Strawberry Alley Aftermath

STRAWBERRY ALLEY AFTERMATH
What Happened Since and Who Didn’t Remain Firm in Negotiations and Why???

By Allyson White
The Weekly Recorder
April 18, 2008

[Washington, PA] – During a recent meeting, City Councilman Matt Staniszewski quoted Shakespeare’s Hamlet when he said “Something is rotten in the state of Denmark.” According to the third edition of the New Dictionary of Cultural Literacy, the statement is “used to describe corruption or a situation in which something is wrong.” One has to ask how often it might appear to represent actual situations. This is a series of “reporter-based essays” investigating local topics for you to decide.

An attempt to sell a portion of Strawberry Alley, a city-owned asset, to W&J College was stopped in its tracks during last Thursday’s City Council meeting. Standing up and voting against the attempt were Councilmen Blackhurst, Faust and Staniszewski while Mayor Spossey and Councilwoman Ullom supported the sale. What led up to the 3 – 2 decision and what happened since?

Originally, W&J had approached City Officials about purchasing Strawberry Alley because the roadway was near the new proposed Science Center the College intends to build. Washington Officials considered the measure if W&J would accept all three conditions to the sale which included $102,500 for the alley and fees, bill each student a $50 municipal services fee per semester which would then be paid to the City, and the College agreed to form a group of non-profits for capital campaigns and to raise funds for City projects. Later, the College refused to accept the municipal services fee; however, did agree to the $102,500 and “provide leadership for a consortium of non-profits to investigate ways to assist municipal government.”

About 35% of properties within the City are tax-exempt and W&J owns an astounding nearly one-forth of them. Tuition at W&J College is $37,000 per year and current enrollment is nearly 1,500 students.
Staniszewski questioned how much $37,100 per year versus $37,000 would affect enrollment at the College. “The taxpayers flip the bill for municipal services to the College year after year and it’s time to stand up to the College. All we’re asking for is $100 per student each year which will generate approximately $150,000 to offset some service expenses and ease the burden the taxpayers face today and for years to come. We need to remain firm in our negotiations,” Staniszewski stated.

Tom Blackhurst, whose leadership has been successful in providing a clear vision for the future of the fire department, agreed that the yearly continual and guaranteed funding would provide some budgetary relief for many departments in the City including the Fire Department. Terry Faust concurred after a long and careful evaluation of the business decision at hand. According to insiders, the municipal services fee was also the deal breaker for Faust citing that he wanted to ensure a long-term return on the investment from the transaction.

Some have also expressed concern about W&J’s wording for item #3 to help with City projects citing the “investigate ways to assist municipal government” language. Some felt that, for decades, the College found loopholes to go back on agreed upon deals. The theme houses built by the College are a recent example.

Originally, the College had agreed in a deal to keep the houses on the tax rolls; but, later removed them anyway. However, with the administration changes at the College over the past few years, Mayor Spossey stressed that it’s time to give the College another chance and not dwell on the past. Staniszewski countered by stating “for decades, the College had administrative changes; but, what didn’t change is how the College treated the City taxpayers. I don’t feel we should live in the past; but, we should at least learn from the past.”

In 1997, the City took the College to the Supreme Court challenging their tax exempt status. Some at City Hall will contend that the College is not required to pay any form of a tax or any payment that resembles a tax. After a careful review of the proposal by this writer, it appears to not be a tax because it’s paid directly by the student, W&J acts as the flow-through for the payment and it doesn’t affect the College financially at all because it would be a separate line item on the tuition bill.

Spossey also claimed that the City-owned asset is a liability to the City due to maintenance costs such as patching potholes and plowing during winter months. We went to the source and asked the Director of the Street and Public Works Department. Staniszewki disagrees when comparing the section of Strawberry Alley to the other 52 miles of streets and major roadways that the Street Department maintains. We also learned during our conversation with the Councilman that the City receives State funding known as Liquid Fuels for that section of the street which essentially means that the alley pays for itself. By selling the alley, the City would no longer receive State funding for the section of the alley. Staniszewski also questioned how the sale would affect the many travelers who utilize the roadway as a shortcut each and every day. “Selling that particular alley would only benefit the College. We were elected to represent the taxpayers’ interests and not the College’s,” Staniszewski stated.

In a typical attack format, Ullom and Spossey then likened the deal to the City-owned East Chestnut Street Parking Garage sale which Staniszewski supported. However, for those who remember, in 2005, Ullom voted in favor of the sale; but, later, during an election year for the Mayor, fought the sale. Spossey was against the sale and noted that it generates approximately $100,000 in parking revenue per year.

Staniszewski felt it is not an accurate comparison citing that the garage needs approximately $2,000,000 worth of renovations and people are scared to park in the garage due to safety reasons. We found that more and more people are parking in the new Franklin Street garage. Also, after interviewing many in the area, we learned that Staniszewski might be right because if the parking garage sale had went through, that property would have been put back on the tax roll (paying taxes instead of nothing), been renovated and spurred economic development which could have created professional paying jobs for the residents.

With the deal falling through, Spossey claims the City will lose additional money in permits. We obviously had to investigate this claim for our readers and learned that the College is going to build this building anyway. So what does the mean for the City? Demolition permits and construction permits will still need to be issued.

From our sources, we learned that originally all of the City Officials (Mayor and City Council unanimously – yes, even Matt and Virginia) agreed to remain firm in negotiations and “walk away” from the deal if the College wouldn’t agree to the three basic terms of the agreement. Emails later surfaced that were allegedly from Ullom and Spossey confirming this and showing they did not support selling the alley unless the deal satisfied the conditions that City Officials had requested. Limited details are available as to what transpired next leading to the 3 – 2 vote. It was obvious that certain members of City Council were remaining firm on the terms of the agreement.

Unfortunately, that isn’t true for all 5 of the City Officials. We did later learn that Mayor Spossey and the College President allegedly had a private meeting before the public workshop to discuss the potential transaction. After that meeting, Spossey quickly became a public supporter of the sale for unknown reasons. Speaking on conditions of anonymity, some supporters close to the Mayor asked “What happened overnight for some to change their minds.”

Many thought this would be the end to this particular epic battle. To many it was. To some it just sparked more questions. City Council held a special meeting on Monday. Councilwoman Ullom was absent because she is vacationing overseas for almost the entire month. For many in the audience, the attempt “passed through the night” without anyone noticing. Mayor Spossey along with Councilmen Blackhurst, Faust and Staniszewski conducted a rather cordial meeting even though questions were quietly popping up regarding an agenda item. Mayor Spossey made a motion which failed to approve a $2,500 payment to York Realty for the “commission on the sale of Strawberry Avenue.” When the Mayor made the motion, it failed to pass and all three of the councilmen remained silent including the quite verbal Staniszewski during the attempt.

Through our investigation, we learned that Councilwoman Ullom had previously suggested that York Realty not only performs the appraisal of Strawberry Alley but also acts as the agent for both the buyer (W&J) and the seller (City of Washington). We later learned that Councilman Blackhurst questioned why there is no written agreement detailing the terms for this service. Other questions were spreading throughout City Hall. Why would the City pay a commission on a sale that never happened? Even if it was a typo and should have read ‘appraisal’ rather than ‘commission,’ isn’t $2,500 expensive for an appraisal of a small alley? Though it’s apparently not illegal or unethical, we also learned that York Realty appears to be an agent for some of Mayor Spossey’s personal real estate deals including his barber shop on Chestnut Street. With all of this, some at City Hall are asking what’s next.