Democratic mayoral candidates Thomas Richards and Lovely Warren say the city of Rochester can do only so much to retain large employers such as Bausch & Lomb Inc., and they differ on when and if state government will provide meaningful budget relief for its cities.
Richards, the incumbent, and City Council president Warren are campaigning for the Sept. 10 Democratic primary. The winner will face Green Party representative Alex White in the Nov. 5 general election for a four-year term.
Richards, the former chairman and CEO of RGS Energy Group Inc. and the city's corporation counsel when Robert Duffy was mayor, has the endorsements of the Monroe County Democratic Committee, the Independence Party and the Working Families Party. If he loses the Democratic primary, Richards can run in the general election on the third-party lines.
Warren is lead counsel and chief of staff for state Assemblyman David Gantt, D-Rochester.
Richards and Warren debated several issues during a 90-minute discussion at the Rochester Business Journal. An edited transcript of the first half of the debate appeared in the paper's Aug. 23 edition. What follows is the second half.
ROCHESTER BUSINESS JOURNAL: Bausch & Lomb has been sold to Valeant, and its headquarters is being relocated, along with 400 or so jobs being cut. What can a mayor do, or what should a mayor do, to influence a private company's business decisions as they relate to Rochester?
LOVELY WARREN: You can only advocate on behalf of your community and make sure they consider the impact unemployment or laying off people would have. But you also can look to go outside of your community to bring in people that are in that particular profession or look at other jobs that are currently here, small businesses that are currently here, that may be able to help (retain the jobs) that Bausch & Lomb has given.
But at the end of the day, businesses are going to make a decision based on their bottom line. That's what they tend to do. So it's best to be able to advocate with the business and talk to them, bring in your legislative partners.
THOMAS RICHARDS: There are things you can do to make sure people view this as a competitive place to be. If you look at the things that we have done in that regard, actually that's one of the reasons why the manufacturing is going to stay where it is. The city, and the county and the state, have been supportive of that facility for a long time, with respect to the way we tax it, with respect to the way we have programs to support it.
Hidden in all this bad news here, there is some hidden success. But it also shows the limitations of what we can do as a practical matter. The decisions about Bausch & Lomb, in many respects, were made quite some time ago. Their influence on our economy changed 10 years ago, to a large extent. They used to employ 6,000 or 7,000 people. They were down to 1,500 when this event occurred.
So it's a disappointment, but when they went into venture capital ownership and went through all those processes, this is probably the outcome that was going on. They threatened to move the headquarters to New Jersey several years ago and had moved almost all of their people out of the tower already and out to Goodman Street.
I do think there's a lesson there for us, and that lesson is the announcement of that move and the reduction in employment is a lot like the fact that Eastman Kodak went bankrupt. That puts a public face on the transformation that's already occurred in our economy, and it's in many respects more psychological than it is financial. It's obviously financial to those people that are affected. So the need to deal with this issue of how we build up this alternative economy that's going to replace what we once had is really where we ought to put most of our effort here.
We're not going to be able to browbeat these people into doing something they don't think is in their long-term best economic interests. To a large extent, the decisions that shape that outcome were made quite some time ago, and we can't change it. If there's anything that it tells us here, it's that we need to keep working and work hard at providing alternatives that have the opportunity to grow in the current environment, and that we're not going to be able to rely on people like Bausch & Lomb and Eastman Kodak to take care of it, because they're no longer in a position to do it and often owned by people who aren't interested in doing it.
If you look at the new board of the Eastman Kodak Co. that it appears will emerge from bankruptcy, a majority of the people on there are hedge funds or venture capitalists who are in this for the money. They don't make any bones about it. They no longer feel any obligation to this place, and we're going to have little or no influence over them. We need to be working on things we can influence and things we can do something about, which is why I'm looking at Eastman Business Park as really the place where we can have an impact, as opposed to trying to chase Eastman Kodak or whatever Eastman Kodak will become.
RBJ: Do you think the city suffers from a brain drain, an outmigration of young, well-educated people, and if you were talking to one of these young people, what would you say to persuade them to stay?
RICHARDS: Yes, I think we have had a brain drain. I think that brain drain is a product of lack of employment opportunities. There's some sort of environmental issue there. By environmental issue, (I mean) it's everybody who grows up here wants to go to New York City or Washington. I don't know if I can change that. We don't need them all. I mean, we're not that big. And we should get over that. We should get over the fact that young people graduating from these schools around here choose to go other places where young people are, and their lives evolve over time. We can live with that, but there has been a brain drain.
The example of success-I was at it the other day-is this new business, this Brand (Networks Inc.) company that's formed down in High Falls. It's amazing to see. There are now over 80 young people working there. They work in this open environment. It's a process that takes major companies and puts them on Facebook. We were down there for the opening of the place, and the young guy who started it had everybody raise their hand who graduated from a college in Rochester in the last five years. You couldn't find another hand in the place.
So one (factor) is opportunities. We have to have those kinds of opportunities for people to work here. And they have to be in the kinds of things that people can do. We're producing people here who can do it. And second of all, one of the reasons we invest in our city is we want it to be the kind of environment that people want to live in. They want to be in an environment that appeals to them. Urban environments can appeal to people like that.
High Falls is a good example. High Falls is a pleasant place to be. It's a combination of our urban history and the modern arrangements-all of the festivals we do here, all the entertainment we do here, the maintaining of the sections of the city that are important to them. Those are all important. So it can be a good place for you to live and enjoy. And we also provide a level of opportunity here.
In this city, unlike New York City, you can get engaged and you can have an influence, and you can do it early on. If you're interested in that, if you're interested in having opportunities to do things, this is a city that can provide that, because we're small enough and manageable enough so you can really do it. In New York City, you're lost. In Washington, you're lost. Now, that doesn't mean you ignore all kinds of other issues the city has. But in order for us to be successful, it's going to be a mix of all those things.
I'm looking out the window, too, at the Temple Building, for instance, and what will be the Sibley Building, where we're going to have the kind of residences that appeal to people in those circumstances, who want to be in an urban area and want to have the amenities that are associated with that and are happy to live in that process. So that's what I'd say to them. And when we have the job opportunities, we get our share. We can get our share if we keep building the city, keep making it a place that's attractive.
WARREN: It has to do with the environment for young entrepreneurs. I agree that we have a situation where many of our young people that are educated here or graduated from high school here do not see Rochester as a place where they want to live. Many of the people that I graduated from high school with chose to move to other cities. That has to do with access to opportunity and feeling like you are valued. I think that's the issue here. Young people want to feel like they are part of the solution, and they want to be included.
There is a young professionals group here, the Rochester Young Professionals. There's a great black young professionals group that the Urban League has that has many events all around the city that allows people to go into different areas that they may not have been in before and explore what our city has to offer. But I know plenty of people that came to Rochester thinking that this was a city they could make a mark in, that they could move up in, and found that they were sort of stuck because the opportunities to move up were not there.
If you're starting your own business and you're a young entrepreneur-and I know plenty of those-they see this as a great place because they can make their own mark. But if you are trying to get into a company, or even into City Hall, the opportunities for you just are not there. People are not retiring the way they used to, so the opportunities to move up in a particular company are not there.
It's also the environment. If you're a young, single person in the city of Rochester, finding a mate is challenging because we don't have those areas in the city that people feel comfortable enough to go, except for East Avenue to a bar or during nighttime. But it's not something that's constant, where they feel like they can sit down and have coffee and meet other young professionals. It's always around a particular event that is planned by a young professional that you get the opportunity to meet them. It's not something that's free-flowing. Young professionals like things that are more free-flowing, to be able to live in this area, walk to the grocery store in this area, walk down the street to a movie theater and walk home. We just don't have that right now.
RICHARDS: I agree with Lovely's as-sessment of what we need, but we do have a couple of areas. It's not just the East End, where you see the bar scenes. Park Avenue itself provides that. And recently, South Avenue in the South Wedge has been very successful growing in that regard and has all kinds of alternatives. Those are two examples of places that have been more success-ful in providing them. The South Wedge is a product of the last four or five years in terms of how it's taken off. It's amazing to go over there and see what's going on right now.
WARREN: The South Wedge started a long time ago, 10 or 15 years ago, when people started to move there, renovate their homes there. Many families lived there. Couples lived there. I think you have a mixture, but it is an environment where people feel good enough, safe enough, to walk down the streets to the shops and other things. But it took a while to get there.
RICHARDS: It certainly did. And you're right, in terms of the residential aspect. I was talking just that commercial strip.
RBJ: How would you tackle the city's structural financial problems?
WARREN: It's very complex. When you look at both the federal government and the state government, we have a situation where everything is very competitive. You're competing for grants, whether it's on a federal level or a state level. You have to make sure you have people on staff to go after those, to know that they're there. That's why I proposed hiring two new grant writers to look at and go after those competitive grants.
You also have to look at other funding sources. You have a number of foundations, a number of entrepreneurs that are giving away dollars for new, innovative thinking. We have to position ourselves as a city to take advantage of that.
What I wrestle with is the fact that we have, for a number of years, been trying to get more (Aid and Incentives to Municipalities) aid from our state government. They have not allowed us to access more dollars that way, and we contribute more to our school district than any other city in the state of New York. We have that sort of problem, so we have to look at other funding sources. We can't depend on Albany, or even Washington, D.C., to help us fix our structural deficit problem. We have to learn how to do the same things we do with less dollars.
A lot of what we have to do is stated and mandated by Albany. They send us a pension bill; we have to pay it. We have to provide for police services and fire services and environmental services. Those are all things we have to do. But there's also that portion of the budget that's a priority list, that is not set up by mandates. In that priority list, you have to look at what is the greatest impact you can have on the people in your city and what their needs are.
I think we tend to govern with a blanket. Every neighborhood's needs in this city are completely different. We have to tailor our solutions on a micro level instead of a macro level. The needs of people that live in the Marketview Heights area in the city of Rochester are completely different than the needs of the people that live in the 19th Ward.
RICHARDS: In the longer run, this is probably the most significant challenge that the city faces, in this sense: It's not the most interesting and the most exciting, (but) if we don't solve it, all these other things we're talking about will fall apart.
If you look at the cities in this country that have failed, they've failed financially. At some point in time they could no longer access the capital markets or they could no longer pay their bills, and that's what happened to them. But before they got there, they failed socially. The reason to exist in an urban environment had been so decimated that it was predictable what the outcome would be.
When Detroit went bankrupt, only 40 percent of the streetlights worked. Who wants to live in a place where only 40 percent of the streetlights work? Our city, particularly in terms of state and federal grants, has been quite successful. One of the reasons we have a very good and extensive housing program is we've been very successful in competing. We're getting more than our share, and the people in the state (government) will tell you that. We need to continue to do that. I support that idea.
But in the long run we need to get the fundamentals straightened out. We're not going to be able to run the city on grants. That'll get us through one year. The school district is a good example of that; they tried to do it that way. We need to get the fundamental arrangement with respect to the city in place.
We've been fortunate in the sense that we've been able to balance ourselves, we've kept our credit rating up, and we've still been able to make the investments we've talked about. When the judgments are made about money, you need to talk about not just the money that is talked about in terms of Albany and these other places. You need to talk about the value that is inherent in what you do. So if we balance the budget by closing the rec center, there's a cost to that. It's harder to measure, but there's clearly a cost to it.
What happens in the process we get into, particularly in Albany, they're only measuring the financial numbers on the financial report, because they're easier to measure. We have to start thinking about this in a broader sense. And there will have to be some help from Albany. We will have to be successful in convincing them. They already dictate, essentially, the situation we're in.
Our real estate property tax-the only tax we control-raises, give or take, $150 million. All of that's consumed by two mandates from the state: the pension bill and the payment to the school district. We have no real estate property tax left. Fortunately, in this area, we get sales tax and other things. So we're going to have to get them to engage in this solution. And the solution needs to be, at some level, that the fundamentals of the city-the revenue that it can count on and the expenses it needs to make-are in balance. They're not now, and we need to get that problem solved. If we don't solve it, we'll get ourselves in trouble.
Rochester, fortunately, starts in a better position than, say, Syracuse and some other cities in the state. But that's a fundamental we have to get. I've put a lot of personal time into it. I'm going to continue to put a lot of personal time into it. We are going to have to win that fight, and I think we will. Even politically, I think we will. The upstate economy and the success of upstate has become a major discussion with respect to the governor and Albany and all that other stuff you hear about all the time. He's up here touring the wineries and doing this other stuff. You will not be successful economically in Upstate New York if the cities fail. You cannot be successful if the cities fail. We've got to deal with that problem.
Now, we will do better if we go into it in a responsible condition. If we mind our own business, if we do like what we did with the health care here, where we moderate that problem substantially ourselves so that our case is such that, fair enough, you're going to hold us to certain standards and you're going to make sure we're responsible, but then you have to deal with this.
WARREN: I've worked in Albany for 14 years. I know how they operate. We all know how they operate. We have two of the highest elected officials from the Rochester area, right? So this past year, you had the (Assembly) majority leader, Joe Morelle, and you have the lieutenant governor. We got no more AIM aid, not one more dollar. It would be great if people that understood our concerns were putting our agenda at the forefront of their concerns in solving the issue for us.
They don't see us as having the same financial issues as other upstate cities. Part of that is because we have, for decades, been able to manage and take care of ourselves. That is the reason why instead of making the necessary decisions and cuts and other things to lessen the blow next year, the mayor's budget decided that they wanted to amortize the pension and push it another year.
We can talk about what the issues are, and the deficits and the concern. How do you solve it? I've worked in Albany for 14 years, and that is a bear to try to solve because everybody is in the same situation. Even though Buffalo gets more money than us, even though Syracuse gets more money than us, and even though two of the highest elected officials in the state of New York are from the Rochester area, our challenges are still falling on deaf ears. We have to recognize that this is something that we're going to have to be prepared, if nothing else changes, to help solve ourselves.
The only way, currently, we can bring revenue to our city is basically through our tax base, and raising parking fees and other things. The reason I voted against part of the Midtown Tower development was because one of the ways we can raise revenue for our city is through parking fees. We leased 32 spaces for a dollar, and then $8 a space a month in the parking garage. We can talk about ways locally that we can try to build revenue, but to say that Albany is going to fix this problem for us, they haven't. What they continue to offer us and have offered us is basically loans to borrow from the future.
RICHARDS: The history has been tough. Last year, for instance, the Assembly proposed in their budget to substantially increase our AIM aid. It didn't get all the way through. But that's how it begins. I do think one of the reasons to be optimistic is that we do have some senior people in Albany. They haven't been in those senior positions that long, but I think those things do help us. I'm not willing to give up on it. I'm just not.
We can't be naive about the consequence of trying to do this all ourselves. The real estate property tax is not going to save this city. Real estate property tax is an anachronism. It's an 18th-century solution for a 21st-century problem. Continuing to raise our property taxes or continuing to try to build the base worked great when we had this industrial base, when Kodak paid the city $15 million a year worth of property taxes. But we're not going to get that back. Relying on it and focusing on it, to my way of thinking, misses the point. In fact, it encourages you, quite frankly, to make the situation worse. We need to change the way we finance these cities. We have got to win that war.
WARREN: I agree that we do need to change it, but the fact of the matter is what do we do? It's something that's not within our control. What we do have in our control is the real estate property tax, our parking fees and revenues that way. We're depending on our state Legislature, and you know they're not all from the Rochester region. They're from all over the state. Making a case and saying we are in a unique situation doesn't necessarily resonate with people who aren't representatives of Rochester.
We don't necessarily give up trying to win that war, but we also have to figure out what we do in the meantime. That's what I don't hear the mayor talking about. Do you continue to amortize your pension, continue to kick the can down the road? Or do you try to do something to help it, so we are not Detroit 30 years from now or 20 years from now. It would be great if Albany would give us additional dollars. But how long has the Rochester Business Alliance, the mayor, all the (local) state legislators been talking about increasing our AIM aid? How long have they been trying to change how cities are financed?
RICHARDS: I would dispute that we've done nothing in the meantime. The city has been able to get through this process for quite some time now without raising property taxes, without closing libraries, without closing rec centers, without reducing the Police Department and the Fire Department, the essential services we provide, maintaining the highest credit rating of any comparable city in the state. So we are doing things, including the solution we came up with with respect to our medical care, which took that curve and flattened it out. We are doing things, and I agree that we need to do things, and our credibility won't be any good in Albany if we don't do things. The issue here is whether those things ultimately catch up with you, and you pay such a price for doing them that you wind up killing the issue before you get there.
One of the reasons we don't get as much attention-and Lovely is right about that-is that we have been successful doing it in the short run. And the politics of things is, the way to get attention is to collapse. You fall on your sword and collapse. But I don't go for that. There are some cities in the state of New York who are headed that way right now. That's actually their strategy. My feeling about that is if you let that happen here, you'll be sorry for a decade. They may give you some money, but you'll be sorry for a decade. And you will not have saved the city in the process.
WARREN: I agree. We've done a lot to curb this. Council's primary responsibility is making sure we don't spend more money than we have. We've done a lot, and the administration has proposed a lot of things so that we can continue to go along. But again next year, we're back at the same point.
The changes in our health care only last for so long. The changes in working with our unions and other things only last for so long. Eventually, it will catch up to us and we will have to decide what we need to do. For me, it's how do we continue to bring in those dollars to offset whatever we have to spend in our general fund (rather) than to just continue to advocate for the AIM aid and additional dollars?
I would love to be able to sit here and say the governor and the Legislature are going to change the way cities are funded. They recognize that we have a shrinking tax base. We went from over 300,000 people down to now 210,000. They recognize that. They recognize that we're losing our big businesses and they're not contributing to our tax base. They knew that 10 years ago. They knew that five years ago. They knew that last year. What are we going to do in the meantime? We've done a lot of things in the meantime. But again, stuff like giving away parking ...
Working with businesses and other people to try to attract businesses to the city, to try to build up the tax base because that's our only source of revenue at this point in time; the only way the state allows us to self-finance is through the tax base. We have to try to build that up, too. We can't just say that's old school. Well, that's all we have right now. They haven't proposed anything new.
RBJ: If you could give primary voters one reason to vote for you, what would it be?
WARREN: I believe, at this critical time in our city, we need a mayor that's just as comfortable in the neighborhood as they are in City Hall. I believe we need someone that can bridge the gap between these two cities that we have. We have a city that's moving forward and that's doing a lot as far as development and construction, but you also have a city that's really suffering.
All the reports say we have a part of this city that's suffering. I believe you need a mayor that can energize those people to help them help themselves, as well as someone that has the wherewithal and the ability to do what needs to be done in City Hall. You need both. You cannot just have one at this critical time in our city, because if we do not focus on the problem we have in this other city, if we continue to go along the way we're doing, it will overtake all the good. That's why I think I'm the better candidate for this job.
RICHARDS: I think I come to this at a point in time in my life, and with my experience, that I'm best-suited to deal with the problems that face the city. And I believe, if you look at the broad base of support that's endorsed me, I have been able to work with people all across the board.
I don't think it's fair to say that the city has ignored the neighborhoods or ignored our other things. Most of our time, money and effort go there. You get the publicity downtown, but the work is done in the other places. That is an issue that we need to deal with here, and I believe I am in a position to do that and I believe I've demonstrated that I can do it, which is why that broad base of support that has endorsed me is there. That's what we need today in this city, and that is what I think I bring to it and what I intend to bring to it.
RBJ: If you don't win the primary, will you endorse the other?
WARREN: I'm a Democrat, so of course I will.
RICHARDS: This is the race that counts. I think we both agree on that. I'm the endorsed Democratic candidate, and I need to respect that, and I will. I'm on two other lines. I'll make that decision at the end of the primary, but I know what I need to do and who to support. What I will do is support the city. You can count on that. I've been here all my life, and I'm not going anywhere.
WARREN: We're both Democrats. At this point in time in our city, I think I have a different view as to what the needs are and who's the best fit to lead us into the future. I would hope that we would be able to come together as a party and work together after the primary to make sure a Democrat is the person that leads the city.
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