Reiss in Newsday on Stimulus Program

Newsday quoted me in State Faults Venture Capital Firm (registration required for full access).  The story reads in part,

New York State officials say Canrock Ventures, a venture capital firm in Brookville, failed to notify them of potential conflicts of interest when it invested taxpayer money in local technology startups.

An official with Empire State Development, the state’s primary business-aid agency, said under the terms of a written agreement with the state, Canrock should have convened a “valuation committee” to review its proposed investments of federal funds in four computer software startups.

The four businesses were co-founded by a Canrock partner, and the venture firm holds sizable stakes in them. The official requested anonymity.

Mark Fasciano, the Canrock partner, said yesterday that he disclosed all of Canrock’s holdings and his roles in the companies to the state at the start of the investment process.

*     *      *

Canrock’s 2013 contract with New York State, obtained by Newsday under the state Freedom of Information Law, stipulates that conflicts of interest are to be weighed by a valuation committee.

The Empire State Development official said the committee is composed of two state representatives and a Canrock representative, and can only been convened by the venture firm, not New York State.

“They [Canrock] have to disclose potential conflicts of interest to the valuation committee,” the official said last month. “They did not meet that requirement.”

*     *      *

Valuation committees were also included in the state contracts of six other venture firms investing Innovate NY money. None of the six called valuation committee meetings to handle conflicts of interest “because no conflicts had arisen,” an Empire State Development spokesman said.

Some experts questioned whether the valuation committees were effective.

David Reiss, a law professor and research director for Brooklyn Law School’s Center for Urban Business Entrepreneurship, said, “a self-reporting system,” such as the valuation committees, would only deter fraud if the probability of getting caught is high and the consequences are grave.

 “The likelihood of getting caught here sounds pretty low,” he said.

Urban Reviewer: NYC’s Neighborhood Plans

NYC land use geeks will want to check out the Urban Reviewer. From its website,

The City of New York has adopted over 150 master plans for our neighborhoods. You can see which areas have been affected and what those grand plans were here.

Neighborhood master plans – often called “urban renewal plans” – were adopted to get federal funding for acquiring land, relocating the people living there, demolishing the structures and making way for new public and private development. Plan adoptions started in 1949 and many plans remain active today. Development in the plan areas sometimes happened, like Lincoln Center, and sometimes didn’t, like many still-vacant lots in East New York and Bushwick. Areas were selected for renewal because they were considered blighted or obsolete. The “blight” designation always came from outside the communities that got that label – from inspectors working for the mayor’s Committee on Slum Clearance in the early period and Housing Preservation and Development (HPD) employees in the later period.

This is one of those resources that seem pretty obviously useful once someone has gone to the trouble (and great trouble I am sure it was) to construct it. One can imagine urban historians and planners making good use of it as well as community activists. It also provides a great model for other communities to follow.

Kudos to 596 Acres, Partner & Partners and SmartSign for building this resource.