California developer to profit off HSBC deal

[Clipper]

uticadailynews.com/utica_daily_focus/21080-City-may-pay-350000-for-HSBC-building.html

Only Utica could be so unfortunate. It is proposed that the city of Utica buy the building from the California developer that purchased it two years ago and to pay him for $350,000. The developer only paid $250,000 for it when he purchased it, allowed it to decay to it's present state and still will end up making a $100,000 windfall profit off the deal. What a sweetheart deal that is.

I have more faith in Randy Soggs than any of the other area developers, or in his predecessors in the position he holds, to be honest and forthright in his dealings for the city, but it still seems like a damned awful expensive transaction as well as a sad end to that great old building.

I will never understand such things, but I am DAMNED glad that I am not a Utica taxpayer. $350,000 to purchase the building, $250,000 more to demolish it, and to develop parking on the parcel. THAT seems to me to be pretty damned costly to create an empty lot, and then to develop the empty lot into parking.

I am still trying to digest the idea that NOW is the time to replace Oneida Square with a damned roundabout when the economy is so lousy and there are so many more worthy projects to spend money on.

Some days I still want to "come home", but it will NOT be to pay taxes in the city, that is for sure.

I wish Randy himself would get on here and explain the situation in laymen's terms that we could understand.

[firstamendment]

The city wants it probably to make more surface parking for downtown. At least that's a lot of what I've been hearing. The city doesn't need another surface lot, they need a parking structure.

I cannot fathom why they would overpay for the building when they could just as easily take it by eminent domain and pay the owner fair market value for it. Given its current interior condition, I'd venture to say it is probably worth less than what the owner paid for it. I am not typically a fan of eminent domain either and hope they explore their options before going that route. Bottom line though, they should not be overpaying at all, no matter how badly they want that property.

[Clipper]

The OD just posted and update, and it seems that the according to Randy Soggs, the entire cost of purchase, demolition and building of the parking lot will be covered with "state money" allocated for downtown parking."

SO, it is not Utica that I need to avoid. It is the entire State of New York, that spends money on such travesties. Let ME buy a falling down building in the heart of the city business district, so that I might reap a windfall off of the backs of the state taxpayers as well as the local government.

A seasonal site for the travel trailer is looking like a much better alternative than an investment in a permanent, taxable residence all the time.

[Deleted]

I don't blame ya Clipper. This "deal" stinks to high heaven which deoesn's surprise me considering the crowd that is running this city & county. Where's the appraisal on what this building is worth? If the building is in such bad shape why does the city want to give the owner an extra $100,000 for it? To shut him up & get rid of him, that's why. And these clowns wonder why there's a mass exodus of homeowners from this city & the county. It's pathetic what county, city & state representatives have done to this city.

[firstamendment]

Keep in mind Soggs is a developer himself. Not to say he is up to something but always follow the money. Given Utica's history of backdoor deals and GroWest type scams, nothing is beyond the imagination in Sin City.

[Clipper]

I have two different friends that are real estate brokers in that area, and I did a little query as to Randy Soggs' reputation. They both find his integrity to be beyond reproach. I don't question the idea that the building probably needs to come down, I simply question the spending of that much money, and the idea that it is okay to pursue this scenario because it is "state money", as if it is free money, falling from the sky.

I don't see the urgent nature of this move. They said in the article that eminent domain, or condemnation processes would take too long. When considering the cost of this particular manner to acquire the property, I simply don't see the big rush. Harza is not going anywhere. Harza probably has the money to buy the damn building themselves and to finance their OWN parking lot. They weren't terribly concerned about the parking situation when they accepted all the freebies and incentives connected with the deal that put them in their present quarters.

State money "earmarked" for downtown parking? In today's economy, earmarks are killing us. In a climate where people are squeezing a penny to buy gas to get to work, if they are lucky enough to HAVE a job, you don't NEED a round -about. You can LIVE for another few years before the arterial needs to be re-done. Harbor point doesn't HAVE to be developed in a rush, to look like CNY's Orlando, just because it is now cleaned up. Maybe the money should be spent on bringing permanent employment, instead of temporary construction jobs and a few service related jobs. stadiums and parks are not a necessity when the city can't be navigated without breaking an axle in a pothole or breaking a leg on a broken sidewalk. Earmarks for downtown parking? Fine. Just don't pee it away on a ridiculously expensive alternative just because it is "state money."

[firstamendment]

How about earmarking money for repaving roads, fixing the decaying sewer systems or even lead abatement in all the older homes? I guess some don't prioritize well.

Good to hear Soggs is a standup guy. Utica needs that more than anything. I don't see the urgency to take that property either, which is why I question the motivation behind it.

[Clipper]

Why not simply earmark funding for "infrastructure repairs and improvements" or less restrictive use, and allow cities to determine their own most critical needs.

The idea that most of those earmarks are tainted to begin with simply by reputation causes folks to suspect the process. What should be a simple process to designate money for a certain purpose, has become a trading chip for those in government to garner support or favor for special interests.

Any funding for projects such as the round-about and arterial improvements should be taken back, rethought, and reallocated for the time being. There just seems to be so many more urgent matters needing the funds. I don't see the jobs created by the work, offsetting the costs and the benefits of the projects.

It is not just Utica. I bitch about the cosmetic things being done around here also, and OUR downtown IS thriving. I simply don't see the benefit of putting money in "pretty" and "nice to have" when we need to put money in "necessary."

[firstamendment]

Jun 3, 2011 11:03:40 GMT -5 Clipper said:

I simply don't see the benefit of putting money in "pretty" and "nice to have" when we need to put money in "necessary."

And I thought I might be the last one left on the planet who knew how to prioritize! Big thumbs up, that says what needs to be said.

In times of economic recession, like now, it is the time to put into necessity. When we acheive prosperity, then is the time for luxury, or as you put it "pretty" and "nice to have".

[realist13413]

Howdy. I'll se if I can Randy to respond directly later (he's not a big "post on the internet" type) but his motivation is to try to use the state (and I think also federal money) that the city got eight years ago to help create parking before they try to claw it back. I agree, Clipper, that earmarks are an expensive way of getting things done, but can also assure you that if Utica doesn't use this money to create parking, the government isn't going to be sending it's citizens a check.

Randy is getting nothing from this deal (except a headache) nor is he involved as a private developer in anything else going on in the city or the Harbor. He is redeveloping the old Chicago Pneumatic plant and restored Champlin Commons to a viable commercial interest. His reputation is beyond reproach. He's never received grants of any kind to redevelop his projects - it's all his signature on the line. (A lot has been made of him being from New Hartford - which I find funny. I assure you, he pays more in taxes to the City of Utica than the majority of homeowners. As a property owner, he has as vested an interest in the city progressing as anyone - and perhaps more than the many who are just "passing through.")

This money can't be re-allocated, from what I gather, except for parking.

I hear what you're saying about the rush etc. I'll say this: it is not easy to get business here. Strikeslip made a comment on his blog the other day, insulting Randy, saying that a successful businessman doesn't know how to set public policy. I'll say it's more the converse - public policy, in NYS and in Utica, has done NOTHING to support successful business. Everybody thinks they know best - everybody. Randy was hired because he is successful in business - by redeveloping neglected projects and turning them around - and every attempt he's made to do that, using business principles, has been shot down. That's sad for the city, because it indicates that the city has no concrete vision for it's future and that it isn't ready to let go of it's past and welcome the future.

With regard to the HSBC building specifically - it would be great to see it redeveloped, but if that doesn't happen, it should be taken down to add parking that could improve the marketability of other assets downtown, including Harza.

[Clipper]

Exactly FA. Nothing pisses me off worse than hearing a politician tell us that "we have to spend the money, or we will lose it." Money is a tangible. It will NOT be lost. It will only be lost if it is frittered away on an irresponsible project instead of saving it for a rainy day necessity or more appropriate item. It will remain on a balance sheet somewhere until it can be reallocated for a different use. It won't evaporate into thin air or disappear.

It simply seems if we took all the money that is being spent on studies and plans, and being put into these pet projects, we would save enough to accomplish projects like upgrading the sewers to an acceptable state, and pave the streets so they are not like riding on plowed ground. When the economy is back on it's feet, we can go back and "put the lipstick on the pig" as someone quoted during the 2008 campaign.

[Clipper]

Beth, I have the utmost respect for Randy, and have been enthused by his vision and knowledge thus far. My disdain of for the rest of the political goings on in the city, and lack of focus from one day to the next. He DOES have a boss, and can only propose. He is powerless to dictate anything. He is the most qualified individual to hold that sort of position in a long time. It has always been someone politically connected rather than qualified. Sad but true.

As far as reallocating the moneys, I realize that it IS impossible under the present funding processes, but it SHOULD be possible. If money is not critically needed in one area and IS needed somewhere else, it SHOULD be possible to re-designate funding and direct it where it will provide the most benefit to the taxpaying public.

The manner in which money is shuffled about and allocated is simply sinful and wasteful in it's present state.

[realist13413]

I absolutely agree with your point of view about earmarks and other related types of spending. It's not just the earmarking system that needs to be overhauled, it's the way that this nation cares for it's infrastructure.

Until that system is reformed, it's one of the only ways municipalities like Utica can get these big chunks of money for projects.

[dgriffin]

Jun 3, 2011 12:48:37 GMT -5 realist13413 said:

I absolutely agree with your point of view about earmarks and other related types of spending. It's not just the earmarking system that needs to be overhauled, it's the way that this nation cares for it's infrastructure.

Until that system is reformed, it's one of the only ways municipalities like Utica can get these big chunks of money for projects.

But that's the problem, isn't it? The wrong projects?

I should say I know nothing of Utica's needs, much less about parking lots. But if government continues to "earmark" money for projects that turn out to be of little value, everything about the city will eventually be of little value.

[Clipper]

Along with those "big chunks of money" comes a certain amount of stewardship responsibility to spend it wisely.

The cost of this particular project as propose simply seems pretty damned high to me. To put it bluntly, it is a hell of a wad of money to spend to "create" and empty lot, so one can then use the vacant lot to create a parking lot.