Time to Can "The Can?"

Thursday night (May 10), the Ontario County Board of Supervisors unanimously approved the package of reforms related to the County’s Revolving Loan Fund. As you review those documents, particularly the spreadsheet of uncollected loans, you will see a series of loans to the Geneva Industrial Development Agency (GIDA) earmarked for the Geneva Enterprise Development Center (GEDC). The GEDC is more commonly referred to as “The Can”, a reference to the building’s original owner, the American Can Company (you can view pictures of the building here). The building is supposed to be a business start-up incubator, hatching new businesses and creating new jobs. Unfortunately, there are precious few eggs in this incubator, and very few baby chicks ever emerge from it.

We obtained a copy of the County’s “Loan Review Project” document (click here to view it). It says the County approved loans to the Geneva IDA for The Can, for up to $60,000 per year, for a maximum of up to five years, or $300,000. The approved use of the loans was “deficit financing for the GEDC until grant moneys received or building becomes self supporting through lease income.” These, then, were “bridge loans,” meant to cover operating expenses until grants or lease revenues kicked in. Problem is, as the City’s Economic Development Director, Valerie Bassett told the Finger Lakes Times there were never enough grants or lease revenues to sustain the GEDC.

The Loan Review goes on to report several “departures from approved terms/protocol” of the loans, including the fact that the Geneva IDA did not submit an application for the loan until nearly three years after it started receiving loan money. Also, the report notes, there have been no County audits of any financial statements submitted by the Geneva IDA; in fact no financial statements pertaining to the loan are listed as received since April 2004.

To date, $269,751 of the $300,000 in loans remains unpaid by the Geneva IDA. And there is little evidence of jobs creation for the investment. According to the Loan Review, “no jobs report” even exists.

The Can became the “Enterprise Development Center” in 1993, when the City of Geneva teamed up with Ontario County to purchase it from the CCN furniture company to keep them out of bankruptcy. The Finger Lakes Times reported (May 11, 2007) that Ontario County Economic Director Mike Manikowski and CCN president Dick Conoyer defend the government purchase of The Can. CCN was able to relocate to Lehigh St., and, until now, no one was really paying any attention to the drain on revolving loan funds to keep the building open.

The Can’s current tenants are not exactly start-up businesses: the City of Geneva occupies a large portion of the building, Zotos another big chunk of space, a few small companies. There are only 17 jobs there at the moment. The Geneva IDA has hired Mancuso Business Development Group to operate the facility and find new tenants.

The whole thing reminds us of Rochester’s Fast Ferry fiasco, where good money was thrown after bad in a futile attempt to save a lost cause, and with tax payers footing the bill. We applaud Rochester’s Mayor Duffy for his leadership. He did his homework, saw the Ferry was never going to work, and pulled out of the project.

The information we are providing here is all publicly accessible through the Freedom of Information Law (“FOIL”). These are not secret documents and only a little bit of questioning led us in the right direction. You, too, can become more informed about government business by “FOIL-ing” public records. Click here to learn how. According to the FOIL-able minutes of the April 17, 2007 Geneva IDA meeting, a board member asked “if there was any action on the status of the grant funding at the GEDC and what would happen if the building were sold." City Manager Rich Rising said he will “look into this.” Maybe the Geneva IDA should follow Duffy’s example and can "The Can?"