Pandemic relief money spent on hotel, ballpark, ski slopes

Posted at 4:52 PM, Mar 23, 2022

WASHINGTON (AP) — Thanks to a sudden $140 million cash infusion, officials in Broward County, Florida, recently broke ground on a high-end hotel that will have views of the Atlantic Ocean and an 11,000-square-foot spa.

In New York, Dutchess County pledged $12 million for renovations of a minor league baseball stadium to meet requirements the New York Yankees set for their farm teams.

And in Massachusetts, lawmakers delivered $5 million to pay off debts of the Edward M. Kennedy Institute for the U.S. Senate in Boston, a nonprofit established to honor the late senator that has struggled financially.

The three distinctly different outlays have one thing in common: Each is among the scores of projects that state and local governments across the United States are funding with federal coronavirus relief money despite having little to do with combating the pandemic, a review by The Associated Press has found.

The expenditures amount to a fraction of the $350 billion made available through last year’s American Rescue Plan to help state and local governments weather the crisis. But they are examples of uses of the aid that are inconsistent with the rationale that Democrats offered for the record $1.9 trillion bill: The cash was desperately needed to save jobs, help those in distress, open schools, and increase vaccinations.

But with permissive Treasury Department rules governing how the pandemic money can be spent, state and local governments face few limitations. New Jersey allocated $15 million for upgrades to sweeten the state’s bid to host the 2026 World Cup. In Woonsocket, Rhode Island, officials allocated $53,000 for a remodeling of City Hall.

“Outrageous” and “just nuts” is how Rep. Abigail Spanberger, D-Va., described some of the expenditures, which she said were an affront to responsible local governments.

“Our hospitals were overwhelmed because of the pandemic and somebody now has a hotel somewhere?” she added.

Included among the projects and expenditures identified by the AP:

—$400 million to build new prisons in Alabama, accounting for nearly one-quarter of the total aid the state will receive through the program.

—tens of millions of dollars for tourism marketing campaigns in Puerto Rico ($70 million), Washington, D.C. ($8 million) and Tucson, Arizona ($2 million). The city of Alexandria, Virginia, also announced it would spend $120,000 to give its tourism website a makeover.

—$6.6 million to replace irrigation systems at two golf courses in Colorado Springs.

—$5 million approved by Birmingham, Alabama, to support the 2022 World Games. The event features niche sporting contests such as DanceSport, korfball and flying disc.

—$2.5 million to hire new parking enforcement officers in Washington, D.C.

—$2 million to help Pottawattamie County, Iowa, purchase a privately owned ski area.

—$1 million to pay off overdue child support in St. Louis. A city memo states that owing child support stops some people from looking for work because the overdue payments are garnished from paychecks; the program would “empower individuals” by paying down a portion.

—$300,000 to establish a museum in Worcester, Massachusetts, honoring Major Taylor, a famed Black bicycle rider from the turn of the 20th century known as the “Worcester Whirlwind” who died in 1932.

Liz Bourgeois, a spokeswoman for the Treasury Department, called the program a success that allowed state and local governments to “recover from financial distress” and “achieve their own strategies for restoring jobs and industries hit by the pandemic.”

“Ultimately local governments are accountable to their communities on their decisions on how best to use their funds,” Bourgeois said in a statement.

In Broward County, officials defended their planned 29-story, 800-room hotel, which will be owned by the county but operated by a private management group.

They also contest whether federal money is technically being used for the project. Broward County initially routed $140 million in federal coronavirus aid to the project, which ran against Treasury Department rules that generally bar spending the money on large capital projects.

To get around the prohibition, the county adopted a common workaround.

The agenda from a Feb. 22 county board meeting details how: In a back-to-back series of unopposed votes, commissioners clawed back the federal money they had given to the hotel. They then transferred it to the county’s general fund, describing it as a federal payment to cover lost tax revenue, which is an acceptable use. Then the cash was transferred from the general fund right back to the project.

County Administrator Monica Cepero insisted “no federal funds will be used to pay any of the cost of developing the Hotel Project.”

“The County has reviewed the Treasury guidance and modified its use of (the) funds,” she said in a statement.

Some lawmakers in Congress, however, are nonplussed.

“They are basically money laundering funding that is meant to help communities that are suffering,” said Spanberger, who called for more oversight.

Local officials in New York’s Dutchess County, home to the $12 million minor league stadium project, said in a statement that the expenditure was “completely and absolutely consistent” with Congress’ intent for the money.

“It’s ironic that this criticism emanates from the same congressional members who have brought back pork-barrel earmarks,” said Dutchess County Executive Marcus Molinaro.

The Edward Kennedy Institute did not respond to messages seeking comment on the $5 million in coronavirus aid received from Massachusetts. The institute operated at a $27 million loss between 2015 and 2019, according to tax filings from those years, the most recent that are publicly available.

Even in cases where local and state officials may have violated the spending rules, the sheer volume of money pumped out presents a challenge for government oversight offices that are often understaffed and poorly funded.

“The amount of money that went out was so massive and so far beyond anything that has ever been spent in our country before, that our capacity to audit every dollar spent is clearly stretched,” Romney said.

But groups that lobby on behalf of local governments in Washington say the spending rules were written permissively in order to give as much flexibility as possible.

“Counties should be able to determine what’s best for them,” said Mark Ritacco, director of government affairs for the National Association of Counties. “Their residents will decide whether that was appropriate or not at the ballot box.”

The new findings track closely with AP’s previous reporting, which found in October that states and large cities had spent just a tiny fraction of their relief funding six months after it was approved. That was despite their pleas for the emergency cash when Congress was still debating it.

Some school districts also had so much extra federal pandemic cash that they spent it on new sports stadiums, arenas and football turf. In other instances, states used discretionary funding to further school choice initiatives that they had failed to get through their legislatures.

Rich Delmar, the deputy inspector general for the Treasury Department, declined to say whether the office had any active investigations into uses of the state and local pot of money.

“All projects are potentially subject to audit and investigation,” Delmar said in an email, adding that “we are actively engaging in oversight.”

Biden, meanwhile, has said his administration urgently needs more money to pay for things that are directly related to the pandemic.

Without it, the White House says, the administration won’t be able to replenish depleted stockpiles of vaccines and therapeutics. Republican say winning their support will hinge on it being paid for with money that was already appropriated.

A deal that leaders struck this month would have been paid for by recouping some aid intended for states. But the agreement fell apart after several governors objected and rank-and-file House Democrats rebelled.

At least one Democrat sought to raise campaign cash off her opposition to clawing local money back.

“We had a bit of a fight when they tried to take money away from Michigan,” reads a fundraising email from Michigan Rep. Debbie Dingell. “I was not going to let the Midwest get harmed. We won.”