Streams

McCall and the Harlem International Trade Center Corp.

Tuesday, October 15, 2002

State Comptroller Carl McCall frequently points to his experience in the private and public sectors to support his candidacy for Governor. But left off his official bio is a position he held for five years immediately prior to his current job - Chairman of the Harlem International Trade Center Corporation. Conceived as a sort of "miniature world trade center," the Harlem Trade Center was seeded with $50 million in Port Authority funding. But although millions of dollars were spent on consultants, designers, and travel expenses, the Harlem International Trade Center was never built. WNYC's Andrea Bernstein takes a look at why.
On the corner of 125th street and Lenox, a clean, red-brick structure is ascending. Already a Marshalls, a CVS drugstore, and an H&M clothing store are open for business on the lower floors. As office space upstairs is completed, government workers are poised to move in
All of this building is making Abe Matthews happy. He manages the Executive Fashions clothing store next door. Up to now, he says, business has been slow. But he's optimistic
Abe Matthews: the entire outlook of people who come to Harlem has changed because of the new construction, new buildings it is absolutely good news.
A decade ago, there was a very different conception for this block in Harlem. Brother Big Man, who sells books along 125th street, remembers.
Bernstein: Do you know anything about the Harlem International Trade Center?
Big Man: That was a building that was supposed to have been built on Malcolm X Boulevard and some type of way the money didn't materialize and now we have a Marshall's department store.
The Harlem International Trade Center was supposed to be a place that would bring representatives of Third World nations to Harlem under one roof. There would be a hotel, banks, communications facilities. Brother Big Man says he's sorry it was never built.
Big Man: Oh that would have been good, that would have made us made a contact with Africa and uh Asia they also was going to have a center in there with community meetings it would have been great
Bernstein: Why do you think it never happened?
Big Man: Somebody messed up the money.
Bernstein: What do you mean by that?
Big Man: I think it was maybe uh sixty million dollars that was allocated for that project but it seemed like they could never get it off the floor and now if you do your homework uh that's a good question where did the money go at?
The money -- $50 million in Port Authority funds, plus another $36 million in state construction loan guarantees - lay fallow while the Harlem International Trade Center Corporation tried to put together the deal. It never happened. McCall says recessionary times made it too hard to do.
Carl McCall: During the early 90's when we were doing that the late 80's and early 90's there was no interest by the private sector in investing in Harlem . conditions have changed considerably and people are now rushing to do business in Harlem, that was not the case in the late 80's and early 90's
Others have a less charitable view. Richard Kahan, a 1998 Democratic candidate for Governor, was Chairman of the state economic development agency in the mid-80's.
Kahan: I think it was doable and I told this to people at the time, but the way to do it was to get direct deals with foreign governments
More than half a dozen officials of both political parties who spoke to WNYC on condition of anonymity also think the project was plagued by internal problems - not just outside forces. It was hard to get the private sector interested in Harlem, one official, a Democrat said, but McCall, the Chair of the Board, could have pressed the Corporation's staff to meet its goals. Kahan says no one was minding the store.
Kahan: nobody was looking at productivity, nobody said we gave you two and a half million last year what projects are going under construction. I think because of the political power of Harlem the kinds of tough questions about financial feasibility were never asked.
A 1992 audit of the Harlem Trade Center found someone should have been asking those questions. According to the audit, hundreds of thousands of dollars in no-bid contracts were handed out to lawyers and other professionals who were friends with to McCall or other members of the board.
McCall himself expensed $1400 for a trip to the Democratic National Convention and another $800 for a car rental for what turned out to be a family vacation on Martha's Vineyard.
When the expenses were uncovered by the Daily News in the mid-90's, McCall spokesman Steve Greenberg said they were "inadvertently" billed to the Harlem agency. He blamed reimbursement foul-ups and McCall paid the money back.
But the auditors said they quote "could not verify a single instance where HITCC internal guidelines were followed." For example, McCall personally signed chits for nearly $8,000 in limousine use for which no business purpose was stated. One of those chits, according to documents obtained by WNYC, was signed by McCall's wife, Joyce Brown. McCall says the expenses had a legitimate business purpose:
McCall: It was well spent. It was all put into place based on the assumption there would be a private sector partner.
In 1995, a Republican - George Pataki -- took over the state Government and its economic development agencies. The governor criticized the trade center corporation for failing "to use the funds in an intelligent way." Nothing has happened with it, Pataki said at the time, "except an expense for entertainment or political patronage."
Soon after, Pataki shut down the Harlem Trade Center Corporation Carl McCall:
McCall: of course the republicans are going to be critical they're critical of everything the democrats tried to do but we laid the foundation in place.
McCall said what came next to 125th street couldn't have happened without the groundwork laid by the Harlem Trade Center Corporation.
The Pataki administration took the site and made it the Harlem Center - a mixed use building containing retail and office space for government and non-profit tenants. Karen Phillips, a member of the New York City planning commission, was until recently the CEO of the Abyssinian Development Corporation. The Abyssinian Development Corporation is one of the developers of the Harlem Center. They were selected by Governor Pataki. Phillips says development in Harlem is still hard.
Karen Philips: and still to this day commercial office space that was for private sector tenants has not been successful in Harlem
Phillips says even with a renewal on 125th St., the Harlem Center could only get Government and non-profit tenants in its offices.
Philips: it wasn't until president Clinton moved to Harlem that they said oh, what do you think of president Clinton moving to Harlem and I said what that should show is there is a market here for private office clients, one that would allow you to save substantial amounts of money from midtown prices.
Both Carl McCall and George Pataki take some credit for the building that is going up here. In the tough economic times that are sure to come to New York State, both men claim to be the one with the right credentials to lure the private sector to New York. For WNYC, I'm Andrea Bernstein in Harlem.

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