Letter to the editor submitted by David Snyder
Let’s talk money. More specifically yours and mine. Greenwich taxpayers understand that what attracts people to our town is our low mill rate, excellent schools, and beautiful waterfront location.
So, how do we maintain a low mill rate and ensure that Greenwich retains its exceptional reputation? Fred Camillo is looking to public private partnerships (PPPs) to cover the costs to maintain and upgrade our infrastructure, going so far as to suggest they be included in capital project proposals. Sounds good, right? But let’s take a closer look.
Greenwich non-profits and philanthropists already play an important role in helping fund projects that benefit the community. The Junior League is one example. They raised a significant amount of private dollars to build a wildly popular public pool in Byram. Then there is the Bruce Museum. The Town carries some administrative costs, but we benefit from our ownership of the building and land as well as the wonderful programs the museum sponsors that enrich our community.
These partnerships with charitable organizations are often a safe bet for Greenwich because none of the stakeholders are motivated by profit. Although we still run the risk of having donors’ interests dictate the outcome of a project if we aren’t careful. PPPs become a little harder to negotiate when the partner is a for-profit.
Understandably, when they invest their money in their local community, they expect a return on the investment. Unfortunately, the result of this is often that the long-term cost to states and municipalities has been far greater than expected. If you look elsewhere there are plenty of examples where states and towns have been left holding the bag. One reason is the higher cost of financing in the private sector.
Municipal bonds are tax-exempt and result in lower borrowing costs. Investors in municipal bonds get a tax break in exchange for lower interest rates. Private companies do not. Governments entering into these agreements need to be acutely aware of the risks and unexpected costs and negotiate transparently and cautiously on behalf of their residents. There is no such thing as free money.
Looking at the Greenwich Plaza redevelopment plans, it is easy to see how perilous these PPP deals can be. The current Republican administration negotiated with the developers behind closed doors and presented the project to the public as a fait accompli. There was no third-party, arms-length look at the overall deal and there remains little clarity as to whether the appraised value of the airspace used the appropriate methodology. In this public-private partnership we are giving away an asset and still don’t know whether what we get in return is equivalent in value. Once we give away the asset, we have no leverage over future use of the asset.
Fortunately, Democrats on the BET have pressed for the details and fiscal analysis needed to make an informed decision. They immediately recognized the inadequacy of the restricted-use appraisals procured by the town and the developer, questioning the appropriateness of the assumptions and methodology. As a result of this push for more information and a better understanding of the potential risks of such a proposal, the town and developer have postponed bringing the project to Planning & Zoning and the RTM for premature votes.
Whatever the motivation behind this Republican administration’s efforts to fast track this proposal behind closed doors, the result is an embarrassing miscalculation that illustrates well the need to have highly qualified and capable officials ensuring that PPPs are being negotiated to protect the interests of tax payers. In this instance, the lack of transparency and a nuanced understanding of the weaker aspects of the deal suggest incompetency or worse.
While the Democrats clearly understand the need to work with private developers and investors in the community for support infrastructure improvements and help grow the local economy, they have also proven to me that they have what it takes to scrutinize Public Private Partnerships and avoid any missteps that could undermine the value of the partnership to taxpayers.
David Snyder
Old Greenwich