Monday, October 19, 2015

Promises Ignored: Adirondack Resort Seeks State Funding

REDC-Regions-300x236This 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.

Related Stories


Dave Gibson, who writes about issues of wilderness, wild lands, public policy, and more, has been involved in Adirondack conservation for over 30 years as executive director of the Association for the Protection of the Adirondacks, executive director of Protect the Adirondacks and currently as managing partner with Adirondack Wild: Friends of the Forest Preserve

During Dave's tenure at the Association, the organization completed the Center for the Forest Preserve including the Adirondack Research Library at Paul Schaefer’s home. The library has the finest Adirondack collection outside the Blue Line, specializing in Adirondack conservation and recreation history.

Currently, Dave is managing partner in the nonprofit organization launched in 2010, Adirondack Wild: Friends of the Forest Preserve.




38 Responses

  1. Tim says:

    I’m not at all surprised. Sadly, it will be money wasted because ACR is never going to be built.

  2. Paul says:

    Why wouldn’t they just drill wells for the “great camp” lots why would they want to be reliant on (and having to pay for) village water?

    This seems to do more for the village than for the development. Isn’t something that benefits the villages of the park something that environmental groups claim to support? Personally I see other things the money could be used on that would have a more immediate economic impact like re-development of the ski area.

  3. David K says:

    Last week, I saw Tupper Lake in daylight for the first time in a few years, and frankly I am appalled at how the main arteries continues to look blighted.

    I thought it was because of the Great Recession, but frankly from a drive by curb appeal assessment, it appears that vacant storefronts and dilapidated housing continues to increase.

    I am surprised that the soon to be 10 year old Wild Center has not been a strong tourism/economic booster for the community. While I question the ability to market an upscale resort with a Tupper Lake address, I wish the developer and the community great success in the future.

    Any infrastructure improvements would be beneficial to the community.

  4. Marco says:

    The ACR has every right to build where it wants within the rules of the park. That does NOT mean the state (and me) have to pay for their infrastructure. They can drive wells for the water they need. Let them pay for it.

    As far as repairing/replacing the existing sewage/water in the village, they should allow for some additional growth. But not at the expense of degrading the quality of the materials that the ACR would require. If they need more sewage treatment to cover the expansion, again, let the ACR pay for it, not the state (and me.)

    Like most ADK villages, there is no real industry there. It is all tourist, and/or service related work. I typically pass through there 8-12 times per year going somewhere else. Boost tourism. Boost small shops related to tourism. Build a tourist trap like Lake Placid or Old Forge…there is none in the area. Have some Boat builders buy into the area as was tradition. Provide tax incentives for cottage industry occupations. Make it a center for Adirondack furniture. (Just a few poor suggestions.) My question is very basic: Why would you want to plant 1000-2000 more people there? No work. No real hospital. Sorry, I just don’t see the need.

  5. Boreas says:

    I am all for modest, necessary infrastructure improvements for Tupper Lake itself, but if the ACR wants to use it, they need to pay for what is installed on their property plus pay for any village infrastructure upgrades to enable them to use the new systems. If I was building a house in the area, that is what I would be required to do. If the ACR is ever built, then they can ask for all of the discounts and gimme’s they want – once they prove they are a benefit and not a detriment on the community.

    The ACR is under the delusion they are going to be the savior of Tupper Lake – at least that is how they sold the project. I am not surprised whatever they said to grease the wheels to get the project improved is already proven to be false. Politics pure & simple.

  6. Ed Zahniser says:

    Thanks, Dave, for bringing this situation to light. This is the really expensive type of welfare that should be squashed in favor of those among us who actually need the support.

  7. Bellota says:

    Isn’t it evident that the ACR project is a boondoggle and a swizzle. I doubt that this development will ever occur. Aren’t there more meritorious projects that can be funded with taxpayer money?

  8. Hawthorn says:

    Unfortunately, corporate and business welfare is pretty much the norm everywhere, under the guise of creating “jobs, jobs, jobs.” Every time you read of tax breaks to create jobs remember that it is you, the individual taxpayer, that is paying for those tax breaks for businesses. It’s the same thing with these infrastructure improvements that get paid for by ordinary citizens. We see it here locally–build a commercial building and your water connection gets covered by the city, but build or fix up a house and you have to pay through the nose. Plus, everyone’s water rates went up to cover the freebies for commercial builders.

  9. Will Doolittle says:

    Geez, what a mean-spirited post. Are you going to dog every effort of these developers to get their project going? Obviously, they are struggling. The REDC competition is about development (almost as if “development” was part of its name). This is a development, a big one, actually, in the context of Tupper Lake. The developers have every right to try for some of this cash. They may get it or not, but whether they do or not, that won’t affect the amount of state money spent through the REDC process. If the North Country region doesn’t get the funding, another will. The tax dollars will be spent, one way or another. So the argument cannot be that this will affect taxpayers somehow, because it won’t. This money will be spent. The argument is whether this project deserves the funding — whether it has promise, particularly to help the Tupper Lake area recover. Maybe it doesn’t. But the attacks against developers who so far have accomplished very little has the feeling of kicking those who are down.

    • Hawthorn says:

      What is the long-term economic viability of a project that apparently requires taxpayer funding to get off the ground because private money doesn’t see it as a good investment?

      By the way–I hate “reCAPTCHA!” It has definitely reduced my participation on the site, and I am tempted to not read if it is so difficult to comment.

      • Paul says:

        Many projects have a risk profile that requires public investment to get it off the ground. No doubt a development like this is very risky. I doubt it’s success given the fact that it doesn’t have the waterfront development that is really required for these kinds of prices but maybe they can make it work, I am no expert? Spending a little bit of public money on a water project that could benefit the town (as well as the development) is probably a better idea than some of the other economic development boondoggles they have on the wish list.

      • Will Doolittle says:

        There is barely a project in NYS these days that doesn’t get local and/or state tax breaks and/or other government help.

  10. Chris Rohner says:

    For many, the ACR is the single project that will save Tupper Lake and the Central Region of the Park…. I would suggest that thinking is flawed. Improvements to the communities of the region will not be found in a single solution, but in a diffuse set of solutions, across many sectors (energy, commercial, industrial, residential), that are created by local residents. To re-purpose a George Bush Sr. idea, the Adirondacks will find its future in a “thousand points of light” not in one shining star (which is asking for government handouts).

  11. Lakechamplain says:

    Gosh, the tone of most of these comments, as well as the ‘article’ itself are quite discouraging for those of us who’d like to see some reasoned development in our area. I’m an environmentalist, an ADK Mt. Club and 46er member as well as belonging to the Nature Conservancy, in my opinion the best environmental group there is. That said, please people, get your heads out of the sand and your feet unstuck from the mud.

    One of the main purposes of these development funds is to pump money into worthwhile projects in the hope that, both short term and long term, will help the community’s economic health. As Will Doolittle pointed out, if Tupper Lake doesn’t get the state money some other area/community will. Yes ACR is a private development but this money will help build an infrastructure that will help not only it succeed, and thus hopefully help TL’s moribund economy, but also serve the people and businesses of Tupper Lake. It’s called an investment. Investments are not sure things; they involve risk. But the large sums of money to build this infrastructure simply isn’t there. And for those above who say we need to rebuild the economy of TL by attracting small businesses, I’d say you’ve got the cart before the horse. Please people, have some vision. Instead of trying to put more roadblocks up to the ACR let’s try to make it work. Yet another year has passed and nothing is happening except TL gets a little more run down. This would be a much-needed shot in the arm whose goal is to make the community better.

    But I wonder if the developers read the negative comments above can’t help but think that the attitude of this area is too negative and to take their ideas and investment dollars elsewhere. They already jumped over every hurdle and passed every test the state put them through, but even that is becoming old news. Support this investment and help Tupper Lake and the Adirondacks.

    • Jeff says:

      “But the large sums of money to build this infrastructure simply isn’t there.”
      What happened to the investors and buyers who were allegedly waiting in the wings for the project to be approved and the lawsuit to be dismissed? Apparently they have vanished and ACR now needs public funding. If this project had merit, it would stand on its own feet.

  12. Boreas says:

    The point is – the developer of ACR has been trying to get the project approved for many years. They have heard all of the negative comments thousands of times and paid no attention. But they persevered in pushing it through (and finally got approval) partly by stating they would not require any taxpayer funds. Were they crossing their fingers and winking at the APA/DEC when they said that? This is the point of the article, not whether they should or shouldn’t get funding. How trustworthy are they?? If funds are going to be given out in the area, I would have no problem with it going DIRECTLY to Tupper Lake for infrastructure programs. But I do have a problem with giving it to an untrustworthy developer under the guise of “build it and (maybe) they will come”.

    • Paul says:

      If you look at what the project it looks like it will benefit the town more than the development. Increasing the size of a water district (which allows growth of the town along with its tax base) is something that benefits Tupper Lake as well as the people who need the water. In a perfect world someone else should pay for everything but we don’t live in that one.

      • Boreas says:

        Paul,

        You could triple the size of the TL water district, but that doesn’t mean it would necessarily promote sustainable fiscal growth via an increased tax base. It could simply promote sprawl, which isn’t going to help anyone, especially the downtown district. It often means currently healthy businesses moving into a new facility on the edge of town, leaving behind yet another empty building. That doesn’t really help the tax base.

        Unless TL has a lot of interested manufacturing/technology companies anxiously waiting to relocate to the middle of the Adirondacks with poor shipping hubs and questionable existing tech infrastructure, it is unlikely the expansion of the water district will do much to revitalize the area.

        • Paul says:

          Sometimes I think (assuming they want growth and I think they do) you have to take what type of growth you can get. The switch over the years has been one from a manufacturing type of base to a service and tourist type of economy. One aspect of that switch is second home development which is a substantial portion of the economy in some areas of the Adirondacks. Some don’t like it but that is a fact of life in the area if you want people there even if some of them are only there on a seasonal basis. Like the demographics show the area is aging here is an opportunity to take advantage of that demographic. They have lots of money why not put some of it in Tupper Lake?

          • Bruce says:

            Paul,

            “They have lots of money?” Were you talking about state coffers? According to what I’ve been reading, this project isn’t getting off the ground without a commitment of state funding at this point.

            Unless Adirondack development works differently, developers usually show good faith by getting something started up front, which attracts more investors. Have they broken ground, put it some roads, a guard house, dug a pond or two…the usual things developers do to show they have what it takes to attract funding?

            It also seems to me the developer promised to pay to increase the Tupper Lake water infrastructure. Did he really mean pay with state funds?

  13. Dave says:

    Boreas, Great points and a great article by Mr Gibson. The ruse the ACR has been playing trying to sell is the one of no taxpayer money funding the infrastructure. That is a joke, one major point that Gibson didn’t point out about the IDA and the PILOT program is the way the bonds get paid off. In the ACR play book, the bonds(which pay for the infrastructure on this private venture) are paid off by the forfeiture of the property and school taxes from the property owners in the project. So much for no taxpayer money being used. The strange part is that the ACR guys have somehow sold this to the local taxing entities as this being a good thing for the community. I don’t see how they can be buying the idea that a bunch of rich second homeowners tax money going to pay off a developers infrastructure for 25 yrs instead of going into the local tax coffers as a good idea.

    As another poster commented, why don’t they use the REDC money for something useful like rebuilding the ski area, which might actually attract some people to the area.

    • Paul says:

      Dave that was just my selfish suggestion. But it seems like a better way to spend economic development funds. It would be a huge benefit for the development as well. Seems like a win-win. Too late I expect.

    • Jeff says:

      “why don’t they use the REDC money for something useful like rebuilding the ski area, which might actually attract some people to the area.”
      Exactly. Granted I’m biased as a skier, but the ski area is purported to be the centerpiece of the project. So why not use economic development funding to refurbish the ski area (and God knows it needs some major refurbishment to attract skiers), which at least has the potential for stimulating economic activity, rather than for infrastructure for a speculative residential real estate project?

  14. Bruce says:

    Funding issue aside, I see something happening with a strong resemblance to Western North Carolina, especially Asheville. Years ago, Asheville’s downtown was pretty much run down, much as described for Tupper Lake. Along came some folks with money and transformed Asheville into a tourist destination, with shops, hotels, restaurants, etc. Sounds good, doesn’t it? One problem, these shops, hotels and restaurants are generally for the well-heeled; the city is being remade in the image called gentrification.

    Outside folks are moving in, opening businesses, then claiming they’re locals who only have the betterment of the city in mind. They have openly said they don’t want any businesses catering to Joe Average by saying businesses resembling “box stores” have no place there. They’re fighting one now, a business which wants to restore the early 20th Century building it has in mind for a location, I forget the name. These outsiders are fine with high end boutiques. It’s getting so that aside from the free street entertainment or the occasional festival, ordinary folks have little business being there, unless they have low paying service jobs, but be sure to leave when your shift is over. Oh, and did I mention ever climbing municipal tax rates coupled with stagnant wages?

    If this project goes through, and the village doesn’t take a strong hand in making sure there is a balanced approach, I see a Vail, Co., or Rodeo Drive in Tupper Lake’s future. I may be wrong, but I kinda got the same feeling when I visited Lake Placid briefly a few years ago.

  15. Thirdgeneration says:

    Another excellent article by Mr. Gibson who has done a great job of reminding us of this developers promises and the APA’s permit requirements. The sad truth is this boondoggle has little chance of getting off the ground, let alone being a transformational catalyst to save Tupper Lake. I’d love it if Will Doolittle would focus on his own community and leave these Adirondack issues to those of us who live, work and govern this region. Or, if you are desperate to tell others what is best for them, Will, why not give Buffalo a call, or Gansevoort, or Jamestown?

    • Will Doolittle says:

      I’m guessing if you kick off from commenting everyone except people who reside in the Adirondack Park, you’re going to be kicking off a lot more than me.

    • Robert says:

      “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.”

      “Should.” It’s an opinion piece, not an article. Let’s stop calling pieces here by folks like Mr. Gibson and Mr. Bauer news. They aren’t objective; they’re editorials.

    • Bruce says:

      Thirdgeneration,

      Are you saying those from outside the Blue Line who come every year and spend their money in the park don’t have a stake in AP issues?

  16. Paul says:

    Can’t say that Dave’s group shares his view here but if environmental groups are now focusing their concern and criticism on how a development project is funded (and discouraging it) then they really are trying to stop projects rather than trying to ensure that they meet some sort of environmental standard.

  17. Dave Gibson says:

    Boreas, you articulate well an underlying point of my post: trustworthiness, as well as wherewithal, competence.

    • Boreas says:

      Thanks Dave. That is the take-away message. I personally have no dog in this fight (other than my taxes), but I have been around long enough to know snake oil when I smell it.

  18. chris says:

    Y’all should know by now that developers always say what you want to here and then do just what they always wanted to do. Ask for forgiveness, claim hardship, “the toothpaste is out of the tube”…that is a well-known and well-worn playbook that is successful more times than not. It’s standard business practice for these folks.

  19. chris says:

    “the bonds(which pay for the infrastructure on this private venture) are paid off by the forfeiture of the property and school taxes from the property owners in the project.”

    OMG!

  20. Dale Jeffers says:

    Some of the comments make me wonder if people do any due diligence research on the backgrounds of the promoters of ACR before commenting. Could be enlightening.

  21. oldguywithabeard says:

    For a number of years, I have been trying to figure out what Foxman and Lawson are really up to. I don’t think they can possibly believe their own financial projections, so what is the game, and why have they been pursuing it for a decade? Quite apart from whether the project is good or bad for Tupper Lake or the Park or the environment or the economy of the North Country, nothing about it makes sense to me. Does anybody posting here understand what is going on, and can you help me to do so?

  22. Dave Gibson says:

    Oldguywithabeard,
    I think a lot of people ask the same questions you do. IMO, ACR as proposed and permitted by the NYS APA continues to tack against the wind. There was and still is a possible successful development project here, but not the spread-out, very costly one permitted by APA in 2012 (but still needing other regulatory approvals as far as I know).