Flipping???!!!

An article in today's Observer Dispatch says that Ryan Companies of Minneapolis, Minnesota, is selling the recently completed Hartford Insurance Company building in the New Hartford Business Park.

According to the article:

A public relations official for Ryan Cos., which owns the building, said the decision to try to sell was based on what made financial sense.

“The decision to sell this building was a capital allocation decision, part of a select group of buildings across the country that Ryan Companies has decided to sell in order to increase the company’s overall liquidity,” spokeswoman Sarah Voight said in an e-mail.

However, when questioned as to whether or not the sale had anything to do with the recent revelations regarding the closed-door panel that had no authority to approve the business park plans, the article stated:

Voight would not directly answer questions about whether the revelations had to do with the sale, instead pointing to her initial statement.

But not to worry...according to Town Supervisor Earle Reed:

“It’s called flipping,” Town Supervisor Earle Reed said. “It’s very commonplace. Developers do that all the time, so we are not concerned at all about it.”

Supervisor Reed, do you mean flipping...as in flipping pancakes?



or flipping...as in flipping a coin?



or flipping...as in flipping a piece of real estate?

Interesting...according to Wikipedia:

Real estate flipping
Profits from flipping real estate come from either buying low and selling high in a rapidly-rising market, or buying a house that needs repair and fixing it up.

Well, they surely didn't buy low...they've got a lot of money invested in that brand new building. Can you realize profits from an expensive building that you have only collected about six months (6) rent from or are they just hoping to be lucky enough to break even?

Councilwoman Krupa, real estate attorney for Pyramid Management Group (Sangertown Mall), was quoted in the article as saying:

“I think it may be that in our market real estate prices aren’t fluctuating that much, and it’s probably a good deal for them,” she said.

It sure isn't a rapidly-rising market either! By the way, how's it going with the sale of Sangertown Square, Ms. Krupa?

Perhaps, by "flipping" Town Supervisor Reed really means that Ryan Companies is:

Flipping...as in flipping the bird to Larry Adler and town officials!

Will The Hartford Insurance Company be far behind in their desire to "get out of Dodge"?

An Honest Mistake?

Today's article in the Observer Dispatch pretty much says it all regarding the New Hartford Business Park fiasco...New Hartford panel can’t approve business park plans.

Was it an honest mistake as Larry Adler stated in today's Observer Dispatch article:

Adler said the confusion had been “frustrating,” but that he believed any errors made were honest mistakes.

“I think it's a positive step, because it will bring more clarity to the process for all involved,” he said.

or was the town board in such a rush to find a way to keep the plans out of the public eye that Town Attorney Gerald Green failed to do his homework and ill-advised the town board and employees? What made the town board and the town attorney think that any discussion where the spending of taxpayer dollars is involved should or could be done behind closed doors?

According to the OD article:

Business Park developer Larry Adler, who attended the meeting, said he was mulling whether to initiate such a review himself.

“I'm just getting this letter today,” he said, adding that he would confer with others involved in the project before making a decision.

Think hard, Uncle Larry. Should you do the right thing and correct "the honest mistake" or continue trying to "get one by us"?


You decide...is this town board just a bunch of clowns or was this a carefully orchestrated plan to shanghai taxpayers leaving them to pick up the tab for infrastructure on private property owned by one of their "developer friends"?


For the record, here is the ...letter from the Department of State and ...here is Jerome Donovan's email to the town board.

Town of New Hartford Zoning Board of Appeals...

will hold a Public Hearing on Monday, July 20, 2009 at 6 p.m. in the New Hartford Public Library (rear entrance, downstairs).

Agenda is now online!

In the year 2011...

We just stumbled upon a copy of the Official Statement for serial bonds totalling $24,918,859 that were recently sold by New Hartford Central School to finance the $25.7 million renovation project approved by district voters on March 13, 2007. According to the bottom of page 19 of the Statement - Future Construction Plans:

"The School District anticipates a future capital improvement project for the Fall of 2011. Potential capital improvement items will focus on infrastructure and a bus repair and storage facility."

Looks like New Hartford Central School taxpayers will have another bond vote to consider in a couple of years.

A bus repair and storage facility...that must be the project planned for the 17 acres of land donated to the school by Larry Adler. On February 9, 2009, Oneida-Herkimer-Madison BOCES, the New Hartford Central School District, the Town of New Hartford/Village of New Hartford and the Village of New York Mills submitted a Shared Services grant application to NYS Dept. of State requesting $50,000 to study the feasibility of constructing a shared transportation facility near the BOCES complex on the land donated by Mr. Adler.

The future capital improvement...could that be the Higby Park...er..we mean Romano Park?

Concerned Citizens FOILed all available documentation in conjunction with the park:

There is the school board resolution [bottom of first page under New Business] that states that the school will reimburse the Foundation for all expenses related to acquiring the property and gives Superintendent Nole the authority to enter into a Naming Rights Agreement.

Then there is the Naming Rights Agreement. Interesting to say the least!

There is Exhibit A - park plans.

There is Exhibit B - Naming Opportunities.

There is Exhibit C - Signage.

There is the list of sponsors.

And finally, the letter sent to donors.

We gotta tell you, we found it interesting that according to page 21 of the Official Statement, under "...professional advisors of the school district", bond counsel for New Hartford Central School is Bond, Schoeneck and King, i.e. Linda Romano, the main push behind the purchase of the Hubbell property and whose family name will grace the entrance of the park. Also, the school's architect, King & King Architects, LLP out of Syracuse, just happens to be a donor to the Higby Park and appears to have "naming rights". Wonder if the school has a Procurement Policy and ever goes out to bid for these professional services as outlined in General Municipal Law.

By the way, we received an anonymous tip that the school has recently been investigating zoning regulations as it relates to wind energy in New Hartford. According to a couple of Observer Dispatch articles back in 2006, the school was looking at putting wind mills on property between Higby Road School and Perry Junior High. Wow...that sounds like the Hubbell property. Is that one of the ways they think they are going to finance the development of Romano Park?

Do You Want Fries and a Drink with Your Whopper?

According a June 2009 Observer Dispatch editorial regarding the hiring of Heather Mowat:

Town Councilwoman Christine Krupa said Mowat was one of four people interviewed, adding that the town received between 10 and 15 resumes. Some applicants had seen the O-D story; others had been recommended by word of mouth within the accounting community, Krupa said.

Wow...10 to 15 applicants just because an article regarding the town finances (no job listing) appeared in the Observer Dispatch.

Concerned Citizens FOILed all resumes, letters of interest or applications, etc., but Ms. Krupa denied our FOIL for all but Ms. Mowat's resume; so Concerned Citizens presented the town board with a FOIL appeal at the June 9, 2009 town board meeting. The town board voted to give us the information with some of the information redacted. Past practice has been to just give us the resumes when we submitted a FOIL request without redacting any information.

It's been over a month since the town board approved our appeal; Councilwoman Krupa has failed to give us the resumes. A couple of weeks after the appeal decision, we sent an inquiry to the town clerk as to where the information was; in reply, on July 9th, Councilwoman Krupa sent us an email that said:

It is still my intention to respond to Ms. Lawrence with a detailed analysis and the educational history of the applicants that provided resumes. I'm about half-way through the process and unfortunately got side tracked. I will be responding ASAP.

FOI Law does not call for Councilwoman Krupa to create a record...the records were already created when the resumes were submitted to the town. All Councilwoman Krupa needs to do is produce the records...very simple. Looks like there are none, but you decide.

We agree with the OD editorial when they said that no one is disputing Ms. Mowat's qualifications; it's the process that stinks and will leave some doubt in taxpayers' mind because it is apparent that Ms. Mowat was hand-picked by Supervisor Reed with no one else getting a chance to apply.




We also blogged about the $6,800 Standard & Poors invoice for the credit rating for the bonding of the New Hartford Business Park improvements. The purchase order signed by Councilwoman Krupa stated that it was a budgeted expenditure. Since we already had a copy of the 2009 Adopted Budget showing $0 budgeted for that line, we FOILed the budget worksheet. Today, the town clerk forwarded an email to us from Budget Director Heather Mowat:

-----Original Message-----
From: Mowat, Heather
Sent: Monday, July 13, 2009 12:04 PM
To: Young, Gail
Subject: FOIA Request - 2009 Budget Worksheet for 2009 Bond Rating

There is no worksheet for the 2009 budget that outlines $6,800 for the February 2009 bond rating.

Of course, we already knew that; the expense is also listed as an unanticipated expenditure on the FOILed spreadsheet we received for budget modifications that were approved at the last town board meeting.

And speaking of the town board, are we to believe that the town board really didn't know in November 2008 when they adopted the 2009 budget that they were going to have a bond vote in March 2009 and would need a rating from Standard & Poor's? That would be a tough sell considering that the town board approved a bond resolution in 2008. Yet, as usual, not not one of them spoke up...they just keep voting voted 'aye'...except for Councilman Payne who did vote 'nay' a couple of times in an effort to shut out the public!

Looking at the FOILed Budget Modification spreadsheet, it would appear there have been several unanticipated expenditures...and that's not including the times that they had to pay Attorney Green $150 an hour to Close the Barn Door.

Do we really think that we will get a full and accurate accounting of where the fund balance went? We might want to look behind those "closed doors".

Planning Board meeting...

Monday, July 13, 2009, at 5:30 p.m. in the New Hartford Public Library (downstairs - back entrance).

Topics to be discussed:

• Valentino's Banquet Hall

• Cherrywood Annexation

• GEIS Southern Area - Notice of Completion, Advertise for Public Hearing, FAQ Update

• Business Park Subcommittee Update

Agenda now online!

As of June 30, 2009....

it would appear that the Town of New Hartford finances are in a state of disarray.

Budget Director Heather Mowat addressed the town board at last Wednesday night's meeting and asked for board approval for some budget transfers and also some reductions in budgeted expenses. Ms. Mowat explained to the Town Board that she met with all department heads and requested that they cut the spending in any budget lines they could in an effort to control spending for the remainder of 2009.

According to the spreadsheet prepared by Ms. Mowat and provided to Concerned Citizens through a FOIL request, the overall reduction in budgeted expenses after budget transfers and cutting expenses for each fund are as follows:

General Whole Town.......$ 302,073
General Part-Town.........$ 205,118
Highway Part-Town........$ 223,935

So a total of $ 731,126, or a little under 5%, was shaved off the 2009 budget that originally totalled $14,965,503.

We will go through some of the budget reductions and notations on the spreadsheet in our next blog. For now, we will just give you the bottom line as it relates to the fund balances.

Each year when the budget is prepared, it is customary for the town board to include a certain amount of fund balance(s) to offset some of the expenditures and thus keep the tax rate down. The fund balances are budgeted monies that are not spent by the end of each year; at year-end all accounts are brought to a $0 balance and any unused money is the "rainy day" fund, if you will.

The 2009 Summary Sheet that was included with this year's budget outlines the amount of fund balance the town board projects will be needed to offset expenses. When the 2009 budget was adopted last November, the town board planned on using the following fund balances to offset expenses:

General Whole Town................$ 1,170,444
General Part Town...................$ 156,618
Highway Part Town..................$ 280,364

The good news...with the cuts to the departmental spending, it is anticipated that less fund balance will be needed to balance the 2009 budget. The anticipated need for dipping into the "rainy day funds" is now as follows:

General Whole Town................$ 868,371
General Part Town..................$ 361,736
Highway Part Town.................$ 56,699

The bad news...there isn't enough fund balance left in two (2) of the accounts (General Whole Town and Highway Part Town) to cover the anticipated needs of the town through December 31, 2009.

We looked at the fund balances as of December 31, 2008 as reported in the 2008 Annual Update Document that is required to be filed with the State Comptroller's Office by May 15th of the following year.

The December 31, 2008 fund balances and possible shortfalls are as follows:

General Whole Town................$ 250,179, leaving a possible shortfall of $ 618,192 with possibly nothing left to offset next year's budget.

General Part Town...................$ 672,007, possibly leaving a balance of $ 310,271 that could possibly be used to offset next year's budget.

Highway Part Town.................$ -33,692, leaving a possible shortfall of $ 90,391 with possibly nothing left to offset next year's budget.

Of course, at this point, these are preliminary numbers; the numbers could change if there should be any further reductions in spending or conversely more unbudgeted spending; or, if there are less revenues realized than anticipated; or conversely if there are more revenues received than anticipated.

At any rate, as it stands at the moment, there are only two ways to solve the problem, bond again or increase next year's tax rate to cover any shortfalls and the likelihood that there may be a lack of fund balances to offset next year's expenditures.

To be continued....

Town Board Meeting...

tomorrow, Wednesday, July 8, 2009 at 6:00 p.m. in Butler Hall.

Agenda now online.

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.