Saturday, December 31, 2011

Cornell University of Ithaca and Technion University of Israel Combine For Massive Project to Benefit Economy and Education

But Their Football Teams Still Don’t Play in a Bowl Game

Those who hate government, the “government never ever created a single job” crowd (usually said by people who work for government) do not want to know about the recent successful bid by a joint venture of Cornell University and Technion University of Haifa to construct a Graduate School of Applied Sciences in New York City.  See in Mayor Michael Bloomberg the city has a leader from the business community, who unlike, say that pretend business leader running for President, actually has created jobs and knows how to create jobs.

The Mayor through the city has offered $400 million in incentives to a college that will build and operate the Graduate School in the city.  The competition for the money just ended, with Cornell University and Technion winning.  The result, New York gets a spectacular campus.

The city asked for at least 250,000 square feet in the first phase, and a million over 25 years. Cornell-Technion proposed 400,000 and 2.1 million, with space for 2,500 students and 280 professors. Others said classes would start in September 2013; Cornell-Technion promised September 2012.

One key to the winning by Cornell and Technion, was a promise to provide $150 million in venture capital financing for participants at the school and a $350 million gift to the school.  Here’s how it was done.

Meanwhile, Dr. Skorton had been cultivating Cornell’s major benefactors, including Charles F. Feeney, the billionaire founder of Duty Free Shoppers who created the Atlantic Philanthropies to give away his fortune. They talked at length about the Roosevelt Island project several times, Dr. Skorton said, beginning in late spring or early summer. But it was not until after the proposals were submitted on Oct. 28 that Mr. Feeney revealed the scope of his generosity, a gift more than double the size of the largest in the university’s history.

Dr. Skorton saved that information for just the right moment. After Thanksgiving, the city invited five contenders to make detailed presentations. Cornell and Technion went last, on Dec. 3.

“President Skorton ended it by saying ‘I want to tell you all that we have a $350 million gift,’ ” Mr. Fuchs recalled. “You could have heard a pin drop in that room.”

Mr. Steel said, “It’s pretty breathtaking when other schools are talking about the challenges of fund-raising, and one of your strongest competitors says on the first phase financing: done.”

So at the end of the day, this is how a successful economic development – job creation – higher education project can be done in America.  It took a partnership: government, an elite private university, an international relationship, and private money.  Would anybody have expected such a project if Mitt Romney had been running things, really, anybody?

The Dismal Political Economist does not know who Mr. Feeney is, but it is safe to assume that he is probably one of those persons cast in the mold of Bill Gates and Warren Buffet, you know, people who feel that after they have amassed great fortunes they should do some public good with them.  Sort of like the anti-Koch brothers, or those other billionaires who fund political activities designed to allow them to acquire even greater wealth.

And as for the issue of government standing in the way of economic activity and job creation.  Well in a couple of years there will be hundreds of companies funded by the venture fund and thousands of employees trained by the graduate school who will be evidence of the fallacy of that position.  Not that it will make any difference to those who hold those views, they are not swayed by factual evidence like this project.

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