October 5, 2020

KEMPFF | Invest in Ithaca

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My life flashed before my eyes when I saw the 10-foot-tall, paper-mache capitalist. Last March, climate protesters held up the roads throughout Central Campus to campaign Cornell’s divestment from fossil fuels. I have to hand it to them; anyone who is willing to stand outside in Ithaca in March must be really committed.

In just a few short months, word came from the bureaucrats in Day Hall (or wherever they work): Cornell’s seven billion dollar endowment would be effectively divesting from fossil fuels. This was not only a win for climate activists, but for anyone who cares about socially responsible investing.

As the endowment looks to pull funds from fossil fuel aligned investments, the answer to where to place the money is sitting right in front of us: Upstate New York. I propose the creation of a multimillion dollar investment fund focused on the Ithaca community and the surrounding area.

At first, you might think it is irresponsible to take investing advice from a sophomore hotelie (whose entire fiduciary experience rests upon an accounting course). I would say, fair enough. However, a large local investment would be impactful to both the community and the school’s bottom line. A local investment strategy could take two forms: Real estate and local businesses.

Ithaca is undergoing a long term affordable housing crisis, and one of the main culprits is a distinct lack of middle-income housing. Many of my coworkers at the Statler Hotel would scoff at the idea of living within the city due to the high cost of living attached.

Cornell, through its infinite wisdom and pocketbook, could abate some of these worries by investing in reasonable Ithaca real estate developments. Multifamily construction would be a nice break from fancy collegetown eyesores that would require my kidney and first born childhood as rent. It would also help solve the problem of Cornell not paying its fair share towards keeping the city afloat.

Building these developments would be a sound investment for the university, betting on the very community that it purports to anchor. Real estate ownership also provides the university more opportunities to do good within the community, as was seen at a handful of schools, Yale included, during the COVID pandemic. These colleges’ position as  landlord allowed them to extend leniency to local businesses, propping up the economy at a time when many private landlords lacked the ability or willingness to do so. Cornell has already taken a stab at private projects through initiatives like the Cornell Business & Technology Park; however, there are still many more opportunities to invest in local real estate.

An endowment reinvestment would also be impactful to local businesses. When people think of rapid job and economic growth, Upstate New York is rarely top of the list. Ithaca, as in most things, has proven to be an exception to yet another trend plaguing upstate New York.

Cornell is already heavily invested in the economic development of upstate, ranging from its large cooperative extension program to its entrepreneurship incubator here in Ithaca. Walking past the E-hub on College Ave is a reminder that there are people thinking about changing the world, even as my mind is occupied by what I’ll be having for lunch.

Still, these business initiatives stop just short of what could be the last step: A major investment initiative directed into local companies. Investing in small and large businesses in upstate New York would be a smart financial choice with a compounding effect for the area.

There are many successful businesses here, ranging from a hummus startup to a multibillion dollar glass corporation a few towns over. However, economic development is stalled in the community by the lack of free flowing capital.

If Cornell were to make a commitment to invest funds in these businesses, the number of successful companies would rapidly increase. Successful businesses would create jobs and opportunities, catalyzing a chain reaction for the community.

The university is in a special position; a multibillion dollar institution located in an area in sore need of investment. The problems faced by the Ithaca region are substantial, including housing shortages and a distressed economy. Cornell has a powerful tool to combat these problems: Its endowment.Those climate change protesters in March showed that the endowment is not untouchable; it’s a living, breathing investment that can be adjusted to match our needs. Today, the local area is in sore need of the funds at Cornell’s disposal. A direct investment in both Ithaca real estate and regional small businesses would prove to be a powerful tool to create positive change; it is what we need the university to act on today.

Brendan Kempff is a sophomore in the School of Hotel Administration. He can be reached at bpk43@cornell.edu. Slope Side runs every other Monday this semester.