Subsidy Sheet: Over 20 Groups Urge Hochul to Sign EconDev Transparency Bills
Yesterday, we and more than 20 groups urged Governor Hochul to sign two bills that would improve transparency in the state’s process for approving new projects (State of Politics).
The Penn Station redevelopment process’s lack of transparency has highlighted the urgency of the bills. Weeks before the state is set to take bids for the project, New Yorkers still know very little about how the project will be paid for, but it seems likely that real estate developer and major Hochul donor Vornado will profit from the project, and that a PILOT (payment-in-lieu-of-taxes) agreement will take billions in tax revenue from New York City.
The first bill (S8419-B/A9622-C (Ramos/Solages)) will require that Empire State Development’s Community Advisory Committees, which allow community members to weigh in on projects, meet publicly. To date, the review process has been highly secretive, with advisory committee members instructed to treat meetings and documents they receive as confidential, even though the meetings affect the public.
The second bill (S7337/A10157 (Comrie/Paulin)) reverses changes to the Public Authorities Control Board that Governor Cuomo forced through in 2019 in response to Amazon canceling its plans to establish a second headquarters in Queens. Projects cannot go forward without approval from PACB, but Cuomo’s changes made it so that the Governor could remove members that were “acting … beyond the scope of [their] legal authority.”
The practice of having a “gag order” for members of community advisory committees is anti-democratic and runs counter to the presumption of access under our state’s transparency laws.
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An NYC Comptroller audit found that the City didn’t account for $224 million in subsidies for its ferry system, which is run by Hornblower (NY Times).
The NYC ferry system has been dogged by controversy since its launch – in 2019, it was revealed that a stakeholder in Hornblower also sat on the board of the authority that approves subsidies to the company (NYC Economic Development Corporation), a clear conflict of interest. Citizens Budget Commision says that as of 2019, the subsidy for a single ride, $9.34, is one of the highest in the nation, raising questions about how those tax dollars could be better spent (the subsidy for one subway ride was $1.05 in 2019).
Highlights from the Comptroller’s report:
- “EDC’s financial decisions resulted in over $66 million in unnecessary expenditures.”
- EDC’s accounting of the ferry’s costs appear to be getting worse, missing the mark by about $2 per ride in 2018, and more than double that in 2021.
- EDC did not ensure that payments to Hornblower “were accurate, substantiated, and justified.”
EDC contested most of the Comptroller’s findings.
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Other stories you might have missed:
- Since the Supreme Court will review their cases, Louis Ciminelli, Steven Aiello, Joe Gerardi, and Alain Kaloyeros – each convicted of corruption in the Buffalo Billion scandal – were all granted bail (ABC News).
- Most of the $350 million set aside for Long Island this year will be used for “large scale construction projects” (Newsday).
- Our friends at Streetsblog write about how a contract for Brooklyn Bridge repairs went from $425 million to $657 million.
- For the new Buffalo Bills stadium, Erie County will transfer more than 250 acres to the state, including 56 acres from Erie Community College (Rochester First).
- The Daily News Editorial Board calls the state deal to pay for half of the Portal North Bridge a “boondoggle.”
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Fun fact: 80 to 96 percent of dollars from subsidies go to firms with over 100 employees.
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If you got this from a friend, sign up here. Subsidy Sheet is written by Tom Speaker, Policy Analyst at Reinvent Albany. Please send questions and tips to tom [at] reinventalbany.org. We look forward to hearing from you!