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Letter to the Editor: Wu Sets Record Straight

Written By Editor on 2/19/14 | 2/19/14




Dear Editor,


In light of some online rabble-rouser’s absurd and untruthful comments, it is time for me to set the record straight regarding my involvement in the Maranatha Fitness Center (MFC). My willingness to invest in the MFC was offered with the specific intention of salvaging a recreation facility both needed and wanted by the community. All grant monies had already been spent almost a year before my awareness of MFC, much less my involvement, and my only intent was to move forward.

Every business has its model, including a health club. Records showed that the majority of MFC's revenue occurred from December through part of March, which is well within the industry's standard parameters. However, the drop-off in membership from May through September was so large and is so unique to this locale, that the limited revenue-producing time period specifically requires an abundance of success just to keep the business running without some exceptionally creative programming during the warmer months—which I was confident that I could provide. Additionally, to invest in a business which was running such a large deficit and with no working capital, required that the business model be altered to produce a greater percentage of return on the investment, including, equity ownership. With that said, in September 2013 I asked for two concessions from the Town and the Village of Richmondville in order to have a reasonable amount of time to get the business running again before having to cover all the arrears.

I first asked the Town to allow me to postpone a federally requested grant audit that cost $20,000 dollars, and which carried absolutely no penalty if not done. They agreed to give me a postponement opportunity, but wanted me to put $20,000 dollars in escrow, which is the same as not giving me a postponement. I also asked the Village of Richmondville's board to stretch out the electric bill payment of $31,000 dollars over three months, which they denied. Since neither the town nor the village was willing to make any concessions, under the health club model described above, in which the profits of the winter months must carry the business through the lack of activity in the summer months, the requirement of such a large initial payment after the winter term had already begun, made the investment untenable.

On top of that, the town’s delay in requesting a waiver from the state regarding the recapture of any funds related to the grant—the only way to have allowed me to obtain equity ownership—and which the state offered in late September, as well as numerous times in October and November, made it almost impossible to work within the business model and timetable required to make MFC successful. The need for a substantial infusion of capital then became way more than the business model's standard. By the time the town requested the waiver in mid-December, (which protects the taxpayers from having the state ask for any recapture of funds from the original grant) it was just too late in the season to get MFC’s doors open and viable.

The rabble-rousers who protested and focused on what was, and not what is, over these past couple of years—like they were Soviet citizens protesting the USA hockey team's win over their own team in Sochi, days after the game already ended—and especially, since those actions so severely affected the town officials' courage and their ability to move forward with what was necessary to allow the business model to flourish until after Election Day, has caused the facility to remain closed, and for all of the public debts to become solely the taxpayer's responsibility.

In my opinion, that is exactly why all in the community should ignore those who want to cry about what went wrong back in the day, and who refuse to make any efforts to find a way to currently make the situation better for everyone. They make a lot of noise which benefits no one, while this valuable community resource remains closed, and most likely, affected in a grossly negative manner by this year's intense weather conditions. The bottom line is that the facility could have easily been reopened, and everyone in the community would have had something healthy and enjoyable to occupy their time without having to hibernate in their homes due to all of the cold and snowy weather conditions which we are now experiencing.

Sincerely,


Da-lai Wu
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1 comments:

upstateny1000 said...

It is very telling that Mr. Wu demanded a delay in a mandatory audit as a condition of investing in the failed facility (In addition to the 6 months delay already asked for by the Town). Mr. Wu would like the community to simply forget what happened “back in the day” (as if the 3 years ago was a previous century), even if the audit he fears is the only way for the community, local and county government, banks and State agencies to know exactly what it was that did happen. His excuse is that an audit would cost $20,000 and he doesn’t want to pony up that amount of money. So, as Mr. Wu postures as the investor of means willing to save Maranatha, he is unable to come up with $20,000 to cover a required audit for multi-million dollar facility he wants to own.

It is also important to note that the second concession Mr. Wu demanded (and received) was a waiver of a key tax payer protection built into the Restore NY Grant program intended to prevent grant recipients from simply “flipping” a facility paid for with public monies for a profit. With that concession Mr. Wu could have leveraged Maranatha’s desperation, purchased the facility well below its appraised value and then sold it for a profit. – with no intention or requirement to pay back the money lost by taxpayers. That’s quite a deal, and no wonder the Town, already burned by terrible decisions, was hesitant to sign on the dotted line.
Despite Mr. Wu’s colorful allusions to “Soviet citizens” (an odd metaphor given that the Soviet Union has not existed since 1991) the Town of Richmondville finally acted with due diligence in its careful evaluation of concession demands, the Village of Richmondville was absolutely correct in refusing to push Maranatha’s debt onto the backs of its other rate payers and the community is more than justified in demanding a full and fair investigation of what went wrong with the Maranatha project.

Mr. Wu would like everyone to forget misrepresentations and questionable financial dealings and let him have his way. I’m sorry he is disappointed but if he would like to pay us all back for the tax money we threw at Maranatha I’m sure we could all be the best of friends.

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