NEWS

Women’s League of Voters releases report on local development corporations

Amy Cavalier

The League of Women Voters of the Rochester Metropolitan Area is hoping a recent report will shed light on Local Development Corporations.

The report identifies about 16 LDCs in the Rochester area including the Monroe Newpower Corp., formed in 2004 to take over the IOLA cogeneration power plant, and the Main and Clinton Local Development Corp., which was formed to oversee the $230 million Renaissance Square project.

Among the recommendations in the report, the League would like to see LDCs make their annual budgets available to the public, comply with state laws concerning open meetings, pay and sell property for fair market value and solicit work and accept bids from the lowest bidder, among others.

“These corporations are independent, private companies with no oversight,” said Rose Mary Zaffron, Greece resident and member of the League. “People should know what is impacting public policy.”

Brighton resident Judith Weinstein, a member of the League, said the study was initiated as a follow-up effort from previous work done by the League in the 1970s and 1980s that focused on accountability and transparency of government.

The League contracted with the Center for Governmental Research to complete the “Local Development Corporations: Risks and Benefits” study which was completed earlier this month. The study was funded by an endowment created by a member of the group.

Local Development Corporations were recognized by state law in 1962. According to the report, local government can use LDCs to get involved in economic development by assisting businesses with loans or grants, to take part in private-public partnerships as a nonprofit, or to purchase and develop real estate. Created to “lessen the burdens of government,” according to the report, “in the Greater Rochester area, LDCs have been used to manage and upgrade government assess, promote tourism and recreation, address unique fiscal problems, and more.”

The village of Hilton founded a Local Development Corp. in 2000 to improve the village. The Hilton LDC has been used to purchase a large anchor retail space on Main Street as well as to develop an abandoned railroad in a light industrial park.

Calling LDCs a form of “hidden government,” Borgus said the Center for Governmental Research admits there are probably more than 16 LDCs in Rochester, but that there’s no information available about them.

“The thing that kind of shocked us the more we looked into them (LDCs) was the fact that nobody knows how many there are,” said Dorothy Borgus, president of the League of Women Voters of the Rochester Metropolitan Area, and Chili resident. “There is no list, no place to register if you are one of these, there’s no tracking them. And we were also shocked to find out, if you wanted to call one or talk to a board member or CEO, you can’t because they don’t have offices, they don’t have websites and you can’t find them in the yellow pages. They’re not there, and yet they’re impacting our lives every day in a huge way by what they do.”

The reason that there are no records is that income and operations of Local Development Corporations are exempt from taxes, they can acquire public property without appraisal, can award contracts without bidding, and are not required to disclose their dealings to the public.

“Those that do file them do it because they don’t want to be criticized,” said Borgus.

There is no limit to what LDCs can borrow and they can override zoning laws as well, said Borgus. They can also issue tax exempt and taxable bonds.

“Try to get your hands on the legal documentation,” said Borgus. “You can’t. It’s really pretty scary.”

Borgus did note that LDCs do provide benefits by encouraging economic development and by-passing some governmental red tape, but added that residents should still be wary of them. She said the report is the League’s gift to the public.

“We want them to take advantage of it and read every line,” she said.

To view the report, visit www.lwv-rma.org/.

Amy Cavalier can be reached at (585) 394-0770, Ext. 243, or at acavalier@mpnewspapers.com.