Thursday, December 14, 2006

What's a Few Million Between Friends?

So last spring, Mayor Driscoll signed a city ordinance to bill the Syracuse Industrial Development Agency $2.9 million for the work city employees did on various elements of Congel's Ditch. Now, Driscoll has changed his mind, and does not plan on asking SIDA to reimburse the city for these services. It seems the $2.9 million number was chosen by the Common Council because it just so happened to be the projected budget shortfall for the 'Cuse at the time. While the city ended up not needing the cash this year, it probably will in the next two years, and the Common Council is annoyed that Driscoll is no longer interested in getting it.

This is one of those situations in which one wants to get vehemently annoyed and pick a side, but it's just so confusing to know what to get mad about. On first glance, it seems a tad inappropriate for the Council to suggest making up budget shortfalls by essentially taking tribute from other entities, in dollar amounts that have no relationship to actual services rendered. Buuuut, on the other hand, if SIDA is not an independent entity, but actually an agency that falls under the authority of the city, particularly the city's fiscal authority, shifting funds from one department to another as needed is just common sense.

So what exactly is SIDA, and what is its relationship with the city? The mayor, according to the article, appoints its board, currently chaired by MDA head Erwin Davis, with top Driscoll official Kenneth Mokrzycki also serving as a board member. SIDA is a public non-profit corporation, with some decidely governmental powers, including granting tax exemptions and negotiating PILOT agreements. I don't think the Salvation Army or even the Red Cross can do that

Now of course, I'm being somewhat deliberately obtuse, as the economic development corporation is a pretty standard arrangement in cities across the U.S. But I think this disagreement neatly illustrates some of the problems inherent in government involvement in local development. As a non-profit public corporation, my guess is SIDA's charter empowers it to act independently on behalf of the city's economic development. Technically speaking then, the Common Council treating this organization like it was a $20 bill the Council just found in its collective coat is an abuse of its purpose. On the other hand, when quasi-governmental entities are created, they occupy a precarious position. If it has governmental powers, it should be under the authority of the local government, including fiscally.

It's quite possible I'm misunderstanding some key element of this debate, but what I think my point ultimately is, is this. There needs to be clear delineations between government and private entities. Zoning, basic services, police protection, taxes, etc., these are the functions of government. Indirectly, the city's attitude towards these things can have a powerful impact on development.

But things get awfully sticky when governments get involved in this particular development project or that one. Government should set the rules of the game, and make sure they are enforced, but then leave the real magic up to private firms (who shouldn't expect, or rely on, government financing or special treatment)...thus my libertarian leanings are betrayed. But I'm interested if anyone can shed more light on this matter.


Blogger Josh said...

I'm with you completely.

10:01 AM  
Blogger Josh said...

Oops, I published too early there. I never see anything good happen when government assumes the role of private developer in any city, probably due to the immediate, unbreakable and corrupting influence of campaign donations and local, backroom connections.

I'd abolish these entities entirely, because often governments use them to avoid other essential laws to protect or at least inform the public, i.e., the Open Meetings Law and FOIL. By working through these quasi-public entities, Pataki can divy up millions with Bruno and Silver without any public accounting (until recently...i.e., the litigation that NYCO covered well), the City of Syracuse can essentially give away public property in no-bid contracts (the Jewish Hall at SU to Swanson...the City never advertised the building for sale, or I'd argue, ever seriously considered any other developers), etc...

But I think you hit on the exact point about why we'll always be living with these entities, and why cities will never provide clear performance standards for developers -- they lose the ability to control development, to dole out property to favored companies, to control the game. So instead of revised zoning and permitting rules, we get a zoning and permitting officer to help (something the City of Syracuse recently offered as a change for the better). On paper, that reads just great...but it's only another symptom of the problem and Driscoll's desire to control the game from a backroom rather than trust the public with its own property. And that's never good for the health and future of a city.

10:08 AM  

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