February 28, 2009

Sunday Morning

Tomorrow I will wake up, wake down my driveway pick up the Worcester Telegram and the Boston Globe, which I have no idea why we subscribe to on Sundays and take them back to my house. After reading through them, in about 15 minutes, I will question why the hell we keep paying for these newspapers?

Maybe it is because I just keep waiting for some great reporting? Don't get me wrong there is some great reporting, but just not enough of it. The thing about the newspaper is that when you do get the great reporting, you love it, come back and hope that you get it again next time.

Let me post a couple questions here.
  • Last year Shaun Sutner wrote a great story on the Garage Mahal. How about a follow-up?? How many monthly parkers do we have? What is the total monthly revenue versus the expenses? What about the status of the street level retail spots?
  • Can someone, anyone, write a story about Pharmasphere, the winner of the large parcel of land in the South Worcester Industrial Park that still one year later has not taken title to the property after winning the bid with their $1 bid?

No lie I can come up with 100 other stories before the Pools Coalition has another story, but that will never happen.

There are alot of good writers in the various Worcester media publications and there are readers out here, like me, who love it when you dig into stories like these. Thats what makes people come back, not the same old same old stories that you read once per year every year for the last 25 years.

Here is hoping I read some great investigative stories tomorrow. Maybe Robert Z Nemeth will even write about the airport and how the MassPort deal is an example of privatization?

Dawson Road

Making progress, click here. Great view of airport from here.

February 27, 2009

Cig Tax

You know that last buck a pack tax that was suppose to raise all sorts of monies to pay for the new Commonwealth of Mass Health Program. Officially collections have gone down 3% as sales in the Commonwealth are down 20%.

April 1st, there is a new Federal tax going on cigs that will jack up the cost of cigs by about another 80-90 cents a pack. Will they ever learn?

Arts District? Low Income Housing District

Just drove down Main Street consider this:
  • Hadley (Burwick building)
  • Odd Fellows Building (next to old Mart)
  • Standish Building (diagonally across from the YMCA)
  • May Street (old Mattress factory)
  • Piedmont Street (empty lots next to old Manoog Plumbing)

At the most that is a half mile and we have invested I bet you this represents 70 million invested in "affordable" housing.

Cheers to the Mayor of Gardner

Another story in the Telegram yesterday. Imagine any of our elected officials ever saying this!!

He also said new low-income apartments would be overkill in Gardner, which has one of the highest affordable housing rates in the state.

Yeah, right not in Worcester--- can you say:
  • Hadley Apartments
  • May Street apartments
  • Mason Winfield
  • Southgate Place
  • Piedmont Street next the old Manoog

Pay freeze

In the newspaper yesterday, it mentioned the City Manager would forego his pay increase and raise his health insurance deduction to 25%. Lets hope the City Councilors follow suit and propose a wage freeze on their salary, which also would freeze that of the School Committee also.

February 26, 2009

NRSA Program

NRSA stands for Neighborhood Revitalization Strategy Area and is a great program. The NRSA is combination of a CDBO (Community Development Business Organization) and an accompanying business grant reinvesting monies into said neighborhood, after they both TOGETHER review applications award monies to those projects that they feel will improve the neighborhood.

Over the past 3 years, we have had 5 NRSA's in the City of Worcester:
  1. Chandler Street/Common Ground
  2. Grafton Street/East Side CDC
  3. Beacon Neighborhood/Main South CDC
  4. South Worcester/South Worcester Neighborhood Center
  5. Lower Lincoln Street/Oak Hill CDC

Three years ago these 5 areas competed for what was suppose to be 2 NRSA designations. In the end, it was decided to split the monies amongst the 5. At this point I hope the City of Worcester takes a step back and reviews:

  1. the results of each NRSA
  2. did they meet the goals as laid out in the initial application
  3. were there true partnerships between the CDBO and the accompanying business group

In the end the NRSA's that are working should be rewarded, while the others that are failing miserably should be ended.

Skating Rink

Almost done. It would be a perfect spray park?

February 25, 2009

New Construction Dawson Road

Great house, learn more go to WorcLand.com or check out the slide show. By the way, great builder--me. Can't afford to build in Main South anymore--can' t compete with the CDC's , need to move to the West side.

Seriously this is no exaggeration. A private developer, with his own money, can not compete in a low-income area, that desperately needs investments, against the CDC's. Why?? They are so highly subsidized by our tax dollars.

Consider this. $5,8000,000 of work was down in the Gardner Kilby Hammond project for the Main South CDC and Clark University. Are they making the payments on the loan? No, the City of Worcester, you and me, are paying it back through lost CDBG monies.

Let me make an analogy to try help explain this:
  • A bank takes out a 5,800,000 loan to do all the development costs on a parcel of land for you.
  • You do not have to make any of the payments on the 5,800,000 loan
  • The bank will make them, although they will try to get the local Congressman to get funds to pay the payments for the bank.
  • In the meantime bank deeds you parcels for pennies and you are able to develop them and sell them without having to pay back any of the $5,800,000 loan.

I know this sounds crazy, but this is the reality in the the CDC development world. The City of Worcester took out a 5,800,000, guaranteed it, gave out the underlying collateral (parcels) for pennies on the dollar and has stuck the tax-payers of Worcester with the repayments.

How can any private developer compete against an entity that gets the benefits of 5,800,000 of investments without having to pay back one penny? Lets not even get into the other grants, the waived permitting fees and free infrastructure work. The answer is, sadly, they can not. As a result, they need to move on and we wonder why we can not get any private investments in the City's inner core.

Does this make any sense?

Better yet why isn't the vocal Pools Coalition complaining about the $365,000 that will be deducted from our annual HUD CDBG allocation to pay back this $5,800,000 Garnder Kilby Hammond HUD Loan. These monies could have been spent on the pools that they so desperately want?


Think I spelt it wrong, but you know on Pearl Street --old GAR Hall. Just walked by, the place is crawling with fire trucks. Definately smell smoke, but I also hear the fire alarm still going off. It looks like the fire department got there before any extension damage.

City Pools

Story by Nick K today in the Telegram. Check out this part:

The public hearings are: March 2, Friendly House, 36 Wall St.; March 4, PNI Club, 290 Millbury St.; March 9, Beaver Brook Park Community House, 36 Mann St.; March 11, St. Peter’s parish gymnasium, 929 Main St.; March 16, Worcester Senior Center, 128 Providence St.; and March 23, Great Brook Valley Multi-Purpose Center, 180 Constitution Ave.

Six public meetings?? Surprised we do not hire a couple more consultants and have a charette. On a serious note why is there no public meeting on the West Side of the City of Worcester, where there are no pools or beaches, have to say?

It would be nice to keep all the nine pools and two beaches open, but is providing swimming a "core" service? Simply put it is not and while we are looking to cut 400 employees and not hire an incoming police class how can we seriously consider keeping all the pools and beaches open?

Where's the leadership? Closing all the pools and focus on the two public beaches. Its just that simple.

February 24, 2009

New Favorite Website

Rick Santelli's Chicago Tea Party

Patrick Admin New Taxes

Must read opinion piece from MetroWest Daily, amazing when you see it listed. Jahn comments should be classic.

Jet America

Founder of Skybus, John Weikle, is going to try it again with Jet America and is looking for a hub in a secondary airport. Can you say DJ Air? They may be worth an invite, however, with MassPort completely on board.

February 23, 2009


Obama's press secretary, Robert Gibbs, on Santelli ???

Santelli on Hard ball, click here

how about this one...

Worcester Catchment Area

I saw an article about how the person at Manchester said he was not worried about SouthWest going into Boston and I agree with him. He should, however, be very worried about MassPort taking complete control of ORH.

I fly, my wife fly and my immediately family flies on average about 10-15 times per year. I can say that only 1/3 of the time that we go to Boston and may be on the high side Our first preference is TF Green followed by Bradley and Manchester. Now from other people I talk to, I would say that is pretty much average. Ironcially they are all about one hours drive from Worcester?

If MassPort were to get Virgin/Southwest/JetBlue to fly some direct flights to Florida out of ORH? This would hurt all three of these airports in surrounding states big time. Telling you right now MassPort is goiing to be great.

February 22, 2009

Two Great Videos

Coach Calhoun

Rick Santelli

Incredible Shrinking Newspaper

There have been weeks where I have commented on how quickly I was able to read the newspaper. Today was officially the worst. When they said that they were going to come out with a new look, I did not know that they meant the paper would be cut in half?

No lie I spent twice as long reading silly bloggers then I did newspapers. On the left side you will links to Jeff, Paul, Gabe and 4-rilla--my favorites. Sometimes I don't check them for a week or so but today I read them all. Honestly, great stuff.

The Telegram is so predicatable. My favorite is the story on prostitution in Fitchburg. I swear it is annual story that we read each year. Same old same old. If it were not for Nick K or Diane, the paper would be completely empty. Sutner is good too, especially when he investigates stuff like the Garage Mahal, but there is just not enough of it.

Now for my favorite. How could Mr Nemeth write about St Kitts today and not ORH being taken over by MassPort?

February 21, 2009

Its Done Part 2

Remember three years ago, or has it been four years, when one Robert Z. Nemeth came to my office and told me those infamous words. "Nothing will get done at the airport unless it goes through me", but I digress. In other words, even if it was a great idea for the City of Worcester, he would shoot it down unless he could somehow take credit for it.

After explaining to him what WiFi was, I needed to also explain to him what "privatization" meant. I used the eample of Stewart International Airport in Newburgh, New York, which had been leased out to National Express for 99 years. Robert Z Nemeth, in turn, told me to submit my "silly"idea in writing to the airport commission, which I did. In fact, this was recorded in the minutes of the meeting, but quickly dismissed and never to be talked about again.

  • Mr Nemeth, I have a question for you?
  • What do you think MassPort taking over Worcester Airport is?
  • Answer-privatization!!!!!!!!

Although it is not a private sector entity like National Express or Avports, we are witnessing the privatization or ORH as I had explained to him was the best course of action for ORH. Again I think this is a good move and bodes well for the future of ORH, but I think we made a mistake by not soliciting bids from other port authorities, private sector airport management companies and who knows who else. As Harry as mentioned many times, maybe we should have had Sir Richard Branson come to ORH?

I guarantee you that within three years, we will have a strong airport at ORH. Have to ask why, if we were in fact to going privatize ORH did we only talk to one buyer?

February 20, 2009

Its Done

Finally. MassPort will be taking over ORH. We need to look at this two ways.

First, the commercial side. ORH will become a real airport. I guarantee you three years from now, we will not even recognize ORH. This is a very good thing for the City of Worcester.

Second, the financial side. This is where we need to look at the details. My gut tells me it will be some type of nominal lease for an extended period of time, not an outright sale. Will MassPort pay property taxes? Questions like these need to be answered.

In the end, we need to look at this as a good thing. Not only do we save money right now by not having to pay the annual deficits, but ORH will thrive. I have to say, however, that we should have talked to other potential buyers like Avports. That said I am still excited about this latest development.

February 19, 2009

Blogger Retreat

How could I resist??? I will open Pandora's box. Where should we have the retreat?

Here are my suggestions:

  1. Airport
  2. Proposed home of the Blackstone Visitors Center
  3. Pharmasphere at the South Worcester Industrial Park
  4. UNUM's new site at City Square
  5. Southgate Place at former home of City Builders
  6. Cambridge and Hacker housing project
  7. Winfield Mason Project
  8. Wyman Gordon Parcel
  9. Gardner Kilby Hammond and we can burn $9 million in monopoly money to stay warm

Can't wait to read these comments

Cape Air

I know we are seeing this as another blow to ORH, but who knows maybe we should look at it as maybe SouthWest is one step closer to ORH?

The one that really bothers me is Cape Air. Remember this blog first started when JetBlue was just starting to invest in the Embrear 190. Our idea at that time was a flight from ORH to JFK on the smaller Embraer, fomr there then connect direct to anywhere. That did not work, although the Embraer makes five round trips per day out of Boston and I still think one of these round trips could be diverted to ORH.

Cape AIR!!!! This one makes no sense. Currently they fly from :

  1. P-town

  2. Hyannis

  3. Martha's Vineyard

  4. Nantucket

Best part is that they have a code sharing arrangement with JetBlue so it appears as JetBlue flight but you avoid the long lines at Boston since you go through the smaller airport lines. I believe there are two flights per day from these smaller airports.

Go on the JetBlue website and check out a flight from any of these cities. It makes no sense to me that this has been done for these four cities but not for ORH.

Southwest to Boston

Thats right SouthWest is going to Boston, although they already fly into Manchester and Providence. Story in the Boston Globe.

February 18, 2009

Allegiant To LAX

Why couldn't we get an airline like this.

Long Beach Airport Privatization

Interesting story from the LA Times.

I know people will say that there was interest because they had 3 million passengers, but check out the deficit---15.7 million!!! ORH is losing about 2 million per year.

Despite this shortfall, "the city received unsolicited inquiries about the sale or lease of Long Beach Airport assets from major banks and Wall Street firms, including Citigroup, J.P. Morgan, Goldman Sachs, Merrill Lynch and Morgan Stanley."

February 17, 2009

Allegiant Announcement

Wednesday at 10:30AM

City Council Agenda

No meeting tonight but would it not be nice to see an agenda like this for next Tuesday?

  1. single residential/commercial tax rate over 5 or 10 years
  2. privatization of city owned assets like the Airport, DCU, Union Station and Green Hill Golf Course
  3. 5,800,000 million HUD loan that is cost to cost us $9,345,000 in lost CDBG funds
  4. Why was $100,000 of unexpended NRSA funds not transferred to a successful program like the facade program, which has no money for the rest of this fiscal year, versus Main South CDC and 93 Grand Street.
  5. City Council take a wage freeze for their pay and stop current and future pay automatic pay raises?
  6. Unfunded pension obligation
  7. How does the City of Worcester support a $7,000,000 million dollar 25 unit low income apartment building at the former City Builders site, that nobody in the neighborhood suports, when the track history to date has resulted in the mess called Cambridge/Hacker Street?

Avports in Westfield

Read this in the Republican below. Can someone in Worcester please invite John Harden from Worcester to come to ORH and look into the possibility of them taking over ORH?

WESTFIELD - The city's Airport Commission wants to negotiate a two- to three-week extension with AvPORTS, of Teterboro, N.J., to continue managing operations at Barnes Municipal Airport while it considers the appointment of a manager.

The three-member commission sent a formal request to the New Jersey firm on Thursday requesting negotiations for the extension to allow local officials more time in finding a replacement for Christopher J. Willenborg. He resigned as manager last month to become executive director of the state Aeronautical Commission.

AvPORTS has managed the local airport since Jan. 9 under a $3,000 weekly contract that is due to expire at the end of the month.

February 15, 2009

Allegiant's New Destination -- Los Angelas

It gets announced Tuesday. I personally was thinking Myrtle Beach but based on the 12 cities that will be serviced by this new destination it could not be Myrtle Beach.

It has to be Los Angelas like the Crankly Flier predicts, click here for his post.

Interview with Mr Davis

Worcester Business Journal interview here. Surprisingly he still does not know the passenger loads of the only airline, Direct Air, that flies out of ORH?

So has Direct Air been filling most of their flights?

I don’t have their exact numbers but I know they’ve had some great high-load factors and some low-load factors.

February 14, 2009

Saginaw Civic Center

I read this history page on their website, maybe some day we will read about a company like AvPorts taking over ORH?:

The Saginaw Civic Center was built in 1972 by the City of Saginaw. The Civic Center was composed of three main parts: Wendler Arena, Heritage Theater, and Unity Hall. Since 1972, the Center has served Saginaw County and the surrounding region as a first-class event venue...

In 2000, the City determined that it could no longer afford to pay the $850,000 annual deficit necessary to operate the Civic Center. If the City could not find additional funding, the City would close the facility on December 31, 2000....

The Authority hired Deloitte & Touche of Chicago to conduct a Feasibility Study on the Saginaw Civic Center. Spicer Engineering of Saginaw conducted an Engineering Study of the entire facility and the cost of repairs and maintenance for updating the facility was estimated. Estimates for repairs on the facility came in at $17 million and included repairs and enhancements to lighting, seating, restroom facilities, sound systems, roofing, and loading docks. They were also asked to present the costs associated with building a similar facility somewhere else within the County. It was estimated that it would take $69 million to build such a facility elsewhere.....

Representatives from the Building Authority and Civic Center Task Force interviewed two private management groups to run the facility. SMG was chosen as the management group to run the newly-dubbed County Event Center.On June 30, 2001, the City of Saginaw closed the Saginaw Civic Center....

The voters of Saginaw County decided on May 8, 2001, to reopen the facility on July 1, 2001, as the Saginaw County Event Center. SMG has managed the facility with the oversight of the Saginaw County Building Authority and an Event Center Advisory Group. The $850,000 subsidy was reduced by almost half in the first three years of operation......

February 13, 2009

Telegram Advertisement

New and improved Telegram has a great color ad on the bottom of page 4 and page 5 advertising great liquor prices for the New Hampshire liquor store. I resent this on two levels.

First, you can not keep going up on taxes, people will buy their products elsewhere. The cigarette business has already moved out of state, liquor sales may next followed by gas and then soda/water.

Second, I really question the Telegram running this. Here I am selling their newspaper along with many other retail outlets and we are selling a newspaper telling our customers to shop somewhere else? I can only imagine how Yankee Spirits and other liquor stores, who run ads in their newspaper, feel right now.

Guess I just feel that a local newspaper that wants local support should not run an ad that hurts the local economy that they want support from??

February 12, 2009

The Truth About the GIC

Group buying works in alot of situations and can always save money. Let me give you an example. Assume you have three government entities loooking to buy 1000 pens. Instead of each of them buying 1000, they should buy 3000 together and they will save money.

This does not work with insurance!!!! Why? There is a thing called claims experience. Lets take a look at the same case where you have three municipalities where two of them have high claims experience, while the 3rd one has great claims experience. The two bad groups would love the low claims experience group to join with them to buy health insurance, since their overall bad claims, as an average, would drop and they would get better rates. In this case the group with the good claims experience would be crazy to join this buying group, since their rates would go up.

The other night the City Council asked if they were to join the GIC, could the state legislature pass a bill whereby each member of the GIC would get their own claims experience. Yeah right, this will never happen! Lets for arguements sake there were three municipalities in the GIC and their claims experience were as follows:
  • A: Claims were 125% of premiums
  • B: Claims were 110% of premiums
  • C: Claims were 70% of premiums

If you were company C, what would you do? That's right you would leave the group in a second, get better rates on your own and the remaining upside groups will get killed at renewal. Bottom line if a buying group like the GIC were to release claims experience to each member, it would be the end of the GIC.

If we will never be able to get our claims experience from the GIC, how will ever be able to leave the GIC down the road if we are not happy with the plans or rates? It would nearly be very difficult for a group the size of the City of Worcster to get anyone to give us a rate without having any claims experience.

Lastly the GIC definately has a higher percentage of membership in the Eastern part of the Commonwealth, where medical costs are much higher then the rest of the Commonwealth. Moving to the GIC is a big decision and one if made may almost be impossible to change back.

February 11, 2009

Allegaint January Traffic

From Forbes

Allegiant Air, which carries passengers to Las Vegas and other resort areas, said Wednesday its January traffic rose 8.7 percent from a year ago, bucking a downward trend affecting most U.S. carriers.

Allegiant said paying passengers flew 303 million miles on its scheduled service in January, compared with 278.7 million revenue passenger miles a year earlier.

Capacity rose 0.6 percent to 340.3 million available seat miles from 338.3 million available seat miles, while occupancy, or load factor, increased to 89 percent from 82.4 percent in January 2008. Most airlines with broader networks reduced capacity

Answer to my question?

There was a meeting on Monday regarding Southgate Place, at the former site of City Builders. I asked if the EPA grant that was given to the South Worcester Neighborhood Improvement Center (SWNIC), that does not have to be paid back since they are a non profit, would it have to be repaid if SWNIC were to sell the property as planned to City Builders LLC, a for profit entity.

Here is the answer I received today in writing from SWNIC, here is a portion of the response:

To respond to your question, the South Worcester Neighborhood Center is the owner of the Site and must hold title to the property during the site cleanup. As a condition of receiving the grant, SWNIC is committed to holding the property until the cleanup is completed. After the cleanup is completed, SWNIC can sell or transfer title to the property.

I hope this answers your questions.

Jahn help me, does this answer my question? Bottom line is that they feel that they can do whatever they want with the property, including selling it, without any ramifications. If this is true then I suggest that every non-profit:
  1. Should buy contaminated parcels on the cheap
  2. Apply for EPA monies
  3. Clean up the parcel
  4. Sell the parcel
For example they buy a $10,000 parcel and clean it up with a $100,000 grant from the EPA then turn around and sell it for $60,000--they pocket $50,000.

5,800,000 HUD Loan

That loan that will cost the tax-payers of Worcester some 9,345,000 did not come up last night? I wonder if we could have used these CDBG funds for core services like fire and police?

February 10, 2009

Councilor Rosen Naming Rights?

DCU paid money for the Centrum because people go there. Why do people go there? It is privatized and managed by a company that actually books events.

Don't get me wrong I believe that the naming rights to ORH and Union Station could be worth money but not right now. We need to privatize these assets, long-term lease or outright sale, not discuss naming rights that will bring close to nothing to our bottom line.

Gas Tax Increase & Menino Wage Cut

From the Boston Globe:

The gas tax in Massachusetts is 23.5 cents per gallon, which has not been substantially increased since 1991. A 29-cent increase would bring the state's tax to 52.5 cents per gallon. New York currently has the nation's highest state gas tax, at 41.3 cents per gallon.

From the Boston Herald:

Swamped by the worst financial crisis in decades, Mayor Thomas M. Menino and 19 of his top advisers - nearly all making $100,000 or more - are taking a 3-percent pay cut, effectively giving back raises the mayor handed out in August.
As a result of the pay cut, Menino’s $175,000 salary will drop to $169,750. In all, the city expects to save $122,000 by cutting and then freezing Menino and his Cabinet chiefs’ salaries until June 30, 2010.

February 09, 2009

Big Money In Low Income Housing

Make no mistake about it there is big money in this. Consider this:
  • underlying municipality typically gives out variances, that nobody else can get, allowing for high density development for the low income housing project
  • underlying municipality typically waives or at least credits fees for permits and water/sewer hook-ups
  • underlying municipality typically pays for infrastructure improvements like sidewalks, grind and overlay, etc
  • a great majority of the cost to develop the project is received in various grants and federal tax credits that the developer does not have to pay back as long as the "affordability" period is complied with

Bottom line if you have a willing, unsuspecting, co-operating municipality a low income housing developer will build on every possible parcel of land available since they themselves can make big money. They will downplay this and say that they make little or no money, but this is simply not true.

Do The Developers Make Money On SouthGate Place?

You better believe they do. Here is how it works:
  1. Up front cost of $7,000,000
  2. $6,000,000 comes in the forms of various grants and federal tax credits that in this case mandate that all 25 units are rented to low to mod income people for an "affordability" period. Think this one is 20 years.
  3. Assuming all the units are in fact rented to low mod income, your only real costs that you need to pay back is the $1,000,000

Bottom line you if you play the low income game, you get 25 units that you can get section 8 money for 1 million. The developers make a ton of money on this project and don't let anyone tell you different.

Community Information Session

One of my tenants received a hand-out today for a meeting at the South Worcester Neighborhood Center. I own a three decker that abuts the former City Builders site and the future home of a single building that will house 25 low -income tenants.

Here is the content of the letter:

To have a discussion about the Southgate Housing Development
Monday February 9th at 5:30PM

What exactly is there to discuss? It is a done deal and no matter what the abutters want makes no difference. In these tough economic times, when we need to cut back, we somehow have $7,000,000 for this project. Jahn, the average cost per unit works out to $280,000.

It should have read:

Final Presentation of Plans for Southgate
25 apartment rentals all for low to mod income housing in one building
No home ownership opportunities as originally promised
No Townhouses as originally promised
No Daycare Center as originally promised

Convenience Store on NH border

Imagine if you owned one on the New Hampshire border. Over the past year, you would have seen your cigarette sales disappear. Now if they add a deposit on soda and water, those sales will disappear. Then low and behold a gas tax, then everyone will not only buy their cigarettes, soda and water, as well as their lottery in New Hampshire but gas soon.

How can a convenience store in the northern part of Massachusetts will be able to survive this new taxes?

Feb--Good Month at ORH

This week I have gotten at least 10 e-mails or calls from people regarding their flights at ORH. The most common question is regarding parking:
  • How far away is the lot?
  • How is the security?
  • Is there a long term Park N'fly lot?

The most common complaint is that nobody answers at the toll free number for Direct Air. Bottom line is that I bet you the loads are very good this month at ORH.

February 08, 2009

Activity at ORH

Thanks Jim and Tim ;

They both noticed four B737 flights from Miami hours apart today. Does anyone know what these flights were, freight or junkets.
Check FlightAware and enter ORH for airport.

Newburgh NY HUD Loan Problems

Two stories. From the Times Herald Record:

The council's favor for McGrane cooled quickly last month when it heard the results of a scathing audit of a federal loan program by the U.S. Department of Housing and Urban Development. Over six months last year, HUD investigators combed the city's financial records and uncovered more than $2 million in what they deemed unnecessary loan payments for a deadbeat waterfront developer and fallow industrial park site

Another from the Times Herald Record:

The City of Newburgh loaned Dr. Thomas Glendening and two of his companies $1.5 million for a marina project that was supposed to create 43 full-time jobs. The money came from two sources: $1 million through a Section 108 loan and $500,000 from an Economic Development Initiative grant. Both are federal funds with a goal of helping people who have low and moderate incomes. Glendening was supposed to begin repaying the $1.5 million to Newburgh in January 2003. Glendening paid the city nothing until July 2007, when he sent $27,500.

Meanwhile, the city had to make payments to HUD and used $449,817 from Community Development Block Grants to do so. HUD auditors declared that improper.

Blog Fav Tom Bona

Rockford Register

Direct Air extends RFD-to-Fla. flights

Impressed by strong early sales, Direct Air has extended flights from Chicago Rockford International Airport to the Fort Myers, Fla., area and Myrtle Beach, S.C., into the summer.
Tickets are on sale for flights to Punta Gorda, Fla., 30 minutes northwest of Fort Myers, through Aug. 26. Tickets to Myrtle Beach are available through Sept. 7. Both routes were previously only scheduled through mid-May.

February 07, 2009

Dorm Room Tax

The worst thing about the Dorm Room Tax idea is that this is something the City of Worcester can not arbitrarily do on their own. The way I understand it that it can only be the State Legislature that can do it, which make sense. Since they are the only ways who could force non-profits to pay a property tax, I would imagine that it would be the State Legislature that could allow Dorm Room Tax.

There is no doubt, however, this will be a topic of conversation at City Council instead of discussing things that they actually have control of:
  1. single residential/commercial tax rate
  2. privatization of city owned assets like the Airport, DCU, Union Station and Green Hill Golf Course
  3. 5,800,000 million HUD loan that is cost to cost us $9,345,000 in lost CDBG funds
  4. Why was $100,000 of unexpended NRSA funds not transferred to a successful program like the facade program, which has no money for the rest of this fiscal year, versus Main South CDC and 93 Grand Street.
  5. City Council take a wage freeze for their pay?
  6. Unfunded pension obligation
  7. How does the City of Worcester support a $7,000,000 million dollar 25 unit low income apartment building at the former City Builders site, that nobody in the neighborhood suports, when the track history to date has resulted in the mess called Cambridge/Hacker Street?

Do you think any of these issues will be discussed.

February 06, 2009

Facade Program

Over the past 7 years I have had alot of experience dealing with the facade plan through the City of Worcester. It was basically a complete disaster and ineffective.

Recently, with some new blood running the program the facade program (targeting downtown and the canal district) and the storefront program (through the 5 NRSA's) have been quite successful and should be an example of how city government and local businesses can work together.

The monies, however, allocated for the facade program this fiscal year (thru June, 2009) are all spent, somewhere in the area of 100,000. Too bad we could not have diverted unexpended CDBG allowances into the facade program, versus making the payments on the $5,800,000 HUD loan for Gardner Kilby Hammond.

Here is another question. Why did we divert $100,000 recently from unexpened NRSA funds to Main South CDC to help them with 93 Grand Street? That $100,000 should have gone to the facade program, not to entity that put us in the situation that we are in now with the $5,800,000 HUD Loan.

California Furlough

All we keep hearing from the State and Local levels are ways to collect more revenues and not enough ideas on how to cut expenses.

Starting February 200,000 state workers will have to take off two unpaid days per month. This works out to be a 9% cut and save the state some 1.4 billion through 2010.

We need more ideas like this in Massachusetts..

February 04, 2009

Allegiant on MSNBC

Maury Gallager, CEO of Allegiant, was on MSNBC today saying how great they were doing and all the analysts were complimenting him. Why couldn't we get an airline like that.

Gardner Kilby Hammond Math

Total Project 32,000,000

1. Boys Club 8,000,000
2. Track 2,500,000
3. Remaining cost 21,500,000

Lets just call it an even $20,000,000 for the 3rd part of the project, low to mod income housing. To date 42 housing units, which breaks down to

$476,190 per unit.

Garnder Kilby Hammond

From this on the HUD website, to date I know there have been jobs added at the Boys Club but can they be considered new jobs and 300?

Worcester will receive $1 million of BEDI funds and $2.45 million in Section 108 loan funds to assist in the redevelopment of a brownfield site on the 30 acre Gardner-Kilby-Hammond Street Neighborhood Revitalization Project. The project includes the construction of a new Worcester Boy's and Girl's Club facility, the Clark University athletic complex and 80 units of affordable rental and homeownership housing. The Gardner-Kilby-Hammond project is expected to create 300 new jobs for the community. The City will use the BEDI grant and the Section 108 loan for site preparation and environmental remediation. The City expects this project to generate an additional $3 million in other private investment. Total project costs are estimated at $32 million.

February 03, 2009

City Council Meeting

Tonight I watched, for the first time in a while, to see if anyone brought up the $5,800,000 that the City of Worcester guaranteed, that had no borrower, that will cost us $9,345,000 in CDBG dollars over the next 16 years. Nobody brought it up???

In fact nobody on the City Council asked, while discussing a wage freezes, if the City Manager would freeze his pay to set an example for the rest of departments. Nobody asked ??

What, however, was the most bizarre moment of the City Council Meeting was Councilor Germain suggesting that we should impose a motel/hotel tax on every dorm room in the City of Worcester??? If it is illegal to impose a property tax on non-profit real estate holdings, do you think we can really institute a motel/hotel tax on dorm rooms. Why stop there lets impose a motel/hotel tax on rectories too.

More importantly as one who was on a task force (for the 101st time) that eventually ended in the formation of the UniverCity Partnership, which should have been a success, but was an utter failure. The Colleges have saved the City of Worcester from becoming the next Springfield. Not saying that we can not do a better job tapping into the assets of the colleges, which was the job of the UniverCity Partnership, but lets focus on ideas that have a chance.

I digress. It amazes me that losing $9,345,000 in CDBG funds over the next 16 years did not even make it into any discussions.

Four Tiered System for Health Insurance

What are the four tiers?
  1. employee
  2. employee & spouse
  3. employee & child
  4. family

Here are some questions.

1) Will it cost the City of Worcester any more money to switch to the 4 tiers? Not it will not.

2) Will the people who go from family to one of the middle tiers save money? Yes they will

If the it will cost the City of Worcester no additional monies and people who switch to the middle tiers save money, who makes up the difference? FAMILIES!!!!!

Gardner Kilby Hammond Plans

  1. 80 units of housing for first time home buyers
  2. New Boys Club
  3. State of the art athletic fields for Clark

Where do we stand:

  1. Boys Club is finished

  2. Clark Field not done yet, although I am confident that it will get done

  3. 38 units to date
  • Kilby (2 new duplexes)=4 units
  • Hollis (3 new duplexes)=6 units

  • Hollis (4 moved and rehabbed 3 deckers)= 12 units

  • Beacon (8 new duplexes)= 16 units
We have 42 units of housing that still need to be built.

February 02, 2009

Good Story

Click Here-- this line could ring very true in Worcester soon....

Some have started to rent them to unlikely candidates: low-income and formerly homeless tenants who receive subsidized housing vouchers from the New York City Housing Authority.
"By guiding them to this community, they're creating de facto housing projects," Gaska says. "These houses were built two or three years ago and already look like they're 15 years old. Many of the residents don't have jobs. It's destabilizing the neighborhoods."
Some residents are calling on the city government to act.

February 01, 2009

9,345,000 in CDBG Funds to be Lost

Unexpended CDBG Balances 365,000 already spent
2009 -2024 365,000 times 16 = 5,840,000
2018 balloon payment = 1,870,000
2014 ballon payment = 1,270,000

If we do not get federal earmarks, the City of Worcester stands to lose


in CDBG funds from now thrus August 2004. These monies could have been invested in our community.

Nick K Strikes Again

Not just saying it because he not only quoted me ,and did not call me a silly blogger, but these are the types of things we need to take a closer look at and not just blindly approve under the auspices of it is good since it is for low to mod income housing. The City is a business and it needs to be run like one. Click here for the Telegram story.

Let me clarify one thing and lets call it Loan 101. There are always two parties to a loan:

1) Lender
2) Borrower

Sometimes there is a 3rd party

3) Guarantor

Calling this 5,800,000 loan a Section 108 Hud Guarantee always gave me the impression that the City of Worcester was in the third position and was guaranteeing the loan for the borrower, Gardner Kilby Hammond. In actuality, Garnder Kilby Hammond is not a party to loan and there are only two parties--HUD and City of Worcester. In actuality the City of Worcester is not the Guarantor, but the actual borrower.

In dollars and cents, as Nick points out, now the the enexpended CDBG balances are gone, which could have gone other items like sidewalks, we are going to lose 365,000 per from our current CDBG allocation not to mention two large balloon payments in 2018 (1.87 million) and 2024 (1.27 million). This is awful.

Let me digress for a second. I do not blame the City Manager for this since this was done before he was here, but I do not think him blaming George Bush made sense. He should have said that we should not have done this then and under his administration things like this will not happen.

Case in point the Skybridge. This could have easily become the same thing when the Special District Zone did not generate enough additional net revenue to pay that loan. At least Skybridge loan had some potential revenue source, however, to unlike this 5.8 million dollar loan which hoped for federal earmarks the next 20 years.

This week I will get some of the press releases on this project and what was suppose to be done and what has actually been accomplished.