Buffalo, NY (WBEN) A Rochester based company is part of a joint venture seeking a $260 million grant from Albany to finish work on reconstructing rest stops on the New York State Thruway. State lawmakers say the company needs to stick to its promise to not put cost overruns on the backs of taxpayers.
The contract for the rest stops gave LeChase a 33 year exclusive lease plus a cut on sales of goods at those stops in exchange for not asking taxpayers to chip in.
Assemblyman Bill Conrad tells WBEN the chairman of the assembly's transportation committee, Bill Magnarelli, has been approached on the issue. "I have to agree with him [that] this could create a real slippery slope, if any contractor facing financial issues can be bailed out by state government," says Conrad. He says that was discussed similarly with the Bills stadium project.
Conrad says all he's aware of is what has been reported and that they apparently are having financial issues. The issue was first reported by The Buffalo News. "Why else do we do these deals than to to make sure that we get the most bang for our buck for our taxpayers and, of course, get new amenities on the Thruway," says Conrad, who notes customers are not impressed with the new rest stops.
State Senator George Borrello tells us he smells a coverup. "As far as I'm concerned, this was leaked information. There's been no confirmation from the governor's office and, in fact, this whole project seems to be, I think, mired in controversy. They just recently told their bondholders that everything's fine," states Borrello. He wants an admission that there's a problem by the governor, by the Thruway Authority, and by the other parties involved before any funding is considered. "When you start talking about, investors, bondholders, being told that everything is fine, and they're on budget, but then somehow there's been leaked information that there's a $260 million shortfall that the construction company says will essentially put them out of business tells me that somebody's not telling the truth," says Borrello.
Borrello thinks the people of New York State really need to start asking serious questions about the leadership. "We just need to ask serious questions about things like the Thruway and other authorities that essentially operate under the cover of darkness. And the fact that we have to rely on leaked information from insider confidential sources tells you that there's something really wrong in the way New York is governed," believes Borrello.
State Senator Sean Ryan says he stands with Governor Hochul when it comes to holding LeChase to its end of the bargain. "We should also acknowledge that the reports that they're really relying on, it's not even clear that they're over budget right now. But a lot of companies had costs rise because of supply chain issues over the last few years. And, you know, can you imagine if all those companies came running to the state for a handout, expecting taxpayers to socialize their losses," ponders Ryan.
Ryan believes it's time to get away from the notion of sometimes throwing public money at private companies. "Taxpayers should not be in the business of subsidizing private companies. They made a deal. We're gonna hold them to it," contends Ryan.
State Senate Republican Leader Rob Ortt says he's not surprised. "Just in my time in government, how many times something like this has happened where New York taxpayers are told, you're not going to have to pay anything, we have an agreement. And yet somehow, very often, I've seen this where contractors come in and make promises to win a contract to win the award, and then tried through either change orders or something like this, to try to put taxpayers on the hook for decisions and commitments that they made," notes Ortt. He believes this is happening in the most secretive, least transparent ways.
Ortt says it sounds like somebody who has bitten off more than they could chew or ultimately agreed to a contract that they can't abide by. "I'm not an expert on supply chain, and how certain things affect different industries, and what we can expect the price of lumber to be today versus six months out. That is their responsibility. That's their job," explains Ortt.
Ortt says the facilities in question seem up to quality standards. "Not a knock against their work. The product that I've seen so far is pretty good. But that does not change sort of the the merits, or the point that New York state taxpayers were told by their elected leaders in this contract, we would not be responsible for this," explains Ortt.
LeChase issued the following statement. "Given the unprecedented global supply-chain disruption and industry-wide cost increases, ESC Partners, Applegreen/Empire State Development Partners, and the NY State Thruway Authority have had ongoing discussions on all items related to the project. All stakeholders are actively working to solve the complex challenges involved in this project for the benefit of the traveling public and remain committed to successfully completing the program."
