Post by Robert Braun on Oct 29, 2003 9:23:00 GMT -5
New York Sells Rights Along Erie Canal for Only $30,000
Tuesday, Oct. 28, 2003
ALBANY, N.Y. – The ambitious developing project was announced in a whisper: A 250-word notice seeking bidders, right below the notices for mops, shop towels and coveralls, on page 62 of a booklet available to vendors for $175 a year.
The state was asking $30,000 for the rights to build up to 40 prime waterfront communities along New York's historic Erie Canal system with the full support of New York's resources and political might.
So, in 1999, New York got just one bid, from a Buffalo developer named Richard Hutchens who had been working with the state on a canal proposal since 1996.
Now, some of New York's top Democrats say Hutchens got a sweetheart deal like few others in New York's political history. Probes by the Assembly, attorney general and inspector general could lead to criminal charges.
"Mr. Hutchens had the contract steered to his company," charged Democrat state Comptroller Alan Hevesi. "The competitive process here did not exist. It was a sham."
Thomas Bystryk, Hutchens' general manager, said the developer was being unfairly pilloried.
"For $30,000, I've got the right to spend money," he said. The company still must buy property and get extensive local approvals and, he pointed out, still hasn't built a single house.
It began more than seven years ago. The Pataki administration sent letters to 200 potential bidders for the luxurious residential development along the canal system from Lake Erie to the Hudson River.
The state would allow "cuts" into the canal, each for a $15,000 fee, to exclusive neighborhoods of up to 400 estates, providing water driveways to the homes along both sides of the 524-mile system that includes four canals.
More than a century before, the state's canal system in a few short years gave life to its six biggest upstate cities. Today, 80 percent of New York's upstate population lives within 25 miles of the canal system.
State officials were desperate to revive upstate New York, a key political battleground, where the manufacturing-based economy missed the 1990s boom that got New York City and the nation humming. They said 33 developers showed interest in the canal proposal, but few were serious.
Hevesi says the Republican administration of Gov. George Pataki piloted the contract to Hutchens in part by lying to Hevesi and the Democrat attorney general, who had to sign off on the deal. Hevesi says the Pataki administration reported no other developers were interested, when Hevesi's investigation found some were.
Hevesi has rescinded his office's approval, an unprecedented step. Pataki has ordered an investigation by his inspector general and asked Democrat Attorney General Eliot Spitzer to review it. Pataki's office said if fraud is unearthed, the contract would be voided and criminal charges could follow.
"This resonates, and it should because it's such a part of American history," said Assemblyman Richard Brodsky, whose hearings and the Syracuse Post-Standard newspaper uncovered much of the deal. "I think it's easy for people to understand `$30,000 for the rights to the Erie Canal.' ... It's a poster child for what's wrong with the system."
Neither Brodsky nor Hevesi will speculate on a motive to steer the contract to Hutchens, who isn't among Albany's big political contributors or lobbying interests.
"It's politically motivated, and I'm tired," Bystryk said. "I don't think the Canal Corp. did anything wrong, I know we didn't do anything wrong. It's just another example of why not to do business with New York state."
© 2003 Associated Press. All Rights Reserved.
Tuesday, Oct. 28, 2003
ALBANY, N.Y. – The ambitious developing project was announced in a whisper: A 250-word notice seeking bidders, right below the notices for mops, shop towels and coveralls, on page 62 of a booklet available to vendors for $175 a year.
The state was asking $30,000 for the rights to build up to 40 prime waterfront communities along New York's historic Erie Canal system with the full support of New York's resources and political might.
So, in 1999, New York got just one bid, from a Buffalo developer named Richard Hutchens who had been working with the state on a canal proposal since 1996.
Now, some of New York's top Democrats say Hutchens got a sweetheart deal like few others in New York's political history. Probes by the Assembly, attorney general and inspector general could lead to criminal charges.
"Mr. Hutchens had the contract steered to his company," charged Democrat state Comptroller Alan Hevesi. "The competitive process here did not exist. It was a sham."
Thomas Bystryk, Hutchens' general manager, said the developer was being unfairly pilloried.
"For $30,000, I've got the right to spend money," he said. The company still must buy property and get extensive local approvals and, he pointed out, still hasn't built a single house.
It began more than seven years ago. The Pataki administration sent letters to 200 potential bidders for the luxurious residential development along the canal system from Lake Erie to the Hudson River.
The state would allow "cuts" into the canal, each for a $15,000 fee, to exclusive neighborhoods of up to 400 estates, providing water driveways to the homes along both sides of the 524-mile system that includes four canals.
More than a century before, the state's canal system in a few short years gave life to its six biggest upstate cities. Today, 80 percent of New York's upstate population lives within 25 miles of the canal system.
State officials were desperate to revive upstate New York, a key political battleground, where the manufacturing-based economy missed the 1990s boom that got New York City and the nation humming. They said 33 developers showed interest in the canal proposal, but few were serious.
Hevesi says the Republican administration of Gov. George Pataki piloted the contract to Hutchens in part by lying to Hevesi and the Democrat attorney general, who had to sign off on the deal. Hevesi says the Pataki administration reported no other developers were interested, when Hevesi's investigation found some were.
Hevesi has rescinded his office's approval, an unprecedented step. Pataki has ordered an investigation by his inspector general and asked Democrat Attorney General Eliot Spitzer to review it. Pataki's office said if fraud is unearthed, the contract would be voided and criminal charges could follow.
"This resonates, and it should because it's such a part of American history," said Assemblyman Richard Brodsky, whose hearings and the Syracuse Post-Standard newspaper uncovered much of the deal. "I think it's easy for people to understand `$30,000 for the rights to the Erie Canal.' ... It's a poster child for what's wrong with the system."
Neither Brodsky nor Hevesi will speculate on a motive to steer the contract to Hutchens, who isn't among Albany's big political contributors or lobbying interests.
"It's politically motivated, and I'm tired," Bystryk said. "I don't think the Canal Corp. did anything wrong, I know we didn't do anything wrong. It's just another example of why not to do business with New York state."
© 2003 Associated Press. All Rights Reserved.