Story and Photo By Ken Krayeske • 00:30 AM EST
Be sure: pension funds are not for rebuilding Hartford, city treasurer Kathleen Palm says. But it’s a local development proposal that has been getting her and her office mad press lately.
Palm has picked up where other visionaries have stopped by proposing to invest in the construction of residential brownstones on the empty parking lots between Buckingham and Capital. By working with Fannie Mae, it is a seemingly risk-free investment of $10 million — one percent of the total $1 billion in retirement funds that Palm manages.
The project's success rests on the state chipping in millions to construct a parking garage to supplant those acres of asphalt, now used by Bushnell Theatre patrons and state employees. Theoretically, the brownstones could eliminate some cars, if the state provides an incentive to its employees to buy the homes and walk to work. The project should incorporate the construction of a small neighborhood school.
What are the odds of this actually happening? Palm won't offer percentages, but with the cooperation of the state and developers like Phil Schonberger, she says within four years, she sees groundbreaking at Capital and Buckingham.
40-Year Plan fans should remember that we recently picked this site as one of the 15 most important lots for fixing Hartford. This week, I say that for Hartford to rebuild, if must utilize pension funds for more economically targeted investments (ETIs).
Previously, Palm has bought into just two of more than 100 ETI proposals. ETI’s are risky, and Palm has a legal fiduciary responsibility to protect pension funds. She has her own 40-year plan to insure that that $1 billion remains for the 3,000 retirees now living off it and for generations of current and future employees.
To do this, Palm follows strict guidelines to invest in six asset classes: U.S. stocks and bonds, foreign stocks, guaranteed investment certificates, bonds and real estate. Except for a previous treasurer's purchase of a small vacant lot on Edwards Street in Hartford, Palm avoids land holding because it is illiquid. With almost 50 percent of pension funds in stocks, she plays the market shrewdly. Palm made $1.5 million off Enron, dumping it before the collapse because of doubts about Enron’s accounting.
To a reasonable person, though, the stock market is anathema to local development. How many jobs did Hartford lose when Arthur Anderson went belly-up in Enron's wake? Additionally, profit-minded job cuts slash our workforce and confidence. Stock corporations like Mass Mutual hold our local interests hostage. Did Mass Mutual's stock prices rise when it razed the homes on Fraser Place? No, but we should hold Mass Mutual accountable for that before it leaves.
Plus, when bombs drop, stocks like United Technologies rise. Tax dollars that should pay for city redevleopment instead make war machines.
So if you have an idea, and can convince Palm with an airtight proposal, get working, because by investing in the corporate tyranny of the stock market, the city actively participates in its own demise. If that doesn't work, perhaps we can create our private investment fund for people who want to leave the market yet see their nest egg grow with Hartford’s future.