveiled in January, included $9.5 billion in funds in 44 separate economic development and infrastructure pots that do not specify any official as having authority and lack any disclosure and accountability about how the funds would be spent, according to Citizens Union, a government reform group, in its 2017 “Spending in the Shadows” report.</p> <p>The analysis also identified $4.3 billion divided among 60 different pots of discretionary funding that are assigned to one or more elected officials and not subject to disclosure requirements -- a $2 billion increase from last year’s executive budget. “We do not know what the criteria is, we do not know what projects are being considered, and we don’t even know what projects are being denied,” said Dick Dadey, executive director of Citizens Union.</p> <p>It is not yet clear exactly how much of the ‘shadowy’ money outlined in Cuomo’s executive budget made it into the final spending plan (Citizens Union has yet to do its analysis of the adopted budget).</p> <p>Access to these vaguely defined funding streams make lawmakers particularly susceptible to corruption schemes like the ones executed by former Assembly Speaker Sheldon Silver and former Senate Majority Leader Dean Skelos, according to Dadey. Both Silver and Skelos were convicted on federal charges, leading to unmet calls for government ethics reforms.</p> <p>“It’s an increasing problem in New York. We have 33 legislators who were forced from public office since 2000 because of misconduct. In the last six years alone 16 have been forced from office,” said Dadey at a press conference last month.</p> <p>Meanwhile, an annual reporting requirement for Start-Up NY participants has been removed from this year’s budget, as first <a href="http://www.newsday.com/business/start-up-ny-reporting-requirement-cut-by-accident-official-confirms-1.13459711" target="_blank" rel="noopener noreferrer">reported by Newsday</a>. Since 2013, business owners were mandated to report how many jobs their companies created and how much money they’ve invested in their operations, or they would be removed from the program. Instead, the new state budget directs the state’s Empire State Development, which runs Start-Up NY, to publish broader reports on the program. A Cuomo administration source told Newsday the omission was an accident.</p> <p>The three-year-old program grants businesses creating at least one new job per year and their employees up to a decade of tax relief for moving to or beginning in designated zones on or nearby public college campuses.</p> <p>The Start-Up NY program drew criticism last year when annual reports showed that 1,135 jobs were created in its first two-and-a-half years, while $53 million was spent by Empire State Development on advertising the program. Cuomo in his executive budget requested a name change on the start-up initiative, and proposed loosening the requirements for participation in the program. The Legislature did not agree to these changes.</p> <p>

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by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p> <p> Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union. </p>
<p><img src="http://www.gothamgazette.com/images/graphics/2017/9679095845_cd060f4b01_z.jpg" alt="Cuomo Buffalo" width="600" height="400" /></p> <p>Gov. Cuomo in Buffalo (photo: The Governor's Office)</p> <hr /> <p>The new state budget, passed nine days into the fiscal year, is by many accounts a win for New Yorkers, with the inclusion of, among other things, significant new funding for education and affordable housing, college affordability measures, billions for clean water infrastructure, and important criminal justice reforms.</p> <p>The agreement hammered out by Governor Andrew Cuomo and the Legislature also included major provisions central to what is perhaps the governor’s top ongoing priorities. When he realized they would miss the April 1 deadline for a new spending plan, Cuomo squeezed into the state’s emergency budget extender bills funding for all of his signature economic development programs and splashy infrastructure projects, forcing lawmakers to accept them or risk a government shutdown.</p> <p>The nearly $1.8 billion in funds remained when the deal was then reached for a full fiscal year budget, which overrode the extender bills a week later. This money includes $150 million for the state’s 10 Regional Economic Development Councils (REDCs); $500 million for the next phase of Cuomo’s “Buffalo Billion” investments; and $700 million for the creation of a new wing of Manhattan’s Penn Station.</p> <p>The Legislature <a href="http://www.gothamgazette.com/state/6862-cuomo-announces-153-billion-state-budget-deal" target="_blank" rel="noopener noreferrer">also agreed</a> to a provision that would allow Cuomo the discretion to make mid-year changes to the budget in the event of major federal cuts to New York, though the governor conceded that the Legislature could have 90 days to come up with an alternative plan, which would override the executive’s plan. Citing uncertainty from the federal government, Cuomo made clear early on that he would not agree to a budget that did not include this type of flexibility.</p> <p>“I want to make sure we do not overcommit ourselves financially. We have never been in this situation before, where you basically have a federal government that has said that, in both their rhetoric and their actions, that there will be a financial cost to the state of New York,” Cuomo explained on April 5, two days before he announced a budget deal.</p> <p>But while it forges full speed ahead on the governor’s signature economic development and infrastructure programs and gives him additional budgetary powers, the final spending plan fails to beef up disclosure and oversight measures on the governor’s ambitious spending agenda. It also lacks any procurement reform and removes at least one crucial disclosure requirement previously attached to the governor’s Start-Up NY business development program that runs on tax incentives.</p> <p>Critics say lax oversight and limited transparency requirements for state-run nonprofits, through which the state funnels tens of millions of dollars each year, make Cuomo’s economic development programs ripe for abuse. Last year, nine associates of Cuomo -- including top former aide Joe Percoco and economic development leader Alain Kaloyeros -- were arrested on federal charges for their roles in an elaborate pay-to-play scheme involving the governor’s signature programs. The charges center around bid-rigging, kickbacks, and bribes and laid bare gaps in contract review and oversight.</p> <p>In the wake of these scandals, Comptroller Tom DiNapoli released six recommendations for procurement reform, beginning with the restoration of the comptroller’s independent oversight of SUNY, CUNY, and Office of General Services contracts. The governor and Legislature stripped the comptroller’s office of this power in 2011 as they sought to speed the economic development process.</p> <p>Other recommendations made by DiNapoli include prohibiting the use of non-profits to avoid procurement transparency laws, requiring state officials to follow the same procurement requirements as state agencies, creating tighter ethics requirements, implementing steeper penalties for those who abuse the procurement process, and requiring state agencies and their affiliates to make public all potential business opportunities in order level the playing field for all potential vendors.</p> <p>In a statement after the new state budget was passed, DiNapoli expressed disappointment that procurement reform was not included.</p> <p>“Hopefully before the end of session, the procurement reforms my office has advanced will be addressed,” said DiNapoli. “With heightened risks to federal aid, a clear understanding of the impact of spending, revenue and policy decisions in this budget is especially essential. My office will provide more detailed analysis of the enacted budget in the coming weeks.”</p> <p>While it was immediately evident that procurement reforms -- like other government ethics, campaign finance, transparency, and voting reforms -- <a href="http://www.gothamgazette.com/state/6862-cuomo-announces-153-billion-state-budget-deal" target="_blank" rel="noopener noreferrer">were not included in the budget</a>, it will take time to unpack what is included, as DiNapoli indicated, in part because the budget was rushed through the Legislature over the weekend of April 7. Cuomo issued “messages of necessity” in order to waive the otherwise-necessary three-day bill review period.</p> <p>One indication that reform measures were not likely to be included in the budget was how they were dealt with in the budget outlines put forth by Cuomo and each legislative majority. In their on-house budget resolutions, the Democratically- controlled Assembly and Republican-controlled Senate both called for Cuomo’s 10 REDCs, which lawmakers have accused of self-dealing, to adhere to the Code of Ethics and FOIL requirements in the Public Officers Law, abide by the open meetings law, and mandate members file annual financial disclosure statements. However, the legislative houses rejected the governor’s proposals to require legislators to file conflicts of interest disclosure notices regarding their involvement in the spending of lump sum funds and to subject the Legislature to FOIL, among other reforms.</p> <p>Ultimately, the governor and Legislature agreed upon more unspecified spending than before and fewer accountability measures at a fiscally uncertain time for New York State and in the wake of corruption scandals.</p> <p>Since 2011, both the executive and legislative branches have been home to scandal, often featuring people on the inside seeking to exploit this unchecked cash flow for personal gain.</p> <p>Cuomo’s executive budget proposal, unveiled in January, included $9.5 billion in funds in 44 separate economic development and infrastructure pots that do not specify any official as having authority and lack any disclosure and accountability about how the funds would be spent, according to Citizens Union, a government reform group, in its 2017 “Spending in the Shadows” report.</p> <p>The analysis also identified $4.3 billion divided among 60 different pots of discretionary funding that are assigned to one or more elected officials and not subject to disclosure requirements -- a $2 billion increase from last year’s executive budget. “We do not know what the criteria is, we do not know what projects are being considered, and we don’t even know what projects are being denied,” said Dick Dadey, executive director of Citizens Union.</p> <p>It is not yet clear exactly how much of the ‘shadowy’ money outlined in Cuomo’s executive budget made it into the final spending plan (Citizens Union has yet to do its analysis of the adopted budget).</p> <p>Access to these vaguely defined funding streams make lawmakers particularly susceptible to corruption schemes like the ones executed by former Assembly Speaker Sheldon Silver and former Senate Majority Leader Dean Skelos, according to Dadey. Both Silver and Skelos were convicted on federal charges, leading to unmet calls for government ethics reforms.</p> <p>“It’s an increasing problem in New York. We have 33 legislators who were forced from public office since 2000 because of misconduct. In the last six years alone 16 have been forced from office,” said Dadey at a press conference last month.</p> <p>Meanwhile, an annual reporting requirement for Start-Up NY participants has been removed from this year’s budget, as first <a href="http://www.newsday.com/business/start-up-ny-reporting-requirement-cut-by-accident-official-confirms-1.13459711" target="_blank" rel="noopener noreferrer">reported by Newsday</a>. Since 2013, business owners were mandated to report how many jobs their companies created and how much money they’ve invested in their operations, or they would be removed from the program. Instead, the new state budget directs the state’s Empire State Development, which runs Start-Up NY, to publish broader reports on the program. A Cuomo administration source told Newsday the omission was an accident.</p> <p>The three-year-old program grants businesses creating at least one new job per year and their employees up to a decade of tax relief for moving to or beginning in designated zones on or nearby public college campuses.</p> <p>The Start-Up NY program drew criticism last year when annual reports showed that 1,135 jobs were created in its first two-and-a-half years, while $53 million was spent by Empire State Development on advertising the program. Cuomo in his executive budget requested a name change on the start-up initiative, and proposed loosening the requirements for participation in the program. The Legislature did not agree to these changes.</p> <p>

***
by Rachel Silberstein, State government reporter, Gotham Gazette
     

Read more by this writer.

</p> <p> Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union. </p>
A Big Bet on 'Revitalizing Downtown' 2016-10-12T04:00:00+00:00 2016-10-12T04:00:00+00:00 http://www.gothamgazette.com/?id=6570:a-big-bet-on-downtown-revitalization Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2016/far_rockaway_richards.jpg" alt="far rockaway richards" width="600" height="400" /></p> <p>Officials announce the Far Rockaway plan (photo: @DRichards13)</p> <hr /> <p dir="ltr">With individuals constantly moving in and out of the state, New York&rsquo;s population remains one of the most dynamic in the <a href="http://www.newsday.com/news/region-state/census-new-york-s-population-rises-remains-fourth-in-u-s-1.11255076" target="_blank">country</a>. This fluidity changes the makeup of communities and the character of neighborhoods - lately, more people are leaving New York than coming, even leading the state to <a href="http://www.dailykos.com/story/2015/11/22/1444508/-Which-states-will-gain-seats-in-Congress-come-2020-and-which-will-lose-Here-s-a-very-early-look" target="_blank">lose clout in Congress</a>. Often related to economic forces, especially job opportunity, New York has seen a number of its once-bustling cities, towns, and communities economically devastated in recent years.</p> <p dir="ltr">City and state governments consistently grapple with these changes in economics, demographics, and vitality. Policymakers sometimes decide to invest in stimulating a local economy, by luring a company to move in, offering an existing company incentives to stay, or by other means. &ldquo;Downtown revitalization&rdquo; has become a popular term in both New York City and at the state level. As part of his <a href="http://www.dos.ny.gov/opd/programs/Downtown%20Revitalization%20Initiative_%20Program_Information_Criteria.pdf" target="_blank">Downtown Revitalization Initiative</a>, Gov. Andrew Cuomo and his administration recently allocated a series of grants based to local communities selected by the state&rsquo;s Regional Economic Development Councils.</p> <p dir="ltr">In a statement about the development grants, Cuomo explained the initiative: &ldquo;A thriving downtown can provide a tremendous boost to the local economy. This initiative will transform selected downtown neighborhoods into vibrant places for people to live, work and raise a family.&rdquo; Under this initiative, the Cuomo administration awarded <a href="https://www.ny.gov/programs/downtown-revitalization-initiative">10 communities,</a> nine in Upstate and one in the city, $10 million each. &nbsp;</p> <p dir="ltr">These grants are different from, though in the same vein as, the massive state economic development programs that recently came under intense criticism due to federal criminal charges that were brought against nine individuals involved.</p> <p dir="ltr">Through downtown revitalization projects, whether city or state, public tax dollars are allocated toward improving infrastructure, creating amenities like park space, and constructing new mixed-use buildings to make an area more attractive for incoming residents and businesses. While the state awarded most grants to downtrodden communities outside New York City and much of the city is bustling with commerce and jobs, there are spots where neighborhood economic development and commercial activity lag -- and in Jamaica, Queens, at least one &ldquo;downtown,&rdquo; the city is infusing significant revitalization funding.</p> <p dir="ltr">An active governmental role in stimulating a local economy is not a new phenomenon, especially in New York City. Since the beginning of the<a href="https://www.innovations.harvard.edu/sites/default/files/hpd_1102_hoffman.pdf" target="_blank"> 20th century</a>, all five boroughs have undergone major revitalization projects. New Yorkers have seen significant infrastructural changes in places like <a href="http://www.nycedc.com/program/long-island-city" target="_blank">Long Island City</a>,<a href="http://www1.nyc.gov/office-of-the-mayor/news/351-14/investing-downtown-brooklyn-de-blasio-administration-next-wave-projects-spur" target="_blank"> Downtown Brooklyn</a> and <a href="http://www.nycedc.com/project/125th-street-revitalization" target="_blank">East Harlem</a>.</p> <p dir="ltr">When the government invests large sums of public dollars into redeveloping neighborhoods, tensions often arise between officials and the residents of the communities. To give residents a voice, government agencies and officials hold public information sessions and zoning hearings to explain revitalization plans and listen to concerns. The extent of the tension usually relates to how much community engagement is done in forming plans in the first place.</p> <p dir="ltr">Unsurprisingly, most residents welcome changes that would bring more jobs, improved transportation, and more facilities for families and youth. However, when the plan involves building new housing units, residents often become concerned with issues of affordability, high density, and the aesthetics of new, tall buildings.</p> <p dir="ltr">In his February <a href="http://www1.nyc.gov/office-of-the-mayor/state-of-our-city-2016-future-plans.page" target="_blank">State of the City</a> address, Mayor Bill de Blasio promised $91 million to revitalize Downtown Far Rockaway in Queens. In August, the city <a href="http://www.nycedc.com/press-release/nycedc-council-member-richards-local-elected-officials-and-city-commissioners" target="_blank">announced</a> a &ldquo;Roadmap for Action, an expansive, interagency plan to re-establish Downtown Far Rockaway as the commercial hub of the Rockaway peninsula.&rdquo;</p> <p dir="ltr">In his address, de Blasio explained some of what the revitalization would entail: &ldquo;We&rsquo;ll help businesses in commercial corridors like Beach 20th Street. Parents will be able to attend job training workshops while their kids play a pickup game at the greatly improved Sorrentino Recreation Center. And the whole community will enjoy the new, state-of-the-art Downtown Far Rockaway Library.&rdquo;</p> <p dir="ltr">It is largely welcome news for a community that has been seeking similar city assistance for nearly half of a century. The interagency effort, led by the city&rsquo;s Economic Development Corporation (EDC) and City Council Member Donovan Richards, to spur economic development and guarantee permanent affordable housing on the peninsula has been met with mostly positive feedback. Yet, some residents fear the uncertain effects of these major developmental changes, especially when it comes to new housing, created at least in part by government.</p> <p dir="ltr">For over 30 years, a shopping center at the intersection of Mott and Central Avenues in Downtown Far Rockaway sat nearly vacant. When a Dunkin&rsquo; Donuts opened there <a href="https://www.dnainfo.com/new-york/20150806/far-rockaway/dunkin-donuts-open-long-vacant-rockaway-shopping-center" target="_blank">last summer</a>, it became one of just three stores opened over decades in 30 possible storefronts. Now, a year later, the community will undergo substantial change after the EDC, the City Planning Commission, the Department of Housing and Preservation, other agencies, and state and local public officials promised to spur economic development in the area following de Blasio&rsquo;s decision to invest there.</p> <p dir="ltr">Council Member Richards, who <a href="http://council.nyc.gov/d31/html/members/home.shtml" target="_blank">represents</a> Far Rockaway in Council District 31 and chairs the Subcommittee on Zoning and Franchises, spearheaded efforts to acquire funding from the city for the project.</p> <p dir="ltr">In a press release announcing the project, Richards said, &ldquo;Disinvestment, lack of open space, lack of local employment options, lack of infrastructure, and poor pedestrian circulation, created not only a recipe for disaster, but hopelessness in this community.&rdquo;</p> <p dir="ltr">He added, &ldquo;But today, we begin the steps in righting these wrongs by paying our moral and</p> <p dir="ltr">economic debt owed to this community. The bounced checks of promises written out to this community in the past are long gone. The historic $91 million investment that the de Blasio administration has made will go a long way in providing economic justice to this community.&rdquo;</p> <p dir="ltr">Richards, a City Council member since March 2013, said the project will focus on making Far Rockaway a commercial hub again, especially making it easier to travel to and within the neighborhood.</p> <p dir="ltr">&ldquo;Right now, when you get off the A train, it feels like you&rsquo;re not even in the country,&rdquo; he said in an interview with Gotham Gazette, referencing the baron nature of the downtown area so desperately in need of new life. &ldquo;You feel like you&rsquo;re in a third-world country.&rdquo;</p> <p dir="ltr">The mayor first spoke about Far Rockaway&rsquo;s potential in his 2015 State of the City <a href="http://www.nytimes.com/2015/02/04/nyregion/new-york-mayor-bill-de-blasios-state-of-the-city-address.html" target="_blank">address</a>. Then, in part as a response to a February 2016 <a href="https://www.nycedc.com/system/files/files/project/2016.02.01_Downtown%20Far%20Rockaway%20Recommendations%20Letter.pdf" target="_blank">letter</a> of recommendations written by Richards and the Downtown Far Rockaway Working Group, a task force made up of local businesses and stakeholders created in November of last year, the mayor outlined his plan to invest in the community in his 2016 State of the City <a href="http://www1.nyc.gov/office-of-the-mayor/state-of-our-city-2016-future-plans.page" target="_blank">address</a>.</p> <p dir="ltr">Richards said he met with residents who asked for improved access to transportation services, new youth and family facilities and more job opportunities. According to Richards, community participation has been vital in getting the mayor&rsquo;s attention.</p> <p dir="ltr">&ldquo;Government sometimes is top-down heavy,&rdquo; Richards said. &ldquo;Any projects that come into my district, I don&rsquo;t care how small it is, I always want the community to be aware of what&rsquo;s going on.&rdquo;</p> <p dir="ltr">The letter from the group to de Blasio, written on stationery from Richards&rsquo; office, begins with: &ldquo;GOAL 1: Re-establish Downtown Far Rockaway as the commercial and transportation hub of the Rockaway peninsula,&rdquo; and follows with several other goals, each with a set of specific recommendations -- many of which were adopted by the City.</p> <p dir="ltr">Under that first goal, the Downtown Far Rockaway Working Group&rsquo;s recommendations point to the specifics of &ldquo;downtown revitalization&rdquo;: &ldquo;Redevelop the shopping center site at the heart of Downtown with mixed-income housing, commercial and community facility space,&rdquo; one reads.</p> <p dir="ltr">&ldquo;Reinvigorate Mott Avenue, Central Avenue, Beach 20th Street, and Cornaga Avenue by attracting more diverse retail offerings with a balance of local, regional, and national businesses and restaurants that foster a walkable environment&rdquo; is number two, &ldquo;Create destinations to draw residents as well as visitors, including family and youth recreation and entertainment&rdquo; is three, and &ldquo;Highlight Downtown&rsquo;s unique character and history, including as a music and entertainment destination, by fostering a &ldquo;Main Street&rdquo; feeling in Downtown with storefront improvements, traffic calming, lighting, and free wifi,&rdquo; is four. These are followed by a recommendation to push the state-run MTA for increased A-train service and other transportation improvements.</p> <p dir="ltr">Although the city&rsquo;s <a href="http://www.nycedc.com/system/files/files/project/Downtown%20Far%20Rockaway%20Roadmap%20for%20Action.PDF" target="_blank">&ldquo;Roadmap to Action&rdquo;</a> plan, which outlines the major goals of the project, elicited a positive response from residents, some remain hesitant about parts of the project, especially the housing element.</p> <p dir="ltr">As <a href="http://citylimits.org/2016/09/28/some-confusion-over-prospect-eminent-domain-in-rockaways/" target="_blank">reported by City Limits</a>, a Far Rockaway law firm, specializing in eminent domain law, sent notices to a number of residents detailing the city&rsquo;s plan to acquire their properties. When this was addressed by many upset residents at a scoping hearing in September, the City explained that the potential urban renewal area is still being studied. If approved, the city said, it would affect about a dozen property owners. While the law firm made a mistake by sending these notices to many residents whose properties would not be affected, it left lasting concerns for residents about the city&rsquo;s proposal. The possibility is still in the planning phases.</p> <p dir="ltr">As with other rezonings the de Blasio administration is moving forward, there are concerns about levels of affordability in housing, gentrification, and whether new development will be out of scale with the current, mostly low-rise residential community.</p> <p dir="ltr">Jonathan Gaska, in his 28th year as district manager of Community Board 14 in Queens which includes Far Rockaway, said a lot of residents worry that new 10- to 15-story residential units would take away from the character of Downtown Far Rockaway.</p> <p dir="ltr">&ldquo;The fear is they&rsquo;re going to build it like Long Island City,&rdquo; Gaska said. &ldquo;Not that Long Island City is a bad place, but it&rsquo;s all big buildings. It&rsquo;s more Manhattan. And I don&rsquo;t think this community wants to be Manhattan.&rdquo;</p> <p dir="ltr">Gaska said after Hurricane Sandy left Rockaway in wreckage, the city finally paid attention to the citizens&rsquo; grievances of the past five decades. When asked why it took so long for government to step in, Gaska said he thinks officials never saw it as a neighborhood worth investing millions of dollars to improve until Council Member Richards, who Gaska said has a &ldquo;good working relationship with the mayor,&rdquo; became its champion.</p> <p dir="ltr">&ldquo;Rockaway has been the Siberia of New York City government,&rdquo; Gaska said. &ldquo;Whenever the city had a problem, and to this day, really, they send it to Rockaway. I think that they just didn&rsquo;t see this as place that could ever improve.&rdquo;</p> <p dir="ltr">The plan in Far Rockaway would implement the mayor&rsquo;s Mandatory Inclusionary Housing <a href="http://www1.nyc.gov/assets/planning/download/pdf/plans-studies/mih/mih-summanry-adopted.pdf" target="_blank">program</a> (MIH), approved by the City Council in March, which requires new construction to include permanently affordable housing. In exchange for the ability to build more units, developers <a href="http://www1.nyc.gov/site/planning/plans/mih/mandatory-inclusionary-housing.page" target="_blank">must maintain affordable housing</a> for a certain percentage of units at specific affordability rates (rental caps based on income levels and family sizes). The numbers vary based on which combination of units and incomes the local City Council member selects.</p> <p dir="ltr">Richards said he understands one of the biggest challenges about this rezoning and downtown development project remains preserving the character of the community while infusing a large amount of government resources into the area. But current zoning, according to Richards, is not working to spur growth.</p> <p dir="ltr">&ldquo;We understand that the zoning we have now has not activated the public realm,&rdquo; he said. &ldquo;It has not activated better commercial and better amenities for Far Rockaway.&rdquo;</p> <p dir="ltr">However, Richards added: &ldquo;We want to ensure that whatever the residential homes are, we want to keep the scale low,&rdquo; Richards said. &ldquo;We don&rsquo;t want to have towers towering over our two areas. Even as we develop, we want responsible development.&rdquo;</p> <p dir="ltr">Governor Cuomo is also in on the revitalization efforts in Queens. Cuomo&rsquo;s <a href="https://www.governor.ny.gov/news/governor-cuomo-launches-100-million-downtown-revitalization-initiative" target="_blank">Downtown Revitalization Initiative</a> awarded one of its ten $10 million grants to Downtown Jamaica, in Queens.</p> <p dir="ltr">As he awarded Jamaica the investment, Cuomo said in his August announcement, &ldquo;Queens has all sorts of assets, but Queens needs a partner. You can have all the assets but you need that start-up capital to make those assets really come together.&rdquo;</p> <p dir="ltr">Cuomo&rsquo;s Regional Council&rsquo;s chose where to provide these assets by looking at neighborhoods both in need and with the potential to develop. Queens has now seen investment from the city and state in Far Rockaway and Jamaica as both Astoria and Long Island City have become bustling residential and commercial hubs. However, as new housing and businesses come on the market, concerns have been raised about long-time residents and businesses being pushed out by increased rent prices.</p> <p dir="ltr">Mark Winston-Griffith, executive director of the <a href="http://brooklynmovementcenter.org/" target="_blank">Brooklyn Movement Center</a>, a multi-issue community organizing group focused on issues related to rapid neighborhood change and gentrification, said despite the city&rsquo;s possible good intentions behind economic development projects, current residents lose some control over their neighborhood during the revitalization process.</p> <p dir="ltr">&ldquo;Once you raise property values,&rdquo; he said. &ldquo;At the point you make it easier for people to not only get there, but to stay, then you inevitably make it more difficult for the people who are there now to remain.&rdquo;</p> <p dir="ltr">According to a <a href="http://furmancenter.org/files/sotc/NYUFurmanCenter_SOCin2015_9JUNE2016.pdf" target="_blank">report</a> on the state of housing in New York City written by New York University&rsquo;s Furman Center, newly developed housing units in gentrifying neighborhoods become younger, more educated and more likely to be labeled as a non-family household (as in, occupied by single people). The study found that in 2015, only incomes of those in gentrifying neighborhoods increased.</p> <p dir="ltr">The Furman Center study found the &ldquo;share of the population that identified as black also declined in gentrifying neighborhoods between 1990 and 2010 (37.9 percent to 30.9 percent), but the share of population that identified as white increased (18.8 percent to 20.6 percent).&rdquo;</p> <p dir="ltr">Winston-Griffith said there continues to be a legitimate fight for the right of low-income black New Yorkers to continue to live and thrive in the neighborhoods where they have lived for years. It is an issue that Council Member RIchards has raised and focused on when his committee was considering - and tweaking - the mayor&rsquo;s Mandatory Inclusionary Housing program.</p> <p>&ldquo;There&rsquo;s always that tension that comes with development, particularly in New York City,&rdquo; Winston-Griffith said. &ldquo;In this moment, when residential and commercial prices seem to know no limit, we see entire neighborhoods being transformed in front of our eyes.&rdquo;</p> <p>

***
by Devin Gannon for Gotham Gazette

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2016/far_rockaway_richards.jpg" alt="far rockaway richards" width="600" height="400" /></p> <p>Officials announce the Far Rockaway plan (photo: @DRichards13)</p> <hr /> <p dir="ltr">With individuals constantly moving in and out of the state, New York&rsquo;s population remains one of the most dynamic in the <a href="http://www.newsday.com/news/region-state/census-new-york-s-population-rises-remains-fourth-in-u-s-1.11255076" target="_blank">country</a>. This fluidity changes the makeup of communities and the character of neighborhoods - lately, more people are leaving New York than coming, even leading the state to <a href="http://www.dailykos.com/story/2015/11/22/1444508/-Which-states-will-gain-seats-in-Congress-come-2020-and-which-will-lose-Here-s-a-very-early-look" target="_blank">lose clout in Congress</a>. Often related to economic forces, especially job opportunity, New York has seen a number of its once-bustling cities, towns, and communities economically devastated in recent years.</p> <p dir="ltr">City and state governments consistently grapple with these changes in economics, demographics, and vitality. Policymakers sometimes decide to invest in stimulating a local economy, by luring a company to move in, offering an existing company incentives to stay, or by other means. &ldquo;Downtown revitalization&rdquo; has become a popular term in both New York City and at the state level. As part of his <a href="http://www.dos.ny.gov/opd/programs/Downtown%20Revitalization%20Initiative_%20Program_Information_Criteria.pdf" target="_blank">Downtown Revitalization Initiative</a>, Gov. Andrew Cuomo and his administration recently allocated a series of grants based to local communities selected by the state&rsquo;s Regional Economic Development Councils.</p> <p dir="ltr">In a statement about the development grants, Cuomo explained the initiative: &ldquo;A thriving downtown can provide a tremendous boost to the local economy. This initiative will transform selected downtown neighborhoods into vibrant places for people to live, work and raise a family.&rdquo; Under this initiative, the Cuomo administration awarded <a href="https://www.ny.gov/programs/downtown-revitalization-initiative">10 communities,</a> nine in Upstate and one in the city, $10 million each. &nbsp;</p> <p dir="ltr">These grants are different from, though in the same vein as, the massive state economic development programs that recently came under intense criticism due to federal criminal charges that were brought against nine individuals involved.</p> <p dir="ltr">Through downtown revitalization projects, whether city or state, public tax dollars are allocated toward improving infrastructure, creating amenities like park space, and constructing new mixed-use buildings to make an area more attractive for incoming residents and businesses. While the state awarded most grants to downtrodden communities outside New York City and much of the city is bustling with commerce and jobs, there are spots where neighborhood economic development and commercial activity lag -- and in Jamaica, Queens, at least one &ldquo;downtown,&rdquo; the city is infusing significant revitalization funding.</p> <p dir="ltr">An active governmental role in stimulating a local economy is not a new phenomenon, especially in New York City. Since the beginning of the<a href="https://www.innovations.harvard.edu/sites/default/files/hpd_1102_hoffman.pdf" target="_blank"> 20th century</a>, all five boroughs have undergone major revitalization projects. New Yorkers have seen significant infrastructural changes in places like <a href="http://www.nycedc.com/program/long-island-city" target="_blank">Long Island City</a>,<a href="http://www1.nyc.gov/office-of-the-mayor/news/351-14/investing-downtown-brooklyn-de-blasio-administration-next-wave-projects-spur" target="_blank"> Downtown Brooklyn</a> and <a href="http://www.nycedc.com/project/125th-street-revitalization" target="_blank">East Harlem</a>.</p> <p dir="ltr">When the government invests large sums of public dollars into redeveloping neighborhoods, tensions often arise between officials and the residents of the communities. To give residents a voice, government agencies and officials hold public information sessions and zoning hearings to explain revitalization plans and listen to concerns. The extent of the tension usually relates to how much community engagement is done in forming plans in the first place.</p> <p dir="ltr">Unsurprisingly, most residents welcome changes that would bring more jobs, improved transportation, and more facilities for families and youth. However, when the plan involves building new housing units, residents often become concerned with issues of affordability, high density, and the aesthetics of new, tall buildings.</p> <p dir="ltr">In his February <a href="http://www1.nyc.gov/office-of-the-mayor/state-of-our-city-2016-future-plans.page" target="_blank">State of the City</a> address, Mayor Bill de Blasio promised $91 million to revitalize Downtown Far Rockaway in Queens. In August, the city <a href="http://www.nycedc.com/press-release/nycedc-council-member-richards-local-elected-officials-and-city-commissioners" target="_blank">announced</a> a &ldquo;Roadmap for Action, an expansive, interagency plan to re-establish Downtown Far Rockaway as the commercial hub of the Rockaway peninsula.&rdquo;</p> <p dir="ltr">In his address, de Blasio explained some of what the revitalization would entail: &ldquo;We&rsquo;ll help businesses in commercial corridors like Beach 20th Street. Parents will be able to attend job training workshops while their kids play a pickup game at the greatly improved Sorrentino Recreation Center. And the whole community will enjoy the new, state-of-the-art Downtown Far Rockaway Library.&rdquo;</p> <p dir="ltr">It is largely welcome news for a community that has been seeking similar city assistance for nearly half of a century. The interagency effort, led by the city&rsquo;s Economic Development Corporation (EDC) and City Council Member Donovan Richards, to spur economic development and guarantee permanent affordable housing on the peninsula has been met with mostly positive feedback. Yet, some residents fear the uncertain effects of these major developmental changes, especially when it comes to new housing, created at least in part by government.</p> <p dir="ltr">For over 30 years, a shopping center at the intersection of Mott and Central Avenues in Downtown Far Rockaway sat nearly vacant. When a Dunkin&rsquo; Donuts opened there <a href="https://www.dnainfo.com/new-york/20150806/far-rockaway/dunkin-donuts-open-long-vacant-rockaway-shopping-center" target="_blank">last summer</a>, it became one of just three stores opened over decades in 30 possible storefronts. Now, a year later, the community will undergo substantial change after the EDC, the City Planning Commission, the Department of Housing and Preservation, other agencies, and state and local public officials promised to spur economic development in the area following de Blasio&rsquo;s decision to invest there.</p> <p dir="ltr">Council Member Richards, who <a href="http://council.nyc.gov/d31/html/members/home.shtml" target="_blank">represents</a> Far Rockaway in Council District 31 and chairs the Subcommittee on Zoning and Franchises, spearheaded efforts to acquire funding from the city for the project.</p> <p dir="ltr">In a press release announcing the project, Richards said, &ldquo;Disinvestment, lack of open space, lack of local employment options, lack of infrastructure, and poor pedestrian circulation, created not only a recipe for disaster, but hopelessness in this community.&rdquo;</p> <p dir="ltr">He added, &ldquo;But today, we begin the steps in righting these wrongs by paying our moral and</p> <p dir="ltr">economic debt owed to this community. The bounced checks of promises written out to this community in the past are long gone. The historic $91 million investment that the de Blasio administration has made will go a long way in providing economic justice to this community.&rdquo;</p> <p dir="ltr">Richards, a City Council member since March 2013, said the project will focus on making Far Rockaway a commercial hub again, especially making it easier to travel to and within the neighborhood.</p> <p dir="ltr">&ldquo;Right now, when you get off the A train, it feels like you&rsquo;re not even in the country,&rdquo; he said in an interview with Gotham Gazette, referencing the baron nature of the downtown area so desperately in need of new life. &ldquo;You feel like you&rsquo;re in a third-world country.&rdquo;</p> <p dir="ltr">The mayor first spoke about Far Rockaway&rsquo;s potential in his 2015 State of the City <a href="http://www.nytimes.com/2015/02/04/nyregion/new-york-mayor-bill-de-blasios-state-of-the-city-address.html" target="_blank">address</a>. Then, in part as a response to a February 2016 <a href="https://www.nycedc.com/system/files/files/project/2016.02.01_Downtown%20Far%20Rockaway%20Recommendations%20Letter.pdf" target="_blank">letter</a> of recommendations written by Richards and the Downtown Far Rockaway Working Group, a task force made up of local businesses and stakeholders created in November of last year, the mayor outlined his plan to invest in the community in his 2016 State of the City <a href="http://www1.nyc.gov/office-of-the-mayor/state-of-our-city-2016-future-plans.page" target="_blank">address</a>.</p> <p dir="ltr">Richards said he met with residents who asked for improved access to transportation services, new youth and family facilities and more job opportunities. According to Richards, community participation has been vital in getting the mayor&rsquo;s attention.</p> <p dir="ltr">&ldquo;Government sometimes is top-down heavy,&rdquo; Richards said. &ldquo;Any projects that come into my district, I don&rsquo;t care how small it is, I always want the community to be aware of what&rsquo;s going on.&rdquo;</p> <p dir="ltr">The letter from the group to de Blasio, written on stationery from Richards&rsquo; office, begins with: &ldquo;GOAL 1: Re-establish Downtown Far Rockaway as the commercial and transportation hub of the Rockaway peninsula,&rdquo; and follows with several other goals, each with a set of specific recommendations -- many of which were adopted by the City.</p> <p dir="ltr">Under that first goal, the Downtown Far Rockaway Working Group&rsquo;s recommendations point to the specifics of &ldquo;downtown revitalization&rdquo;: &ldquo;Redevelop the shopping center site at the heart of Downtown with mixed-income housing, commercial and community facility space,&rdquo; one reads.</p> <p dir="ltr">&ldquo;Reinvigorate Mott Avenue, Central Avenue, Beach 20th Street, and Cornaga Avenue by attracting more diverse retail offerings with a balance of local, regional, and national businesses and restaurants that foster a walkable environment&rdquo; is number two, &ldquo;Create destinations to draw residents as well as visitors, including family and youth recreation and entertainment&rdquo; is three, and &ldquo;Highlight Downtown&rsquo;s unique character and history, including as a music and entertainment destination, by fostering a &ldquo;Main Street&rdquo; feeling in Downtown with storefront improvements, traffic calming, lighting, and free wifi,&rdquo; is four. These are followed by a recommendation to push the state-run MTA for increased A-train service and other transportation improvements.</p> <p dir="ltr">Although the city&rsquo;s <a href="http://www.nycedc.com/system/files/files/project/Downtown%20Far%20Rockaway%20Roadmap%20for%20Action.PDF" target="_blank">&ldquo;Roadmap to Action&rdquo;</a> plan, which outlines the major goals of the project, elicited a positive response from residents, some remain hesitant about parts of the project, especially the housing element.</p> <p dir="ltr">As <a href="http://citylimits.org/2016/09/28/some-confusion-over-prospect-eminent-domain-in-rockaways/" target="_blank">reported by City Limits</a>, a Far Rockaway law firm, specializing in eminent domain law, sent notices to a number of residents detailing the city&rsquo;s plan to acquire their properties. When this was addressed by many upset residents at a scoping hearing in September, the City explained that the potential urban renewal area is still being studied. If approved, the city said, it would affect about a dozen property owners. While the law firm made a mistake by sending these notices to many residents whose properties would not be affected, it left lasting concerns for residents about the city&rsquo;s proposal. The possibility is still in the planning phases.</p> <p dir="ltr">As with other rezonings the de Blasio administration is moving forward, there are concerns about levels of affordability in housing, gentrification, and whether new development will be out of scale with the current, mostly low-rise residential community.</p> <p dir="ltr">Jonathan Gaska, in his 28th year as district manager of Community Board 14 in Queens which includes Far Rockaway, said a lot of residents worry that new 10- to 15-story residential units would take away from the character of Downtown Far Rockaway.</p> <p dir="ltr">&ldquo;The fear is they&rsquo;re going to build it like Long Island City,&rdquo; Gaska said. &ldquo;Not that Long Island City is a bad place, but it&rsquo;s all big buildings. It&rsquo;s more Manhattan. And I don&rsquo;t think this community wants to be Manhattan.&rdquo;</p> <p dir="ltr">Gaska said after Hurricane Sandy left Rockaway in wreckage, the city finally paid attention to the citizens&rsquo; grievances of the past five decades. When asked why it took so long for government to step in, Gaska said he thinks officials never saw it as a neighborhood worth investing millions of dollars to improve until Council Member Richards, who Gaska said has a &ldquo;good working relationship with the mayor,&rdquo; became its champion.</p> <p dir="ltr">&ldquo;Rockaway has been the Siberia of New York City government,&rdquo; Gaska said. &ldquo;Whenever the city had a problem, and to this day, really, they send it to Rockaway. I think that they just didn&rsquo;t see this as place that could ever improve.&rdquo;</p> <p dir="ltr">The plan in Far Rockaway would implement the mayor&rsquo;s Mandatory Inclusionary Housing <a href="http://www1.nyc.gov/assets/planning/download/pdf/plans-studies/mih/mih-summanry-adopted.pdf" target="_blank">program</a> (MIH), approved by the City Council in March, which requires new construction to include permanently affordable housing. In exchange for the ability to build more units, developers <a href="http://www1.nyc.gov/site/planning/plans/mih/mandatory-inclusionary-housing.page" target="_blank">must maintain affordable housing</a> for a certain percentage of units at specific affordability rates (rental caps based on income levels and family sizes). The numbers vary based on which combination of units and incomes the local City Council member selects.</p> <p dir="ltr">Richards said he understands one of the biggest challenges about this rezoning and downtown development project remains preserving the character of the community while infusing a large amount of government resources into the area. But current zoning, according to Richards, is not working to spur growth.</p> <p dir="ltr">&ldquo;We understand that the zoning we have now has not activated the public realm,&rdquo; he said. &ldquo;It has not activated better commercial and better amenities for Far Rockaway.&rdquo;</p> <p dir="ltr">However, Richards added: &ldquo;We want to ensure that whatever the residential homes are, we want to keep the scale low,&rdquo; Richards said. &ldquo;We don&rsquo;t want to have towers towering over our two areas. Even as we develop, we want responsible development.&rdquo;</p> <p dir="ltr">Governor Cuomo is also in on the revitalization efforts in Queens. Cuomo&rsquo;s <a href="https://www.governor.ny.gov/news/governor-cuomo-launches-100-million-downtown-revitalization-initiative" target="_blank">Downtown Revitalization Initiative</a> awarded one of its ten $10 million grants to Downtown Jamaica, in Queens.</p> <p dir="ltr">As he awarded Jamaica the investment, Cuomo said in his August announcement, &ldquo;Queens has all sorts of assets, but Queens needs a partner. You can have all the assets but you need that start-up capital to make those assets really come together.&rdquo;</p> <p dir="ltr">Cuomo&rsquo;s Regional Council&rsquo;s chose where to provide these assets by looking at neighborhoods both in need and with the potential to develop. Queens has now seen investment from the city and state in Far Rockaway and Jamaica as both Astoria and Long Island City have become bustling residential and commercial hubs. However, as new housing and businesses come on the market, concerns have been raised about long-time residents and businesses being pushed out by increased rent prices.</p> <p dir="ltr">Mark Winston-Griffith, executive director of the <a href="http://brooklynmovementcenter.org/" target="_blank">Brooklyn Movement Center</a>, a multi-issue community organizing group focused on issues related to rapid neighborhood change and gentrification, said despite the city&rsquo;s possible good intentions behind economic development projects, current residents lose some control over their neighborhood during the revitalization process.</p> <p dir="ltr">&ldquo;Once you raise property values,&rdquo; he said. &ldquo;At the point you make it easier for people to not only get there, but to stay, then you inevitably make it more difficult for the people who are there now to remain.&rdquo;</p> <p dir="ltr">According to a <a href="http://furmancenter.org/files/sotc/NYUFurmanCenter_SOCin2015_9JUNE2016.pdf" target="_blank">report</a> on the state of housing in New York City written by New York University&rsquo;s Furman Center, newly developed housing units in gentrifying neighborhoods become younger, more educated and more likely to be labeled as a non-family household (as in, occupied by single people). The study found that in 2015, only incomes of those in gentrifying neighborhoods increased.</p> <p dir="ltr">The Furman Center study found the &ldquo;share of the population that identified as black also declined in gentrifying neighborhoods between 1990 and 2010 (37.9 percent to 30.9 percent), but the share of population that identified as white increased (18.8 percent to 20.6 percent).&rdquo;</p> <p dir="ltr">Winston-Griffith said there continues to be a legitimate fight for the right of low-income black New Yorkers to continue to live and thrive in the neighborhoods where they have lived for years. It is an issue that Council Member RIchards has raised and focused on when his committee was considering - and tweaking - the mayor&rsquo;s Mandatory Inclusionary Housing program.</p> <p>&ldquo;There&rsquo;s always that tension that comes with development, particularly in New York City,&rdquo; Winston-Griffith said. &ldquo;In this moment, when residential and commercial prices seem to know no limit, we see entire neighborhoods being transformed in front of our eyes.&rdquo;</p> <p>

***
by Devin Gannon for Gotham Gazette

Read more by this writer.

</p>
In Wake of Charges, Cuomo Promises Change, Offers Few Details 2016-09-28T04:00:00+00:00 2016-09-28T04:00:00+00:00 http://www.gothamgazette.com/?id=6553:in-wake-of-charges-cuomo-promises-change-offers-few-details Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2014/03/29878309492_c6ac23da80_z.jpg" alt="Cuomo gaggle teacher award night" width="600" height="393" /></p> <p>Gov. Cuomo (photo: Kevin P. Coughlin/Governor's Office)</p> <hr /> <p>A day after United States Attorney Preet Bharara unveiled a myriad of corruption charges against two of his closest allies and some of his biggest donors related to their abuse of the state&rsquo;s economic development programs, Gov. Andrew Cuomo traveled to Buffalo to announce he was expanding the program that sparked Bharara&rsquo;s investigation.</p> <p>Cuomo publicly acknowledged the &ldquo;truly disappointing&rdquo; allegations and told the gathered crowd that his administration plans to learn from revelations about bid-rigging and bribery schemes. He also promised not to &ldquo;miss a beat&rdquo; and pledged his administration will &ldquo;redouble our efforts&rdquo; on economic development projects in Buffalo and Western New York.</p> <p>What exactly Cuomo has learned and what he and his administration actually plan to do about the alleged corruption - which was uncovered by reporters and watchdogs over a year ago and outlined by Bharara last week - remains largely unclear. The lack of clarity is especially stark given the amount of time the administration has had to formulate a response to problems and change protocols.</p> <p>On Friday, Cuomo announced that the Empire State Development Corporation would take over a portfolio of projects previously overseen by SUNY Polytechnic President Alain Kaloyeros, who was suspended without pay after he was charged Thursday in two separate bid-rigging investigations (one by Bharara and one by Attorney General Eric Schneiderman).</p> <p>&ldquo;We are today going to take that portfolio of responsibility, those projects, transfer them all to the Empire State Development Corporation, which is run by a fellow named Howard Zemsky is his name, and he&rsquo;ll take over management of that immediately,&rdquo; Cuomo said on Friday.</p> <p>Asked if the governor&rsquo;s announcement would end the use of nonprofits under SUNY Poly to administer economic development projects, Cuomo spokesperson Dani Lever told Gotham Gazette that &ldquo;ESDC will oversee all economic development projects.&rdquo;</p> <p>Cuomo said this week that Zemsky will formulate new procedures and oversight mechanisms to be unveiled in January during the governor&rsquo;s State of the State Address. Cuomo is also expected to debut a new phase of the Buffalo Billion in the same speech.</p> <p>On Friday, Cuomo also cited a report from Bart Schwartz, a lawyer retained by the governor in April after it became public that Bharara had subpoenaed a number of Cuomo officials and allies as part of his Buffalo Billion probe.</p> <p>&ldquo;We engaged an organization headed by a former prosecutor to review our entire procurement system. We have that report. It recommends changes to the procurement system,&rdquo; Cuomo said on Friday of Schwartz&rsquo;s investigation. &ldquo;We accept all the changes to the procurement system and we are going to be instituting them immediately to make sure whatever can be done to protect the taxpayer dollars is going to be done.&rdquo;</p> <p>However, the Cuomo administration has not made Schwartz&rsquo;s report public. Cuomo announced that the &ldquo;independent&rdquo; investigation came to a conclusion on the same day Bharara unveiled related charges, in an apparent attempt at moving the conversation from the charges toward reforms. The governor said earlier this year that he wouldn&rsquo;t have a problem releasing Schwartz&rsquo;s report, but that it may not be made public depending on whether Bharara&rsquo;s office approved its release.</p> <p>Bharara&rsquo;s office declined to comment on whether its representatives had spoken to Schwartz or the Cuomo administration about the report.</p> <p>Schwartz&rsquo;s office declined to comment on whether the report will be made public or how it will be implemented.</p> <p>The Cuomo administration failed to return requests for comment about whether the report will be made public and what kind of changes will be made to the state&rsquo;s economic development programs to reduce corruption risk. Representatives for Cuomo also failed to respond to a question about whether Schwartz looked into, or continues to investigate, malfeasance in the state&rsquo;s economic development programs.</p> <p>When Bharara announced the charges at a Thursday news conference, he said that his investigation is &ldquo;ongoing.&rdquo; Bharara said that Cuomo was not implicated in the criminal complaint, but would not comment about whether the governor is an ongoing target. On Wednesday, Cuomo told reporters that he was not interviewed by Bharara&rsquo;s office and that he did not expect to testify in Percoco&rsquo;s trial, if there is one.</p> <p>David Friedfel, director of state studies for the Citizens Budget Commission, said CBC welcomes the handover of state projects to Empire State Development Corp. &ldquo;We certainly think the move to the ESDC is a good idea. In general we take the view that if you can&rsquo;t do what you want to do with economic development through a government entity you should not be able to do it or be allowed to create a non-government entity to do it,&rdquo; he said.</p> <p>While ESDC does appear to have stricter contracting rules in place than SUNY Poly and its nonprofits, in the end both are controlled by Cuomo.</p> <p>And ESDC didn&rsquo;t go untouched by the recently revealed criminal charges, which were brought against nine people and showed a system lacking oversight. One of the charges against Cuomo&rsquo;s close friend and former top aide Joseph Percoco is that he took a $35,000 bribe to get ESDC to select a company for a project it didn&rsquo;t technically qualify for.</p> <p>Watchdogs believe the state used SUNY Poly and the nonprofits it oversees, like Fort Schuyler Management, in an end-run around standard state contracting protocols and to reduce public scrutiny, in part to fast track expensive projects. On Wednesday, Cuomo repeatedly blamed the alleged corruption on that same system, which he has done nothing to reform. He told reporters on Wednesday that the system &ldquo;had worked fine for 15 years. In retrospect I did not revisit their procurement system because they&rsquo;re a separate branch, they&rsquo;re a separate agency,&rdquo; Cuomo said, appearing to reference SUNY Poly. &ldquo;We will do just that,&rdquo; he promised of such a reexamination.</p> <p>Cuomo said on Friday in Buffalo that Zemsky will &ldquo;learn from what happened and to see how we can improve the system to make sure that it never happens again.&rdquo;</p> <p>The idea that there isn&rsquo;t already a blueprint on the table on how to avoid the pitfalls connected to the administration&rsquo;s use of nonprofits to administer economic development programs is laughable to many groups that have been calling for drastic changes for years and warning of corruption.</p> <p>&ldquo;Right now all we have are vague, undefined reforms wrapped in secrecy,&rdquo; said John Kaehny of Reinvent Albany, a group that has followed economic development projects closely. &ldquo;The questions we have about the administration&rsquo;s approach remain the same as the questions we had last year.&rdquo;</p> <p>While Cuomo plans to wait until January to unveil his changes to the state&rsquo;s economic development procurement system, a number of watchdog groups have been clear for over a year on what changes needed to occur to better prevent corruption. Comptroller Thomas DiNapoli has also complained that Cuomo and the Legislature stripped him of his ability to review contracts at SUNY, something watchdogs have echoed. State legislative leaders have said little about the issue.</p> <p>In a letter dated September 23, 2015, several groups, including CBC, Reinvent Albany, Citizens Union, Fiscal Policy Institute, and the New York Public Interest Research Group, called on Cuomo to increase accountability and transparency surrounding economic development projects. The groups asked Cuomo to consider &ldquo;making one state agency the sole negotiator and implementer of state subsidy deals with public review and input, and ending the use of state controlled non-profit groups and the state university system in the contract award process.&rdquo;</p> <p>In a letter dated December 23, 2015, some of the same groups called on the state to implement a &ldquo;database of deals&rdquo; to allow for greater transparency and give New Yorkers a better idea of whether businesses that receive subsidies, like SolarCity, are actually keeping their promises to the state on deliverables like jobs.</p> <p>Wall Street&rsquo;s faith in SolarCity has been shaken in recent months and the company has altered the timeline for what it will produce. Meanwhile, the state paused a payment to the company this week that would allow it to purchase factory equipment it needs for its Riverbend Plant. The state has repeatedly skipped scheduled payments to SolarCity this year, <a href="http://www.politico.com/states/new-york/albany/story/2016/09/state-delays-payments-on-solarcity-factory-equipment-105776" target="_blank">as reported by Politico New York</a>.</p> <p>Friedfel said that CBC would prefer to see the state stick to economic development programs where businesses are forced to deliver on their promises before they see payment from the state. &ldquo;Our view, taken apart from the criminal charges, is that economic development should be done with set metrics that are accomplished ahead of time the state makes any payments,&rdquo; he said. &ldquo;The state should only spend after promises are delivered on.&rdquo;</p> <p>

***
by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p> <p>Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2014/03/29878309492_c6ac23da80_z.jpg" alt="Cuomo gaggle teacher award night" width="600" height="393" /></p> <p>Gov. Cuomo (photo: Kevin P. Coughlin/Governor's Office)</p> <hr /> <p>A day after United States Attorney Preet Bharara unveiled a myriad of corruption charges against two of his closest allies and some of his biggest donors related to their abuse of the state&rsquo;s economic development programs, Gov. Andrew Cuomo traveled to Buffalo to announce he was expanding the program that sparked Bharara&rsquo;s investigation.</p> <p>Cuomo publicly acknowledged the &ldquo;truly disappointing&rdquo; allegations and told the gathered crowd that his administration plans to learn from revelations about bid-rigging and bribery schemes. He also promised not to &ldquo;miss a beat&rdquo; and pledged his administration will &ldquo;redouble our efforts&rdquo; on economic development projects in Buffalo and Western New York.</p> <p>What exactly Cuomo has learned and what he and his administration actually plan to do about the alleged corruption - which was uncovered by reporters and watchdogs over a year ago and outlined by Bharara last week - remains largely unclear. The lack of clarity is especially stark given the amount of time the administration has had to formulate a response to problems and change protocols.</p> <p>On Friday, Cuomo announced that the Empire State Development Corporation would take over a portfolio of projects previously overseen by SUNY Polytechnic President Alain Kaloyeros, who was suspended without pay after he was charged Thursday in two separate bid-rigging investigations (one by Bharara and one by Attorney General Eric Schneiderman).</p> <p>&ldquo;We are today going to take that portfolio of responsibility, those projects, transfer them all to the Empire State Development Corporation, which is run by a fellow named Howard Zemsky is his name, and he&rsquo;ll take over management of that immediately,&rdquo; Cuomo said on Friday.</p> <p>Asked if the governor&rsquo;s announcement would end the use of nonprofits under SUNY Poly to administer economic development projects, Cuomo spokesperson Dani Lever told Gotham Gazette that &ldquo;ESDC will oversee all economic development projects.&rdquo;</p> <p>Cuomo said this week that Zemsky will formulate new procedures and oversight mechanisms to be unveiled in January during the governor&rsquo;s State of the State Address. Cuomo is also expected to debut a new phase of the Buffalo Billion in the same speech.</p> <p>On Friday, Cuomo also cited a report from Bart Schwartz, a lawyer retained by the governor in April after it became public that Bharara had subpoenaed a number of Cuomo officials and allies as part of his Buffalo Billion probe.</p> <p>&ldquo;We engaged an organization headed by a former prosecutor to review our entire procurement system. We have that report. It recommends changes to the procurement system,&rdquo; Cuomo said on Friday of Schwartz&rsquo;s investigation. &ldquo;We accept all the changes to the procurement system and we are going to be instituting them immediately to make sure whatever can be done to protect the taxpayer dollars is going to be done.&rdquo;</p> <p>However, the Cuomo administration has not made Schwartz&rsquo;s report public. Cuomo announced that the &ldquo;independent&rdquo; investigation came to a conclusion on the same day Bharara unveiled related charges, in an apparent attempt at moving the conversation from the charges toward reforms. The governor said earlier this year that he wouldn&rsquo;t have a problem releasing Schwartz&rsquo;s report, but that it may not be made public depending on whether Bharara&rsquo;s office approved its release.</p> <p>Bharara&rsquo;s office declined to comment on whether its representatives had spoken to Schwartz or the Cuomo administration about the report.</p> <p>Schwartz&rsquo;s office declined to comment on whether the report will be made public or how it will be implemented.</p> <p>The Cuomo administration failed to return requests for comment about whether the report will be made public and what kind of changes will be made to the state&rsquo;s economic development programs to reduce corruption risk. Representatives for Cuomo also failed to respond to a question about whether Schwartz looked into, or continues to investigate, malfeasance in the state&rsquo;s economic development programs.</p> <p>When Bharara announced the charges at a Thursday news conference, he said that his investigation is &ldquo;ongoing.&rdquo; Bharara said that Cuomo was not implicated in the criminal complaint, but would not comment about whether the governor is an ongoing target. On Wednesday, Cuomo told reporters that he was not interviewed by Bharara&rsquo;s office and that he did not expect to testify in Percoco&rsquo;s trial, if there is one.</p> <p>David Friedfel, director of state studies for the Citizens Budget Commission, said CBC welcomes the handover of state projects to Empire State Development Corp. &ldquo;We certainly think the move to the ESDC is a good idea. In general we take the view that if you can&rsquo;t do what you want to do with economic development through a government entity you should not be able to do it or be allowed to create a non-government entity to do it,&rdquo; he said.</p> <p>While ESDC does appear to have stricter contracting rules in place than SUNY Poly and its nonprofits, in the end both are controlled by Cuomo.</p> <p>And ESDC didn&rsquo;t go untouched by the recently revealed criminal charges, which were brought against nine people and showed a system lacking oversight. One of the charges against Cuomo&rsquo;s close friend and former top aide Joseph Percoco is that he took a $35,000 bribe to get ESDC to select a company for a project it didn&rsquo;t technically qualify for.</p> <p>Watchdogs believe the state used SUNY Poly and the nonprofits it oversees, like Fort Schuyler Management, in an end-run around standard state contracting protocols and to reduce public scrutiny, in part to fast track expensive projects. On Wednesday, Cuomo repeatedly blamed the alleged corruption on that same system, which he has done nothing to reform. He told reporters on Wednesday that the system &ldquo;had worked fine for 15 years. In retrospect I did not revisit their procurement system because they&rsquo;re a separate branch, they&rsquo;re a separate agency,&rdquo; Cuomo said, appearing to reference SUNY Poly. &ldquo;We will do just that,&rdquo; he promised of such a reexamination.</p> <p>Cuomo said on Friday in Buffalo that Zemsky will &ldquo;learn from what happened and to see how we can improve the system to make sure that it never happens again.&rdquo;</p> <p>The idea that there isn&rsquo;t already a blueprint on the table on how to avoid the pitfalls connected to the administration&rsquo;s use of nonprofits to administer economic development programs is laughable to many groups that have been calling for drastic changes for years and warning of corruption.</p> <p>&ldquo;Right now all we have are vague, undefined reforms wrapped in secrecy,&rdquo; said John Kaehny of Reinvent Albany, a group that has followed economic development projects closely. &ldquo;The questions we have about the administration&rsquo;s approach remain the same as the questions we had last year.&rdquo;</p> <p>While Cuomo plans to wait until January to unveil his changes to the state&rsquo;s economic development procurement system, a number of watchdog groups have been clear for over a year on what changes needed to occur to better prevent corruption. Comptroller Thomas DiNapoli has also complained that Cuomo and the Legislature stripped him of his ability to review contracts at SUNY, something watchdogs have echoed. State legislative leaders have said little about the issue.</p> <p>In a letter dated September 23, 2015, several groups, including CBC, Reinvent Albany, Citizens Union, Fiscal Policy Institute, and the New York Public Interest Research Group, called on Cuomo to increase accountability and transparency surrounding economic development projects. The groups asked Cuomo to consider &ldquo;making one state agency the sole negotiator and implementer of state subsidy deals with public review and input, and ending the use of state controlled non-profit groups and the state university system in the contract award process.&rdquo;</p> <p>In a letter dated December 23, 2015, some of the same groups called on the state to implement a &ldquo;database of deals&rdquo; to allow for greater transparency and give New Yorkers a better idea of whether businesses that receive subsidies, like SolarCity, are actually keeping their promises to the state on deliverables like jobs.</p> <p>Wall Street&rsquo;s faith in SolarCity has been shaken in recent months and the company has altered the timeline for what it will produce. Meanwhile, the state paused a payment to the company this week that would allow it to purchase factory equipment it needs for its Riverbend Plant. The state has repeatedly skipped scheduled payments to SolarCity this year, <a href="http://www.politico.com/states/new-york/albany/story/2016/09/state-delays-payments-on-solarcity-factory-equipment-105776" target="_blank">as reported by Politico New York</a>.</p> <p>Friedfel said that CBC would prefer to see the state stick to economic development programs where businesses are forced to deliver on their promises before they see payment from the state. &ldquo;Our view, taken apart from the criminal charges, is that economic development should be done with set metrics that are accomplished ahead of time the state makes any payments,&rdquo; he said. &ldquo;The state should only spend after promises are delivered on.&rdquo;</p> <p>

***
by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p> <p>Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.</p>
Improving Entrepreneurial Opportunities for Hispanics Will Be a Boost for the City 2016-09-22T04:00:00+00:00 2016-09-22T04:00:00+00:00 http://www.gothamgazette.com/?id=6540:improving-entrepreneurial-opportunities-for-hispanics-will-be-a-boost-for-the-city Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2014/03/pichardo_horizontal3.jpg" alt="pichardo presser" width="600" height="395" /></p> <p dir="ltr">Assemblymember Pichardo, one of the co-authors</p> <hr /> <p dir="ltr">New York City is, and always will be, one of the world&rsquo;s economic powerhouses. Yet that doesn&rsquo;t mean there isn&rsquo;t room for improvement. In fact, although unemployment across the city has fallen faster than the rest of the country since the recent recession, areas like the Bronx still lag.</p> <p dir="ltr">While the Bronx has seen some progress, there is still much work to be done for shared prosperity and economic opportunity for all. With the right tools and policies focused on entrepreneurial growth, the most impoverished borough can have the opportunity to complete the city&rsquo;s economic boom and ensure that the entire city, not just the lower half of Manhattan and a few other areas, experiences long-lasting economic growth.</p> <p dir="ltr">New York City&rsquo;s resilience was again proven by an impressive return to economic prosperity after the recent worldwide recession. Although it&rsquo;s near 5 percent overall unemployment rate may make much of the rest of the country envious, the Bronx continues to have a rate above 7.5 percent, more than 50 percent higher, while the 1.5 million Hispanics in the borough also make up a majority of its unemployed.</p> <p dir="ltr">Hispanics in New York City total nearly 2.5 million people; alone they would be the fourth-largest and one of the fastest growing cities in the country. Even while Hispanics still constitute a disproportionate amount of the unemployed, also losing more of their wealth than any other demographic during the recession, Hispanic-owned businesses have proliferated across New York. In fact, new business growth in this demographic has increased at a rate of more than eight times the overall rate, simultaneously improving total payroll by 40 percent and revenue by almost 50 percent.</p> <p dir="ltr">Local representatives and appointed officials shouldn&rsquo;t take these statistics lightly. While we&rsquo;ve always known that something has to be done to improve economic outcomes in more disadvantaged areas such as much of the Bronx, what hasn&rsquo;t always been clear is what will drive results. It should now be clear: the best opportunities for long-term growth reside in improving entrepreneurial opportunities.</p> <p dir="ltr">There is plenty of room for improvement. While the Governor Cuomo&rsquo;s <a href="http://labor.ny.gov/strikeforce/strikeforce.shtm" target="_blank">Unemployment StrikeForce</a> is a great program to increase employment, New York City was <a href="https://wallethub.com/edu/best-and-worst-cities-for-hispanic-entrepreneurs/6491/" target="_blank">recently ranked</a> 145 of 150 U.S. cities for Hispanic entrepreneurs. More should be invested in creating entrepreneurial opportunities, while also ensuring that regulations don&rsquo;t impede them. &nbsp;</p> <p dir="ltr">When asked, one of the greatest impediments to creating and growing a business is the lack of access to capital. Hispanics in particular receive funding at rates far lower than the rest of the population. In one recent study, it was found that across the country less than one percent of venture capital funding went to Hispanics. Grants and other creative funding opportunities should be pursued through both the private and public sectors, especially here in the New York City.</p> <p dir="ltr">While some ventures require significant capital to start, it should be noted that thousands of small business owners across the city continue to bootstrap their way to success. While few are lucky enough to get angel funding and share space with other like-minded entrepreneurs, many more start businesses selling products such as those offered by Herbalife, which focuses on expanding its line of nutrition products and is especially popular in the Hispanic community.</p> <p dir="ltr">With little up front capital, these &ldquo;micro-entrepreneurs&rdquo; are creating additional income for their families that is otherwise hard to obtain. When considering easing the burden of the city&rsquo;s bureaucracy, officials should realize that many of these smaller startups might not find it worthwhile to take the time &ndash; and pay the fees &ndash; to navigate the existing regulatory process. Although tempting to focus on the direct revenues gained from complying with existing regulations, if we have to choose between a profitable, tax-generating, employee-paying business in operation versus an entrepreneur sitting on the sidelines, the former should always win.</p> <p dir="ltr">Incubators and accelerators are another alternative to promote economic development and are fast becoming the best way to improve the economy of a particular region, especially one that is currently plagued by poor economics. Thus far, few of these exist in areas outside of Manhattan.</p> <p dir="ltr">It&rsquo;s not unreasonable to ask a municipality to get involved in the creation and development of a local accelerator; after all, the entire region benefits. Just ask 1776, which has incubated hundreds of local startups in Washington D.C. with a relatively small grant from the city and has begun expanding across the country, recently opening a branch in Brooklyn. New York should have similar success stories in every borough.</p> <p dir="ltr">Whether a future business mogul looking to get that tech startup on its feet or a local family just hoping to help make ends meet with income selling nutritional products within their neighborhood, one thing is certain: New York&rsquo;s future resides in these entrepreneurs. Local appointed and elected officials should remember that New York City&rsquo;s best chance to grow is through the expansion of new, and improvement of existing, entrepreneurial opportunities outside of lower Manhattan. Only then can we guarantee the successful future that New York has always promised.</p> <p dir="ltr">***<br />Assemblymember Victor M. Pichardo represents the 86th District in the New York State Assembly.</p> <p dir="ltr">Justin V&eacute;lez-Hagan is the executive director of the National Puerto Rican Chamber of Commerce and an economic policy researcher at the University of Maryland.</p> <p>

***
Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2014/03/pichardo_horizontal3.jpg" alt="pichardo presser" width="600" height="395" /></p> <p dir="ltr">Assemblymember Pichardo, one of the co-authors</p> <hr /> <p dir="ltr">New York City is, and always will be, one of the world&rsquo;s economic powerhouses. Yet that doesn&rsquo;t mean there isn&rsquo;t room for improvement. In fact, although unemployment across the city has fallen faster than the rest of the country since the recent recession, areas like the Bronx still lag.</p> <p dir="ltr">While the Bronx has seen some progress, there is still much work to be done for shared prosperity and economic opportunity for all. With the right tools and policies focused on entrepreneurial growth, the most impoverished borough can have the opportunity to complete the city&rsquo;s economic boom and ensure that the entire city, not just the lower half of Manhattan and a few other areas, experiences long-lasting economic growth.</p> <p dir="ltr">New York City&rsquo;s resilience was again proven by an impressive return to economic prosperity after the recent worldwide recession. Although it&rsquo;s near 5 percent overall unemployment rate may make much of the rest of the country envious, the Bronx continues to have a rate above 7.5 percent, more than 50 percent higher, while the 1.5 million Hispanics in the borough also make up a majority of its unemployed.</p> <p dir="ltr">Hispanics in New York City total nearly 2.5 million people; alone they would be the fourth-largest and one of the fastest growing cities in the country. Even while Hispanics still constitute a disproportionate amount of the unemployed, also losing more of their wealth than any other demographic during the recession, Hispanic-owned businesses have proliferated across New York. In fact, new business growth in this demographic has increased at a rate of more than eight times the overall rate, simultaneously improving total payroll by 40 percent and revenue by almost 50 percent.</p> <p dir="ltr">Local representatives and appointed officials shouldn&rsquo;t take these statistics lightly. While we&rsquo;ve always known that something has to be done to improve economic outcomes in more disadvantaged areas such as much of the Bronx, what hasn&rsquo;t always been clear is what will drive results. It should now be clear: the best opportunities for long-term growth reside in improving entrepreneurial opportunities.</p> <p dir="ltr">There is plenty of room for improvement. While the Governor Cuomo&rsquo;s <a href="http://labor.ny.gov/strikeforce/strikeforce.shtm" target="_blank">Unemployment StrikeForce</a> is a great program to increase employment, New York City was <a href="https://wallethub.com/edu/best-and-worst-cities-for-hispanic-entrepreneurs/6491/" target="_blank">recently ranked</a> 145 of 150 U.S. cities for Hispanic entrepreneurs. More should be invested in creating entrepreneurial opportunities, while also ensuring that regulations don&rsquo;t impede them. &nbsp;</p> <p dir="ltr">When asked, one of the greatest impediments to creating and growing a business is the lack of access to capital. Hispanics in particular receive funding at rates far lower than the rest of the population. In one recent study, it was found that across the country less than one percent of venture capital funding went to Hispanics. Grants and other creative funding opportunities should be pursued through both the private and public sectors, especially here in the New York City.</p> <p dir="ltr">While some ventures require significant capital to start, it should be noted that thousands of small business owners across the city continue to bootstrap their way to success. While few are lucky enough to get angel funding and share space with other like-minded entrepreneurs, many more start businesses selling products such as those offered by Herbalife, which focuses on expanding its line of nutrition products and is especially popular in the Hispanic community.</p> <p dir="ltr">With little up front capital, these &ldquo;micro-entrepreneurs&rdquo; are creating additional income for their families that is otherwise hard to obtain. When considering easing the burden of the city&rsquo;s bureaucracy, officials should realize that many of these smaller startups might not find it worthwhile to take the time &ndash; and pay the fees &ndash; to navigate the existing regulatory process. Although tempting to focus on the direct revenues gained from complying with existing regulations, if we have to choose between a profitable, tax-generating, employee-paying business in operation versus an entrepreneur sitting on the sidelines, the former should always win.</p> <p dir="ltr">Incubators and accelerators are another alternative to promote economic development and are fast becoming the best way to improve the economy of a particular region, especially one that is currently plagued by poor economics. Thus far, few of these exist in areas outside of Manhattan.</p> <p dir="ltr">It&rsquo;s not unreasonable to ask a municipality to get involved in the creation and development of a local accelerator; after all, the entire region benefits. Just ask 1776, which has incubated hundreds of local startups in Washington D.C. with a relatively small grant from the city and has begun expanding across the country, recently opening a branch in Brooklyn. New York should have similar success stories in every borough.</p> <p dir="ltr">Whether a future business mogul looking to get that tech startup on its feet or a local family just hoping to help make ends meet with income selling nutritional products within their neighborhood, one thing is certain: New York&rsquo;s future resides in these entrepreneurs. Local appointed and elected officials should remember that New York City&rsquo;s best chance to grow is through the expansion of new, and improvement of existing, entrepreneurial opportunities outside of lower Manhattan. Only then can we guarantee the successful future that New York has always promised.</p> <p dir="ltr">***<br />Assemblymember Victor M. Pichardo represents the 86th District in the New York State Assembly.</p> <p dir="ltr">Justin V&eacute;lez-Hagan is the executive director of the National Puerto Rican Chamber of Commerce and an economic policy researcher at the University of Maryland.</p> <p>

***
Have an op-ed idea or submission for Gotham Gazette? Email opinion@gothamgazette.com

</p>
Federal Corruption Charges Confirm Systemic Flaws in State Economic Development System 2016-09-22T04:00:00+00:00 2016-09-22T04:00:00+00:00 http://www.gothamgazette.com/?id=6544:federal-corruption-charges-confirm-systemic-flaws-in-state-economic-development-system Ben Max <p><img src="http://www.gothamgazette.com/images/graphics/2014/03/19673670634_68575a51ab_z.jpg" alt="cuomo topping off buffalo" width="600" height="392" /></p> <p>Cuomo in Buffalo (photo via The Governor's Office on Flickr)</p> <hr /> <p>After laying out multiple corruption and bribery charges against nine players involved with Gov. Andrew Cuomo&rsquo;s signature economic development program, including his former aide and close friend Joe Percoco, family friend and confidante Todd Howe, and a number of major developers and Cuomo donors, U.S. Attorney Preet Bharara refused to say whether the governor is a target in the probe or if it is reasonable to hold him accountable for the conduct of the people he empowered. The prosecutor noted the case remains open as a &ldquo;general matter.&rdquo;</p> <p>Alluding to things possibly to come, though, Bharara said, "I really do hope that there is a trial in this case, so that all New Yorkers can see, in gory detail, what their state government has been up to.&rdquo;</p> <p>Whether or not Cuomo is indeed being investigated, or will see charges, those brought by Bharara on Thursday are an indictment of a system that the governor has presided over, and one that other leaders in state government have done little to oppose.</p> <p>Cuomo issued a statement lamenting the charges and promising justice will be served: &ldquo;If the allegations are true, I am saddened and profoundly disappointed. I hold my administration to the highest level of integrity. I have zero tolerance for abuse of the public trust from anyone. If anything, a friend should be held to an even higher standard. Like my father before me, I believe public integrity is paramount. This sort of breach, if true, should be and will be punished.&rdquo;</p> <p>Cuomo and his administration have continuously responded to reports about corruption in his economic development programs as though they are surprising and have caught them off guard, but the administration has been receiving warnings for years that the system was being abused.</p> <p>Watchdogs have been setting off alarms that the state&rsquo;s economic development system is ripe for corruption, while the press has consistently reported what appeared to be instances of bid-rigging related to the Buffalo Billion and government favors for donors to Cuomo&rsquo;s electoral campaigns.</p> <p>All the while, the Cuomo administration has taken the criticism and spun it as attacks on the effectiveness of the investments and on the needy communities they benefit, especially Buffalo. And while the governor did hire an &ldquo;independent&rdquo; investigator, Bart Schwartz, to examine and oversee the system last Spring, it was only after the administration was rocked by a storm of subpoenas. Schwartz and his firm can earn up to $450,000 for their work examining the system, a job watchdogs say should have been carried out by the state Legislature, Comptroller, and Attorney General.</p> <p>Schwartz&rsquo;s office declined to comment on the charges or what his role will be going forward now that the charges have been unveiled.</p> <p>&ldquo;The real story here is the system is broken. Everything we thought was going on, was going on, and is actually worse than we thought,&rdquo; said John Kaehny, executive director of Reinvent Albany, a group that has been pushing for major reforms to the state&rsquo;s economic development systems and greater budget transparency.</p> <p>Kaehny noted that the scandals related to bid-rigging in Buffalo, Syracuse, and Albany involve over $1.5 billion in taxpayer funds. &ldquo;These indictments shine a light on a broken and corrupt system -- not a few bad apples,&rdquo; said Kaehny.</p> <p>Hundreds of millions of dollars in state funds flow through opaque non-profits that the state established, a practice that predates Gov. Cuomo but he has expanded. Large sums of cash are approved in the state budget with little debate and the money is given little scrutiny by the Legislature thereafter.</p> <p>The major beneficiary of the alleged malfeasance, besides those charged with unfairly winning contracts and those accused of taking bribes, appears to be the Cuomo campaign. Developers involved in the scandal gave generously to Cuomo around the times they won state economic development contracts.</p> <p><a href="http://reinventalbany.org/2016/09/three-indicted-ceos-are-all-among-gov-cuomos-biggest-upstate-contributors-biggest-state-econ-dev-contractors/" target="_blank">According to Reinvent Albany</a>, three of the executives now charged in bid-rigging schemes are some of Cuomo&rsquo;s biggest donors. Louis Ciminelli of LP Ciminelli has given Cuomo&rsquo;s campaign $143,550 in contributions and received over $600 million worth of contracts through state-controlled non-profits. Joe Nicolla of Columbia Development has given Cuomo $320,000 while receiving $190 million in contracts through state-controlled non-profits and Steven Aiello of COR Development has given $338,500 to the Cuomo campaign while receiving $105 million through state-controlled non-profits.</p> <p>Among those charged is Percoco, a childhood friend of Cuomo&rsquo;s who has followed the governor throughout his various political positions. Percoco was known as the governor&rsquo;s enforcer when he worked under him in the Capitol and later as a high-pressure fundraiser when he worked for Cuomo&rsquo;s campaign. He is accused of using his position to take state action on behalf of contractors in exchange for bribes.</p> <p>Alain Kaloyeros, now the former head of SUNY Polytechnic, which has awarded contracts to Buffalo Billion developers, was also charged Thursday. Kaloyeros is charged with bid-rigging.</p> <p><a href="https://www.justice.gov/usao-sdny/pr/nine-defendants-including-joseph-percoco-former-executive-deputy-secretary-governor-and" target="_blank">Also charged</a> were developers including Aiello, Ciminelli, and Joseph Gerardi.</p> <p>Bharara&rsquo;s office also unsealed a guilty plea by Todd Howe, a lobbyist and Cuomo family friend who has faced financial trouble over the years and was advocating for contractors while also overseeing and working with Kaloyeros.</p> <p>Up until very recently the system allowed the state to funnel money to two non-profit entities overseen by SUNY Polytechnic. Those entities issued requests for proposal that in several instances were written specifically to only fit developers that had donated generously to Cuomo&rsquo;s campaign. Bharara charges that Kaloyeros actually tipped his favorite contractors far in advance of issuing an RFP to give them a leg up.</p> <p>The nonprofits have resisted transparency, only recently opening board meetings to the press. Additionally, the state appears to have been extremely lax in holding recipients of economic development funds to their promises, like how many jobs they plan to deliver or how much a project will cost.</p> <p>Legislative leaders, the comptroller, and attorney general have raised little fuss about an economic development system that appeared to evade standard state contracting procedures by using a complicated system of nonprofits controlled by the State University to award bids and dole out funding.</p> <p>Even with the spectre of Bharara&rsquo;s investigation hanging overhead, the Legislature made no broad attempts to reform the system, instead mostly deferring to the Cuomo administration.</p> <p>Comptroller Tom DiNapoli&rsquo;s office raised concerns this year about its ability to audit economic development projects, but DiNapoli has a reputation as being non-confrontational. When an audit of his challenged the effectiveness and oversight of Cuomo&rsquo;s Excelsior Jobs Program, the administration hit back hard, attacking the competence of DiNapoli&rsquo;s staff. <a href="http://www.gothamgazette.com/index.php/state/6485-cuomo-seeks-to-undermine-comptroller-s-check-on-his-power" target="_blank">Cuomo said</a> DiNapoli should &ldquo;educate&rdquo; himself and called his audits of economic development's &ldquo;opinion.&rdquo; DiNapoli has said he&rsquo;s not intimidated and that he does his mandated job.</p> <p>Cuomo and the Legislature actually <a href="http://www.gothamgazette.com/index.php/state/6485-cuomo-seeks-to-undermine-comptroller-s-check-on-his-power" target="_blank">stripped DiNapoli</a> of the ability to review contracts issued by SUNY and CUNY ahead of time, part of creating a secretive system without clear checks and accountability.</p> <p>On Thursday afternoon, Attorney General Eric Schneiderman unveiled bid-rigging charges of his own, these having to do with the construction of dorms near SUNY Albany, against Kaloyeros and Nicolla, of Columbia Development. Kaloyeros has spearheaded economic development programs under Cuomo and routinely appeared by Cuomo&rsquo;s side for years.</p> <p>According to Schneiderman&rsquo;s office the investigation took a year and was performed in partnership with the probe by federal agents led by Bharara&rsquo;s office. Schneiderman accused Kaloyeros, who was the state&rsquo;s highest paid employee until being suspended without pay on Thursday, of rigging bids to go to developers who in turn directed grants and other benefits to SUNY Polytechnic. Kaloyeros&rsquo; compensation package was directly tied to the activity he oversaw at SUNY Polytechnic, therefore he benefited from the bid-rigging.</p> <p>Last year Kaloyeros contacted this reporter by Facebook messenger after reading and apparently being upset by a story about the role he played in the Buffalo Billion. When asked if he would like to set up an interview to correct any misunderstandings or inaccuracies, he replied that he would like to give a tour of the nano facilities he oversees, but any discussion of federal investigations would be off limits. "The issue we have is confidentiality. We were instructed in no uncertain terms not to comment on the inquiry from down South with the threat of jail which is being interpreted as we are the target of an investigation,&rdquo; Kaloyeros wrote. &ldquo;So that part we cannot comment on beyond what we were authorized to say publicly. The rest is not a problem.&rdquo;</p> <p><a href="http://www.gothamgazette.com/index.php/government/5925-buffalo-billion-boss-offers-cancels-interview-claims-threat-of-jail" target="_blank">The article</a> attracted attention to Kaloyeros and he later deleted his Facebook profile.</p> <p>Now with the &ldquo;gory&rdquo; details of the charges out for all to see, Reinvent Albany is calling on the state to take quick action to fix the system. It wants the state to freeze any new economic development activity by SUNY Poly and its subsidiaries; a phase out of using state-controlled non-profits to oversee economic development funds; a uniform contract process by the state, public authorities, and SUNY; new pay-to-play controls limiting contributions from those doing business with state entities; the creation of a database that reports the details of state subsidies and contracts given to businesses; and restoration of the Comptroller&rsquo;s ability to review contracts issued by all state entities before they are signed.</p> <p>Asked for a comment on Reinvent Albany's reform suggestions in light of Thursday's charges brought by Bharara, a spokesperson for Gov. Cuomo did not respond.</p> <p>Jennifer Rodgers, executive director of The Center for the Advancement of Public Integrity at Columbia Law School and a former prosecutor who served in Bharara&rsquo;s office, said that the charges give proof that the state&rsquo;s economic development system failed.</p> <p>"As shown by the allegations in the indictment, there was a clear failure here in the oversight of the bidding procedures related to these Buffalo Billion projects,&rdquo; Rodgers said in a statement. &ldquo;We need greater transparency in these processes and stronger oversight; hopefully this will prevent recurrences of a situation where public funds made their way into the defendant's' pockets instead of being used for the benefit of the people of New York."</p> <p>

***
by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p>
<p><img src="http://www.gothamgazette.com/images/graphics/2014/03/19673670634_68575a51ab_z.jpg" alt="cuomo topping off buffalo" width="600" height="392" /></p> <p>Cuomo in Buffalo (photo via The Governor's Office on Flickr)</p> <hr /> <p>After laying out multiple corruption and bribery charges against nine players involved with Gov. Andrew Cuomo&rsquo;s signature economic development program, including his former aide and close friend Joe Percoco, family friend and confidante Todd Howe, and a number of major developers and Cuomo donors, U.S. Attorney Preet Bharara refused to say whether the governor is a target in the probe or if it is reasonable to hold him accountable for the conduct of the people he empowered. The prosecutor noted the case remains open as a &ldquo;general matter.&rdquo;</p> <p>Alluding to things possibly to come, though, Bharara said, "I really do hope that there is a trial in this case, so that all New Yorkers can see, in gory detail, what their state government has been up to.&rdquo;</p> <p>Whether or not Cuomo is indeed being investigated, or will see charges, those brought by Bharara on Thursday are an indictment of a system that the governor has presided over, and one that other leaders in state government have done little to oppose.</p> <p>Cuomo issued a statement lamenting the charges and promising justice will be served: &ldquo;If the allegations are true, I am saddened and profoundly disappointed. I hold my administration to the highest level of integrity. I have zero tolerance for abuse of the public trust from anyone. If anything, a friend should be held to an even higher standard. Like my father before me, I believe public integrity is paramount. This sort of breach, if true, should be and will be punished.&rdquo;</p> <p>Cuomo and his administration have continuously responded to reports about corruption in his economic development programs as though they are surprising and have caught them off guard, but the administration has been receiving warnings for years that the system was being abused.</p> <p>Watchdogs have been setting off alarms that the state&rsquo;s economic development system is ripe for corruption, while the press has consistently reported what appeared to be instances of bid-rigging related to the Buffalo Billion and government favors for donors to Cuomo&rsquo;s electoral campaigns.</p> <p>All the while, the Cuomo administration has taken the criticism and spun it as attacks on the effectiveness of the investments and on the needy communities they benefit, especially Buffalo. And while the governor did hire an &ldquo;independent&rdquo; investigator, Bart Schwartz, to examine and oversee the system last Spring, it was only after the administration was rocked by a storm of subpoenas. Schwartz and his firm can earn up to $450,000 for their work examining the system, a job watchdogs say should have been carried out by the state Legislature, Comptroller, and Attorney General.</p> <p>Schwartz&rsquo;s office declined to comment on the charges or what his role will be going forward now that the charges have been unveiled.</p> <p>&ldquo;The real story here is the system is broken. Everything we thought was going on, was going on, and is actually worse than we thought,&rdquo; said John Kaehny, executive director of Reinvent Albany, a group that has been pushing for major reforms to the state&rsquo;s economic development systems and greater budget transparency.</p> <p>Kaehny noted that the scandals related to bid-rigging in Buffalo, Syracuse, and Albany involve over $1.5 billion in taxpayer funds. &ldquo;These indictments shine a light on a broken and corrupt system -- not a few bad apples,&rdquo; said Kaehny.</p> <p>Hundreds of millions of dollars in state funds flow through opaque non-profits that the state established, a practice that predates Gov. Cuomo but he has expanded. Large sums of cash are approved in the state budget with little debate and the money is given little scrutiny by the Legislature thereafter.</p> <p>The major beneficiary of the alleged malfeasance, besides those charged with unfairly winning contracts and those accused of taking bribes, appears to be the Cuomo campaign. Developers involved in the scandal gave generously to Cuomo around the times they won state economic development contracts.</p> <p><a href="http://reinventalbany.org/2016/09/three-indicted-ceos-are-all-among-gov-cuomos-biggest-upstate-contributors-biggest-state-econ-dev-contractors/" target="_blank">According to Reinvent Albany</a>, three of the executives now charged in bid-rigging schemes are some of Cuomo&rsquo;s biggest donors. Louis Ciminelli of LP Ciminelli has given Cuomo&rsquo;s campaign $143,550 in contributions and received over $600 million worth of contracts through state-controlled non-profits. Joe Nicolla of Columbia Development has given Cuomo $320,000 while receiving $190 million in contracts through state-controlled non-profits and Steven Aiello of COR Development has given $338,500 to the Cuomo campaign while receiving $105 million through state-controlled non-profits.</p> <p>Among those charged is Percoco, a childhood friend of Cuomo&rsquo;s who has followed the governor throughout his various political positions. Percoco was known as the governor&rsquo;s enforcer when he worked under him in the Capitol and later as a high-pressure fundraiser when he worked for Cuomo&rsquo;s campaign. He is accused of using his position to take state action on behalf of contractors in exchange for bribes.</p> <p>Alain Kaloyeros, now the former head of SUNY Polytechnic, which has awarded contracts to Buffalo Billion developers, was also charged Thursday. Kaloyeros is charged with bid-rigging.</p> <p><a href="https://www.justice.gov/usao-sdny/pr/nine-defendants-including-joseph-percoco-former-executive-deputy-secretary-governor-and" target="_blank">Also charged</a> were developers including Aiello, Ciminelli, and Joseph Gerardi.</p> <p>Bharara&rsquo;s office also unsealed a guilty plea by Todd Howe, a lobbyist and Cuomo family friend who has faced financial trouble over the years and was advocating for contractors while also overseeing and working with Kaloyeros.</p> <p>Up until very recently the system allowed the state to funnel money to two non-profit entities overseen by SUNY Polytechnic. Those entities issued requests for proposal that in several instances were written specifically to only fit developers that had donated generously to Cuomo&rsquo;s campaign. Bharara charges that Kaloyeros actually tipped his favorite contractors far in advance of issuing an RFP to give them a leg up.</p> <p>The nonprofits have resisted transparency, only recently opening board meetings to the press. Additionally, the state appears to have been extremely lax in holding recipients of economic development funds to their promises, like how many jobs they plan to deliver or how much a project will cost.</p> <p>Legislative leaders, the comptroller, and attorney general have raised little fuss about an economic development system that appeared to evade standard state contracting procedures by using a complicated system of nonprofits controlled by the State University to award bids and dole out funding.</p> <p>Even with the spectre of Bharara&rsquo;s investigation hanging overhead, the Legislature made no broad attempts to reform the system, instead mostly deferring to the Cuomo administration.</p> <p>Comptroller Tom DiNapoli&rsquo;s office raised concerns this year about its ability to audit economic development projects, but DiNapoli has a reputation as being non-confrontational. When an audit of his challenged the effectiveness and oversight of Cuomo&rsquo;s Excelsior Jobs Program, the administration hit back hard, attacking the competence of DiNapoli&rsquo;s staff. <a href="http://www.gothamgazette.com/index.php/state/6485-cuomo-seeks-to-undermine-comptroller-s-check-on-his-power" target="_blank">Cuomo said</a> DiNapoli should &ldquo;educate&rdquo; himself and called his audits of economic development's &ldquo;opinion.&rdquo; DiNapoli has said he&rsquo;s not intimidated and that he does his mandated job.</p> <p>Cuomo and the Legislature actually <a href="http://www.gothamgazette.com/index.php/state/6485-cuomo-seeks-to-undermine-comptroller-s-check-on-his-power" target="_blank">stripped DiNapoli</a> of the ability to review contracts issued by SUNY and CUNY ahead of time, part of creating a secretive system without clear checks and accountability.</p> <p>On Thursday afternoon, Attorney General Eric Schneiderman unveiled bid-rigging charges of his own, these having to do with the construction of dorms near SUNY Albany, against Kaloyeros and Nicolla, of Columbia Development. Kaloyeros has spearheaded economic development programs under Cuomo and routinely appeared by Cuomo&rsquo;s side for years.</p> <p>According to Schneiderman&rsquo;s office the investigation took a year and was performed in partnership with the probe by federal agents led by Bharara&rsquo;s office. Schneiderman accused Kaloyeros, who was the state&rsquo;s highest paid employee until being suspended without pay on Thursday, of rigging bids to go to developers who in turn directed grants and other benefits to SUNY Polytechnic. Kaloyeros&rsquo; compensation package was directly tied to the activity he oversaw at SUNY Polytechnic, therefore he benefited from the bid-rigging.</p> <p>Last year Kaloyeros contacted this reporter by Facebook messenger after reading and apparently being upset by a story about the role he played in the Buffalo Billion. When asked if he would like to set up an interview to correct any misunderstandings or inaccuracies, he replied that he would like to give a tour of the nano facilities he oversees, but any discussion of federal investigations would be off limits. "The issue we have is confidentiality. We were instructed in no uncertain terms not to comment on the inquiry from down South with the threat of jail which is being interpreted as we are the target of an investigation,&rdquo; Kaloyeros wrote. &ldquo;So that part we cannot comment on beyond what we were authorized to say publicly. The rest is not a problem.&rdquo;</p> <p><a href="http://www.gothamgazette.com/index.php/government/5925-buffalo-billion-boss-offers-cancels-interview-claims-threat-of-jail" target="_blank">The article</a> attracted attention to Kaloyeros and he later deleted his Facebook profile.</p> <p>Now with the &ldquo;gory&rdquo; details of the charges out for all to see, Reinvent Albany is calling on the state to take quick action to fix the system. It wants the state to freeze any new economic development activity by SUNY Poly and its subsidiaries; a phase out of using state-controlled non-profits to oversee economic development funds; a uniform contract process by the state, public authorities, and SUNY; new pay-to-play controls limiting contributions from those doing business with state entities; the creation of a database that reports the details of state subsidies and contracts given to businesses; and restoration of the Comptroller&rsquo;s ability to review contracts issued by all state entities before they are signed.</p> <p>Asked for a comment on Reinvent Albany's reform suggestions in light of Thursday's charges brought by Bharara, a spokesperson for Gov. Cuomo did not respond.</p> <p>Jennifer Rodgers, executive director of The Center for the Advancement of Public Integrity at Columbia Law School and a former prosecutor who served in Bharara&rsquo;s office, said that the charges give proof that the state&rsquo;s economic development system failed.</p> <p>"As shown by the allegations in the indictment, there was a clear failure here in the oversight of the bidding procedures related to these Buffalo Billion projects,&rdquo; Rodgers said in a statement. &ldquo;We need greater transparency in these processes and stronger oversight; hopefully this will prevent recurrences of a situation where public funds made their way into the defendant's' pockets instead of being used for the benefit of the people of New York."</p> <p>

***
by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p>
Role of Cuomo’s ‘Independent Investigator’ Remains Unclear 2016-05-26T04:00:00+00:00 2016-05-26T04:00:00+00:00 http://www.gothamgazette.com/?id=6363:role-of-cuomo-s-independent-investigator-remains-unclear Ben Max <p><img src="http://www.gothamgazette.com/images/26525493775_e0420675ca_z.jpg" width="600" height="373" alt="cuomo purple tie" /></p> <p>Gov. Cuomo (photo:&nbsp;Kevin P. Coughlin, Governor's Office)</p> <hr /> <p>In trying to stifle the blaze that has become U.S. Attorney Preet Bharara’s investigation into the Buffalo Billion economic development program, Governor Andrew Cuomo has repeatedly invoked the name of Bart Schwartz, a former federal prosecutor the administration has retained (or is in the process of retaining) to carry out an “independent” review of the project.</p> <p>In acknowledging that people close to him were being investigated in relation to the Buffalo Billion, Cuomo announced Schwartz’s hire on April 29.</p> <p>When the Public Authorities Control Board met this week and <a href="http://www.nytimes.com/2016/05/26/nyregion/state-funding-approved-for-buffalo-factory-with-oversights-attached.html?_r=0" target="_blank">approved</a> without debate another $485 million for a key Buffalo Billion project, the administration quickly reminded reporters that Schwartz would now provide another layer of oversight by considering approval of disbursement of the funds.</p> <p>The day before, Cuomo told reporters he had yet to finalize Schwartz’s contract. The governor also <a href="http://blog.timesunion.com/capitol/archives/249536/cuomo-staff-respond-on-potential-release-of-schwartz-report/" target="_blank">appeared unsure</a> whether Schwartz would make his findings public. Administration officials later clarified Schwartz would release his findings as long as doing so wouldn’t interfere with Bharara’s investigation, which appears to be focused on bid-rigging and a web of relationships among private and public entities.</p> <p>Even as Schwartz’s presence is held up as a measure of confidence in the Cuomo administration and the state’s vast economic development apparatus, several questions about Schwartz’s role and power remain. These include whether Schwartz has already started his work; when his contract will be available to the public; if his efforts are duplicative of the U.S. attorney’s office’s; and what authority Schwartz will invoke to audit the nonprofits that oversee the Buffalo Billion, which are said to be independent from the Governor’s Office.</p> <p>Both the Cuomo administration and Schwartz’s recently-hired public relations firm failed to respond to Gotham Gazette’s questions about Schwartz’s role.</p> <p>“In the real world someone doesn’t start work before they have a contract,” said Blair Horner of The New York Public Interest Research Group.</p> <p>In conjunction with Cuomo's office, Schwartz issued a statement April 29 detailing some of his plans and saying he would begin immediately.</p> <p>“The state has reason to believe that in certain programs and regulatory approvals they may have been defrauded by improper bidding and failures to disclose potential conflicts of interest by lobbyists and former state employees,” Schwartz wrote, in apparent reference to Cuomo associates Joseph Percoco and Todd Howe.</p> <p>“As the state needs to continue operating these important programs, they have asked me to commence an immediate review of all grants and approvals – past, current and future – in certain programs and operations including the Buffalo Billion/Nano Economic Development Program,” Schwartz wrote.</p> <p>It remains unclear exactly what Schwartz will be reviewing and how he will conduct his work. Part of the uncertainty and unease around Schwartz’s role held by some stems from Cuomo’s messaging around the investigation and various long-standing concerns about the Buffalo Billion.</p> <p>There are three major questions about the Buffalo Billion raised by watchdogs and, it seems, Bharara’s office: Was the contracting process designed to benefit Cuomo campaign donors? Did Cuomo loyalists use their connections to play both sides of the contracting process? Are SUNY Polytechnic, the college that oversees the distribution of Buffalo Billion funds, and its associated nonprofits doing enough to make sure corporations like SolarCIty make good on their jobs promises and other deliverables. SolarCity recently appeared to revise the number of jobs it expects to host in its Buffalo Billion-funded factory and pushed back the factory’s open date.</p> <p>Cuomo himself appears to have introduced a fourth question, which goes something like: Did someone steal money? It's a question watchdogs see as misdirection given that many of them doubt any money was actually secretly taken by lobbyists or contractors - they are more concerned about contracts being awarded improperly.</p> <p>While Cuomo is calling it a measure to ensure integrity, Schwartz’s appointment is seen as a smokescreen by many legislators and watchdogs who are concerned about the Buffalo Billion. The governor has continued to tell the press that the investigations by Bharara and Schwartz will examine the possible wrongdoing of “one or two” individuals while analysts say Bharara’s subpoenas indicate an investigation into systemic corruption.</p> <p>“This is a major effort the state is running that is working extraordinarily well and is vitally important to upstate New York,” Cuomo told reporters in Syracuse on Wednesday of the Buffalo Billion. “There is no reason to stop investing in upstate New York, to hurt the upstate economy, because a couple of people may or may not have done something wrong.” He went on to say: “You have questions raised about the conduct of several individuals. That’s now being investigated by the U.S. attorney. We also started our own internal investigation by a former prosecutor.”</p> <p>Cuomo has also <a href="http://observer.com/2016/05/andrew-cuomo-denies-getting-defensive-over-justice-department-probe/" target="_blank">said</a> he will “throw the book” at anyone found to have violated the public trust, and that he holds every Buffalo Billion dollar as “sacred.”</p> <p>Without seeing Schwartz’s contract it won’t be possible to ascertain what Cuomo has actually tasked him with investigating. It also won’t be clear what the public is actually paying him to investigate a project that watchdogs say should have already been monitored by the state Comptroller.</p> <p>“It’s ironic that [Cuomo] has gone out and hired someone who apparently will have access to contracts and information that the Comptroller of New York, who is independent, doesn’t have access to,” said E.J. McMahon, president of the Empire Center for Public Policy. McMahon did note that Schwartz isn’t “political” or “one of the governor’s people,” though.</p> <p>When Schwartz’s role was first announced on April 29, Cuomo Counsel Alphonso David said of the Buffalo Billion, “Any grants made by this program will be thoroughly scrutinized – past, current or future.” David’s statement accompanied Schwartz’s in the same release to the media.</p> <p>Schwartz may indeed be performing duties that once belonged to the Comptroller, Thomas DiNapoli, who was formerly allowed to review SUNY and CUNY contracts. That ability was stripped by Cuomo and the Legislature in 2011. SUNY Polytechnic has created two nonprofits to distribute state cash to various economic development projects across New York.</p> <p>John Kaehny of Reinvent Albany, a group that has been closely tracking the Buffalo Billion, said that it is unclear to him what problems the governor has asked Schwartz to examine, especially because Schwartz’s contract has yet to be made public. “Where is his contract? Exactly what does it say?” Kaehny asked, wondering whether Schwartz is focused on everyday expenditures or aspects of possible pay-to-play and conflict of interest in the awarding of contracts.</p> <p>After news broke this month that Bharara had subpoenaed Cuomo’s office, DiNapoli unveiled a series of reform proposals that watchdogs say would upend how the Buffalo Billion is administered and overseen by the state. His plan would ban lump sum appropriations, create a council to plan capital spending, and require economic development program proposals to be scored and ranked in a public database.</p> <p>“Public authorities are not subject to the same checks and balances that apply to state agencies, resulting in hundreds of millions of dollars being spent annually with limited oversight,” reads a release from DiNapoli’s office detailing the reforms. “DiNapoli’s proposal would require state-funded public authority projects to be scored and ranked using measurable and objective criteria. His proposal also requires more disclosure of public authorities’ spending and financing activities.”</p> <p>DiNapoli also recently indicated that he may investigate parts of the Buffalo Billion.</p> <p>“Why, other than Cuomo saying so and Schwartz saying so, is there any reason to think that Schwartz is completely independent of the governor's office?” asked Kaehny. “Schwartz is not a court appointed monitor, nor is he reporting to a board of directors. He is effectively reporting to a CEO with no board whose top associates are under federal investigation.”</p> <p>Dick Dadey, executive director of government reform group Citizens Union, said it is critical for the integrity of Schwartz’s work to make the terms of his employment clear. “If this investigation is about transparency it should start by making this contract public to reassure people that there will not be a repeat of the Moreland Commission where the governor promised independence but abruptly shuttered it.”</p> <p>Cuomo <a href="http://blog.timesunion.com/capitol/archives/249536/cuomo-staff-respond-on-potential-release-of-schwartz-report/" target="_blank">told reporters</a> on Tuesday “We're doing a contract that's being finalized now. When it's finalized we’ll give it to you.” He added negotiations were about “the dollars.”</p> <p>The use of nonprofits to disburse government funds has led many to question the application of state procurement rules requiring an open request for proposals process. The RFPs for two major Buffalo Billion projects appeared tailored for the two firms that won them, both of which donated generously to Cuomo.</p> <p>Kaehny, in a press release, asked members of the Public Authorities Control Board, a five-member group appointed by the governor, four of whom are recommended by heads of the Legislature’s majority and minority conferences, that is tasked with approving funding for state economic development projects, to pose that very question in their meeting on Wednesday. It was not asked.</p> <p>However, the Assembly Democrats' representative on the board said she was voting for disbursing the funds with several conditions of more transparency and oversight.</p> <p>SUNY Poly has previously insisted that the nonprofits do abide by those rules.</p> <p>“SUNY Poly and our related entities follow New York state government’s well-established and legally defined procurement procedures — to the letter,” David Doyle, a spokesman for SUNY Poly, <a href="http://www.timesunion.com/tuplus-opinion/article/SUNY-Poly-always-operates-openly-6535779.php" target="_blank">told the Times Union</a> in a September letter.</p> <p>State Attorney General Eric Schneiderman’s office declined to comment on whether the office believes the law actually applies to the nonprofits.</p> <p>For the first time, on Wednesday Cuomo denied having influenced the contracting process for the Buffalo Billion. “The way it worked...the state didn't do any of the contracts," Cuomo was quoted as saying <a href="http://www.syracuse.com/state/index.ssf/2016/05/cuomo_investigation_upstate_projects_while_at_state_fair.html" target="_blank">by The Post Standard</a>. "It's all done through SUNY, the state university system. They are the ones that actually managed the contracting process. They are the ones who ran the contracts, ran the competitions, made the selections," he said. "I had absolutely nothing to do with that. It was done by SUNY.”</p> <p>However, as Cuomo distances himself from SUNY Poly and its decisions in contracting, his appointment of Schwartz brings into question just how much control the governor does have over the SUNY nonprofits. It appears, in a sense, by hiring Schwartz Cuomo is saying he has direct authority over all the entities involved despite legal and rhetorical framework painting them as independent.</p> <p>Kaehny said he doesn’t believe Cuomo has “the legal authority” to direct the Empire State Development Corporation or SUNY’s nonprofits to allow Schwartz to review their contracts or approve them. “ESDC is a public authority with a legally independent board and the nonprofits also have legally independent boards,” said Kaehny. “If they want to vote to subject themselves to control by Schwartz, they could do that, but that would be abdicating their fiduciary duty to a consultant to the governor, which raises questions of separation of powers. Are these entities independent of the governor or not? If they are not, then why are they exempt from state contracting and conflict of interest rules?”</p> <p>SUNY Poly and a representative of Fort Schuyler Management, one of SUNY Poly’s nonprofits that administers the Buffalo Billion, failed to return requests for comment on whether Schwartz had begun his work and whether the boards of Fort Schuyler Management and Fuller Road Management had decided to give Schwartz access to their decision making processes.</p> <p>On Tuesday Cuomo was asked about the scrutiny of his use of nonprofits and whether he would consider changing the process. “What's interesting is that all predated me, right?” Cuomo <a href="http://blog.timesunion.com/capitol/archives/249536/cuomo-staff-respond-on-potential-release-of-schwartz-report/" target="_blank">said to reporters</a>. “That went back to Governor Pataki, who was a saint. That was all in place and we used the existing mechanism; we did not design that mechanism.”</p> <p>Watchdogs say this is another misdirection by Cuomo as the particular system he has used to expedite Buffalo Billion was pioneered by SUNY Poly head Alain Kaloyeros during Cuomo’s time in office.</p> <p>“The governor said the structure was here when he got here,” said McMahon of the Empire Center. “That isn’t true. It was set up by a very ambitious college president [Kaloyeros] who wanted to expedite the construction of his empire. The governor has used it because he can get done what he wants to get done faster. It avoids the niceties that usually go into spending public money.”</p> <p>Dadey said there should be no mistake that Schwartz’s full task is to examine systemic issues in the Buffalo Billion and not just look for possible wrongdoing. “The SUNY cartel is hard to follow and that is a problem. Bart Schwartz's task is not just to find out if someone did something wrong, but to examine this opaque system and suggest ways to improve it, so voters can have faith in it.”</p> <p>

***
by David King, Albany editor, Gotham Gazette
     

Read more by this writer.

</p> <p>Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.</p>
<p><img src="http://www.gothamgazette.com/images/26525493775_e0420675ca_z.jpg" width="600" height="373" alt="cuomo purple tie" /></p> <p>Gov. Cuomo (photo:&nbsp;Kevin P. Coughlin, Governor's Office)</p> <hr /> <p>In trying to stifle the blaze that has become U.S. Attorney Preet Bharara’s investigation into the Buffalo Billion economic development program, Governor Andrew Cuomo has repeatedly invoked the name of Bart Schwartz, a former federal prosecutor the administration has retained (or is in the process of retaining) to carry out an “independent” review of the project.</p> <p>In acknowledging that people close to him were being investigated in relation to the Buffalo Billion, Cuomo announced Schwartz’s hire on April 29.</p> <p>When the Public Authorities Control Board met this week and <a href="http://www.nytimes.com/2016/05/26/nyregion/state-funding-approved-for-buffalo-factory-with-oversights-attached.html?_r=0" target="_blank">approved</a> without debate another $485 million for a key Buffalo Billion project, the administration quickly reminded reporters that Schwartz would now provide another layer of oversight by considering approval of disbursement of the funds.</p> <p>The day before, Cuomo told reporters he had yet to finalize Schwartz’s contract. The governor also <a href="http://blog.timesunion.com/capitol/archives/249536/cuomo-staff-respond-on-potential-release-of-schwartz-report/" target="_blank">appeared unsure</a> whether Schwartz would make his findings public. Administration officials later clarified Schwartz would release his findings as long as doing so wouldn’t interfere with Bharara’s investigation, which appears to be focused on bid-rigging and a web of relationships among private and public entities.</p> <p>Even as Schwartz’s presence is held up as a measure of confidence in the Cuomo administration and the state’s vast economic development apparatus, several questions about Schwartz’s role and power remain. These include whether Schwartz has already started his work; when his contract will be available to the public; if his efforts are duplicative of the U.S. attorney’s office’s; and what authority Schwartz will invoke to audit the nonprofits that oversee the Buffalo Billion, which are said to be independent from the Governor’s Office.</p> <p>Both the Cuomo administration and Schwartz’s recently-hired public relations firm failed to respond to Gotham Gazette’s questions about Schwartz’s role.</p> <p>“In the real world someone doesn’t start work before they have a contract,” said Blair Horner of The New York Public Interest Research Group.</p> <p>In conjunction with Cuomo's office, Schwartz issued a statement April 29 detailing some of his plans and saying he would begin immediately.</p> <p>“The state has reason to believe that in certain programs and regulatory approvals they may have been defrauded by improper bidding and failures to disclose potential conflicts of interest by lobbyists and former state employees,” Schwartz wrote, in apparent reference to Cuomo associates Joseph Percoco and Todd Howe.</p> <p>“As the state needs to continue operating these important programs, they have asked me to commence an immediate review of all grants and approvals – past, current and future – in certain programs and operations including the Buffalo Billion/Nano Economic Development Program,” Schwartz wrote.</p> <p>It remains unclear exactly what Schwartz will be reviewing and how he will conduct his work. Part of the uncertainty and unease around Schwartz’s role held by some stems from Cuomo’s messaging around the investigation and various long-standing concerns about the Buffalo Billion.</p> <p>There are three major questions about the Buffalo Billion raised by watchdogs and, it seems, Bharara’s office: Was the contracting process designed to benefit Cuomo campaign donors? Did Cuomo loyalists use their connections to play both sides of the contracting process? Are SUNY Polytechnic, the college that oversees the distribution of Buffalo Billion funds, and its associated nonprofits doing enough to make sure corporations like SolarCIty make good on their jobs promises and other deliverables. SolarCity recently appeared to revise the number of jobs it expects to host in its Buffalo Billion-funded factory and pushed back the factory’s open date.</p> <p>Cuomo himself appears to have introduced a fourth question, which goes something like: Did someone steal money? It's a question watchdogs see as misdirection given that many of them doubt any money was actually secretly taken by lobbyists or contractors - they are more concerned about contracts being awarded improperly.</p> <p>While Cuomo is calling it a measure to ensure integrity, Schwartz’s appointment is seen as a smokescreen by many legislators and watchdogs who are concerned about the Buffalo Billion. The governor has continued to tell the press that the investigations by Bharara and Schwartz will examine the possible wrongdoing of “one or two” individuals while analysts say Bharara’s subpoenas indicate an investigation into systemic corruption.</p> <p>“This is a major effort the state is running that is working extraordinarily well and is vitally important to upstate New York,” Cuomo told reporters in Syracuse on Wednesday of the Buffalo Billion. “There is no reason to stop investing in upstate New York, to hurt the upstate economy, because a couple of people may or may not have done something wrong.” He went on to say: “You have questions raised about the conduct of several individuals. That’s now being investigated by the U.S. attorney. We also started our own internal investigation by a former prosecutor.”</p> <p>Cuomo has also <a href="http://observer.com/2016/05/andrew-cuomo-denies-getting-defensive-over-justice-department-probe/" target="_blank">said</a> he will “throw the book” at anyone found to have violated the public trust, and that he holds every Buffalo Billion dollar as “sacred.”</p> <p>Without seeing Schwartz’s contract it won’t be possible to ascertain what Cuomo has actually tasked him with investigating. It also won’t be clear what the public is actually paying him to investigate a project that watchdogs say should have already been monitored by the state Comptroller.</p> <p>“It’s ironic that [Cuomo] has gone out and hired someone who apparently will have access to contracts and information that the Comptroller of New York, who is independent, doesn’t have access to,” said E.J. McMahon, president of the Empire Center for Public Policy. McMahon did note that Schwartz isn’t “political” or “one of the governor’s people,” though.</p> <p>When Schwartz’s role was first announced on April 29, Cuomo Counsel Alphonso David said of the Buffalo Billion, “Any grants made by this program will be thoroughly scrutinized – past, current or future.” David’s statement accompanied Schwartz’s in the same release to the media.</p> <p>Schwartz may indeed be performing duties that once belonged to the Comptroller, Thomas DiNapoli, who was formerly allowed to review SUNY and CUNY contracts. That ability was stripped by Cuomo and the Legislature in 2011. SUNY Polytechnic has created two nonprofits to distribute state cash to various economic development projects across New York.</p> <p>John Kaehny of Reinvent Albany, a group that has been closely tracking the Buffalo Billion, said that it is unclear to him what problems the governor has asked Schwartz to examine, especially because Schwartz’s contract has yet to be made public. “Where is his contract? Exactly what does it say?” Kaehny asked, wondering whether Schwartz is focused on everyday expenditures or aspects of possible pay-to-play and conflict of interest in the awarding of contracts.</p> <p>After news broke this month that Bharara had subpoenaed Cuomo’s office, DiNapoli unveiled a series of reform proposals that watchdogs say would upend how the Buffalo Billion is administered and overseen by the state. His plan would ban lump sum appropriations, create a council to plan capital spending, and require economic development program proposals to be scored and ranked in a public database.</p> <p>“Public authorities are not subject to the same checks and balances that apply to state agencies, resulting in hundreds of millions of dollars being spent annually with limited oversight,” reads a release from DiNapoli’s office detailing the reforms. “DiNapoli’s proposal would require state-funded public authority projects to be scored and ranked using measurable and objective criteria. His proposal also requires more disclosure of public authorities’ spending and financing activities.”</p> <p>DiNapoli also recently indicated that he may investigate parts of the Buffalo Billion.</p> <p>“Why, other than Cuomo saying so and Schwartz saying so, is there any reason to think that Schwartz is completely independent of the governor's office?” asked Kaehny. “Schwartz is not a court appointed monitor, nor is he reporting to a board of directors. He is effectively reporting to a CEO with no board whose top associates are under federal investigation.”</p> <p>Dick Dadey, executive director of government reform group Citizens Union, said it is critical for the integrity of Schwartz’s work to make the terms of his employment clear. “If this investigation is about transparency it should start by making this contract public to reassure people that there will not be a repeat of the Moreland Commission where the governor promised independence but abruptly shuttered it.”</p> <p>Cuomo <a href="http://blog.timesunion.com/capitol/archives/249536/cuomo-staff-respond-on-potential-release-of-schwartz-report/" target="_blank">told reporters</a> on Tuesday “We're doing a contract that's being finalized now. When it's finalized we’ll give it to you.” He added negotiations were about “the dollars.”</p> <p>The use of nonprofits to disburse government funds has led many to question the application of state procurement rules requiring an open request for proposals process. The RFPs for two major Buffalo Billion projects appeared tailored for the two firms that won them, both of which donated generously to Cuomo.</p> <p>Kaehny, in a press release, asked members of the Public Authorities Control Board, a five-member group appointed by the governor, four of whom are recommended by heads of the Legislature’s majority and minority conferences, that is tasked with approving funding for state economic development projects, to pose that very question in their meeting on Wednesday. It was not asked.</p> <p>However, the Assembly Democrats' representative on the board said she was voting for disbursing the funds with several conditions of more transparency and oversight.</p> <p>SUNY Poly has previously insisted that the nonprofits do abide by those rules.</p> <p>“SUNY Poly and our related entities follow New York state government’s well-established and legally defined procurement procedures — to the letter,” David Doyle, a spokesman for SUNY Poly, <a href="http://www.timesunion.com/tuplus-opinion/article/SUNY-Poly-always-operates-openly-6535779.php" target="_blank">told the Times Union</a> in a September letter.</p> <p>State Attorney General Eric Schneiderman’s office declined to comment on whether the office believes the law actually applies to the nonprofits.</p> <p>For the first time, on Wednesday Cuomo denied having influenced the contracting process for the Buffalo Billion. “The way it worked...the state didn't do any of the contracts," Cuomo was quoted as saying <a href="http://www.syracuse.com/state/index.ssf/2016/05/cuomo_investigation_upstate_projects_while_at_state_fair.html" target="_blank">by The Post Standard</a>. "It's all done through SUNY, the state university system. They are the ones that actually managed the contracting process. They are the ones who ran the contracts, ran the competitions, made the selections," he said. "I had absolutely nothing to do with that. It was done by SUNY.”</p> <p>However, as Cuomo distances himself from SUNY Poly and its decisions in contracting, his appointment of Schwartz brings into question just how much control the governor does have over the SUNY nonprofits. It appears, in a sense, by hiring Schwartz Cuomo is saying he has direct authority over all the entities involved despite legal and rhetorical framework painting them as independent.</p> <p>Kaehny said he doesn’t believe Cuomo has “the legal authority” to direct the Empire State Development Corporation or SUNY’s nonprofits to allow Schwartz to review their contracts or approve them. “ESDC is a public authority with a legally independent board and the nonprofits also have legally independent boards,” said Kaehny. “If they want to vote to subject themselves to control by Schwartz, they could do that, but that would be abdicating their fiduciary duty to a consultant to the governor, which raises questions of separation of powers. Are these entities independent of the governor or not? If they are not, then why are they exempt from state contracting and conflict of interest rules?”</p> <p>SUNY Poly and a representative of Fort Schuyler Management, one of SUNY Poly’s nonprofits that administers the Buffalo Billion, failed to return requests for comment on whether Schwartz had begun his work and whether the boards of Fort Schuyler Management and Fuller Road Management had decided to give Schwartz access to their decision making processes.</p> <p>On Tuesday Cuomo was asked about the scrutiny of his use of nonprofits and whether he would consider changing the process. “What's interesting is that all predated me, right?” Cuomo <a href="http://blog.timesunion.com/capitol/archives/249536/cuomo-staff-respond-on-potential-release-of-schwartz-report/" target="_blank">said to reporters</a>. “That went back to Governor Pataki, who was a saint. That was all in place and we used the existing mechanism; we did not design that mechanism.”</p> <p>Watchdogs say this is another misdirection by Cuomo as the particular system he has used to expedite Buffalo Billion was pioneered by SUNY Poly head Alain Kaloyeros during Cuomo’s time in office.</p> <p>“The governor said the structure was here when he got here,” said McMahon of the Empire Center. “That isn’t true. It was set up by a very ambitious college president [Kaloyeros] who wanted to expedite the construction of his empire. The governor has used it because he can get done what he wants to get done faster. It avoids the niceties that usually go into spending public money.”</p> <p>Dadey said there should be no mistake that Schwartz’s full task is to examine systemic issues in the Buffalo Billion and not just look for possible wrongdoing. “The SUNY cartel is hard to follow and that is a problem. Bart Schwartz's task is not just to find out if someone did something wrong, but to examine this opaque system and suggest ways to improve it, so voters can have faith in it.”</p> <p>

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by David King, Albany editor, Gotham Gazette
     

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</p> <p>Note: Gotham Gazette is an independent publication of Citizens Union Foundation, sister organization of Citizens Union.</p>