Apparent conflicts of interest raise eyebrows even among supporters
The maneuvers and machinations behind the Ginsberg’s Foods deal—resulting in some $2 million in public fundings and tax credits—strike many local observers as irregular at best.
Ginsberg family members and employees have touted the company’s longevity, local roots and continued “investment in the community” as reasons for the company to benefit from substantial County largesse and indulgence from town permitting agencies.
To a large extent, both have rolled over and given Ginsberg’s everything they’ve asked for, from public handouts to multiple zoning variances.
But while development officials have voiced a shining appreciation for the employment provided by Ginsberg’s, such testimonials seem tarnished by a growing sense that inside government influence has been used to achieve a private company’s expansion goals.
Below is an inventory of some of the more dubious ways in which this deal has been advanced. Taken together, these raise the questions: Why should a highly successful company, with a massive cashflow and presumably healthy profits, need the public to underwrite its expansion? And: Is it really appropriate for County agency board members with close ties to Ginsberg’s to be going to bat on its behalf?
(1) Ken’s Conflict. The main public booster of Ginsberg’s expansion has been County economic development czar Kenneth J. Flood. But Flood appears to owe a significant professional debt of gratitude to the top dog at Ginsberg’s.
According to sources familiar with the search to fill the job eventually landed by Flood, that search was led by none other David Ginsberg himself. At the time of Flood’s appointment, Ginsberg was the President of the Columbia Economic Development Corporation, and apparently was responsible for both the interviewing and the ultimate selection of candidates.
The search resulted in Flood assuming the titles of Executive Director of CEDC, Commissioner of Columbia County Planning/Economic Development, and Executive Director of the Columbia County IDA.
If true, Flood would not only would appear to be helping out the guy who hired him, but is heading an agency with direct financial dealings with that person’s firm. Audits of the IDA, conducted by the politically-connected accounting firm of Pattison Koskey Howe & Bucci, show G’s Best Realty listed under the agency’s Projects, Exemptions and Payment in Lieu of Tax programs. G’s Best Realty is understood to be a real estate holding company for Ginsberg’s Foods, sharing the same address (Box 17 Route 66, Hudson NY 12534) and appearing on some of its applications.
(2) David’s Dual Role. About a year after hiring Flood, Ginsberg relinquished the Presidency of CEDC in the Spring of 2010. But he remained on the CEDC board for several more years. It appears the company’s expansion plans were not only well known, but also actively advocated by the agency, well before Ginsberg finally stepped down entirely from that board.
Flood told the Register-Star in July 2013 that “the company has expressed interest in potential assistance from the Columbia County Industrial Development Agency and Columbia Economic Development Corporation”—two of the three agencies Flood had been hired to direct.
Indeed, there is evidence that Flood knew of Ginsberg’s plans even earlier than that. The minutes of CEDC’s June 18th, 2013 meeting note that Consolidated Funding Applications (CFAs) to the State were due by August 12th. Flood states in the minutes that several CFAs would be submitted, including the “Ginsberg’s expansion.”
At the CEDC’s August 2013 meeting, a conversation to discuss the Board’s Code of Ethics occurred. The meeting minutes note that “The Board expressed dissatisfaction with the inability to loan to a company due to the fact that the owner was a Board Member.”
No specific company or Board Member was specified. But David Ginsberg resigned from the board shortly thereafter, sometime between CEDC’s September and October meetings—and just before the State approved a package of more than $1.5 million in tax credits and funding for Ginsberg’s in late November. In the December press release, Flood praises Ginsberg’s Foods without acknowledging any prior relationship or obligation to the former president of CEDC.
(3) Crawford’s Connections. Succeeding Ginsberg as CEDC President was another David—David Crawford, the head honcho of the Hudson-based engineering and planning firm Crawford & Associates.
Crawford’s firm has represented Ginsberg’s efforts to obtain permits before the various Claverack and Ghent boards reviewing its expansion plans, even as CEDC has gone to bat for the company. The abovementioned $1.5 million funding applications appear to have been submitted during Crawford’s (ongoing) tenure as President of CEDC.
Crawford has also used his role as CEDC boss to speak up for his client’s interests in more purely symbolic ways. At its the same May board meeting, “Mr. Crawford stated it was appropriate for the Board to honor Mr. Ginsberg” and “presented Mr. Ginsberg with a trophy as a token of thanks.” The minutes do not disclose what the trophy cost, or what shape it took. (A cornucopia, maybe?)
(The main Crawford & Associates spokesperson at meetings about the project has been Brandee Nelson, who has elsewhere been rumored to be the odds-on “favorite” to unseat County Department of Public Works honcho David Robinson.)
(4) Spinning Ginsberg’s. Meanwhile, Crawford recently pushed for a public relations firm to be hired to help get its message out, including “the message about Ginsberg’s”—again, his client.
According to the May 2014 CEDC minutes, a motion was passed to seek “a proposal from Behan Communications.” Behan is in turn connected with Crawford Associates and at least one other CEDC board member, attorney Bill Better. Both Crawford and Better have performed high-profile work for TCI of NY, the former Ghent PCB processor whose Falls Road facility infamously exploded several summers ago, causing a widespread lockdown and the installation of an emergency notification system.
Despite the Board only approving the solicitation of a “proposal” from Behan, at the next month’s meeting Flood revealed that he had already started working with Behan.
This revelation caused board member Tony Jones, former publisher of The Independent, to express his “confusion,” goven that “only a proposal and not a contract had been authorized by the board vote.” Crawford jumped in that “Behan could use Ginsberg’s as a CEDC accomplishment” to help burnish the misunderstood agency’s image. (Once again: Ginsberg is Crawford’s client, and both Crawford and Better rubbed elbows with Behan while they all worked for TCI.)
Despite the evident consternation among several more independent CEDC members, at the following meeting Mr. Crawford announced that “Behan had been hired.”
Minutes of the August meeting have not been published yet online, but attendees report that Crawford and Flood have already gone ahead with spending $4,000 of a potential $10,000 retainer with Behan, though the CEDC board still had not authorized the hiring of any P.R. firm... It is not clear if Behan had a hand in placing the recent, fawning profile of David Ginsberg in the Register-Star.
(5) Land Grab. Another tasty morsel in the Ginsberg Goodie Bag is the County’s plan to “sell” them 33 acres of developable, vacant farmland along Route 66 for the princely sum of $1. Ken Flood told the media that “we had an appraisal done two months ago, and the appraised value is $280,000.” A public hearing on the gift is scheduled for today (Wednesday) at 10 am at the West Ghent Fire House on Route 9H near Kozel’s.
But other land owned by CEDC is hardly given away for a sawbuck. For example, at its May 2014 meeting, the Board approved the sale of 5.8 acres—about half of it wetland—to Tierra Farm. The price? $50,000, loaned at the extravagant rate of 10% interest for 5 years. The company promised to create 25 new jobs, roughly half of Ginsberg’s estimate.
So why was Tierra Farm required to pay $50,000 and 10% interest, while Ginsberg paid $1 and got $1.5 million in credits and grant funding? The minutes do not say. Flood has spun the giveaway by saying that his agency heard of no interest in the land after years of it sitting empty. But this appears to be more a reflection on CEDC and the IDA’s inept-to-nonexistent marketing efforts than on its real worth.
(6) Corporate Blackmail? In spite of his longtime official role as a booster of Columbia County development, David Ginsberg has made a point of threatening to move his company elsewhere, if the County does not support its expansion with funding.
Before State funding was obtained, rumors ran rampant (spread by whom?) that Ginsberg’s was mulling the idea of moving to Rensselaer or Berkshire counties. Even recently, as Ginsberg’s has racked up benefits and approvals, Ginsberg told the Register-Star:
“(People) offered to sit down and talk to me about the incentives about going somewhere else,... It’s not like I need to be here. I could be 25 miles in any direction and continue the same business model I presently have.”
(7) The $220,000,000 question. So is it worth it to spend about $2 million? That same Reg-Star article noted that “nearly 60 percent of the company’s approximately 260 employees are current Columbia County residents, he added, with the proposed expansion yielding anywhere from 50 to 75 new jobs.”
That would indicate that Ginsberg’s currently employees approximately 156 local residents, with the number climbing to something like 200 in Columbia County if the expansion goes through.
Now, according to the New York State Department of Labor, there are 21,800 people filling nonfarm jobs in Columbia County as of June 2014.
This means that Ginsberg’s provides less than 1% of the employment in the county. If every local business were to receive grants and tax credits in the same proportion to Ginsberg’s based on the number of jobs each provides, the County and State would have to pony up more than $220,000,000.
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At the end of the day, even those who might hope to keep Ginsberg’s Foods locally have to wonder: Why all the handouts to a huge business which is said to have revenues in the tens of millions? Can't Ginsberg’s afford to pay its own way?
After 100+ years, doesn’t Ginsberg’s have the assets and credit to get a low-interest loan of its own, without reaching into the pockets of State or County taxpayers? Why should a small farm pay $50,000 and 10% interest on 6 acres, while Ginsberg’s gets 33 acres for a measly dollar?
When even the conservative-coddling Register-Star blasts the deal, it’s a sign that County insiders may finally have gone too far. The Register wrote that “most [residents] will not benefit from Ginsberg's multi-million dollar investment,” and that the handling of the land deal and PILOT leave an “impression that the deal with Ginsberg's is not above board.”
