This week, New York State will host the ten Regional Economic Development Councils (REDC) to examine their annual round of project submissions. This is the fifth year of the statewide funding competition created under Governor Andrew Cuomo.
I say good luck to those projects which seek to enhance the Park’s human communities, quality of life, and job growth and retention grounded upon protection and appreciation of the Park’s natural resources, wilderness and scenic beauty, and outdoor recreation. One project however, is seeking state funding which exploits rather than enhances the Adirondack Park: the Adirondack Club and Resort.
The 600+ unit Adirondack Club and Resort, approved by the Adirondack Park Agency (APA) in 2012, is seeking funds from the Governor’s Upstate Revitalization Initiative this week, which will provide 3 of 5 upstate REDCs $500 million each spread over the next five years.
The “ACR Transformation Water Project” appears as one of 34 recommended projects for Upstate Revitalization Initiative funding in the latest North Country REDC press release, under the tourism category.
“The proposed project will result in improvements to the Village (of Tupper Lake) water system, delivering an improved public water supply, and would provide the capacity necessary to serve the proposed Adirondack Club and Resort development in Tupper Lake which would be a regionally transformational development,” the North Country REDC’s press release says.
According to the REDC, the water supply project would cost $7,777,528, of which state taxpayers would, in this round of funding, provide $1,555,450 from the Upstate Revitalization Initiative. Surely, if this round is funded more will follow.
According to the APA Project Order in January, 2012, the water supply component of the ACR project is described as follows:
“The proposed connection to the Village of Tupper Lake water supply will require the construction of on-site water infrastructure including a new 280,000 gallon water storage tank located on Mount Morris and approximately 15 miles of transmission lines and new pump stations. In addition, improvements to existing off-site Village infrastructure such as the Tamarack booster station and the water treatment plant will be required to serve all phases of development. An existing Village water booster station will need to be upgraded and approximately 64,000 lineal feet of 8 inch diameter and 13,000 lineal feet of 6 inch diameter, cement lined, Class 52, ductile iron, force main will need to be installed to convey the water from the Village supply to the development.”
“The Village of Tupper Lake and New York State Department of Health have expressed concerns that the municipal water supply system cannot support water supply to any of the Great Camp lots.”
“The formation and extension of the water district and associated on-site and off-site water supply improvements required to serve any phase of the Project will require additional review and approval from the New York State Department of Health (―NYSDOH‖), NYSDEC, Village of Tupper Lake, Town of Tupper Lake requirements and the Town/Village Planning Board.”
What’s more, the Adirondack Club and Resort’s applicant Michael Foxman has made repeated promises that state taxpayers would bear none of the cost – none whatsoever – for the construction of infrastructure for this private development.
The Adirondack Park Agency, relied upon the following statements in the Adirondack Club and Resort’s application:
“The capital costs of constructing the public infrastructure (roads, sewer, water and electric) are proposed to be funded by the Project Sponsor through Franklin County Industrial Development Agency (FCIDA) bonds, conventional bank financing, and internally-generated funds.”
In its Final Order (issued January 24, 2012), the APA found that:
“According to the F&EIS, $35,980,863 of public infrastructure will be financed through four bond issuances, in connection with the project’s phasing, of $10,317,939, $12,301,185, $8,051,031, and $5,310,708 for Phases 1-4 respectively. The Project Sponsor’s projected terms call for fixed-rate bond issuances with an amortization period of 25 years and an interest rate of 7.5%.
“Infrastructure will be financed through four bond issuances. No municipal bonds will be issued. The Project Sponsor intends to construct all of the public infrastructure necessary for the project with financing through a mix of conventional bank financing, internal investors, and bonds issued by the FCIDA. The FCIDA also maintains a PILOT mortgage on the Tier 1 and Tier 2 properties and if a property owner was deemed to be in default the FCIDA could assume ownership of the property and use that property to raise funds. As industrial development agency (IDA) bonds are the obligations of IDAs themselves, no municipal, county, or state money would be liable in such an event and the bondholders would be solely obligated to any losses.”
As I read it, the APA permit was conditioned, and most certainly the project was promised, on the basis that no municipal, county or state money be liable.
Moreover, in my view the North Country Regional Economic Development Council and the Governor should not even consider the Adirondack Club and Resorts’ application for public financing of its infrastructure until the necessary permits from the DEC, the Department of Health and US Army Corps of Engineers, are in hand.
Illustration: REDC regions.