Move follows county supervisor’s vote to review loans
HUDSON—The county Board of Supervisors last week appointed Supervisors Art Baer (D-Hillsdale) and John Reilly (R-Gallatin) to review loans of $25,000 or more made by the Columbia Economic Development Corporation (CEDC) between January 1, 2010 and May 31, 2015.
That was the easy part.
The day after the June 10 meeting of the Board of Supervisors, the CEDC board of directors held its annual meeting and announced that it is replacing Ken Flood, its part-time executive director. Mr. Flood will be replaced with full-time executive director as part of a reorganization plan.
A brief release from the troubled agency dated June 12 said that a committee of CEDC board members “will work with existing staff to continue all programs and initiatives as the organization works to identify its full time executive director.”
All this activity has happened since the state Authorities Budget Office (ABO) investigated the CEDC and issued a report in late April concluding that three local businessmen and a lawyer who served on the CEDC board of directors had potential conflicts of interest because of their financial connections to Ginsberg’s Institutional Foods, Inc. The company is receiving financial assistance from CEDC for construction of a new warehouse.
In 2014 the CEDC transferred 33 acres it owned in Claverack and Ghent to Ginsberg’s for $1. That led to questions about the relationship between CEDC and the company, in part because the head of the engineering firm on the Ginsberg’s project is president of the CEDC board. The CEDC purchased the land in 1997 for $109,000 in public funds and the property was later appraised at $280,000.
The state report found that the transfer of the land was legal and within the powers of the CEDC, but investigation criticized the board members for their potential conflicts.
Reached Friday after the announcement of Mr. Flood’s departure, Mr. Baer said, “In the spirit of trying to work more closely with the CEDC, it was a bit disappointing that they would make the unilateral move to remove Ken Flood, which is a major restructuring move—there’s no other way to describe it—without consulting the Board of Supervisors.”
But Mr. Reilly wrote in an email that he was “not surprised” by the CEDC’s restructuring, adding that he appreciated the CEDC’s efforts to “take a hard look at their organizational structure.” Since then, Patrick Grattan (R-Kinderhook), chairman of the county Board of Supervisors, and Supervisor Ron Knott (R-Stuyvesant) have resigned from the CEDC board. Supervisors Sarah Sterling (D-Hudson First Ward) and John Porreca (R-Greenport) remain on that board, as does Supervisor Michael Benson (R-New Lebanon).
Mr. Baer faults the management of the CEDC, not its purpose, saying, “The CEDC needs to be right-sized and managed in a way consistent in the public interest. The agency function is to help economic development, and we need economic development.”
He had hoped to introduce a resolution at the June 10 Board of Supervisors meeting calling for an independent counsel to review recent loans made by CEDC. But at the start of the meeting Chairman Grattan informed the supervisors and an audience of about 50 that the resolution had been “pulled” from the agenda.
That led to parliamentary maneuvering and to Mr. Baer, a former chairman of the county board, reading a prepared statement. “The ABO report places an unfortunate cloud over this agency which must be dispelled as soon as possible,” he said.
He also called upon Mr. Grattan and the other supervisors who sit on the CEDC board to recuse themselves from “any involvement in addressing the CEDC conflicts of interest.” Mr. Baer said that the conflicts identified in the ABO report have occurred while Mr. Grattan has been chairman of the board of supervisors. “It is imperative that we restore the public trust in CEDC,” Mr. Baer said.
Long, polite applause from the audience greeted Mr. Baer’s conclusion. Some supervisors agreed with him, while others deplored the idea of spending of taxpayers’ money on an independent review. “I agonize over spending $10,000,” said Supervisor Rick Scalera (D-Hudson 5th Ward).
The current annual budget of the CEDC, which is funded by county government, is $437,000. Over the past five years, Mr. Baer said Friday, Columbia County has spent more than $2 million to support the CEDC.
Eight supervisors voted to bring Mr. Baer’s resolution for an independent counsel to the floor, but the weighted vote was 1,909 No and 858 Yes. The audience booed, also politely.
Supervisors Grattan, Sterling and Porreca recused themselves from all CEDC-related votes that evening. Supervisors Knott and Benson did not. James Guzzi (R-Livingston) was the only supervisor absent.
Mr. Reilly was then allowed to make his alternate resolution from the floor, a measure appointing himself and Mr. Baer as a bipartisan committee of two to conduct the review. All supervisors voting except Mr. Knott cast votes in favor of the resolution.
Despite the changes at the CEDC, Mr. Baer said after the meeting that he is preparing a data request with Mr. Reilly to send to the agency. It is not clear whether the CEDC will respond.