OK, let’s make a deal. You give me mucho, mucho bucks and I’ll give you . . . what? A promise? Sound good? Do you know of any business that does business like that?
No, only government does business like that. So welcome to the Adelphia Communications waterfront project.
New York State already has tossed $75 million of public money into the pot, $50 million of it new dollars, to help get the new communications center erected on the waterfront. And that’s not all. Erie County and the city are being asked to kick in additional government support to woo this private venture to the People’s Republic of Buffalo.
In fact, the company’s refrain brings to mind the Edward G. Robinson character in one of his old gangster movies. When asked what he wanted, he thought for a minute and came up with a one-word summation: more. That’s the Adelphia mantra as negotiations proceed.
And what does the public get in return? Supposedly, 1,000 new, good-paying jobs downtown.
All right, if that’s the tradeoff, it’s a decent deal for a job-starved town. There’s only one catch: Who’s going to make sure that happens? And what if the jobs don’t materialize?
It’s a question public-interest and labor groups have been asking more and more in recent years as they examine deals made by the alphabet soup development agencies with weird acronyms. The agencies hand out public money to entrepreneurs whose main skill seems to be giving the public the business.
It’s why some skeptics are pushing so-called “clawback” legislation that writes into such deals specific job targets, pay scales and, most important, penalties. Companies that don’t keep their promises would have to give back the money – just like other welfare recipients.
“Some of the industrial development agencies in New York State are starting to do it,” said Mark Dunlea of the Hunger Action Network, part of a coalition called the Fair Budget Campaign that’s trying to reform such practices.
Assemblyman Mike Bragman, the recently deposed majority leader, has been pushing legislation for years to make all of the development agencies have a plan for recouping aid if the companies don’t live up to their rosy promises. His Financial Incentives Accountability Act has passed the Assembly the past several years, only to die in the Senate.
So where does that leave Empire State Development Corp., the lead state agency on the Adelphia project? It insists it can and will make Adelphia create all of the promised jobs.
“It’s something the Pataki administration has taken a very hard line on, given the history of this type of thing,” said agency spokeswoman Maura Gallucci.
That “history” raises lots of questions. Some who watch this sort of thing say that the state agency is more conscientious in writing such agreements and following up than local development corporations. And Gallucci says companies getting ESD aid have exceeded their job targets by 8 percent in the latest report.
Still, not all firms keep their promises.
“If they are not in compliance, they must reimburse the funding,” she said.
There’s only one problem. No one – not Empire State nor the Washington-based Institute on Taxation and Economic Policy’s Good Jobs First program, which studies subsidized job projects – could immediately come up with examples of projects in which governments have actually made companies like Adelphia give back the money.
Perhaps that’s not surprising. A government that decides a company needs help in the first place will be loath to bring down the financial hammer and drive the firm further into the red when it fails to grow jobs as promised.
But if any firm could withstand that kind of pressure and should be held accountable, it would be the nation’s sixth-largest cable company.
Asked whether Adelphia will agree to clawback language, Executive Vice President Timothy Rigas said, “It’s hard to answer that without having the whole deal completed.” The state should insist on it and taxpayers should insist on a very public scorecard. Even with the good-faith show of 60 new jobs the company recently brought here, this deal needs some enforceable guarantees to make sure the public gets its money’s worth.
As things stand now, it reminds me of the taxpayer dollars shelled out for the downtown baseball stadium while the Rich family verbally dangled the prospect of Major League Baseball before a gullible community.
The stadium was built, fans flocked in, dollars flowed into Buffalo Bison coffers (while the city lost money) and suddenly all of that talk about bringing in a major league team was just that – talk.
It brings to mind the old joke: A verbal agreement isn’t worth the paper it’s written on.
The question this time around is simple: Will the written agreement between the taxpayers and Adelphia be any better?