Hand up, not handout, needed from City Hall
Syracuse Post-Standard
Sean Kirst
November 19th, 2007
Ed Glaeser's name probably won't come up today before the Syracuse Common Council, where the councilors may vote on a tax deal for developer Joe Hucko's proposed $21 million downtown condominium and commercial building at South Clinton and Jefferson streets.
Yet Glaeser's arguments will be there, a whisper in the chambers, since Hucko's project has abruptly touched off a debate about the way development often happens Upstate.
"We've got a political culture that serves up Christmas presents in the form of (public) money, a million here and a million there, instead of addressing the real issues," said Councilor Stephanie Miner, an opponent of the Hucko deal. "It's the equivalent to feeding children nothing but cotton candy, and then wondering why they waste away."
Today, Councilor Kathleen Joy intends to bring a different financing deal to the council. Joy is waiting to learn whether she can amend the proposal from the floor and then put it to a vote, or whether the vote needs to be held off until another meeting.
Joy, the council's economic development committee chairwoman, said incentives only work "when the goal is balancing them against the return we're going to get." The city, she said, is close to brokering a deal with Hucko that would tighten up the tax arrangement for the project. The original proposal called for a 14-year "payment in lieu of taxes," or PILOT agreement.
In either case, Miner's point is as much about the general pattern of Upstate development as it is about Hucko's vision. Her arguments roughly parallel those of Glaeser, a Harvard economist who studies the plight of Buffalo in an article he wrote for the autumn issue of City Journal, a national urban policy magazine.
In that piece, Glaeser described decades-long government efforts to nurture the Buffalo economy through massive grants and subsidies. He wrote of how government cash helped create a 40-story downtown skyscraper for a bank, and a hockey arena worth more than $50 million, and a metropolitan rail system worth roughly $500 million.
"Such bribes," Glaeser wrote, "are notoriously ineffective."
In every case, those projects were presented as a means toward renaissance. In every case, Glaeser wrote, that didn't happen. He chronicled the devastating economic changes that caused Buffalo to lose its importance as a city, then offered a stark conclusion:
"The truth is, the federal government has already spent vast sums of taxpayer money over the past half-century to revitalize Buffalo, only to watch the city continue to decay. Future federal spending that tries to revive the city will likely prove equally futile."
Don't think we are somehow spared. Glaeser specifically mentioned Syracuse and Rochester as being in the same situation. He said any government focus should be citizen-based, with a specific emphasis on education, and he warned against "wasting yet more effort and resources on the foolish project" of returning a city such as Buffalo to its past glory.
Miner said she doesn't believe we're beyond hope. She maintains Syracuse can shake free of decline. But she said it demands a hard look at habitual behaviors that don't fix anything.
For years, state politicians have come through town to pass out "goody bags," she said. They make promises about how Empire Zones or other benefits for developers will "create major jobs and turn the economy around."
That hasn't happened, Miner said.
One counterargument is Hucko himself. He was involved in the rehabilitation of the old Dome Hotel, where the work involved public incentives. The result was a successful turnaround of what had been a dismal eyesore in Armory Square. Miner has nothing bad to say about Hucko or his intentions. As a developer, she said, he simply follows a well-worn trail.
As a 2000 article in Forbes Magazine about Syracuse made graphically clear, Miner contends subsidized local projects rarely lead to new growth. At best, she said, they might maintain the status quo.
The real hope for Upstate cities, she said, is an economy "that would unleash the forces of capitalism on their own." If state leaders really want to help Upstate, she said, they would finally and courageously reduce high state tax and utility rates.
In that way, she said, these cities could fairly compete.
Her points are similar to what Howie Hawkins, a Green candidate who lost in a run for Common Council this month, said repeatedly throughout the campaign. Hawkins boiled our tax problems down to simple math. He pointed out how the city schools base their income on taxable properties, while much of the property in Syracuse is tax-exempt.
The city schools, charged with showing thousands of children the way out of poverty, have the financial odds set against them at the start. Hawkins often mentioned the schools when he spoke out against subsidies and tax incentives he described as "corporate welfare."
Glaeser, in the end, would certainly find truth in this: Subsidized development as we've known it works sporadically, at best. We need dramatic new solutions for the city, for the region, for the schools. And those solutions can't begin until the Upstate cities, with the help of Albany, step back to see the cost of always doing as we've done.
Sean Kirst is a columnist with The Post-Standard. His columns appear Mondays, Wednesdays and Fridays. Call him at 470-6015.