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Saturday, July 4, 2009

Uncle Larry Lied to Us...

According to a recent Observer Dispatch article regarding the revelation that The Hartford Insurance was not built within the business park:

Lawrence Adler, the man behind the business park, said he was unaware of the issue.

“I’m getting hit with this for the first time,” he said. “I would have thought that somebody would have raised that.”

REALLY, Mr. Adler? Then why did you approach the Oneida County Empire Zone Administration Board and ask for a change in the Empire Zone boundaries so that the area under the power lines where the proposed bridge was to be constructed is taken out of the Empire Zone and in its place the property where The Hartford Insurance and proposed hotel owned by Ryan Companies from Minneapolis, Minnesota is located could be included in the Empire Zone?

Questions were asked by Ralph Humphreys and Ed Wiatr at the town board meeting where Mr. Zawko, Oneida County Empire Zone Coordinator made a presentation to the town board. According to the adopted Board meeting minutes of October 1, 2008:

Ralph Reed* (amended Oct 22, 2008) and Edmund Wiatr Jr., inquired if the same person owned all the property, and who had approached the ZAB for this revision, respectively. Mr. Zawko responded that the New Hartford Business Park/Lawrence Adler had approached the County. (Amended: Ralph Humphrey)
So Uncle Larry did know that The Hartford Insurance building was not in the business park because if it was within the boundary of the park, there would have been no need for him to request the change of the boundaries of the Empire Zone!

According to documents we FOILed from Mohawk Valley EDGE, the Oneida County Empire Zone Administration Board passed a resolution [signed by Anthony Carvelli as Chairperson and dated September 17, 2008] allowing Oneida County to "submit to Empire State Development Corporation a Technical Boundary Correction...". The resolution itself was dated September 2, 2008, so that means that sometime in late spring or early summer and perhaps earlier than that, Mr. Adler and probably everyone else connected with this project was aware that The Hartford Insurance building was not in the business park and therefore the need to change the Empire Zone boundaries became necessary.

On September 22, 2008, Peter Zawko, Oneida County Empire Zone Coordinator sent a letter to Mr. Earle C. Reed, New Hartford Town Supervisor, requesting town board action on the Empire Zone change resolution. The justification for the empire zone boundary change was:

"...to facilitate the ongoing expansion of the New Hartford Business Park."
The letter from Peter Zawko to Supervisor Reed had a colored map attached. Looking at the map, it is easy to see that the purple area above Seneca Turnpike (identified as the "Existing Zone" area) looks eerily similar to the map of the business park [see Strikeslip's blog for a copy of the business park map] and the area shaded in light yellow with black lines (identified as "added zone areas") looks eerily similar to the 13.9 acres owned by Ryan Companies where The Hartford Insurance Company is now located and where the proposed hotel will be located.

Let's take another look at the Standard and Poor's Rationale letter. Within the first full paragraph on page 2 of the letter, it says "other leading employers...Hartford Insurance (600)..." Interesting! According to newspaper articles during the construction of The Hartford, we were told that New Hartford would have lost 689 jobs; however, with the move to the business park and the PILOT agreement in place, the number of employees could possibly increase the workforce to possibly 700 or more. Yet by February 2009, less than four (4) months after The Hartford moved to their new location, and a couple of weeks AFTER the bond vote to finance the infrastructure was held, town officials listed the number of employees at 600; exactly the number that needs to be employed for the first 5 years according to the Job Guaranty signed in conjunction with the PILOT?

Concerned Citizens has always found it difficult to understand how a PILOT that has a job guaranty of 600 employees for the first 5 years and 500 employees for the remaining 5 years could be determined to be economic development. Isn' that a decrease in employment numbers?

So why did The Hartford Insurance Company really move about a mile away from their original site? A safe bet would be because their Empire Zone Credits were about to expire on their Middlesettlement Road location and they didn't want to have to pay property taxes. That's right...they didn't want to pay New Hartford property taxes.

Under the Empire Zone, property taxes are reimbursed by the State for up to 10 years. But also under the Empire Zones, a company must be thinking about moving out of the state in order to qualify. The Hartford wasn't moving out of state; they were merely looking to move to another area in close proximity to the present location so they could keep the same workforce yet be in a new Empire Zone and be reimbursed for their taxes for another ten (10) years.

We did some research on the internet. We found minutes of a City of Schenectady Industrial Development Agency. Their May 31, 2006 meeting minutes state:

PILOT Increment Financing Program - Ray Gillen described this initiative, which is similar to tax increment financing programs. PILOT Increment Financing allows a developer to set up a PILOT paying taxes at full assessment, using a portion of the PILOT as a source of project financing and applying for reimbursement under the Empire Zone program.
Sounds familiar, doesn't it? So not only are tax dollars generated by the development being used to build the infrastructure within the park rather than to offset increased budgets of the three (3) taxing entities; town, county and school, but our State tax dollars are being used to reimburse The Hartford for the property taxes they pay. Not a bad deal for The Hartford or for Ryan Companies, Inc., the owners of the property and building! No wonder they decided to stay!

Our guess is that if the Town of New Hartford officials are willing to list 600 current employees at The Hartford, there are far less and The Hartford Insurance may very well not be meeting the requirements of the Job Guaranty they signed.

5 comments:

Anonymous said...

This whole business park venture sounds like something is very wrong. I think the town needs to stop and get EVERYTHING involving the park organized and decide where the buildings and lines really are. Then of course they will need to do the environmental review before proceeding. The town cannot let Mr. Adler bully it anymore with his we have to get this started and worry about the ramifications later.

Anonymous said...

The developers are running this town!

Thanks Earle, Dave, Christine, Bob and Richard.

Anonymous said...

Where are the Oneida County D.A.and the NYS AG? This mess has illegality written all over it.Nobody in enforcement seems to care .

Anonymous said...

One cannot faul the developer nor the company from taking advantage of exisiting laws realting to PILOTs. Look to lawmakers and the IDA! The standars are so lax you can drive a truck through them.

New Hartford, N.Y. Online said...

Au Contrare Anonymous #4,

The "law" that was used to give The Hartford and Larry Adler a PILOT is non-existent. In other words, PILOT/TIFs are illegal in NYS. Show us the particular part of the NYS Education Law that allows a school to divert tax money to a private developer for infrastructure.

The Bill to allow this has been introduced in the NYS Senate and Assembly twice in the recent past. Both times the bill was allowed to run out its time in committee and never voted on.

If they had a legal leg to stand on, they wouldn't have needed to do everything behind closed doors, now would they?