Illuzzi letter

In a May 30th front page article in the Buffalo News on Council President James Pitts, the question was raised within itscolumn inches about whether or not Pitts, as he claimed, really raised the red flags on the possibility of future Adelphia financial problems. Was he really a prophet of doom, the article essentially asked, or rather merely taking credit for something he had no foreknowledge of?

Some said that Pitts spoke only of minority hiring.

While I do not pretrend to be an expert on the Adelphia deal-gone-sour, I did publish, with the Iluzzi letter, the Buffalo Criterion, the Tonawanda News, and Buffalo Beat interviews with Pitts on the topic.

In each interview with me, he clearly stated that Adelphia's heavy debt load might lead them to future troubles. He characterized the Adelphia deal with NY as a chimera.

While every one else was skiddish about even questioning the wisdom the deal- he told me-- for fear of scaring Adelphia away - he was on the record saying that the deal was a hand-out for a seriously over- extended company and that Adelphia wouldn't perform anywhere near as well as what they had promised...

I quote from my Tonawanda News article of March 17, 2001

"Of course, not entirely unlike the Adelphia deal, nothing is guaranteed. According to Buffalo Council President James Pitts, a little known provision in the Adelphia deal - which claims to promise 1500 jobs - the deal allows for an escape clause for Adelphia, in the event of a "downturn in their industry." In short, if business is bad for Adelphia, it can, in effect, pay back a fraction of the $133 million in incentives and grants and pocket much of the rest.

Again in Buffalo Beat Feb 8-2001 in an article entitled "100 million and a dream"

"As most readers know, Adelphia is bargaining with New York state for more than 100 million in (mostly New York state) taxpayer's money in return for their promise to "attempt" to create 1500 new jobs. The deal appeared to be plowing right along, until the sickle hit a stone: Common Council President James Pitts.

"Pitts balked when he learned that Buffalo might have to raise taxes to pay for what New York State negotiated on its behalf. (Estimates vary from a $12 to $20 million contribution from the city). Buffalo taxpayers were asked to cancel rent on the HSBC arena ($500,000 per year), and give Adelphia irreplaceable waterfront - downtown property. In fact, taxpayers are being asked to not only give it away, but render it with building permits, and in "clean environmental condition," which may end up being expensive, since hazards are likely. Furthermore, re-mediation is borne by the city alone, but performed to Adelphia's sole satisfaction. The city must also provide Adelphia with insurance, utility hook ups, and the cost of Adelphia's attorneys for obtaining zoning variances.

"Pitts, of course, was not questioning the wondrous value of creating 1500 local high-tech jobs in the 45k range. He was, in return for the city's investment, asking about guarantees. According to Pitts, the deal New York State brokered stated that if Adelphia failed to create the "promised" jobs, they would only return about 10 percent of the taxpayer's millions, and keep the rest. And a new job was being defined as a mere four weeks of consecutive employment.

"Ironically, the city approved a $21.3 million plan to expand two city-owned parking ramps, projects that will add about 1,500 parking spaces in the downtown area. Whether it's 1500 spaces or 1500 jobs, the public investment is real. One suspects that if the city can afford to invest $20 million to create 1500 parking spaces, it can invest perhaps $20 million for 1500 new jobs.

"But, thanks to Pitts, we know that, unlike the 1500 parking spaces - which are assured - it remains unclear how set in stone the 1500 Adelphia jobs are. All we have heard, thus far, is a solid $100 million plus... and a lot of wishful thinking."

For my article for the Illuzzi Letter which seems to me the publication that is always willing to tackle the most controversial issues, Pitts was more than direct on the doubling of billions of debt that Adelphia had and questioned whether heavy debt might load not cause them severe financial problems later.

But is this proof that Pitts was the voice in the wilderness asking a gullible public to not follow Adelphia blindly? Perhaps not at all. But then consider this:

Researching at City Hall, one finds a resolution that Pitts sponsored No 169, dated April 20th, 1999 where he wrote" Moody’s placed Adelphia’s bond ratings under review for possible downgrade because of concerns about the company’s ability to integrate new systems that have ‘very distinct operating characteristics'... Moody’s also expressed concerns about the high acquisition costs and ... Standard and Poor’s also placed Adelphia’s ratings on CreditWatch... "these developments have created much speculation about Adelphia’s future..."

Pitts asked the City Comptroller, Moody’s Investor Service and Standard and Poor to "provide reports."

Thereafter he was an outsp[oken critic of the deal, and for a multitude of reasons.

Is it true that Pitts was the one man to speak even one word against the Adelphia deal back then?

It seems to me he was....