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Sibley 220X165By approving the purchase of empty Kodak office buildings on State St. for Monroe Community College, the county legislature has altered the future of Main St. and the Sibley building.

It’s sad really. An empty, once-great department store and an empty once-great office building competed for the college’s downtown campus. The Wall Street Journal reported the saga as emblematic of the struggles of Rust Belt cities.

Whatever one thinks of MCC’s move to Kodak, there are very serious questions about what this will cost taxpayers. MCC has only secured about half the money needed for the $72 million renovation. The county is buying 560,000 square feet, twice the space MCC needs. There’s no cost or timeline associated with building out the other half of the complex. This could very well cost taxpayers more than $100 million. Meanwhile, SUNY announced it needs hundreds of millions of dollars to stabilize its finances. And no one would be surprised if Kodak abandons the complex.

MCC has five years left on its lease at Sibley. If the Kodak move doesn’t come together, the county could end up owning a ton of excess space.

Sibley has been neglected for much of MCC’s 20 years in the building. But there are new people in charge. Main St. will be on the upswing when Windstream moves in and Midtown Tower gets under way. A new bus terminal is going right behind the building. Sibley’s owners have promised a state-of-the-art renovation for $18 million less than the Kodak price tag. MCC insists the Sibley building got a fair chance at keeping the campus, but the college trashed Sibley from the start.

Mayor Tom Richards pointed out MCC would be a good citizen if it had stayed put. City taxpayers spend a lot of money on MCC because the county charges residents based on where students live. Do public institutions have a responsibility to help revitalize downtowns? The Kodak move will not have much of an impact on High Falls; the campus will be inside a self-contained box. MCC’s future on Main St. would have had a much greater impact, as it would have remained in the heart of downtown.

The Democrats played their hand poorly. They had this thing won, but incomprehensibly gave up their power to withhold a supermajority when they agreed to non-location-specific bonding. One could also blame former mayor Bob Duffy for helping to kill Renaissance Square in 2009. Four years later, Main and Clinton still looks like crap, MCC is leaving, the bus terminal is going in anyway and the performing arts center project could move to the suburbs. Finally, Wilmorite shares blame for neglecting the property and not paying its $20 million tax and loan bill.

It’s possible 10 years from now, MCC students and staff may look wistfully at Main St. and wished they’d stayed. They might be all alone in a sea of parking lots and abandoned office space. There will have been countless headlines about cost overruns or expansions that never happened. Students will get off the bus at a shiny new terminal and instead of walking 20 steps to class, they’ll have to get on a shuttle. The Sibley Building will be filled with residents and new offices. There will be a restaurant or two on the first floor.

There are many scenarios that could play out. The best scenario is the project is fully-funded and stays within budget while Sibley is able to find another use for the department store portion of the building. The worst scenario is MCC moves in and can’t finish the build-out, Kodak moves out and Sibley remains vacant. I bet a combination of the above happens, which means this move won’t be a win-win for anyone.

Sibley Building Rendering Monroe Community College is on the verge of purchasing twice as much space as it needs.

The county legislature will vote in a couple weeks on spending several million dollars to buy 561,951 square feet on Kodak’s State St. campus. MCC has admitted it needs only 275,000 square feet. The left over space equals two Pittsford Wegmans. MCC says it could develop the space at a later date, but financing isn’t a sure thing and the college will have to pay maintenance costs in the meantime. The first phase of the project alone will cost $72 million.

What’s more, MCC is also purchasing Kodak’s power facility at the State St. site. MCC hasn’t decided if it will sell back the power to Kodak or connect to the downtown power district. MCC would become a “lightly regulated utility,” according to a SUNY memo to the college. Why is the college getting into the energy business?

Another issue is Kodak may eventually abandon the State St. campus.

Finally, the Kodak site is removed from the core of downtown. It is separated from the bus station under construction, the library, the new RIT building, the Brockport building and the Eastman School of Music. It would be an isolated big box surrounded by a parking lot. Isn’t that what’s out in Brighton?

MCC’s current landlord laid out its case for the college remaining at Sibley in a letter given to legislators. One of the arguments is a Sibley rehab is millions of dollars cheaper.

Whatever you think of Sibley v. Kodak, there appear to be very serious financial implications to this move in the present and future.

Read the Winn letter and the SUNY memo below. (Links of the Day following.)

Links of the Day:

– Lt. Gov. Duffy said it would be a “travesty” if Lovely Warren runs against Tom Richards for mayor.

– Governor Cuomo doesn’t want lawmakers to politicize the casino expansion. This, coming from the man who rakes in cash from the gambling lobby.

– Buffalo’s HSBC building could become luxury apartments, offices and hotel rooms.

– Constellation Brands is in Department of Justice hot water.

– Bausch + Lomb’s CEO said the company is committed to Rochester and is in no hurry to sell its downtown office tower.

– A tradition continues. Kodak film was used for six of the Academy Awards Best Picture nominees.

– The Common Core curriculum doesn’t teach cursive and expects kids to be proficient in typing in fourth grade.

– I will be MC-ing the Friends of Strong Wine Tasting tomorrow (2/1). It’s a great and fun event.

Kodak - featured 220 X 165One year ago today, Eastman Kodak filed for bankruptcy.

Since then, the company has shed thousands of jobs, eliminated retiree health benefits, sold its digital imaging patents, sold its online photo gallery, taken its name off the theater that hosts the Academy Awards, stopped making cameras, put its film business up for sale and left a trail of unpaid bills.

The company is poised to emerge from bankruptcy this year. It will be a much smaller firm with a focus on commercial printing. The bankruptcy has cost Kodak at least $125 million in fees.

It’s not clear what will become of Eastman Business Park, a vast 1,200-acre, 3.5-mile long industrial site. There’s an abundance of vacant land and building space. The power plant was sold to a green energy firm, potentially saving the park’s most important asset.

As many predicted on this day one year ago, the world did not come to an end. There’s no question lives were altered and the community’s psyche was damaged. But January 19, 2012 was in the works for a couple decades. It felt like the end of a long illness. There may be painful days yet ahead, but Rochester will go on.

I like what Mayor Tom Richards said a year ago:

“I think we can’t look at Kodak as just the business. We have to look at Kodak as it’s had its impact on this community. And what it did for this community remains…We’ll have some difficulties as a result of all of this, some uncertainty, but we’re certainly going to survive it as a community.”

Links of the Day:

I-Square may finally move forward.

– The Syracuse Post-Standard is moving into new downtown digs, as the Democrat and Chronicle looks for its own new offices in Rochester’s center city.

– New York has redefined what the term “assault weapon” means. It’s still confusing.

– A woman struggling with depression writes about why she never wants a gun.

– Watkins Glen is a finalist for the “Coolest Small Town.”

RIP, Proposition Joe.

Kodak.com

Kodak executives received a total of $15.6 million in bonuses and other payments in the 12 months prior to filing for bankruptcy. That’s according to a Wall Street Journal database. CEO Antonio Perez received nearly $2 million in bonuses, stock wages and other benefits.

The WSJ looked at a number of companies that enriched executives in the months leading up to bankruptcy. The newspaper called it “Payday Before Mayday.” Hostess is among the companies that paid officials big bucks before going belly up:

To avoid running afoul of limits on bonuses that reward executives for sticking around during bankruptcy, companies craft incentive plans that compensate managers for meeting certain performance targets. But another way they can steer clear of the law’s restrictions is by paying bonuses before filing for Chapter 11.

(snip)

Companies often say they are using their best business judgment when paying bonuses to executives who are working overtime to keep operations afloat. A firm’s fate often isn’t known when bonuses are paid, and companies argue they must motivate some executives to stay lest they suffer exoduses that further destabilize troubled situations.

The WSJ found more than 1,600 top-level executives at 80-plus companies got more than $1.3 billion in payments before their companies filed for Chapter 11.

Links of the Day:

– Communities are discovering the value of being walkable. Williamsville is redoing its highway-like Main Street.

– Governor Cuomo shot down a proposal to implement a booze tax and place limits on bars and liquor stores in an effort to curb problem drinking.

– Are Common Core standards sacrificing literature for nonfiction?

– Chicago is planning to raise money by installing digital billboards on city-owned land along expressways. Coming soon to a city near you?

This made my day:

 

A piece in the Washington Post suggests there’s still a lot of value in Kodak’s film business. Christopher Bonanos says Kodak could learn some things from Polaroid. Kodak is looking to sell its film division (it will hold onto movie film) and Bonanos says the right buyer could do very well.

Here are his lessons:

1. “Don’t be afraid to raise prices.” – Film buffs are die-hards. Film sales actually grew last year.

Over the past few years, the company that bought bankrupt Polaroid started making the product again. It charges $24 for a pack of eight frames. Guess what? People are buying the stuff.

“Boutique prices are going to be part of the future of film, and the devout buyer will adjust,” writes Bonanos.

2. “The only cameras are going to be high-end cameras — and very-low-end ones.”

Kodak is still having a lot of success with disposable cameras. One of the companies reportedly interested in Kodak‘s film unit – Lomography – specializes in cheap, plastic film cameras.

3. “Don’t do anything that someone else can do.”

That’s what the founder of Polaroid, Edwin Land, said.

Kodak still makes super-special lines of film that don’t have any peers. It’s discontinued some of them (Kodachrome), but perhaps they can be revived – at a higher price point.

Bonanos writes, “if you’re going to sell film in the 21st century, you need to think of your product as a fine-arts material.”

4. “The little yellow box is still golden.”

Like Polaroid, Kodak has a powerful brand name. Bank on it.

Bonanos concludes, “nearly everyone who cares about the photographic arts is hoping that someone generous and deep-pocketed is feeling the need for a Kodak moment.”

Read the article, “What Kodak Could Still Learn From Polaroid.”

Business Links of the Day:

– Missouri lawmakers want a meeting with Windstream, saying broadband speeds are as slow as dial-up.

– A Bloomberg columnist speculates Xerox could be the next Hewlett-Packard, having “destroyed more value than it’s created.”

– We should only be excited about manufacturing jobs returning to the U.S. if they pay well.

The Wall Street Journal found many companies don’t disclose in advance they’re going to file for bankruptcy. Exhibit A: Eastman Kodak.

In the summer and fall of 2011, Kodak was already gathering a team of restructuring experts as it bled cash. The signs were there, but the company didn’t say the “B” word and denied reports it was headed in that direction:

On Sept. 30, 2011, reports swirled that Kodak had hired restructuring lawyers and was weighing filing for Chapter 11 protection. In response, Kodak said in a statement it “is committed to meeting all of its obligations and has no intention of filing for bankruptcy.”

In ensuing weeks, Kodak made no mention in regulatory filings of bankruptcy preparations or the possibility of pursuing that path, according to regulatory filings. Yet Kodak was exploring a bankruptcy filing before the statement, according to bankruptcy-court records.

Shareholders have sued, but the Journal reports the law is not on their side. Securities law doesn’t require companies to disclose they are filing for bankruptcy. The problem is creditors, supplies and customers could run for the exits, hurting shareholders even more.

“Anybody who could add and subtract knew there was no way out,” said George Conboy of Brighton Securities. “Kodak would say, ‘Ethically, we have a responsibility not to the media, not even to our employees. Our responsibility is to shareholders.”

Despite headlines warning Kodak was on the brink, there were trusting suppliers who continued to do business with the company. Some of them are smaller firms in Rochester. They are among those hurt by by Kodak’s bankruptcy.

Update: A shareholder lawsuit against CEO Antonio Perez has been dismissed.

Links of the Day:

– “At 9:46 I think I threw up, then at 11:46 or 12:46 I’m up by five so, welcome to East Rochester!” The close race for town justice in a Monroe County town.

– Wegmans is expanding its Pub restaurants, which sit within Market Cafes. This wouldn’t work in New York State, which requires separate entrances for eateries serving booze. (Meantime, Wegmans is opening its first Italian restaurant at the East Ave. location.)

– Governor Andrew Cuomo fired his emergency management chief for deploying crews to clear a tree out of his driveway after Hurricane Sandy hit.

– Cities going bankrupt are blaming pensions. Maybe they should also blame sprawl.

– An Albany ship replica avoided the same fate as the Bounty.

After announcing the extension of its patent sale, Kodak filed a presentation with the SEC outlining its new business model.

The Kodak of the future is all about print.

Heavy-duty printing presses. Printing packaging materials and labels. Printing books. Printing pictures from kiosks. Printing pictures on inkjets at home. Printing direct mail.

Under its digital and commercial printing umbrella, Kodak also has an “enterprise services” division. It reminds me a lot of Xerox, with things like scanning, document security and printing network management.

The commercial film division remains.

Is this the right strategy? Assuming the company climbs out of bankruptcy, this is not a slam dunk. Kodak’s own presentation shows the number of worldwide printed pages has been flat. We are rapidly shifting to a world where we all carry around tablets, eliminating further the need for paper.

Kodak’s forecast shows this will be a much smaller company. The document reveals Kodak has cut 2,300 jobs so far this year. Kodak predicts sales of $6 billion in 2017 – the same amount as 2011. That means it’s a tough climb out of the hole – if it can.

Links of the Day:

– The New York Public Service Commission is concerned about how Kodak’s bankruptcy will affect other tenants’ power needs at Eastman Business Park.

Henry B’s in the East End has closed.

– Testing, testing, testing. The teacher evaluation rules mean lots of student tests in all subjects, even electives.

How not to do a school cheating investigation.

Is it getting too hot outside for high school football?

The Culver Road Armory, then and now.

Late last week, Kodak was dealt a blow by the International Trade Commission, which upheld a judge’s ruling that Apple and RIM didn’t infringe on digital image preview technology. Kodak had been hoping to get a $1 billion settlement. The patent at issue is No. 218 and it’s technology is in most cameras.

The Wall Street Journal reports this ruling was a blow in another way. It may have drastically reduced the value of the patents Kodak is trying to sell. Kodak had estimated the digital image portfolio could be worth $2.6 billion. WSJ interviewed one expert who says the ruling will hurt big time and another who said it won’t:

“Any time one of your prime assets is considered invalid, it hurts the overall value of your patents in a major way,” says Dean Becker, chief executive of ICAP Patent Brokerage, which is advising clients with interest in the portfolio. Mr. Becker says future bids, which are due July 30, are likely to come in lower.

(snip)

“We wouldn’t expect the ITC decision to have a significant effect on potential bidders, because there is an understanding that this was always going to be decided by the federal court, regardless of who brought the appeal, and the federal court has great latitude in this respect,” the person said.

(snip)

But patent experts have been less enthusiastic about the value of Kodak’s portfolio, which involves patents related to imaging—a key function of smartphones, but not related to core mobile-communication technologies. Kodak’s patents have also been heavily licensed, diminishing their future value, patent experts said.

The patent sale is crucial to Kodak’s emergence from bankruptcy.

Links of the Day:

– Need to see a dermatologist? The wait in parts of Upstate New York is really long. The shortage of dermatologists is particularly acute in Central New York, where patients can wait months for an appointment. The University of Rochester Medical Center only has three dermatology residency slots a year.

– East Rochester is offering incentives to turn houses back into single-family units.

– Stores and restaurants in Erie County sometimes don’t like it when their competitors get lucrative tax incentives.

 – The Aurora theater shooting suspect bought thousands of rounds of ammunition online as easily as one buys a book on Amazon.

Links of the Day:

– Rochester’s interim superintendent Bolgen Vargas brought up truancy when he discussed the district’s abysmal graduation results. How can students learn when they’re not in school?

The problem starts in kindergarten. Vargas says only about 80 percent of kindergartners show up on a regular basis. That’s why Assemblyman David Gantt and State Senator Joe Robach have introduced bills calling for mandatory kindergarten attendance in the city. Those kids are already getting a start on a school career marked by chronic absenteeism.

Very few parents will say they don’t value education or want their children to succeed. But putting those ideals into practice is clearly an issue. Many parents of kindergartners are barely out of their teens themselves. Many are dealing with poverty, multiple jobs and housing stresses. Somewhere along the line, the importance of going to school is getting lost.

Vargas can knock on as many doors as he wants to get kids to come to school. But changing a culture is much more difficult.

Update: I did a story on this topic today for 13WHAM News.

– How big of a problem is synthetic marijuana? The Democrat and Chronicle goes looking for it in stores and doesn’t find it. It also found few cases of overdoses and severe reactions at local emergency rooms.

– Inmates at Auburn Correctional Facility got their associates degrees, thanks to Warren Buffett’s sister.

It’s hard for the media to cover the state capital with fewer resources. 

Mitt Romney is all about school vouchers, though he doesn’t use the word.

– Kodak is putting its patents up for auction. In a court filing, the company admits it has had trouble attracting a bidder. This is not a good sign. Read the filing below.

“When you look at this very painful Kodak moment today, you’re seeing something that’s deeply symbolic. You’re seeing either a potential for further downsizing of Kodak or at the worst – a liquidation,” – Joel Seligman, President of University of Rochester and Kodak board member

That’s what Seligman said on the day Kodak filed for bankruptcy. Since then, Kodak has burned through nearly $200 million in cash. It’s got $683 million left in the bank.

There are now serious questions about whether the company can successfully emerge from Chapter 11 bankruptcy.

George Conboy of Brighton Securities puts the odds at 60-40 Kodak will survive.

“Unless we see profitability, no judge is going to let them emerge from bankruptcy,” Conboy said. “Early on, it still seems to be difficult for them, despite an economy that seems to be improving.”

Kodak CEO Antonio Perez has said the company hopes to exit bankruptcy in January.

“Why am I believing we exit bankruptcy in January? Our firm believes they exit bankruptcy at least in June 2013,” Conboy said. “Their chief cheerleader never seems to deliver the goods.”

Perez has repeatedly said Kodak is on the path to becoming a “profitable and sustainable” digital company.

Conboy said if Kodak doesn’t stabilize by the middle of July, the company may be headed for Chapter 7.

That’s a liquidation of the business. That’s bye-bye Kodak. That’s turning the headquarters on State St. into condos. That’s possibly a state takeover of Eastman Business Park.

That’s something we don’t want to think about. But it’s not too early to start.

Update: Kodak’s spokesman pointed out the monthly reports provide a limited snapshot and did not include international businesses. “While at times it may seem much longer, remember that it’s not even been three months since we filed for Chapter 11. A reorganization takes some time. While there is much more to do, we have made good progress – bolstering liquidity, rebuilding relationships with suppliers, shoring up our supply chain, focusing on core businesses and, most importantly, reaffirming support with our customers,” Christopher Veronda said in an email, adding the company’s reorganization plan is due in January 2013 and that doesn’t mean the bankruptcy will end then.

George Selden, standing, and his sons

When I was in second grade at School #7, we learned all about local historical figures. George Eastman, Susan B. Anthony, Frederick Douglass, Jacob Bausch, Henry Lomb, Joseph C. Wilson, Nathaniel Rochester and George B. Selden.

Selden who?

We were taught Selden invented the automobile. If only his patent had been enforced, Rochester could have gotten as big as Detroit.

That’s the second-grade version. The whole story is a lot more complicated. It bears some striking similarities to the modern-day tale of Kodak. George Eastman even makes an appearance.

George B. Selden was born in 1846 in Clarkson, N.Y. He grew to despise horses during his service in the Civil War. He later became a patent lawyer and inventor.

Selden filed a patent on a combustion-powered automobile in 1879. George Eastman served as a witness to the patent. Selden, an avid photographer, had been a mentor to Eastman.

Selden’s patent was good for 17 years, but he was in no rush to receive it. He kept delaying its issue by filing legal motions. During those years he never actually opened a plant and made cars, but collected royalties from a group of manufacturers. Some say his strategy was to let others improve on his invention. Selden claimed he lacked capital to do anything.

One guy wouldn’t pay up – Henry Ford. “Selden can take his patent and go to Hell with it,” Ford executive James Couzens reportedly said.

Selden sued Ford. The case was heard in the Southern District of New York. The trial produced thousands and thousands of pages of documents. Ford argued Selden’s engine was totally different – and far inferior. In 1909  judge declared Selden the inventor of gasoline automobile.

Ford appealed. This time, the judge upheld Selden’s patent – but only for his specific engine. Ford had won.

Despite the court case that made headlines around the world, Selden and Ford didn’t become enemies. Selden said he admired Ford and Ford called Selden a “decent old fellow.”

Selden didn’t make out too badly. It’s estimated his patent earned him $200,000, a nice sum back then.

We can take pride in knowing Selden was declared the inventor of gasoline-powered automobile. But he never came up with a dynamite, mass-produced vehicle. That was Ford’s accomplishment.

Selden’s sons did start a factory that assembled vehicles in 1905. It was located on Probert St. The Selden Motor Vehicle eventually made only trucks. It was bought out in 1930 by a Pennsylvania company that moved the operation out of town.

The Selden name in the automobile industry was finished.

Source: Rochester and the Automobile Industry by Joseph W. Barnes

Eastman Business Park website

The news out of Eastman Business Park has been rosy. Kodak spent more than $200 million to transform the site into a modern industrial center. The complex has its own power plant, railroad and other infrastructure. Businesses are moving right in.

Behind the scenes, there’s a growing realization among local officials the work to transform Eastman Business Park isn’t over. There is one million square feet of vacant space and 300 acres of developable land. As a chemical plant, the park is probably limited to industrial uses in the future.

The most immediate need we learned, is the power plant. To meet upcoming EPA guidelines, the plant needs tens of millions of dollars in upgrades because it is a coal-burning facility.

Who will pay for the upgrades? Maybe taxpayers. Already, one potential buyer of the park has walked away upon learning of the issue.

Ken Warner of Unicon likens this to the Midtown Plaza problem of years past. Developers wouldn’t touch the place because the costs of rehabbing it were astronomical. That’s why the state came in and spent $50 million to clear the way for developers.

The state will likely do an assessment of the park. When the information comes back, we might learn Kodak has a Midtown problem.

Here’s what Ken Warner had to say:

I liken it to Fairport Electric. People like to move there because they get cheap power. It’s the same thing with businesses. These days power is a very important thing for businesses choosing to come to a place. What makes Eastman Business Park so great is you can come there and you can get cheap power. If that leaves – if they’re unable to use coal-fired plants two years from now because of EPA regulations – then all of that goes away. Then you put in danger not only the opportunity to bring businesses here but you may put in jeopardy the businesses that are already there.

This is what the danger of Eastman Business Park is. There’s been a chemical plant there for over 100 years. This could turn into a giant cleanup facility situation where we’re spending a tremendous amount of money trying to clean up 100 years of industrial pollution.

You can’t sell it to a private investor when you have a situation where they’re going to have to invest a terrific amount of money within two years to keep that plant going.

I believe the other thing government should be doing is calling upon Eastman Kodak to come clean, if you will, about what’s going on there and to make sure that does not turn into one of our biggest problems in the community, and instead is one of our biggest assets.

In other Kodak news:

– Kodak is selling Kodak Gallery to Shutterfly.

Links of the Day:

City of Rochester Communications Burear

– More than a few columnists blamed Rochester for Kodak’s demise. We’re “cloistered” and “sleepy” and lack a culture suited for innovation.

That’s total crap, as our many tech companies – both large and small – indicate.

I had the pleasure of visiting Vuzix today, a firm competing with Google to develop augmented reality glasses. The company is making eyewear that can translate street signs, send a text message, give directions and recognize your friends. It has 40-50 workers, 95 patents and production facilities in Rochester. It sells $30,000 camera-equipped monocles to the military.

Why is Vuzix here? Because Rochester is an optics center. There are really smart people and access to numerous technology resources.

The only downside is access to capital. This is a frequent complaint of our small start-ups. They have the technology, but they struggle to find the money to make the most of it.

Vuzix has hit on a product that may one day be as ubiquitous as the iPhone. Wouldn’t that silence critics of the Flower City?

– Kodak’s employment has fallen below 5,200, reports the Rochester Business Journal. Despite ongoing job cuts, this is surprising, as we were last reporting the number of workers hovers around 7,000.

This moves Kodak out of the top five area employers. As of about six months ago, the top five are now the University of Rochester, Wegmans, Rochester General Hospital, Xerox and the Rochester City School District. Unity Health is next, making Kodak the seventh largest employer.

Kodak released its 2011 earnings report this week, showing a $764 million loss in 2011. Sales in the U.S. of consumer products fell 51 percent, so it’s no wonder the company stopped making cameras. The numbers spelled out a sad tale leading to bankruptcy.

– Kodak has discontinued three films used to make slides. Die-hard film users are not happy, if the comments to Kodak’s Facebook page are any indication.

– A retired city school teacher said Jada Williams’ school missed a teachable moment. In an op-ed, Beth Vercolan questioned why this escalated and what the girl learned:

It might have been more helpful to the situation if the adults who are involved in the fracas had taken the time to think why a white teacher might say she felt offended by what Jada had written, rather than jumping to the conclusion that Jada was being persecuted for her views and making the whole thing a cause celebre. Jada is still a child. She depends on the adults around her to guide her and explain to her the difference between right and wrong. Unfortunately the opportunity of the teachable moment — for all — has been lost, and harm has been done to our progress towards a more racially neutral society.

– Here’s something Rochester can do with its potholes!

Billy Crystal had some fun at Kodak’s expense.

He called the former Kodak Theatre the “Chapter 11 Theatre” and the “Your Name Here Theatre.” He said next year it will be the “Flomax Theatre.”

Rochesterians were not amused. There are a ton of negative comments on my Facebook page. Here are some tweets about Crystal’s Kodak jokes:

The Academy Awards ceremony will be bittersweet for Rochesterians. For the first time in a decade, the Kodak name will not be part of the festivities. Although seven of the nine Best Picture nominees were shot on Kodak stock, the future of motion picture film is in doubt.

More than a few us will be reflecting on the company’s legacy. Henry Clune, a former Democrat and Chronicle reporter, wrote “Main Street Beat” in 1947. Yesterday, I shared his resonating words on Rochester. Here’s what he had to say about Kodak and George Eastman:

…there is a feeling that if the great plant of the Eastman Kodak Company were removed from the city’s environs a sign might be erected on the station platform, “This was Rochester.” But the remote possibility of this tragic circumstance is rarely openly expressed.

(snip)

Eastman was a bachelor whose life was neither softened by romance nor sullied by personal scandal. He was fiercely intense and at times cruelly exacting and so completely in sympathy with the doctrine of the survival of the fittest that more than once he privately advocated the use of the lethal chamber for the disposal of persons hopelessly ill, crippled, or insane…it was probably this doctrine that prompted him to (end his life) with a self-inflicted bullet…

(snip)

He was a man with whom intimacy was extremely difficult, and though I knew him for many years I often had the feeling I scarcely knew him at all.

(snip)

As Eastman moved from the second to final act of his life he was far from the ruthless, uncompromising fighter of his early years. Sometimes he seemed almost wistfully eager for human companionship.

Eastman fought hard for a city manager style of government, believing it would remove partisan politics from City Hall.

…the ideal of a nonpartisan city government was only briefly attained with the adoption of Eastman’s cherished plan. Today politics are as rampant in the affairs of the City Hall and the municipality is much less efficiently administered…

The author visited Eastman in his final years. Eastman was feeble and his hands were shaking. The pair watched home movies of Eastman’s gardens and children playing on the lawn.

I expressed some surprise at these. “It’s curious, Mr. Eastman,” I said, “that a bachelor like yourself should be so interested in the play of children.”

“Humph,” he grunted. “They’re a lot more graceful than those damn dancers we have down at the Theater.”

Then there was the time a Met Opera singer dined at the Eastman House.

“I can’t understand, Miss Garden,” he said perplexedly, “what it is that holds up that dress.”

“Only your age, Mr. Eastman,” she answered, tapping her host lightly on the hand. “Only your age.”

Eastman failed to blush.

If you’d like to read more, the University of Rochester published an essay online Clune wrote called, “The George Eastman I Knew.” I’d like to thank Tom Belknap for letting me read his copy of “Main Street Beat.”

Even though Kodak’s name won’t be mentioned at the Oscars ceremony, the company will still have a significant presence. Seven of the nine Best Picture nominees were shot on Kodak film.

Hollywood directors still like film. But how long will that last? No one really knows:

“Though reports of its imminent death have been exaggerated, more industry observers than before accept the end of film. “In 100 years, yes,” says AbelCine’s (Moe) Shore. “In ten years, I think we’ll still have film cameras. So somewhere between 10 and 100 years.”

Kodak is still a big player in Hollywood. It makes billions of feet of movie film a year and is continuing to develop new kinds of movie film. Kodak has also innovated in the area of digital cinematography. It licensed its laser projection technology to IMAX.

Movie film has some things working in its favor. The cameras last for years and it’s a well-established technology. Famous directors, including Steven Spielberg, love film. Most movies in India are shot on film. Film has tremendous archival properties. Movies shot on digital begin to deteriorate after as little as 5 years and technology changes can render digital movies obsolete.

But almost everyone sees the writing on the wall. Camera manufacturers have all but stopped making cameras for movie film. Theaters are going digital to save on the costs of making and shipping prints. More directors are choosing digital photography, The technology is making movie production much more accessible to independent filmmakers.

The consumer photography transition to digital is complete. The same absolutely cannot be said for the movie industry.

“It’s going to be less of a debate,” (filmmaker Jeff) Cronenweth added. “In all fairness, we’re at the infancy stage of digital cinema.”

City Hall Photo Lab Collection

Since Kodak’s bankruptcy, the George Eastman House has steadfastly refused all local media interviews “out of respect for Kodak.”

Reporters were told the two entities are very separate and Kodak’s support – $200,000 annually – is a small fraction of the museum budget.

But we haven’t been allowed to ask how the museum will cope in the likely absence of Kodak’s donation. We haven’t been allowed to ask the director whether Kodak’s trouble will have a broader impact on the institution. We haven’t been allowed to talk to visitors, who undoubtedly had the future of the iconic brand on their minds. We weren’t allowed to talk to the curator of the museum’s large camera collection on the day Kodak announced it will no longer make cameras.

The museum named after the founder of Kodak and dedicated to the history of photography, repeatedly and curiously said no to any interviews.

Except to the Wall Street Journal.

In a story called “The Kodak Fallout,” writer Richard B. Woodward makes it clear the museum and Kodak are inextricably linked:

For the first time since being chartered in 1947, the George Eastman House will have to get along without financial support from the company that has been its foundation.

Anthony Bannon, the museum’s director over the last 15 years, tried to be both upbeat and realistic. “It’s not grave but it’s still serious.”

For all concerned the new dispensation will take some getting used to. Throughout much of the museum’s history, it and Kodak have seemed to be one and the same.

(Bannon’s) successor, not yet named, will now have a vast and unique collection to oversee along with a new and permanent hole in the budget. The institution that invented film and photography conservation may be in need of some conservation of its own.

It doesn’t matter how Woodward got the interview. It’s very possible he bypassed the public relations office and called Bannon directly. Bannon is leaving the museum, so perhaps the reporter got him on the phone to talk about his new gig and threw in some Kodak questions. Good for Woodward.

What matters is Woodward’s article exposed the spin of the George Eastman House. The museum is a treasured institution and it’s in the public’s interest to discuss its welfare and talk to its experts. Furthermore, what’s happening to Kodak is part of history, the kind of history this museum is obligated to tell the community and the world.

An internal memo from Kodak to employees about getting out of the camera business provides insight not revealed in the press release. The memo has a straightforward Q&A section. This is an excerpt:

How can Kodak, the company that popularized cameras, be without a camera in the future? 

We want to take all that is great about our heritage and apply it to new market realities as we complete our transformation to a profitable, sustainable digital company. We continue to be in the imaging business. Image capture on the other hand is rapidly moving to multi function devices such as smart phones, and the point-and-shoot camera market is evolving.

Is Kodak now a printing company? 

Kodak has consistently described itself as a digital imaging, materials science and materials deposition company, which accurately conveys the depth of our technology and product and service portfolio in consumer and commercial segments.

I feel like we’ve made a lot of progress in improving this business. Couldn’t we still have made it profitable?

The progress we have made has been substantial and widely recognized by senior management. We should be proud of that. However, with the accelerating market decline and the increased liquidity challenges for Kodak, it became apparent that we could not sustain continued investment and operating losses, and the decision was made to exit.

The memo serves as a reminder there are people behind the products. Kodak unveiled new items, including a Wi-Fi camera, at last month’s Consumer Electronics Show. The company website says not all of them will launch.

Kodak workers made a video of the company’s CES display. It features the digital cameras, frames and video recorders now being discontinued. While watching, it’s hard not to think about the effort that went into making these products, the workers who will be affected and the company’s identity. Here’s the video:

City of Rochester Communications Bureau

More Links of the Day:

Although a recent study found America is less racially segregated than ever before, there are places where it persists. In some of those places, there is a significant “opportunity gap.”

The Urban Land Institute ranked 100 metropolitan areas based on black-white equality. The study measured residential segregation, income, employment, school test scores and home ownership.

Rochester, Buffalo and Syracuse ranked in the bottom ten.

Here’s Rochester’s report card:

Overall: F | 92nd

Residential Segregation: D

Neighborhood Income Gap: F

School Test Score Gap: D

Employment Gap: F

Home ownership Gap: D

The Atlantic points out the study doesn’t take into account the different sizes and lifestyles of each metro area.

But I’m glad this study went a little further than the Manhattan Institute study that looked at residential segregation. That study proclaimed our country is less segregated than ever. As I blogged recently, the data showed only slightly more integration in Rochester. It certainly feels segregated here. This study shows it is – and points out possible consequences.

– What’s up with Syracuse’s school superintendent? She proposed a budget with a 12 percent increase – unheard of in these tough fiscal times. If that’s not shocking enough, her budget has a $35 million hole and she has no idea how to fill it.

– Kodak has a big bankruptcy hearing next Wednesday. The court filings show everyone is lining up to get their piece of the pie. They also suggest Kodak could be having a hard time with vendors right now.

– Rochester’s ShotSpotter program has a shockingly low return on investment. More than 3,000 activations led to only six arrests.

– Save the Crows! Here’s my story on the Facebook group protesting the city’s crow removal. My favorite line: “They’re birds. Let birds be birds.”

Links of the Day:

– The City of Rochester has thousands of unpaid bills…because no one checked the inbox. The Democrat and Chronicle’s Brian Sharp continues his great coverage of the city’s computer “upgrade” that turned into a nightmare:

“One of the things that sort of disturbs me about the whole (computer system) thing is now we are getting involved in kind of finger pointing,” (Councilwoman Carolee) Conklin said in an interview. “And, God, I don’t care about who made the original mistake. We have got to get together on this.”

Among the upset vendors was Verizon, she said, which threatened to shut off city-issue cellphones.

– Rochester has a community of “junkers.” The Democrat and Chronicle’s John Hand takes us into the world of metal scrappers and the “pile.”

– Did your boss make you sign a form confirming your salary? Mine did. Here’s why.

– There’s no rust in Rochester. A University of Rochester professor writes in the New York Times about why Kodak didn’t kill us.

– Why the heck is Fujifilm excited about a new drug for Azheimer’s Disease? Because the company is on an acquisition binge.

 – An Associated Press article joins the few media outlets strongly making a case for conversion disorder in the LeRoy girls:

Experts elsewhere have looked on curiously at the Le Roy story. One piece of footage prompted laughter this week among a group of physicians. They were watching a BBC report on the cases, which showed one girl with a jerking arm that suddenly became very controlled as she applied eyeliner and then jerked around again when she was done.

“It’s almost impossible to conceive of a true neurological disorder that can allow for that complexity of switching back and forth,” said Dr. Jose Maldonado, chief of psychosomatic medicine at Stanford University, who mentioned the group’s reaction. “It also looks very purposeful. I’m not saying she’s making it up. I’m just saying that it doesn’t look neurological.”