College Town Should Not Be Taxpayer Funded

Recently the city broke ground on a project in Rochester called College Town.This is a half-million square foot development on 16 acres of land at the corner of Mt. Hope and Elmwood Avenue in Rochester. This area plans to have a bookstore, grocery store, child care, YMCA, hotel and conference center, restaurants, offices, apartments, and a parking garage. Like many of these projects, the ground breaking brought out a who’s who of city officials- despite the fact it is bad for Rochester.

The project started out as a vision statement from the neighborhood about what they wanted in this area. This process identified a few things the neighbors found important; a grocery store, a locally-owned bookstore, more public spaces, a public transit station, and sufficient parking.

With this in mind the City went out and found a developer and unfortunately this is when the problems began. A proposal was made which offered a great deal of office space, a Barnes and Noble bookstore, 150 apartments, room for some retail, a hotel, and perhaps a small grocery store. They also put in a parking garage but then rented part of it to the University of Rochester. Gone were the public spaces, green space, bus terminal, and sufficient parking.  And, of course, the bookstore was no longer local.

So with the project now something much different than what the neighbors requested, the financing turned this into a nightmare. The total project is going to cost around $100 million to build. Of this, $5.4 million is a federal New Market Tax Credit. There is also a $20 million Section 108 loan (HUD) from the federal government. There is $2.8 million in Brownfield clean up money, $2.7 million in sales tax credits, a $4 million grant from the State of NY, $3.3 million from the City, and almost $7 million in other subsidies. In the end it looks like $45.2 million in public money going to the project.

Of this money, two of the largest pieces seem misused. The New Market Tax Credit is a program which is supposed to spur revitalization efforts of low-income and impoverished communities across the United States. Now Rochester has many low-income areas but the area near Highland Park and adjacent to Strong Hospital is not one of them.

The HUD loan is also suspicious. This program was made for projects which meet one of the three following criteria: benefit low and moderate income persons, prevention or elimination of slums or blight, or address community development needs with particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available. This once more does not seem to fit as the blight was not terrible, slums were non-existent, and there was no health or welfare threat.

The housing does have 8 moderate-income apartments but that hardly justifies $20 million.  Further, this loan is being paid back out of taxes the project should be paying and at a lower tax rate than should be paid.

What are the benefits to the city that this project will bring? They tout the job aspect of this project and claim there will be 582 permanent jobs created by this project. That sounds good but a closer look makes most of these vanish. Of these, almost 300 will be already-existing office with the U of R or Strong Hospital which is moving units from diverse locations to one closer to the hospital. The book store will be the largest retail in the area but this is only going to be a consolidation of 2 other Barnes and Nobles which will close so this might actually cost jobs. Meanwhile the 60,000 sq. ft. of other retail will mostly be restaurants that will compete with existing businesses and will only cause other businesses to fail, so it probably will not create any net jobs. What will create jobs is the parking garage, maintenance for the apartments, and the grocery store, most of which will be low paying.

The city will also receive an estimated $9.6 million in taxes and interest over the next 20 years. This breaks down to only $430,000 in per year, which says the assessment of the property is a mere $10 million, or one-tenth the cost of construction, and only $20 a sq ft. Of course the City is rebuilding both Elmwood and Mt Hope, creating new streets, redoing sidewalks, and improving utilities. They have bonded $3.3 million to cover this so they have interest costs as well.

All told, the City will spend at least $17 million of its own money on improvements around this project that did not need to be done if it was not for this project. So in twenty years the City will lose roughly $10 million on a $20 million dollar investment for a project that meets only one of the items identified by the neighbors as a need of the community.

So what will Rochester really get in this project? About a hundred low paying jobs, a lot of construction jobs which will go to workers which will not be local, an increase in the total taxable property value in Rochester, and a very pretty set of buildings owned by an out of town developer.

Meanwhile, neighborhoods will deteriorate in the crescent around downtown, more houses will become vacant, blight will expand in other sections of Rochester, we will run miniscule smaller deficits every year, and the mayor has a great photo op at this ground breaking. It seems there should be a better way to spend tens of millions of dollars.

There ARE better ways to spend OUR money.  Instead of building new buildings we could be making loans and grants available to maintain the ones we already have.  We could also use some of this money to start new businesses, owned and run by Rochestarians.  These new businesses could get contracts from local institutions for products the presently get from out of town.  Finally, we could fund city services that reduce crime and fight poverty, like recreation, libraries, and schools.   

These are options I have been advocating for but people at City Hall have been ignoring.  There is a way to make these things happen.  Vote Row F on November 5th.

Do you like this post?

Be the first to comment