I’ve been following the debate over the proposed amendment to the New York State Constitution to allow NYCO Minerals, Inc. to conduct exploratory drilling on 200 acres of Forest Preserve in the Jay Mountain Wilderness. The basic framework for this proposal is that whatever land NYCO disturbs by their drilling and mining must be exchanged for land of equal or greater value and acreage that NYCO donates to the Forest Preserve.
Please remember as you read this commentary that I have repeatedly and consistently positioned myself as an advocate for finding common ground and seeking consensus around the most controversial issues in the park. There are plenty of people who are wary of this approach because they fear that efforts to find “balance” or “compromise” will lead to the abandonment of principles that should never be compromised. That skepticism is unfortunate: negotiations to achieve consensus around common interests, when done correctly, are never about compromise of principles. Rather they are about avoiding black and white thinking, absolutist rhetoric and the disingenuous politics that so easily proceeds from strident declamations of rightness (for an object lesson, see the tragic rhetoric over this issue).
In that spirit, the NYCO Amendment, positioned as a “compromise,” a “good deal for the park,” or a great example of “balance” impresses me exactly zero. It’s none of those things. What it is instead is a violation of core principles enshrined in the state constitution; further, it is a violation of a nature that sets off some very familiar alarm bells from my own experience.
For me the issue boils down to this: when a large corporation leverages precedent to violate a public interest or trust for its own gain, almost always everyone but the large corporation loses. In this case we are risking the sanctity of the Forest Preserve in the calculus. Over the long term that’s very dangerous.
I cannot provide a better analysis of the NYCO amendment than Bill Ingersoll did just a few weeks ago and I will not repeat his work here. What I can do is provide a perspective on precedent and how it gets leveraged.
Critics of the NYCO amendment point out that it sets a precedent because it is the only instance of an alteration to Article XIV Section 1 that directly benefits a private corporation. Defenders of the amendment reject this claim with two arguments. Their first argument is that this amendment is unique, a “one-off,” if you will. They say it’s a good deal that has been evaluated on its own merits, therefore it has nothing to do with any future proposals.
This argument shoots itself in its own foot, since if the amendment is unique then by definition it sets a precedent. So is it in fact unique? Listen to the language we used on previous amendments. The amendment to allow new downhill ski routes was the “Whiteface” amendment. The land swap in the West Canada Lakes area was the “Perkins Clearing” amendment. This one is the “NYCO” Amendment. What, did we sell the corporate naming rights?
The second argument is where the real trouble starts. Defenders claim that precedent has already been set, citing previous amendments, most notably the Perkins Clearing land swap which benefited both the State and International Paper, a private corporation. Trouble is, they’re exactly right. Today’s debate proves that Perkins Clearing did indeed set a precedent.
The arguments over Perkins Clearing were distressingly similar; go back to the media coverage from the time and you will see that to be the case. Many people saw the benefit to the Perkins Clearing land swap and felt that it was a unique circumstance, a “one-off” if you will, a good balance. But they were sensitive to the charge that it might set a precedent. Here’s the Lake Placid News from June 16th, 1977:
For these reasons, International Paper and State negotiators have been studying the situation for ten years. It was obvious that a land exchange would be beneficial to both sides. The question was how to work out such an exchange without having it appear that the state was, in effect, subsidizing a private corporation through a land give away.
The issue of precedent did not go away. Here’s the Lake Placid News from October 25, 1979:
Both the Sierra Club and the New York State Conservation Council have taken stands against the amendment. The Sierra Club views the amendment as an “assault” on the forever wild clause and a precedent-setting move which might have more serious consequences in the future.
Does any of this sound familiar? And were opponents of the Perkins Clearing amendment not prescient? I did a quick survey, counting up that the Perkins Clearing amendment has been referenced in the NYCO debate some five dozen or more times in media coverage over the last year. What do you suppose those who once claimed that Perkins Clearing set no precedent are thinking now?
This is not to say that the NYCO Amendment doesn’t set a precedent in its own rite. It does, and that’s the really troubling heart of the matter. Specifically it establishes a new intersection of precedent and profit for the Adirondack region.
I know the dynamic well. A large corporation seeks to exploit a public interest or public asset for profit by leveraging a precedent previously set somewhere else. Right or wrong, the precedent gives it an argument from merit. Then, in order to prevail it uses a carrot (more jobs/better land elsewhere/you get the land back when we’re done) and a stick (we’ll leave/go out of business/cut our workforce). There is plenty of accompanying rhetoric related to being partners in the local community. Perhaps I’m allergic to this dynamic because I grew up and became politically active in Cleveland, Ohio where exactly this kind of approach wrought disaster. Let me share a cautionary fable.
In the mid 1970’s Cleveland was home to many large corporations, among them National City Bank, which was very profitable. Meanwhile due to the realities of rust belt economics Cleveland was dying: the blight of poverty and racial tension, an empty downtown, massive population loss, financial turmoil and failing schools. The city desperately needed business investment downtown and National City Bank saw an opportunity.
Just a couple of years before, New York City had experimented with a new technique to spur development in slums by forgiving property taxes to the developer for a certain number of years. This new creature was called a tax abatement. Note that property taxes are a public asset and certainly a public interest as they fund things like schools.
National City, seeing this New York precedent as an opportunity to lower their financial risk, proposed a brand new headquarters for downtown and asked for a twenty-year tax abatement. They promised hundreds of good new jobs and they threatened to leave Cleveland for the suburbs if they didn’t get it. Carrot, stick.
Lot of people opposed the proposal, seeing it for what it was; a greedy power play and dangerous precedent for a city teetering on the brink. But the allure of a shiny new building prevailed and in 1977 National City Bank got their deal.
One year later, in 1978, Cleveland’s teetering schools, funded mostly by property taxes, ran out of money. Only an emergency loan from the State of Ohio saved them from collapse. The debt that caused this risk of default at the time was less than the value of National City’s tax abatement. Meanwhile a later survey revealed that National City bank had ultimately created a little over sixty new jobs with their new headquarters, most of them low-wage clerical or teller positions.
In December 1978 Cleveland became the first major American city to go into default since the Great Depression because it was unable to pay $5 million in debt owed in the form of short term notes to Ameritrust (then Cleveland Trust), another bank. Five other banks had said they would also be willing to roll over the short term debt the municipality owed them if Ameritrust was willing to extend the pay date of this relatively small amount of debt. But Ameritrust was having none of it. They were playing hardball with then Mayor Dennis Kucinich whose progressive agenda, specifically a crusade to save public power in Cleveland and oppose tax abatements, was considered virulently anti-corporate. Ameritrust withheld the notes, Cleveland plunged into default, Kucinich suffered the political equivalent of being run out of town and the people of Cleveland suffered immensely (Kucinich became a Congressman many years later directly because grateful Clevelanders realized he’d been right on both issues).
When we talk about the power of precedent in the intersection of the corporate world with the public world, we take it lightly at our peril. For if we do, we face the challenge of explaining how the very same Ameritrust Bank asked for a $122 million dollar tax abatement to build a towering new building in Cleveland’s Public Square a mere ten years after the National City debacle, the school crisis and the city default they forced. Did they get the abatement? Of course they did (the building was never built as Ameritrust was absorbed by another bank that was already building a 60-story headquarters in Cleveland using – you guessed it – another huge tax abatement).
That’s the power of precedent, especially when wielded by powerful corporate interests. To this day Cleveland has pockets of new development here and there downtown, many of them subsidized by taxpayers who are paying for precedent, yet after business hours Cleveland’s downtown is practically a ghost town and the schools remain terrible. The population has dropped from nearly a million at its peak to less than 400,000 now. Cleveland, still one of the major centers for multinational corporate headquarters, has been financially gutted. Tax abatements are not the only reason for this, but they are a contributing factor.
Is it fair to make this a direct comparison between two such disparate situations? No. But it makes for a pretty good indirect comparison. Regardless of the venue, precedent serves as a powerful motivating avenue for exploitation in the name of profit.
Some will accuse me of demonizing the business community or the good people who work for – or own – NYCO. This is not the case. This amendment tussle has nothing to do with either. I’m a business owner and want to see more business in the Adirondacks, no question. I love profit. I have no doubt that the people at NYCO are as decent as anyone else. That was the case with people at National City Bank, a number of whom I got to know. The single-minded motive to win is simply the reality of a large corporation under the law, not the people who are part of it. I know, I’ve worked for more than a few.
In the world of the large corporation profit is the holy grail, the sole objective, divorced from other concerns and protected to near perfection by design, by law, by deliberate distancing from ethical or aesthetic responsibility. It’s the nature of the beast. If other corporations see that there is now a price on Adirondack land there will be trouble. Those who buy the argument that the amendment being asked for here is no precedent, that it is merely a one-off, may well live to rue the day.
For the final word, you should do what too few will do: actually read Article XIV Section 1 and the proposed amendment, available here. The original amendment, being one of the greatest and most noble statements of principle ever enshrined in a state constitution, numbers 54 words. Thanks to all the amendments over the years Section 1 now numbers 1,491 words. The cumulative effect is blunting, the number of occurrences of the word “notwithstanding” is numbing. Just the NYCO amendment itself would add more than 300 convoluted words. Read that amendment: it reads so differently than the rest of the article, even with its previous amendments included, that the difference is striking (note also that it says nothing about 1,500 acres of land to be given in return; that oft-cited deal is a gentleman’s agreement with no force of law whatsoever).
Trust your instincts when you read Section 1. Think about precedent and profit. Then go reread the original words at the beginning of Article XIV and think hard about the principle of Forever Wild.
Then vote No on the NYCO Amendment.
Photo: The National City Bank Building, Cleveland. Photo courtesy of Wikipedia.