Parsing priority projects for state subsidies
Last week the North Country Regional Economic Development Council released its 2017 progress report that, among other things, listed its priority projects for the state grant pledges the governor will announce in early December.
On Wednesday we took a dim view of a $5.9 million request to built an upscale hotel in Blue Mountain Lake, big enough to sleep every year-round resident of that hamlet at once. That was the only priority project that jumped off the list at us as a definite no. Today we review some of the other priority projects, especially those in the Adirondacks.
Several are for public infrastructure. We do think state taxpayers should help upstate municipalities and counties pay for water and sewer upgrades, roads, bridges and airports — within reason and without waste. When these things start crumbling, they are too expensive for local property taxpayers in depressed areas of the state to cover.
But what about a private hotel at an airport? A developer is seeking $2 million to do that in Plattsburgh, a city that already has numerous hotels, including some new ones.
What about unorthodox private lodging deep in the Adirondacks? Adirondack Hamlets to Huts Inc., which has a storefront in Saranac Lake, wants the state to give it $365,000 toward organizing a circuit of lodging options for trekkers between Indian Lake and North Creek, including a 48-person eco-lodge hostel. It’s expected to create four jobs directly and indirectly spawn 16.
What about $300,000 to help Bionique Testing Laboratories in Lake Clear upgrade equipment and thus retain 21 jobs, but not create any new ones? The state pledged Bionique $650,000 in 2014 to expand its lab but hasn’t delivered that money yet because the project isn’t done. The NCREDC lists that project, like many others from years past, as “on schedule.”
What about a small company that quietly manufactures all-natural bug repellent in downtown Saranac Lake is also on the priority project list, although for a smaller grant than most. Carpe Insectae (Latin for “seize the bug”), owned and run by Randy Cross, rings many of the REDC’s bells such as manufacturing and exporting to Canada (50 percent of its product). It’s asking for $13,880 to buy equipment that would help it expand production. It sounds like an business idea with strong potential, but if so, could it get private investment or a bank loan instead? That’s always a question in the back of our mind.
We’ll withhold judgment on these projects for now.
We tend to favor a $300,000 grant for an “Astro-Science Center” at the Adirondack Public Observatory in Tupper Lake. The APO is a public asset, complementary to the Wild Center nature museum, and would a better asset with this expansion. It aims to make Tupper Lake a space center of the Adirondacks. What would that look like? We’re not sure, but we know it has good-caliber people behind it and therefore think it would probably add to Tupper Lake’s economy. Private backing would be unlikely, so it would require government aid.
Some private enterprises have clear public benefits, but because they are happening already, one wonders how badly they need the public money. Still, we are favorably inclined toward a $200,000 request to help Chicota Inc. — owned by the intrepid Calli Shelton and Randy Coles — renovate the former Dew Drop Inn restaurant in downtown Saranac Lake. This project would bring a lost landmark back to life in the heart of downtown. It would add to a restaurant cluster on the Broadway Bridge that can draw tourists from nearby Lake Placid. It would let Saranac Lake’s River Walk finally go along the Saranac River, along the restaurant’s patio, instead of the walk having to duck through an alley around this building. It is projected to create 36 jobs plus six constructions jobs. With an estimated total cost of $2.2 million, there is only so much this couple can borrow, so the grant seems pretty key.
To compare, we talked to Mark Jessie, co-owner of Raquette River Brewing, the stupendous success of which has a major economic impact on its hometown of Tupper Lake. Now it’s expanding again and will soon build a canning plant, which will add even more jobs and economic opportunity to the community at large. It’s a great example of what we love to see, so we asked, has Raquette River received any grants? Yes, Jessie said — it upgraded equipment with the help of $35,000 from a microenterprise pool the NCREDC secured and the village of Tupper Lake administered. It’s a tiny portion of their capital, but it came at a time when they were still small but trying to expand. Now that they have reached a new level, they don’t need public funds for the new expansion.
That is an example of how careful, strategic public investment can be a catalyst for real local economic growth. One doesn’t want government propping up weak business ideas; nor does one want to see tax money spent on businesses that could instead land private investors or bank loans.
So what should the parameters be? A successful REDC grant project should show major ripples helping numerous people around it — a public benefit far beyond the value of the grant. It should also show it really needs the public money, that it can’t get the funding it needs through the private sector. It should also take place in a community that really needs an economic boost.
All that depends, of course, on whether New York should keep giving public money to private business at all. Gov. Andrew Cuomo started the REDC process in part to help the upstate economy and in part because he wants to play Santa Claus, as any savvy politician does. In the latter, he’s been successful, but what about the former. How much better off is upstate as a result of this? That’s a subject for another editorial.