EDITORIAL: How do you lose half a million bucks?

“YOU DID IT!”
“Did not. You lost it and I’m tellin’!”
Calm down. It’s only $516,000. That’s just a fraction of the cost for the first phase of the Ginsberg’s warehouse project on Route 66 east of the Route 9G light. The total budget is $13 million. And who knew the government would nix a promised grant for half a million dollars? Blame Washington, Albany or how about El Niño. Nobody around here could have been that careless.

The loss of this money is real and irrevocable, according to government officials. Locally, that means there’s plenty of blame to go around, making this latest development another mess in what has been a very messy project so far. And that’s a charitable way to describe it. It matters because there’s public money involved.

Ginsberg’s is a successful local food distribution company founded in the county over a century ago. It is building a 65,000-square-foot, 50-foot-tall refrigerated warehouse and an 8,500-square-foot maintenance building across Route 66 from the county industrial park. Long term it plans to expand to 300,000 square feet at that site. The Columbia Economic Development Corporation provided the land for the project and helped the company arrange its initial financing, which included a grant for $516,000 through the U.S. Department of Housing and Urban Development, better known as HUD.

HUD has a program called the Community Development Block Grant. It’s been around for over 40 years and in addition to housing, it supports economic development projects that benefit “low and moderate income” people. The company says the warehouse operation will create 25 jobs that fit the HUD grant requirements.

The state Division of Homes and Community Renewal handles the administration of these federal block grants and on January 8 that agency informed the county Board of Supervisors that the county will not receive the promised $516,000 because the project had engaged in “choice limiting actions” before the funds were allocated. These actions included the decision by the CEDC to transfer the 33-acre property to Ginsberg’s more than a year ago and Ginsberg’s decision to start construction activities on the property before the funds were authorized.

Sounds like a lot of government gobbledygook, right? But think about it from the government’s perspective. The feds want “a single project” that isn’t already beholden to deals that a grant applicant has already made. That’s the way government can assure us taxpayers that we know what we’re paying for. This doesn’t sound so unreasonable.

The letter rescinding the grant cited the section of federal law that applies here. But who reads the Code of Federal Regulations? Well, lawyers might, if the law in question affected their clients, and there were plenty of lawyers involved in the Ginsberg’s deal. Maybe somebody with a law degree should have looked it up.

What if a non-lawyer wanted to know whether any limitations applied to a HUD grant like this one? If that non-lawyer went to the state Homes and Community Renewal website, www.nyshcr.org, and clicked on the page for the Community Development Block Grant Economic Development programs, that non-lawyer would see the following: “Project activities must not commence prior to award….” The emphasis comes from the state agency.

Having “must not” underlined and in bold gets the attention of those of us untrained in the law. And if anyone–lawyer or lay person–had questions about what must not be done, it is possible, with a little patience, to reach officials who can explain it.

This lost grant was not one person’s error and it wasn’t just sloppy work. It was collectively sloppy, the kind of result you get from years of self-dealing and lax oversight. You can imagine the affected parties moaning, “But I trusted…,” which misses the point. Anyone offering that excuse forgets the Russian phrase so memorably uttered by President Reagan: “Trust, but verify.” Shouldn’t we expect the same standard where public funds are involved?

Where are the policies that will prevent something like the loss of this grant from happening again? What steps are our public bodies taking now to review all projects in the pipeline in case other costly mistakes lurk there?

The CEDC has new leaders who have made strides in rebuilding that organization. The Board of Supervisors has reshuffled its leadership. But this latest embarrassment is a reminder of how deep the problems go and how much work remains to be done to ensure economic development in Columbia County is diverse, transparent and fair.

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