Council Plays Santa Claus to Local Businesses: Grants Use of City Land without Knowing Its Value

John Kaufmann

Jul 7

The Saratoga Springs City Council is giving out agreements for the use of public property like they are Santa Claus. At the Tuesday, July 5, 2022, Council meeting the members of the Council and the City Attorney admitted they had no idea what the value was of the three properties the city owns that they agreed to allow city businesses to use. This ignorance didn't stop them from granting permission anyway.

The idea that the city needed to transparently establish a reasoned basis for what to charge before approving the use of public property for local businesses was lost in the kind of rambling and unfocused discussion which seems to be the standard for this current Council.

Newly appointed Department of Public Works Commissioner Jason Golub asked the Council to approve three resolutions authorizing the Mayor to sign agreements for three downtown businesses to use public city property for their private use. Two agreements extended existing agreements.

The Adelphi Hotel had a previous five-year license for a section of city sidewalk for which they paid $2500.00 per year. They were seeking to extend that lease at the same rate for another five years.
The public alley known as Lena Lane has been leased since 2012 by two businesses which each paid the city $2,000 a year. One was Hattie's, now referred to as JBA Restaurant Corp in the new lease agreement, the other was a bar which is now occupied by another establishment called The District. The two current businesses now abutting that alley were seeking to extend the lease for another five years at the same rate set ten years ago.
Flat Bread Social on Henry Street was seeking the rights to operate their eating and drinking establishment on Short Alley for three years at $2,000.00 per year.

The Standard For Determining How Much To Charge

City Attorney Tony Izzo told the Council that the law requires the city to sell or allow the use of public property based on its fair market value or by establishing that the public good that would result from the sale or lease equals or exceeds the fair market value.

Here is the direct quote:

"The rule of course is that when a government sells or leases public property it should be an approximation of fair market value unless there are facts that indicate the benefit to the public in a particular situation is equal to or greater than what would have been obtained on fair market value and governments have a lot of flexibility in determining when that situation exists..."

Tony Izzo, July 6, 2022

The following is a clip of this blogger asking Commissioner Golub to either table the resolutions or amend them to only one-year agreements while the Council establishes a method, open to the public, to determine what should be charged.

Did the Council then table action until, at a minimum, the fair market value could be determined? In a word: No.

In this clip, Mayor Kim asks City Attorney Izzo how the city arrived at the fees for the original agreements with the Adelphi and Hattie's, admitting in effect that he has no idea what the properties involved are worth.

In turn, Tony admits he doesn't know how the fees were originally established.

Here is the excerpt from the video.

The Abuse of the Concept of Public Good

In the rambling discussion that followed, Commissioner Moran, Mayor Kim, and Commissioner Golub claim that these restaurants provide a public good because they employ people, and they bring in sales taxes. Commissioner Moran asserted that if the Flat Bread Social didn't utilize Short Alley, the homeless would use it, so Flat Bread Social is performing a public good. Commissioner Golub expressed the need to support local businesses.

This line of reasoning reflects a lack of understanding of what constitutes the "public good".

Here is the definition of the "public good" according to the Oxford dictionary:

1. In ECONOMICS, a commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization, "a conviction that library informational services are a public good, not a commercial commodity"

Oxford Dictionary

Let me be clear. I do not oppose the city allowing restaurants or any other business to use city land. What I unequivocally oppose is providing land to particular businesses without providing to the public and other businesses a consistent standard so that everyone knows what the terms of use are and how they were arrived at.

When the current elected Council members (Commissioner Golub was just recently appointed) campaigned last year, they accused the previous administration of cronyism without ever giving any evidence of this. What they do not understand is that the road to cronyism is paved by doing exactly what they have just done: giving out public resources to particular businesses without clearly established standards. Their clear indifference to standards is the path to trouble.

Readers of this blog know that I have asked Commissioner Moran in person and in emails how he arrived at the permit fees the city charges to restaurants to use the city's sidewalks and parking spaces. After six months of asking I have been unable to get an answer.

The following is a video clip of the full discussion the Council carried on over the leasing issue.

The city has a real estate committee that has operated to determine the price of public properties sold to private individuals and companies. City Attorney Izzo suggested the real estate committee might take the leasing task on. Commissioner Golub offered to meet with Tony about pursuing this. Nevertheless, the Council vote was unanimous to approve these long-term agreements without further study.

A Hopeful Trend

I followed up the meeting by emailing Mayor Kim asking for information on the real estate committee. I asked:

Who is on the committee?
When do they meet?
Are their meetings covered by the open meetings law?

Given that numerous emails with questions that I have sent to Mayor Kim have not been responded to, I was encouraged to get a timely response from Tony Izzo at the Mayor's behest. I hope this is the beginning of a trend.

According to Tony, the real estate committee was established in 2004. The City Attorney acts as chair. The other four members are selected by the other Commissioners.

These are the current members:

Carrie Schermerhorn (Accounts)

Michael Veitch (Public Works)

Karen Perrino (Public Safety)

Laura Townsend (Finance)

The committee has met as recently as June 15. Tony wrote that they generally meet on the first Thursday of each month unless there is no business.

Tony noted that strictly speaking this committee is not required to adhere to the New York State Open Meetings Law but that the city charter states, "Every agency, board, commission, and other entity shall conduct business in accordance with the provisions of the Open Meetings laws of the state of New York."

I went to the city's web page of agenda and minutes and could not find anything related to this committee. Apparently they are not adhering to the charter's requirement that the real estate committee be dealt with according to the open meetings law. It appears the failure to adhere to the charter in this particular case is not unique to the current administration.

I wrote back to the Mayor and Tony asking whether they planned to include the notices, agendas, minutes, and video for the real estate committee in the future.

Where Does It Stop?

Retailers downtown might ask, why is it only restaurants that get to access the parking spaces in front of their operations to enhance their business and profits? I am sure that many retailers would be happy to pay $1,000.00 to control the parking spaces in front of their store for their customers.

The city is basically giving away the parking spaces in front of those restaurants that want to participate in Commissioner Moran's outdoor dining program. We have no idea what those parking spaces are worth. The restaurants not only get the parking spaces, but the city purchased the barriers that go in front of them and bear the cost of delivering them, picking them up and storing them. We have no idea what that costs the city. Do Moran's permit fees cover these expenses? We have no way of knowing.

Now the city has gone beyond granting permits for seasonal use of city property to renewing and making new long-term agreements with certain businesses. It's time for the city to establish procedures and standards for the private use of public property in Saratoga Springs that are transparently arrived at and fair to all the businesses involved as well as the Saratoga Springs taxpayers.

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