Archive for November, 2011

Big A for Amsterdam

Posted: November 25, 2011 in Economic Development, Vision
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I’d like to take a good look at an initiative (dubbed “Big A”) for getting Amsterdam growing again that was recently proposed on Flippin’ Amsterdam. I would urge anyone who holds out any hope for revitalization in Amsterdam to read through the entire post and consider it. The ideas behind the proposal are ones that have all been discussed before or have been adopted in other cities; however I think this is somewhat of a breakthrough for Flippin to combine everything into a cohesive, actionable plan.

The idea starts with the formation of a public/private corporation (“Big A”) which will be responsible for the economic revitalization of Amsterdam. What Big A will do is fund projects in five key areas:

  1. Preserve existing housing stock and drive residential development in the city for the 20-34 crowd.
  2.  Develop the Southside as a residential and commercial mixed-use destination
  3.  Invest in alternative energy as a revenue driver for the city and attract renewable energy start-ups (leverage the locks on the Mohawk)
  4.  Create a digital arts and engineering (focus on alternative energy) charter middle school
  5.  Establish an incubator center around digital arts, alternative energy and nanotech

 

Overall, I believe these proposals are right on target to make Amsterdam economically competitive again. They build on Amsterdam’s strengths and address the weaknesses. They also fit well with the direction of the NY Tech Valley initiative and the trends in the global economy.

The $3-$5 million price tag that Flippin estimates, which a majority is proposed to be funded by public bonding (borrowing), will no doubt scare some people. But Flippin rightly points out that there is usually no debate when the city bonds for things like demolition of old buildings or other projects that are understood to be “essential”. I believe investing in our economic future is essential. If the furnace in a house breaks down in the middle of winter, the homeowner will no doubt borrow money to fix it rather than risk freezing to death. Amsterdam’s economic furnace is broken down and we are facing an economic winter.

An important aspect of this plan is accountability, and I think Flippin’s ideas for this will go a long way in helping people to trust this initiative. First, he proposes that the agency has a 5 year charter. I’m not sure if that means the agency will only exist for five years, or only use public funds for 5 years, but either way, that’s an important aspect because it avoids creating a new government dinosaur (ie like AIDA) . The other control he suggests is providing public funding in yearly increments ($500,000 to $1 million per year) based on performance, all of which makes perfect sense.

Frankly, the greatest challenge in this whole proposal is selling it to the people of Amsterdam such that it wins an approval in a public referendum. The past mayoral election shows a city evenly divided on the future direction of the city. Flippin advocates “destroying and disrupting” the current thinking on economic growth and the institutions (ie AIDA) that are charged with stimulating economic growth. While I completely agree that our thinking has to change radically, the militaristic analogy, when extended reveals a problem. It’s usually understood that an offensive effort requires an overwhelming advantage in order to overrun a defending foe. That advantage is simply not there. I believe it will require a whole lot of persuasion to rally our residents around this plan. The past behavior of simply labeling people as “against change” or other less than flattering names will simply backfire again. The case for advancing this plan must be presented in a positive, persuasive way, such that a solid majority of voters believe and trust the initiative. If it’s not accepted at first, then it needs to be presented again in a different way and many more times if necessary until it finally takes hold.

I hope to post more comments on the individual proposals soon!

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The Mohawk Valley Regional Economic Development Council, along with other regional councils across the state,  have submitted their final strategic plans which are essentially applications for an initial 40 million dollars of  NY state economic development funding.

The economic councils are part of a new strategy initiated by Gov. Andrew Cuomo to manage economic development ideas and the disbursement of state economic funding. From the Regional Economic Development Councils web site –

The Regional Council approach is a fundamental departure from New York’s traditional economic development approach, which has been top-down and State-directed. The Governor’s vision is that the State will rely on regional expertise to identify and prioritize significant projects that would maximize the State’s return on investment.

You can get more information about the initiative at http://nyworks.ny.gov/, where you can view the Mohawk Valley’s plan as well as all the other region’s plans.

The Mohawk Independent has a nice article outlining some of the “Priority Projects” that will compete for a slice of the initial 40 million dollar funding. The list includes two businesses opportunities located in Montgomery County. Please check out the MI article for some details on those projects.

In addition to county-specific projects, there are also six regional projects which Amsterdam should benefit from. Here are brief descriptions of each program, quoted from the plan:

  1. The Mohawk Valley Regional Revolving Loan Fund (MVRRLF) is proposed to be capitalized at $7.5 million over a five-year period. The MMVRRLF is expected to leverage another $31 million and will target loans to 50 businesses in the six-county region to support the creation and retention of an estimated 750 jobs.
  1. Create the Mohawk Valley Microenterprise Grant Fund, which is designed to stimulate small business and entrepreneurial small business start ups to help capture the needs of younger businesses and turn good ideas into early seed capital businesses. This proposed fund would be capitalized at $2.5 million with $200,000 being capitalized as a priority project and the balance to be funded through the 2012 CFA process. The Microenterprise Fund would seed 100 young and early stage businesses and leverage at least $2.5 million in other funds. The Microenterprise fund would be designed to create/retain 250 jobs.
  1. Priority project funding of $150,000 (with $50,000 to be dedicated for the start-up activities/feasibility activities) would be targeted for exploring the creation of Mohawk Valley Ventures, a Seed Capital-Venture Capital Fund that would be capitalized with state and private funds in 2013.
  2. A Mohawk Valley Sandbox Program would be created to nurture students with a talent for innovation and creativity. The students would be mentored by volunteers from industry and academia who would encourage students to experiment with entrepreneurial techniques as part of their coursework. A Start-up fund of $100,000 is earmarked to help speed the development of this program.
  3. The MVREDC strategy also recommends creation of the Mohawk Valley Waterfront Development Opportunity Fund, (2.5 million initial funding request) a multi-year program to support waterfront development activities in key parts of the region, including Amsterdam’s Waterfront Heritage Way, the Rome Harbor Waterfront Village Initiative, and Utica’s Harbor Point. (2.5 million initial funding request)
  4. Create the Mohawk Valley Brownfield Opportunity Development Fund that is a major regional initiative to help implement the Brownfield Opportunity Area plans that would affect eleven BOA districts within the Mohawk Valley consisting of nearly 8,000 acres. A key thrust of the MVREDC Strategic Plan is to help the region reclaim and re-program former industrial sites. This $75 million effort is included in the Region’s five-year strategy and would be launched with $2 million in priority project funds and $6 million in CFA funding for 2012. The MVREDC would work with local communities to complete BOA strategies, undertake engineering and remedial clean up activates, and begin implementation of BOA strategies that are linked with viable reuse strategies. The MVREDC believes that the reclamation of the region’s former industrial core area is integral with

It’s important to note that with most of these projects, there is an initial funding request (ie “priority funding request”),  with additional funds to be requested through the Economic Transformation Area Program which was created to assist communities affected by closures of the state’s correctional and juvenile justice facilities, or through a Consolidated Funding Application (CFA) which taps an additional $1 billion fund set up by NY State.

Each of the priority projects, as well as additional, lower priority “Regionally Significant Projects”, fits into one of six strategies (quoted from the plan, with my additional clarification in italics)-

  • Enhance Regional Concentrations to stimulate regional growth from within, and to add to that growth by attracting new technologies and industries to the Mohawk Valley Region. (in other words,  help develop existing businesses and use them to attract new businesses)
  • Align the region’s workforce and educational systems to help grow and produce the workforce and talent base needed to support an economy increasingly centered around innovation and entrepreneurialism;
  • Enhance the region’s innovation enabling infrastructure by growing connections and nurturing ideas that will prompt new business activity and invigorate the region’s economy; (in other words, provide grants, loans, etc for new business ideas)
  • Increase the region’s spatial efficiency by working to ensure the organization of the region’s physical assets reduces and minimizes costs for businesses, inhabitants and their governments, while contributing to energy efficiency and sustainability… We will also look for ways to improve the Region’s transportation and infrastructure systems through the expansion of broadband connectivity to underserved and unserved communities; the promotion of Brownfield redevelopment and where feasible the adaptive reuse of vacant facilities; the reclamation of the region’s waterfront assets for community and economic development; and investment in downtowns and Main Street corridors; and
  • Strengthen government and civic effectiveness by promoting and acting to create leaner and more efficient government; by ensuring that civic institutions nurture a business climate that will promote entrepreneurship; incorporating the ideas (in other words, come up with better public policies and also look at consolidation opportunities).

Overall, I’m intrigued by the projects in this plan. Unlike other plans, such as Amsterdam’s  Comprehensive Plan and the Fulton/Montgomery Regional plan, some of the ideas in this plan will, without a doubt, be funded and go forward. There’s more of a sense that immediate progress will be made here.

On the other hand, the grouping of Amsterdam with this particular council along with the cities of Utica and Rome presents us with a serious problem. Being only a 25 minute drive away from Malta, home of the Global Foundries chip plant, and 35 minutes away from Albany, Amsterdam is clearly in a position to benefit from the Tech Valley initiative in the Capital Region. While there are references to the Global Foundries supply chain in the plan, the term “TechValley” is nowhere to be found. By being grouped in this council, we are losing a valuable seat at the discussion table when it comes to collaboration amongst Tech Valley movers and shakers.

Furthermore, Amsterdam has a much stronger historical and cultural connection to the Capital Region area than to the Utica/Rome area, which is over an hour driving time in distance away from us. Indeed, reading through the Capital Region’s plan, you see a much more developed sense of regional collaboration, especially around the Tech Valley initiative, in comparison to the Mohawk Valley plan. I see little sense of shared vision between Amsterdam and the Utica/Rome area.

Unfortunately, it’s yet another hill that Amsterdam will have to climb in its difficult journey to define its role in the emerging NY State economy.

Our Neighbors to the Northwest

Posted: November 16, 2011 in Uncategorized

I thought readers might enjoy this blog called Res Publica, which is about politics in Gloversville and written by a former councilman. I enjoy checking in on this one every so often to see what’s up. It’s strangely comforting sometimes to know that other cities are struggling with many of the same things that we are.

The result of the mayoral election presents supporters of both candidates with a classic “glass half empty/half full” situation. Regardless of which direction the scales tip once all the votes have been counted, and even factoring in speculation as to how many votes Bill Wills took from either candidate, the fact remains that the numbers point to a very even divide over the direction that people want for Amsterdam. Supporters of either candidate can look positively at the numbers as indicating that at least half of the city feels the same way, but at the same time must face the reality that at least half do not.

So the problem that we have here is like a cart that’s being pulled in two opposite directions by two horses of equal strength. The danger being that the cart goes nowhere, or worse, the whole thing gets pulled apart. My hope is that all of us in Amsterdam would take a step back and be humbled a little by the situation. We really have only two choices to move forward: we can fight tooth and nail to push through our ideas, painting those who disagree with us as evil, crazy or stupid; or maybe we can approach each other with a modicum of respect and realize that we are going to have to compromise and/or make tradeoffs in order to make any progress.

I know all too well that the latter scenario is a lot to hope for, but here’s to hoping anyway. Unfortunately some of the issues that the city of Amsterdam will face in the coming years may not be possible to compromise on. I believe the issue of city/county consolidation is going to be one that we as a city are going to have to come to grips with. City residents are going to have to do some serious soul-searching and decide whether they want Amsterdam to continue to have it’s own identity and ability to chart it’s own future or not. We cannot be a city and not be a city at the same time.

Revitalizing Amsterdam is going to take some new initiatives, and those initiatives are going to have to be ones that are palatable to a solid majority of our voters (hint: neither large-scale luxury apartments nor C&D landfills are going to cut it.)  Proponents are going to need to start practicing the lost art of persuasion and consensus building, which involves taking some time to understand the underlying values that form the opinions of an opponent and speaking in a voice that resonates with those values. It also requires a person to have genuine respect for other people’s viewpoints, which is not something that can be faked. We all would do well to dig deep and find that place.

The idea for the City of Amsterdam to merge with other localities to provide police and fire protection, maintenance and other services has been increasingly talked about in the local media, blogsphere and among local politicians this election season. The further goal of completely disbanding the city to be part of a wider, single government encompassing all of Fulton and Montgomery County, is also one that is increasingly being alluded to.

The promise of consolidation seems attractive – more efficient services with lower cost which means lower taxes. What concerns me greatly, however, is the shocking lack of any specific evidence as to whether consolidation will actually achieve this or not. The biggest cheerleader of consolidation, the Amsterdam Recorder, under the direction of publisher Kevin McClary, has put out editorial after editorial supporting the idea with little more than anecdotes and vague generalizations. The conversation on the subject is startlingly lacking in supporting details, which should raise a red flag for all of us.

Looking for some objective analysis on the concept of city/county consolidation led me to discover a fascinating paper written by by H.V. Savitch and Ronald K. Vogel from the University of  Louisville about the 2003 consolidation of the city of Louisville and Jefferson County, Kentucky. This paper is challenging to read, however I would urge anyone seriously concerned about the issue to take the time to look at it. The study describes and analyzes the events and circumstances that led to the merger and takes a critical look at the results. I found a remarkable similarity between the story of this merger and what is currently happening in our area.  The following summarizes the main points of the paper.

Louisville suffered from problems similar to ours
According to the study, the idea to merge the city of Louisville and Jefferson County originated from the same problems that many cities (including Amsterdam,NY) face: declining industrial base, stagnant population growth, increasing poverty and competition between the city and other localities for tax revenues. The first attempt at merging came in 1982 and was narrowly voted down in a public referendum, only to be revived again in the 1990’s.

The consolidation push was spearheaded by big businesses and the local media

“Business elites and the newspaper continued to focus on government organization as a major impediment to Louisville’s future health…A substantial network of organizations and local personalities took up the issue. The local chamber of commerce…took the lead working with business leaders and donors. These included the city’s largest corporations…”

Costs saving studies were completed, showed no benefit, but the results were ignored
In order to answer calls for substantiation, consolidation proponents asked local accounting firms to conduct an analysis.

“The firms produced a six-page financial analysis that covered eight functions representing just 38% of the city-county budgets…Excluded from the analysis were nine other services like police and fire. The analysis found no cost savings; nor could it identify any substantial duplication of services. The most the analysis could say about this limited number of functions was that ‘no major additional costs or cost savings’ could be found by merging…The firms admitted that is was ‘impossible to accurately predict where these benefits might arise’. Searching for a ray of light, the firms speculated that a merged government would somehow find benefits.

Studies of previous city/county mergers showed increase in costs and taxes, but were also ignored

“One study by Edwin Benton and Darwin Gamble (1984) compared merged Jacksonville with unmerged Tampa [Florida]. The authors state ‘These findings demonstrate that city/county consolidation has produced no measurable impact on taxing and spending policies of the consolidated government…In fact, both taxes and expenditures increase as a result of consolidation’.

Similar results are cited from a study of consolidation in the Miami, FL area.

Studies showed that economic development was not related to government reorganization

“Jared Carr and Richard Feiock (1999) find no relationship between economic development and consolidated governments. Their controlled study of 18 consolidated city-counties examined “annual growth in manufacturing, retail, and service establishments” before and after consolidation. These researches found that economic growth was a function of broader economic trends and not government reorganization…. John Blair and Zhongcai Zhang (1994) take a different tack demonstrating that local economic development depends on state prosperity. For them, states rather than metropolitan regions constitute the critical variable” 

The local paper played an important part in the push for the consolidation

“…the city’s newspaper…the Courier-Journal, was central to merger’s success…As the area’s only at-large newspaper, it is the sole source of information on local affairs. The Courier stands as a megaphone for Louisville, and it not only conveys the news but also construes and shapes it. The Courier spared no effort in promoting merger. It’s editorials writers personally attacked anyone who opposed merger, accusing officeholders of being ‘fear mongers’ who engaged in ‘obstruction’…Editorials sometimes devoted whole columns to individual opponents, accusing them of …selfishly defending the ‘status quo’.”

The city never got its own vote
The consolidation plan was fast-tracked through the Kentucky state legislature early in the year and defined only one referendum, to be voted on by the entire region being considered for consolidation. In other words, the citizens of the city of Louisville did not get to determine for themselves whether they wanted to consolidate or not, rather it was decided by the entire region as a whole.  The referendum passed later in the year and took effect in 2003. This merger was actually the first successful merger between a major city and a county in 30 years.

The end result of the merger was more power in fewer hands
The merger between Jefferson County and the city of Louisville created a single government that commanded a budget and workforce that was many times larger than what had existed before. The paper concludes:

“The irony of this realignment is that it has diluted the city’s core constituency and weakened it’s ability to defend itself…Consolidation was used to lodge a great deal of power in a “strong mayor”, making it more difficult for poorly  financed candidates to run for that office.

After examining new political institutions and the local newspaper’s interaction with the merger campaign, we find that consolidation is better explained by a logic of opportunity – one that emphasizes political advantage, individual fortunes, and pressure politics rather than policy considerations. The major consequence of city-county consolidation in Louisville is likely to be a more internally cohesive regime, coupled to weakened city neighborhoods that are less able to influence the development agenda and more rather than less urban sprawl.”

 So what does this mean for Amsterdam?

Let me be clear, I’m not saying we can look at the consolidation in Louisville as an exact parallel to our own situation.  I don’t want to dismiss the concept of consolidation based solely on what happened in other regions. Missing from this paper is a followup analysis on the actual effects of the merger on tax levies (however I believe the citations of studies on other previous mergers are telling.)   I think there are enough striking similarities here that should motivate all of us to take a closer look at the process going forward. Here’s what I think we should look for:

  • We should take a closer look at which politicians, organizations or corporations are leading the charge for consolidation, what the connections are between them and what they have to gain.
  • We should take a closer look at Recorder publisher Kevin McClary (who is a board member of the Montgomery County Chamber of Commerce) and his relationships to the larger corporations in the area
  • We should expect the Recorder to continue it’s increasingly bold stance on city-county consolidation, continuing to provide only ideological and anecdotal arguments rather than hard evidence of real cost savings for tax payers. Look for continued patronizing characterization of opponents of consolidation as “fearful”.
  • We should take into account the pro-consolidation bias in the Recorder’s endorsements for the upcoming election
  • We should demand that legitimate studies be done before any consolidation plans are put up for a vote. We should reject any plan that cannot be shown to have significant cost savings.  Pay close attention to the results of the upcoming study on consolidating highway services to be conducted by the Montgomery County Business Development Center 
  • Watch for a fast-tracked, under-the-radar initiative to get a referendum on consolidation approved by the state legislature. Much of the ideology for consolidation comes from NY Governor Andrew Cuomo and there appears to be widespread, bi-partisan support among state legislators for the concept.

 Thoughts, impressions, arguments and refutations are welcome in the comments section!