Tag Archives: harrisburg

Up to Us: It’s time to begin thinking about our city, post-receiver.

July 31, 2013 | by Tara Leo Auchey

The debt solution is imminent.

That’s what we in and out of the city of Harrisburg have been hearing for the past three months. While another month has come and gone with no official pronouncement, punctuated by grinning politicians posing in photo ops, there are declarations made here and there.

One was made on July 11 at the Harrisburg Regional Chamber of Commerce and CREDC Community Forum on Economic Development by outgoing Mayor Linda Thompson. She said, “In the next several months, there will be a solution that will not only take care of the incinerator debt, but will also leave no stranded debt on the backs of the taxpayers of this city.”

Thompson also declared that the solution will include a plan to balance the city’s budget and assure it stays that way over the next five years. Giving credit to her own administration, she said that whoever is next mayor “will find things in much better order than what I did when I took office.”

We’re not exactly sure if this is true because, for the most part, the public has been kept out of the loop. Key phrases like “agreement in principle” and other scuttlebutt trickle down to the street, but, overall, we don’t know what’s going on, when it will happen or what the terms of the solution will be.

That’s the design of receivership, though. State takeover of the city’s situation dictates there is really no room for public input. Our elected leaders, we are told, have failed us. Thus, the structure of authority has spoken and is setting up to fix the problems. The state law was written and swiftly implemented to account for the crisis. All the while, the people of the city are stuck in the middle like children in a divorce, pawns in some conceptual game of power.

As a result of this alienation, there is a prominent attitude that the state, in its infinite wisdom, is failing the people of Harrisburg because it is neglecting to be sensitive to the citizens’ sense of democracy and freedom. We the people of Harrisburg are being done to. This is happening to us under the guise of for us. The message implied is that this is unavoidable, that this is what must be done. Officials have flunked, so a receiver needed to be put in their stead to fix the situation.

Indeed, there are some absolute challenges on the table that have nothing to do with the public and can’t be solved by the public because the public was never consulted in the first place. “The public” was used as collateral. “The public” was placated and made apathetic. “The public” didn’t give enough input when it perhaps could have made a difference.

Thus, it’s easier for many people to withdraw, shrug shoulders and say “c’est la vie.”

Unfortunately, for Harrisburg residents, that seems a viable survival mechanism as so many feel they are being dragged along this ride of bureaucracy and politics. It’s a challenge to understand what happened, what could happen or what didn’t happen. Even more onerous is attempting to process it and develop a stance on it.

These macro issues may be the headlines and proclamations that grasp the most attention, but, if the city is to have true recovery, it will need the public to be aware, engaged and optimistic about the city’s future. When it comes down to it, what’s broken will not get fixed by the receiver, but by the people, not only those who live within the city’s limits, though. The people of the region will have to play a part in it, too.

We must keep in mind that the receiver is here for one thing and one thing only: to solve the city’s debt problem. The other problems of the city—the deficient governance, the messy infrastructure, the lack of a community-based comprehensive plan, the social tensions, the distrust and the lack of collaboration to address all of it—that’s on us.

The receiver will leave, and, hopefully, the story of the debt with him. Then the slate is left for us to do what we will with it.

If the Thompson administration foresees its own legacy, there’s a better way to set it up than to give itself accolades for the upcoming debt solution that a state team will ultimately make happen.

Rather, in her final months in office, the mayor would do well to concentrate on the basic needs of Harrisburg. She is in a position to use her bully pulpit to educate residents and visitors alike on taking care of this urban core. Discuss ordinances about trash receptacles, vermin prevention, noise considerations and blight. Move beyond the podium at the press conference and travel around the city to talk about what’s already on the books and what already exists as codified ordinances of Harrisburg. Educate the public on community responsibility, on residential duties whether a homeowner or a renter, a landlord or a business. Generate leadership, goodwill, action, attraction and hope.

Undoubtedly, the debt solution will be put before us soon. It will be a done deal given to us in its whole form no matter what we have to say about it. That doesn’t mean there’s nothing left for us to do. Once the solution is complete, it will be the people’s turn to take over and fix this city.

Tara Leo Auchey is is creator and editor of todays the day Harrisburg.

News Digest: July News in Review

July 30, 2013 | by Lawrance Binda

Financial Agreement Near

The major parts of a deal to resolve Harrisburg’s financial crisis are nearly in place, receiver William Lynch announced last month.

These include sale of the city’s incinerator, lease of the parking assets, negotiations with creditors and final agreements with the city’s trade unions.

Lynch expects most of the remaining issues to be resolved this month, including the sale of the debt-laden incinerator to the Lancaster County Solid Waste Management Authority.

“All the stakeholders involved in the sale of the incinerator are in agreement,” said Lynch, who added that the city’s creditors also finally understand that they must negotiate in earnest and might have to accept less than they’re owed.

In addition, the city must finalize an agreement with the firefighter’s union. The city’s police union finalized a new contract in June.

The goal, Lynch said, was to pay off about $600 million in debt, including $350 million related to the incinerator, while allowing the city to regain fiscal solvency over the long-term.

“This plan will create important new revenue streams to help the city reduce its structural deficit and spur economic growth,” said Lynch. “The parking agreement may very well become a national model.”

Many aspects of a final plan must be OK’d by City Council and then approved by the Commonwealth Court, actions that should begin to take place this month.

HUD Funds Distributed

The Harrisburg City Council last month dispersed nearly $1.8 million in federal funds designed to assist housing and community development.

In the annual distribution of Community Development Block Grant (CDBG) funds, 13 social service organizations received a total of nearly $500,000. Another $550,000 went to various city housing programs.

Community-based organizations that received funds were:

The Fair Housing Council of the Capital Region: $45,000
Community Action Commission: $25,000
Harrisburg Police Athletic League: $25,000
Latino Hispanic American Community Center: $25,000
Christian Recovery Aftercare Ministries: $20,000
Christian Love Ministries: $10,000
Camp Curtin YMCA: $100,000
YWCA of Greater Harrisburg: $25,000
Broad Street Market Corp.: $47,739
Rebuilding Together of Greater Harrisburg: $25,000
Habitat for Humanity of Greater Harrisburg: $75,000
African-American Chamber of Commerce: $10,000
Harrisburg Housing Authority: $65,000

City programs that received funding were:

Homeownership Opportunities Program: $100,000
Home Emergency and Lead Repair Program: $100,000
Home Improvement Program: $200,000
Emergency Demolition: $150,000

Lastly, a large part of the funds were used for administrative/debt obligations. Debt service ate up $367,567 of the CDBG grant, while $353,826 was allotted for administration and “indirect” costs.

Auction Proceeds Tallied

Harrisburg recouped about half of what was spent on museum artifacts following a weeklong auction last month on City Island.

Auction sales totaled about $3.1 million for the 8,000 or so items, according to New York-based auctioneer Guernsey’s. Minus the auction fee, the city kept about $2.57 million, money that will pay off a loan taken out in 2006 that used the artifacts as collateral.

Harrisburg had received $1.6 million during two previous sales of another 2,000 items, bringing the proceeds from museum artifacts to $4.17 million. A follow-on auction of historic documents in September should increase that total some more.

Former Mayor Stephen Reed spent at least $8.3 million in public funds on these artifacts in his dream to turn Harrisburg into a museum mecca. Most of the artifacts auctioned were for an “Old West” museum he wanted to build, while some were for a proposed African American history museum.

Zoning Board Rejects 3 Projects

The Harrisburg Zoning Hearing Board last month turned down several proposals, all of which had generated neighborhood opposition.

Bethel AME Church had wanted to re-establish a surface parking lot at its site at the corner of N. 6^th and Herr streets.

The historic church, located on the 1700-block of N. 5^th St., long occupied the 6^th Street site, but its building burned down in 1995. It then ran a commercial parking operation there until 2010, when its special exception, under challenge by the community, was not renewed.

The church’s new pastor, the Rev. Micah Sims, pleaded with the board to allow it to resume renting out parking until it could execute a redevelopment plan. The board, however, sided with members of Fox Ridge Neighbors who argued in opposition, stating the church would have no incentive to sell or develop the property.

In other action, the zoning board:

Rejected a variance/special exception request by developer Gary Wilson, who wanted to construct two two-family houses on vacant land at 1308 Green St. Neighbors testified in opposition, saying that four rental units were not in the best interest of the community.
Rejected a variance request from developer Paul Peffley to locate a convenience store/deli on the ground floor of an historic building he’s redeveloping at the corner of N. 3^rd and Hamilton streets. That application met with opposition from residents of Engleton, who feared a negative impact on their neighborhood.
Approved a variance to turn the ground floor of the former Barto Building, at N. 3^rd and State streets, into restaurant and retail space. Brickbox Enterprises would like a restaurant to locate in the former Barto Building, which the company is transforming into the LUX condominium building
Approved a variance to allow a church, Iglesia Pentecostal Jesucristo La Roca, to locate at 913 N. 2^nd St., which once housed La Kasbah restaurant.

Mayor, Treasurer Clash over Fund Transfers

Harrisburg Mayor Linda Thompson last month asked for a significant increase in the amount of money her administration can reallocate without approval by City Council, a request that drew strong opposition from city Treasurer John Campbell.

Thompson asked for permission to transfer as much as $50,000 within the approved budget without the consent of council, up from the current level of $20,000.

The request prompted Campbell to write a strongly worded memo, urging council to deny the request.

“While this legislation may seem like an opportunity to allow for great flexibility in spending by the administration, it is my opinion that this legislation will only reduce the proper controls that are presently in place and exercised by City Council,” Campbell wrote. “If this legislation were to be approved, budget transfers would begin to become more frequent and thus negate the importance of passing a proper and reasonable budget annually.”

Every year, the council approves numerous reallocations, as some departments spend more or less than budgeted during the year. Campbell fears that increasing the reallocation threshold to $50,000 would give the administration too much leeway to transfer large sums of money outside of the regular budget process and without proper oversight.

The administration’s proposed ordinance was sent to the council’s Budget and Finance Committee for further review and possible action.

$5 Million for Fire Protection, $0 for Revitalization

Harrisburg received a split decision from the state last month, as the legislature approved a record $5 million in fire protection funds, but excluded the city from a new revitalization program.

City officials were pleasantly surprised—even shocked—by the $5 million allocation in the 2013-14 budget, meant to offset the city’s costs of protecting the Capitol complex from fire. That figure is double the amount allotted last year and far more than the $496,000 that House Republicans had approved in their budget plan.

Harrisburg’s state legislators were pushing for $4 million, but late lobbying by receiver William Lynch upped that amount by another $1 million, said state Sen. Rob Teplitz.

The money technically goes to secure the state’s 40 buildings from fire, accounting for the bulk of the Harrisburg Fire Bureau’s $8.4 million budget. However, it actually flows to the city’s general fund, which frees up money for other uses by the highly indebted, insolvent city.

As the state was giving, it also was taking away, as it purposely excluded Harrisburg from participating in a just-launched revitalization program.

The new state budget funded a City Revitalization and Improvement Zone program, which will funnel money to small cities each year to assist in the redevelopment of distressed areas. However, language in the law prohibits any city under state receivership from participating, a designation that applies only to Harrisburg.

Kiosks, Online Payments Come to Harrisburg

Harrisburg bill-payers have several new options available to them, as two computerized payment kiosks, as well as an online payment system, came on line last month.

The two kiosks are located in City Hall outside the city treasurer’s office and at the Giant Food Store in Kline Village, said Treasurer John Campbell, who added that a third kiosk would be located in a yet-to-be-determined location Uptown.

Denver-based EZ Pay Corp. is providing the kiosks at no cost to the city, said Campbell.

In addition, bill-payers now can pay online at www.harrisburgpayments.com or by calling 888-243-3456. Campbell said he expected the online bill-paying portal to be integrated with the city’s website soon.

Through these mechanisms, residents can pay most common bills, including for utilities, property taxes and traffic fines. A convenience fee will be added to each payment based upon the amount of the transaction, averaging $3 for most utility bills and $1 for most parking tickets, said Campbell.

Campbell expects the city, the Harrisburg Authority and the school district to save “at least” $80,000 a year by not having to pay the credit card transaction fee.

City to Receive State Loans

Harrisburg last month was awarded state funding for two major infrastructure projects, including for utility repair at the Uptown sinkhole site.

Harrisburg received a $900,000 low-interest loan through PENNVEST for repairing water and sewer infrastructure damaged by the sinkhole on the 2100-block of N. 4^th Street, said state Sen. Rob Teplitz.

In addition, the Harrisburg Authority received a $26 million low-interest loan, administered by PENNVEST, for upgrading the city’s wastewater treatment facility, said Teplitz.

The improvements will bring the plant’s ammonia and nutrient reduction requirements into compliance with U.S. Department of Environmental Protection regulations. This $53 million project also will receive $26.7 million in outside financing and a $973,000 H20 PA grant, Teplitz said.

MLK Street Renaming on Hold

Harrisburg’s financial crisis seems to have doomed another proposal: the effort to supplement the name of N. 2^nd St. downtown by adding “Rev. Dr. Martin Luther King Jr. Boulevard.”

Last March, the administration made the proposal, which the City Council then sent on to the council’s Public Works Committee.

Committee Chairwoman Sandra Reid said she was in favor of the change, which would give the historic street both names from Chestnut to Forster streets. However, the $6,000 to $8,000 cost of replacing 63 street signs could not be justified, she said.

“We have an ongoing concern that our parks and waterways are not being maintained,” she said.

Last year, park maintenance was transferred from the city’s Parks and Recreation Department to the Public Works Department, which since has been criticized for lax maintenance, particularly in Riverfront Park.

Miller: Still In Mayor’s Race

City Controller Dan Miller last month took a step towards running for Harrisburg mayor as a Republican, filing an affidavit affirming his eligibility for the office.

Miller lost in May in the Democratic primary to businessman Eric Papenfuse. However, he won the Republican nomination by gaining 196 write-in votes.

As of press time, Miller hadn’t yet paid the $25 filing fee, which must be received by the Dauphin County Office of Elections and Voter Registration by Aug. 12.

If he decides to run, Miller will face independent candidates Nevin Mindlin and Nate Curtis, in addition to Papenfuse. The general election is slated for Nov. 5.

Leak Won’t Close Jackson-Lick Pool

An Uptown pool will be open for the remainder of the summer after a major leak was quickly repaired.

City officials feared the Jackson-Lick pool, located at 1201 N. 6^th St., would have to close after it lost about 450,000 gallons of water in a week.

“The city considered closing the pool,” said COO Robert Philbin. “However, we were able to keep the pool open while resolving the problem. City Engineer Paul Francis was able to locate and stop the pool water leakage with the assistance of a diver from the Harrisburg River Rescue.”

The city’s other public pool at Hall Manor on Allison Hill has been shut since last year after persistent leaks led to the finding that its foundation must be rebuilt.

The city’s Engineering Bureau is preparing a maintenance and repair plan to bring both pools back to full operation next season, said Philbin.

Farmers Co-op Debuts

Harvest, a new farmers cooperative, opened last month in the brick building of the Broad Street Market, bringing fresh produce and other goods to Harrisburg from more than a dozen area farms.

The co-op is the brainchild of developer Josh Kesler and chef Matthew Hickey, who is managing the business on a day-to-day basis.

“Our commitment is to build a relationship between the farmers and local consumers, providing healthy, sustainable local food, as well as helping to revitalize the Broad Street Market, which we believe will regain its position as the breadbasket of our region,” said Kesler.

The stand itself is unique for the Market, built from reclaimed lumber from the Stokes Millworks building across the street. Kesler recently bought that building and has begun renovating it for a farm-to-plate restaurant, which should open late next year.

New School in Strawberry Square

This month, the nonprofit Aegis Education Endeavor (AEE) will open in Strawberry Square, offering a new cyber charter school that “combines art, athletics and industry.”

The 2,800-square-foot facility will take space at 306 Market St. in downtown Harrisburg. Aegis is partnering with Achievement House Cyber Charter School, a public online school chartered by the state to serve students in grades 7 to 12.

In addition to an education program, Aegis will offer activities to cyber school students and to students learning at home, public or private schools, said founder Denni Boger.

“Strawberry Square is the perfect site for AEE because it is centrally located to be available to students from surrounding school districts who may wish to use public transportation to access the facility,” said Boger.

Aegis will hold an open house and orientation at its new facility on Aug. 7, 1 to 7 p.m.

Changing Hands

Adrian St., 2256: Burner Properties LLC to B. Britton, $57,000

Bellevue Rd., 1921: A. & S. Jawhar to CNC Realty Group LLC, $63,500

Cumberland St., 114: B. Cohen to L. Larrieu, $132,000

Green St., 1925: F. Shannon to W. Gonzalez, $215,000

Mulberry St., 1158: E. Grill to S. Elazouni, $59,900

N. 3^rd St., 1702: Fannie Mae to M. Mayhew, $75,000

N. 5^th St., 1732: Freddie Mac to B. Harris, $100,000

N. 6^th St., 2559 & 2561: Deutsche Bank Trustee & Company Americas Trustee to V. Acosta, $31,500

N. 20^th St., 32: U.S. Bank Trustee & Pa. Housing Finance Agency to G. Carter & V. Diaz, $52,400

N. Front St., 1705: Rolleston Corp. to WCI Partners LP, $400,000

N. Front St., 2515: Centric Bank to 324 Mishika LLC, $175,000

Penn St., 1716: B. Andreozzi to D. Rhodes, $131,000

Reily St., 311: R. Heath to S. McLearn, $85,500

Rudy Rd., 2465: P. Lemmo to R. Harper, $75,000

Sayford St., 235: R. DeLong to JLS Rentals LLC, $35,000

Showers St., 612: D. & S. Hickethier to M. Murphy & V. Halchak, $166,000

S. Front St., 317: M. & J. Hankins to M. Homa, $115,000

Swatara St., 1321: D. & J. Boyle to J. Rodriguez & J. Vasquez, $33,900

Sycamore St., 1520: L. Miller Jr. to M. Brunner, $97,500

Wallace St., 1529 & 1531; 1513, 1515 & 1517 N. 6^th St., $144,100: Buonarroti Trust to U.S. General Services Administration, $144,100

Source: Dauphin County, for sales exceeding $30,000. Data is assumed to be accurate.

This Was the Weird Week that Was: The Premature Edition

July 26, 2013 | by Lawrance Binda

It’s said that the mid-summer heat does strange things to people.

In the usually loopy town that is Harrisburg, Pa., that’s a strong statement indeed.

The week started out with folks trying to figure out the city’s take from the seven-day Wild West artifact auction, itself one of the more surreal episodes in this city’s (or maybe any city’s) history. Wielding the advanced technology of a calculator, TheBurg’s writer, Paul Barker, seems to have finally settled the question of how much Harrisburg is owed.

The week next snaked to a reminder that, among former Mayor Steve Reed’s thousands of bizarre artifact purchases, one still lies in ruins in a city garage : a disassembled war ship from the Revolutionary War (cost: $42,500 — but, heck, who’s counting when it’s only the public’s money?).

Then, at mid-week, we were treated to a Seinfeldian media frenzy about nothing. Bleary-eyed news humans (including yours truly) were shaken awake by a promise that some major announcement would surface during the early-a.m. gathering of the financial recovery advisory committee.

The media swarm was driven into City Hall by a couple of embargoed news releases from the receiver’s and mayor’s offices. Would a comprehensive agreement be announced? Would we find out just how much the city would get for its cursed incinerator or maybe the parking garages?

No and no.

The usually tight-lipped receiver William Lynch capped off the meeting with the “news” that the city and its creditors have agreed to “stop negotiating against each other.”

That’s it?

As strange as that was, Mayor Linda Thompson, who is a member of the committee, was purposely absent so she could grab the spotlight herself at a press conference two hours later. Before a packed room of local and national media, she gave herself credit, thanked all her supporting players and basically took a victory lap.

But for what? A solution, she said, was “imminent,” but exactly what that solution would be was no clearer than before the morning’s events. In fact, her press conference added no new information from the earlier advisory committee meeting.

Having said that: there was some movement in the melodrama of the city’s financial crisis. However, it was, in news jargon, a “process story,” the incremental progress of a much larger, more complex story.

So, after two years, the city’s creditors — who were entirely complicit in getting Harrisburg into this financial wreck — are finally realizing that they should deal in good faith with the city. OK, that’s good.

We also have a timeline (late August) for when Lynch expects the sale of the incinerator and the leasing of the parking assets to be fully negotiated and up for court review. Well, everyone in the room had been expecting this announcement for months, so the statement that “something’s coming” surprised no one. In fact, the original target date for the incinerator sale was more than a year ago.

This is not to deny credit where it’s due.

Thompson may have made the right call all along in backing the Act 47 process and the receivership. The taciturn Lynch may have been the right replacement for the jumpy David Unkovic. The McKenna Long law firm (along with a few other consultants) may have been the right choice to conduct much of the ground-level, day-to-day work on a recovery solution.

And, in the end, Harrisburg may end up in much better shape and may be able to build a future on much more solid financial footing.

Personally, I think all these things are likely. But, unlike some news people, I’m not going to jump to conclusions. To borrow a cliche, the devil is in the details — and, in this tangled mess, there are an untold number of details that could yet trip up Harrisburg and its residents.

So I’m going to be patient and see what emerges over the next few months. Perhaps, in the end, Thompson will be justified in saying that the next mayor should gratefully “accept the gift we’ve given you.” But, at the moment, that bold statement seems way, way premature.

Bill of Goods: Update

July 25, 2013 | by Paul Barker

In a phone call to TheBurg this afternoon, Guernsey’s president Arlan Ettinger assured Harrisburg residents that the city would not be shortchanged in its income from last week’s auction.

Referring to the fatiguing effect of “possibly the hardest auction in history,” he explained that Tuesday’s numbers were hastily calculated, and that a complete accounting would be submitted and open to scrutiny within 30 days, as promised in the auction house’s contract with the city.

“I didn’t want to give out numbers,” Ettinger said, adding that he did so at the behest of city officials, who were eager to present a tally at Tuesday’s conference. “These numbers were generated for me by members of our team, and it could have been rushed.”

The members of Guernsey’s team, whom Ettinger declined to name, appear to have come up with the reported commission by applying a flat rate of 18 percent to the $3.14 million in total sales. If so, they neglected the clause in the city’s contract with Guernsey’s, which specifies a reduced rate of 15 percent for the second million dollars in sales and a further reduced rate of 12.5 percent for all proceeds above two million.

If his team’s calculation was incorrect, Ettinger said, all discrepancies would be rectified in the final accounting. “No one is going to be shortchanged,” he said. “We’re grateful and honored to work with Harrisburg. We’re doing it the right way.”

Guernsey’s is also slated to manage the auction of numerous leftover items, largely historical documents, in New York in mid-September.

Bill of Goods

July 24, 2013 | by Paul Barker

Did Harrisburg get hornswoggled?

I know what you’re thinking. Not another auction story. But before you pass by: it turns out the supposedly final figures reported yesterday may not be so final after all. There’s a hole in the story, and it may mean Harrisburg is being shortchanged by nearly $100,000.

Observers of the auction may have noticed something peculiar about the reporting of numbers since Sunday afternoon, when the auction closed. They kept on changing. Specifically, the amount that Guernsey’s made on commission, taken as a percentage of sales, seemed to fluctuate.

On a Tuesday morning appearance on WITF’s Radio Smart Talk, Guernsey’s president Arlan Ettinger, when asked about the auction house’s commission, waffled. He estimated it would be “about 16 percent,” and promised firm figures at a press conference later that afternoon.

At the press conference, the mayor gave the final figures: total sales of $3,143,795, with a net for Harrisburg of $2,577,911.

The difference—Guernsey’s commission—was $565,884, or 18 percent.

I was at that press conference, and I asked Ettinger whether a fixed rate of commission had been agreed to in the contract with the city. He looked at me like I’d asked whether auctions still involved bidding. “Of course,” he said.

The contract between Guernsey’s and the city of Harrisburg, signed on Feb. 16, 2012, and obtained by TheBurg this afternoon, does indeed have a pre-agreed rate of commission. According to the contract, Guernsey’s is to receive 18 percent—of the first $1,000,000 in sales. For the second million, the rate shrinks to 15 percent, and for any amount above $2,000,000, the rate is 12.5 percent.

Applying these numbers to the total sales, the commission should break down as follows:

$1,000,000 at 18 percent = $180,000

$1,000,000 at 15 percent = $150,000

$1,143,795 at 12.5 percent = $142,974

Added together, Guernsey’s total commission should have been $472,974—or $92,910 less than what Guernsey’s reportedly made.

The only place this difference could be made up, according to the contract, is in the commission assessed on items sold exclusively online, at a rate of 19 percent.

The only problem? None of the items in this auction were sold exclusively online.

Guernsey’s did not return calls by the end of the day Wednesday. But this afternoon, presented with the discrepancy, city COO Bob Philbin explained that the figures were not, strictly speaking, final. Indeed, as the 2012 contract explains, Guernsey’s will wire Harrisburg the proceeds in 30 days, after payments are collected from bidders and rescinded sales are reconciled. That means the “final” numbers presented yesterday will likely face more refining.

Let’s hope, then, that before the final accounting, Mayor Thompson puts up a fight for the city’s money. It’s a formidable task: the president of an auction house is apt to be a skilled haggler. But 30 days ought to be plenty of time.

In comparison with the nearly $2.6 million the city netted, $92,910 may not seem like much. But it’s an amount that could fix a couple of lights. Or fill a couple of holes.

Coming Soon: “Saving Harrisburg”

July 24, 2013 | by Lawrance Binda

Imagine, for a moment, if Kevin Costner had made an Oscar acceptance speech before an actual movie was released. Then further imagine that the movie was “Waterworld.”

That’s rather what today felt like, as Mayor Linda Thompson thanked everyone who had worked with her on the years-long production of “Saving Harrisburg.”

Thompson thanked receiver William Lynch, Gov. Tom Corbett, state lawmakers, DCED, even her old frenemies on City Council. But, mostly, she thanked herself and her own staff for resisting municipal bankruptcy and embracing both the Act 47 process and the state receivership.

“Harrisburg will be a model for the world,” she said. “This will be my legacy.”

And, in the only sideways reference to former leading man Steve Reed, she added, “I’m amazed we were able to get this done given what we inherited.”

Done?

Two hours earlier, receiver William Lynch had told a disappointed crowd at the bi-monthly meeting of the recovery advisory board that nothing was actually done. Negotiations were continuing to sell the incinerator, lease the parking garages, cram down the debt and conclude labor negotiations. In other words, the cameras were still rolling, with nothing yet ready for public viewing.

The audience in the room clearly was let down. Council chambers were packed, as word had leaked that something big was up. Several TV news people tweeted that receiver Lynch was going to announce a sale of the incinerator — and perhaps even a comprehensive agreement to free Harrisburg from more than half-a-billion bucks in debt.

But it ended up like a hyped summer blockbuster that goes nowhere.

Or almost nowhere.

Lynch — and then Thompson at her follow-up press conference — said that deals were near completion, so we should expect a solution to emerge within the next month or so, information that most people in the room already knew. City Council would begin to tackle enabling legislation in August, followed by consideration by the Commonwealth Court.

“We believe a deal is imminent,” said Lynch.

“We are here to announce the turning point. The deal is effectively imminent,” Thompson later said.

So, in this way, it was more like a preview. We got a taste of a not-yet-quite-done, can’t-yet-reveal, still-in-post-production project that would raise enough money to pay off creditors and leave Harrisburg on solid financial footing. It was just enough to leave us wanting more.

And would there be a sequel?

Thompson said that the solution would provide for a balanced budget through 2016. After that, it was up to her successor. Asked what the next mayor should do, she responded:

“Accept the gift we’ve given you.”

-Fin-

Mayors, Guns & Money

July 23, 2013 | by Paul Barker

Arlan Ettinger, president of Guernsey’s, announcing the final auction figures on Tuesday afternoon at City Hall.

In an old farmhouse outside Elkhorn, Wisconsin, on the other side of a wooden gate framed by teepees and covered wagons, is a dinner theater and museum known as Watson’s Wild West.

“We’re supposedly one of a kind,” said Doug Watson, who founded the museum with his wife in 1989, after taking a college business course. “There’s general stores, and there’s Wild West museums, but we’re the only one that’s both.”

Watson furnished the museum with his personal collection, a hoard of saddles, tin cans, wheels, print advertisements and other artifacts that he amassed over a period of 34 years. “You see, when I started collecting, I collected the real stuff,” he said. “It was kind of readily available back then, but it’s harder to find now. You gotta work at it.”

The website for Watson’s Wild West, with two high-resolution panoramic shots and a YouTube video montage, displays something like what former Harrisburg Mayor Stephen Reed must have been picturing when—largely in secret, and with public money—he steadily stockpiled Western artifacts in the hopes of opening a museum here.

There are elk heads and bison heads, pistols and rifles, copper pots and tea kettles, spoked wooden wheels. General admission is five dollars for adults and three dollars for children. Dinner packages, with actors portraying characters like Annie Oakley and Mark Twain, help Watson make good on one of his museum’s mottoes: “You don’t have to go to South Dakota to enjoy the Old West.”

For the foreseeable future, however, you will still have to go at least as far as Wisconsin. This afternoon in City Hall, Mayor Linda Thompson, along with Arlan Ettinger, president of Guernsey’s, the auction house that managed the seven-day sale on City Island, closed the grim chapter in Harrisburg history that was Reed’s Wild West fantasy.

In an auction that Ettinger described as “one of the largest auctions of anything ever,” with nearly 3,700 lots and over 10,000 registered bidders, the city netted $2,577,911, out of a total sale of $3,143,795. (The difference, $565,884, or 18%, is what Guernsey will make on commission.)

Thompson announced that Harrisburg’s take would allow the city to complete payments on an outstanding loan from 2007, which Reed had taken to help cover a $14 million budget deficit, using the artifacts as collateral.

“The city of Harrisburg does pay its debts,” Thompson said. She urged residents to think of the auction as marking a transition into a period of “post-recovery.”

“Symbolically, this auction clears the air of a lot of old history,” she added.

In addition to “two or three” lots that went unsold, Ettinger said, there remain hundreds of items, mostly paper ephemera, that the city intends to auction in New York in September. Excluding the expected income from their sale, the city’s gains from last week’s auction, when combined with two earlier sales of objects from the collection, is just over $4.1 million—about half of the $8.3 million Reed is estimated to have spent on the objects in the first place.

Describing a scene of “massive enthusiasm,” however, with bidders from every state and over 40 countries, Ettinger suggested the auction could only be viewed in a positive light. “There’s nothing to be unhappy about, nothing to be embarrassed about, only something to be proud of,” he said.

When asked to assess the overall quality of the collection, Ettinger chose his words carefully. “There was treasure, and I won’t say ‘trash’—I’ll say ‘decorative objects.’” He described Reed’s collecting style as “machine-gun acquisition.”

“If you shoot enough bullets, you’re gonna hit some targets and miss others,” he said.

Perhaps, as with many outcomes in the Old West, the fate of Reed’s collection really does come down to shooting styles.

“The thing is not to buy just anything, but things that fit your theme,” Doug Watson said. But despite his history of avid collecting, when it came to the Reed collection, Watson passed. On Monday night, he attended a party where “everyone was talking about” Harrisburg’s auction. “They said to me, ‘We’re wondering why you didn’t go!’ But I already have pretty much everything I need.”

Auction Analyst 2: The Final Tally

July 23, 2013 | by Lawrance Binda

Fifty cents on the dollar.

That was Harrisburg’s return on investment after the weeklong Wild West auction on City Island, according to Guernsey’s auction house.

Estimated spend by former Mayor Steve Reed: $8.3 million. Total return to Harrisburg: $4.17 million (including two previous auction rounds).

Sigh.

And even that money isn’t going to fix our broken city or get a few more cops on the streets. No, it’s going to pay off a loan that Reed took out to fill a hole in the city’s budget back in 2006.

But that’s the way Reed operated — borrow today with no mind for tomorrow. And, when tomorrow comes, borrow more.

In part, that’s why I have such a problem understanding those who still defend Reed’s mayoralty. Yes, I understand that, today, Harrisburg seems better off than 30 years ago, when he first became mayor. However, the ends don’t justify the means — and the means were not just ugly, but, in many ways, arrogantly self-destructive.

The failures of Steve Reed are long and deep. Having come up with some idea, he seemed unable to let it go, even after it was questioned by the public, rejected by City Council or began turning sour. He was chastened many times, even by the court, for ignoring legislative and legal processes, but simply went right back to it, embracing dubious and self-serving interpretations of the law and funneling money through his favorite sandbox, the Harrisburg Authority.

This isn’t effective government. This is government run amok.

There are reasons there are checks and balances and restraints on power in this country. It’s so that one man cannot unilaterally impose his will. That’s called arbitrary power, and that’s what Steve Reed practiced.

You want to know how millions were squandered in an effort to build a hydroelectric dam on the Susquehanna? How millions more were lost in loans to unproven and unworthy businesses? How an untested, ultimately failed, technology was chosen to retrofit the incinerator? How 10,000 Wild West artifacts ended up in a warehouse? How Harrisburg got into the investment banking business?

These ideas all sprung from the mind of Stephen Reed.

Reed also was the master of not facing up to realities. According to former receiver David Unkovic, Reed overspent for two decades, hiding the growing deficits through gimmicks and trickery. So, he overcharged suburban utility customers for water and sewer service, bled the Harrisburg Authority dry, borrowed money in excess of what was needed for a project, originated bond deals so he could sweep up the guarantee fees and, when all this failed, borrowed heavily against city assets. In the end, he was borrowing money just to pay off past borrowings.

Is that a successful mayoralty? I daresay that, with access to a fraction of these funds, most of us would have made much wiser, more responsible choices than thinking what Harrisburg most needed was a Wild West museum. Seriously, would anyone other than Reed have come up with this idea?

Indeed, Reed’s defenders seem to believe that only this great man could have saved Harrisburg. They ignore the reality that, like in Harrisburg, restaurants and nightlife have blossomed in cities throughout the country over the past three decades, while porn theaters and street-level prostitution have virtually disappeared from sight.

As I’ve written before, when you serve as mayor for 28 years and leave your city effectively bankrupt, you have failed. When you squander money on stuffed bison, African masks and a failed garbage-burner, your failure is almost cartoonish, a tragic-comedy that the residents of Harrisburg live with and pay for still.

Auction Analyst: Was Reed’s Vision Crazy?

July 19, 2013 | by Lawrance Binda

Sane or insane?

Such has been the debate around Harrisburg this week during the lengthy auction of some 8,000 Wild West artifacts on City Island.

Was former Mayor Steve Reed’s decade-long shopping spree and plan to build a museum of the old West in central Pennsylvania a legitimate economic development initiative? Or was it, well, crazy?

In my mind, there’s no question at all.

Insane. Really insane.

Touring the rafter-packed D&D Warehouse during the preview, all I could think about was how much effort went into accumulating this mass of stuff. People’s workdays, travel, expenses — all done apparently on the public time and dime. Then there’s the actual cost of the items. We’re told Reed spent about $8.3 million on them, but, without a thorough audit, we’ll never know for sure. It could have been much more.

As I snooped around, the overall impression I got was Reed as a latter-day Citizen Kane, whose obsessive accumulation of objects seemed to fill some type of hole in his psyche from his childhood. Heck, there was even a child’s sled (though it didn’t say “Rosebud”). A key difference was that Kane, if nothing else, spent his own money, not public funds he funneled through a utility authority.

But, evidently, other people disagree with me.

One of those people gave me a ride back to the office during one of my trips to the auction this week. He said it was “too bad” that Reed never got his Wild West museum, that it could have been a “great attraction” for Harrisburg. I thought, “Is he kidding me?” He was not.

The battle also has been waged on Twitter and even among people receiving a paycheck from the Patriot-News (or Pennlive or PA Media Group or Advance Digital or wherever). A couple days ago, reporter Don Gilliland pulled no punches, calling Reed a “huckster” and his artifacts “worthless crap.” Today, columnist Nancy Eshelman defended Reed as a guy who helped save Harrisburg from hookers, porn theaters and hot dog-based cuisine.

In fact, after a week’s worth of “Fair warning — Sold!” the debate seems to have shifted from a discussion of a Wild West museum in Harrisburg (insane vs. not insane) to one of Reed’s mayoralty (good vs. horrible).

Let’s face it: Reed would never have served for 28 years without some accomplishments, some reason for people to repeatedly vote for him. Eshelman cites the Civil War Museum, the Fire Museum, hotels and “the glitz that is 2nd Street” among his achievements.

Well, the Fire and Civil War museums are dubious accomplishments, as both are wonderful facilities that sit largely empty all day, out of sight and unintegrated with the larger city. Most people who live in Harrisburg don’t seem to know where the Fire Museum is, and many have never visited the beautifully designed Civil War Museum at all.

As for hotels and 2nd Street — that’s a tougher call. Reed certainly played a role in the construction of the city’s two convention-grade hotels. And with them came parking garages and parking garages and parking garages, which destroyed much of the historic architectural heritage of downtown, one of the things that now attracts people into cities.

Certainly, Reed liked to take credit for “Restaurant Row” on 2nd Street, but those restaurants didn’t appear until far into his mayoralty. Personally, I give the credit to pioneering restaurateurs like Steve Weinstock and Tom Scott, who took great financial risks to open downtown, seeding the ground for others to follow. Downtown also benefitted from a national movement back to cities that began during the 1990s. Reed was first elected during the absolute low-point of the American city (early 1980s), then was able to stick around long enough to see the pendulum swing back up.

But I judge Reed’s mayoralty not so much by Eshelman’s examples, which I view as a mixed bag. I judge his mayoralty on this: Harrisburg is effectively bankrupt. Harrisburg is the only city ever to go into state receivership in Pennsylvania and, without it, already would have been one of the few American cities ever to enter municipal bankruptcy.

When you serve 28 years as mayor and, after all that time, leave behind a financial catastrophe, you have failed. When you serve 28 years as mayor, leave behind a financial catastrophe and have engaged in no end of financial chicanery, you have failed and probably should be judged by a jury of your peers.

And no museums or art centers or a decent slice of pizza can change that.

Sold! My Day at the Harrisburg Auction

July 15, 2013 | by Lawrance Binda

I had my heart set on the spittoon.

I had no practical use for it, being neither a chewer nor a spitter. But it was the one item at the artifact auction that actually pertained to Harrisburg, manufactured by the city’s own F.H. Cowden Co. sometime in the late 19^th century. That was why I wanted it.

Estimated sales price: $40 to $50.

I hoped the small, stoneware vessel would get lost amongst the 5,500 or so other lots up for grabs at the (mostly) Wild West auction held today on City Island. Apothecary bottles, Indian-style rugs, butter churns, sheriff’s medals of dubious provenance.

A spittoon manufactured in Harrisburg, Pa.? Who’d want that?

I arrived just as a guy with Guernsey’s auction house was laying down the ground rules for in-person bidding. Speaking above the roar of several industrial-strength fans, he explained that there were no reserve prices, so the highest bid would win the item, regardless of its perceived value.

I was in.

I took some pictures, claimed bidder ticket #112 and had a seat.

The crowd was sparse, maybe 50 or 60, but I wasn’t certain what to make of that. Guernsey’s said that more than 7,000 people had registered for the auction, so most of the action was going to come from Internet bidders. And, in fact, a long table occupied the entire right side of the pavilion, where Guernsey’s staff hovered over a line of computers to track and call out Internet bids.

A bit after 10 o’clock, the auctioneer took her position behind the microphone and announced the first item: an antique wooden yarn winder. Estimated pre-auction value: $60 to $100.

A picture of the item flashed on a screen beside her, at the front of the auction area. It looked like a long wooden stick with handles on either end, but the projected image was vague in the daylight and difficult to see clearly.

“$100,” the hopeful auctioneer called out.

Nothing.

“$75. $50,” she said.

Still nothing. She paused. The bidding was going the wrong way.

Then some hope. A staff member manning one of the laptop computers had an interested bidder.

“$25!” he yelled out.

“$25,” repeated the auctioneer.

“Thirty, thirty,” she said, trying to juice the crowd into bidding more. “Thirty, anywhere?”

Faces looked up blankly, and no bidding numbers were raised.

“I have $25,” she said, drawing out the number. “Fair warning . . . “

“Sold! To the Internet bidder! $25!”

And so started the long-awaited Harrisburg artifact auction, with a sale of an item at less than half the estimated sales price.

Much of the rest of the morning would proceed in a similar way. There were a few bright spots, such as the beautiful National brass cash register, which an Internet bidder paid $600 for (estimate: $300 to $500).

But most of the items ended up more like the $30 paid for “primitive farm implements” (estimate: $40 to $50); the $80 paid for the “large wooden ox yoke” (estimate: $100 to $200); and the $60 paid for the “Oliver Standard Visible (Type) Writer No. 9” (estimate: $300 to $400).

Other items fetched more or less their pre-auction estimates, while a bunch received no bids at all and were passed over.

I cooled my heels, waiting for my spittoon to come up. As it neared, I grabbed the cardboard number from my bag and nervously got ready to shout out a bid.

“Number 1086: F.H. Cowden Harrisburg Spittoon,” said the auctioneer, and the vague image of the stoneware vessel appeared on the screen. I leaned forward to try to see it more clearly.

“$50,” called out one of the guys following the Internet bidding, before I could say a word.

$50? The spittoon already was selling for the top of the estimated range. Oh no.

“$75. $100. $125,” cried the auctioneer, happy she finally had an item selling over predicted value.

Clearly, a few other locals were jumping on the only Harrisburg-related item in the auction, and I was being outbid.

“$150? Do I hear $150?” said the suddenly hopeful auctioneer.

“I have $125,” she said. “Fair warning . . .”

“And sold! To the Internet bidder! $125.”

Rats!

Sure, I had lost out, but at least hadn’t gotten suckered into paying too much for it. Researching Cowden pottery before the auction, I learned there’s a ton for sale on eBay for less than $100, which was my upper limit for the piece.

I stuck around long enough to bid on another lot I had spied at the auction preview the day before in a warehouse at the incinerator complex. My girlfriend liked a set of 10 old-timey glass lamp shades, said they’d look nice in a house we’re having renovated in Olde Uptown.

Estimated value: $100 to $150. I paid $40.

As I made my way back across the Walnut Street Bridge (lights out again) and over to the adjoining plaza (badly damaged planter) and back to the office through the streets of Harrisburg (potholes, no striping), I hoped that my money would be spent well. Money that, years ago, should have gone to fixing Harrisburg.

Note: A longer version of this story will appear in our August issue.

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