A Glimpse At The Treehouse

The Brookings Institution has compiled a report Restoring Prosperity, that deals with the role states can play to help old industrial cities rebound from economic decline.

They had a presentation on their report in downtown Syracuse last night and I attended. I’m usually pretty pessimistic about these kinds of reports. The community group that I work for has collected mounds of these reports in the 30 years of our existence. Nothing ever comes of the good intentions, charts and glossy pictures.

Unfortunately, Sean Kirst , a columnist for the local newspaper wrote a column on the report and because he’s such a damn good writer and so obviously cares about development policy, I figured this was an event to attend. All I can say is that the presentation was two hours of my life I’ll never get back again.

The report, which I have to more thoroughly read, seems too light on practical steps for corrective action. The report tells us to “fix the basics”–safe streets, good schools and a positive business climate. Well, duh. Then it says what everyone has said lately: play to your yuppie strengths–build up downtown and University Hill.

The biggest problem we face was not addressed: we are relying on the same old clique of narrow-minded government officials and development types to lead this effort. Sean Kirst has nicknamed them members of the “Treehouse”–they pull up the ladder behind them and go on making stupid decisions–not siting the ballpark downtown, using outdated technology for sewage treatment plants in residential and retail districts while still not cleaning up Onondaga Creek. Rt. 81 blasted through the old 15th ward, separating the University from the city. The list goes on and on.

According to Sean Kirst, guts and creativity are what is needed to turn our city around. According to Brookings, these local people will be able to better show those guts and creativity with new and enlightened state policies. Bullshit. The most rancid example of the thought process in the Treehouse was uttered by one of the hosts of the event, a woman from the power company National Grid, She crowed about her company’s role in rehabilitating the old Dey’s Brothers building downtown.

Here’s the full story on that. Niagara Mohawk (the name of the power company prior to the National Grid buyout ) went to then Mayor Roy Bernardi and threatened to move their customer call center out of downtown and out to the suburbs. NiMo wanted a bigger and better building. The Mayor, through the quasi-governmental Syracuse Industrial Development Agency, financed the purchase and rehabilitation of the Dey’s Building at a cost of $18 million. The administration used financing through the federal Department of Housing and Urban Development and their Section 108 economic development loan program.

Through the Section 108 program, HUD advances the city funding and the city agrees to repay HUD based on the repayments the city expects from the businesses ultimately receiving the loan. Historically, this program was used to help existing businesses expand and individual loans in Syracuse rarely exceeded $50,000. Mayor Bernardi changed all that, extending six figure loans to risky start up businesses and the massive Dey Brother’s project.

When the businesses do not generate enough income to make repayments to the city or fail outright, the city is still responsible for repayment to HUD. The collateral HUD uses for this loan program is the city’s Community Development Block Grant budget. This money is given to the city each year to improve low income housing, as well as provide funding for a wide array of social services. At the start of the Bush Administration, the city received $10 million in CDBG funding. Last year’s CDBG funding was $7 million. The city of Syracuse uses this money to fund all the non-profit housing groups working in the city and is the source for funding for the key housing programs in the city’s low income neighborhoods: homebuyer education classes, home improvement loans and mortgage foreclosure counseling.

As a direct result of the failed businesses and the massive amount of money spent on the Dey’s brothers building, the city has had to take over $10 million out of the CDBG program during the past decade. According to figures from Mayor Matt Driscoll, the city will have to take an additional $12 million out of the CDBG budgets over the next five years.

Oh, by the way, when National Grid bought out NiMo it downsized the company’s call center. The smaller center didn’t need the space in the Dey Brother’s building and moved back into the old NiMo building on Erie Boulevard.

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