Has Arunas Chesonis betrayed Rochester?
It is understandable that many people in the community think so because Paetec Holding Corp. has agreed to be acquired by Arkansas-based Windstream Corp. When asked what the deal would mean for Paetec’s commitment to build its new headquarters on the Midtown Plaza site, the company’s chairman and CEO said Windstream would have to decide.
So nearly four years after then-Gov. Eliot Spitzer announced that Midtown Plaza would be razed to make way for Paetec’s headquarters and seven months after Mr. Chesonis and city officials inked a final agreement, the project seems in serious doubt.
Yet the word "betrayal" ultimately might not be well-suited to this development. For one thing, as Fibertech Networks LLC chairman and CEO John Purcell writes elsewhere on this page, assumptions about what Windstream will do regarding the headquarters project and Paetec’s local employees are mere speculation at this point. He makes the case that Windstream might not abandon the Midtown project.
But either way, the first obligation of Paetec’s board is to its shareholders. Anyone who thinks otherwise has forgotten that Paetec is publicly held-and has not been paying attention to what Mr. Chesonis has said a number of times since 2007.
This responsibility to its shareholders would continue even after the headquarters arose on the Midtown site. For Rochester there are no guarantees-and there never have been any.
At last December’s signing of the agreement between Paetec and the city, Deputy Mayor Thomas Richards acknowledged, "There is risk." Then he added, "But put it in the context of the risk of doing nothing."
As mayor now, Mr. Richards confronts a situation that in some ways has not changed: The greatest risk still is doing nothing. He well understands this, and he said he will do all he can to persuade Windstream not to abandon the Midtown project. Equally important, county officials and state and federal representatives need to make the case for keeping Paetec’s local jobs.
Without question, the sale of Paetec could end up a major setback for downtown revitalization. Which is why every effort should be made to avoid that–and at the same time to work prudently on Plan B.
8/5/11 (c) 2011 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail email@example.com.