Edgewater TIF Expansion “Suboptimal Choices”

There just “wasn’t enough time to do it right” so it barely passes with a  3 – 3 tie with the Mayor breaking the tie. The proposal is more messed up than usual. And I think that puts it more in jeopardy than I had imagined. Contains BK comments.

Large parts of Mansion Hill that want to be in the TID (TIF District) are left out. $58M of property in James Madison Park, that doesn’t want to be in there, is in. And the reason why it can’t be changed, kind of disturbing. Plus a love very put down of my neighborhood association by my very own alder. Here’s (most of) the discussion including an interesting little speech by Verveer at the end – which I have heard before, but he does not really have kind words for the process this TID went through and seems to say the Mayor, Maniaci and staff really dissed him.

PUBLIC TESTIMONY
Me. I testified reminding them that the James Madison Park Neighborhood voted that we did not want to be in the TIF district sometime last winter. There is $58M worth of property in the area to the East of N Hamilton Street that should be removed. The neighborhood does not want to be in there because:
a) There are no public improvement scheduled for the area.
b) We don’t believe the small cap TIF will help our area because the current homeowners will not qualify and the houses to not usually sell openly on the market, but instead between landlords.
c) I think I forgot to say this yesterday, but said it two weeks ago when I testified, but also we think that the risk of people who own several parcels (we have a map) wanting to tear down the properties and build an out of scale multi-lot project is too great compared to the small likelihood of small cap TIF working in our neighborhood, especially given there is no program yet for the area and the funding only goes until 2015 instead of 2019 like everything else.

QUESTIONS
Mike Verveer says that several staff and he met late last week to talk about additional changes to the boundaries, and he asks Joe Gromacki, the TIF Coordinator to explain why it’s too late to make changes to the boundaries of the amendment.

Gromacki (rambles a bit so this is hard) says that process to amend the project would be hard for it to be satisfactory to MMSD on the 27th and to meet the deadlines for the state. It’s complicated, there would need to be new financial projections based on the property included if it was smaller or larger. They would have to have a district adopted by council by September 30th. The council would vote on the 21st and then a on the 27th to school district, it needs to be done for them to review it. He doesn’t have time between now and 21st to generate the documents, for submission. There are hundreds of documents, numbers to be verified, if he had another month, he would be able to accommodate you. The option to remove the property that I suggested (twice now, first at the Joint Review Board, second at the last Board of Estimates meeting) would require recalculating everything in the project plan, including all estimates of increment, recalculating indebtedness and how quickly pay off, also require legal description to be rewritten, surveyor would need to do it, so passes muster with dept of revenue. This includes 4 departments, including the assessor, comptroller, clerk and real estate and there are too many moving parts. (Ok, so what’s the point of asking the council about the boundaries when they can only accept what is presented to them and not change things?

Verveer asks Dean Brasser, Comptroller if he concurs with his opinion, which he heard he does.

Brasser, says it is essentially as Gromacki explained. The amount of administrative work means it is highly unlikely it would accomplish it on time for school district approval and review and meet the filing deadline for this year. It could be delayed a year. (That comment is ignored, but a real possibility given the delay due to the law suit.)

Verveer asks if that includine the work done by his staff.

Brasser says he would do the work himself.

Satya Rhodes-Conway says that according to testimony the neighborhood voted more than a year ago, we have been talking about it for that long, so why is it in if they said they wanted to be out.

Bridget Maniaci says that neighborhood group that gets together is only 6 – 10 neighbors, it is the homeowners (there are renters too) in neighborhood, that is the group. This is something that has been discussed, there are opinions on both sides from that group, its a small group and she has discussed at length why it is in best interest of rental properties that these resources be brought forward. For homeowners, the small cap TIF program does not have immediate value to them, they can’t apply unless they buy a different house. She has put together data, has looked at extensively since last summer to find out if worth the effort for the neighborhood. She thinks if look at assessments and look at blight study, she believe that data stands up. This is a neighborhood in great need of assistance and few programs at the table for reinvigorating neighborhoods, this neighborhood is financially viable and competitive for small cap TIF and that’s a lot of the reason why in discussion this for a long time. She was at the meeting with agency heads over a year ago, they discussed redevelopment, TIF and other programs and there is not a lot out there, and this is given benefits to neighborhood. (So, she ignores the realities that we pointed out and substituted her own judgement. Also, the neigbhorhood is a total of about 11 blocks and that much participation is kind of amazing.)

Rhodes-Conway says something to the effect of, so the neighborhood is against, but you’re for it?  And, she says that there are many neighborhood association that only have 6 – 10 active members.

Verveer asks what can get out of the ame ndment, he says this is not about the Edgewater.  He says it is the typical practice by your staff that when draw a map try to include all adjacent right of ways to take advantage of TIF proceeds.

Gromacki says yes but it is not an exact science, he says it is based on value, and I missed some of his explanation.

Verveer asks if blight has been an issue.  I also missed that answer.

Verveer asks if when look at what Clear moved, there is one block in his district where adjacent properties are in but not the street, wondering if that is the case, is the one block just missed?

Gromacki says it is possible to double check that – Gromacki says depends up which on it is.

Verveer points out that it is the 100 block E Gorham, by Holy Redeemer.

There’s a whole bunch of back and forth, Gromacki brings the map over to Verveer to verify.  They discuss privately.

Gromacki says that 6 or 7 parcels could be added, but he is speaking on behalf of 4 departments over which he has no authority, he will try to get his portion of it done.

Verveer says that follows up that as long as adjacent parcels to right of way, ok in statutes to include it, can you double check the survey – Verveer asks if need to be part of the motion.

Gromacki says can’t include just the right of way, have to have contiguous parcels – they have Holy Redeemer but have to get 6 or 7 more parcels – they discuss back and forth some more.

Verveer tells Gromacki that him what Anne Zellhoefer from the city attorney how it can be done.

Gromacki says he can’t get the entire 100 block of Gorham only 2/3 of it.

Maniaci jumps in to say if he did it the way he describes it would be consistent with the rest.

Bruer asks Zellhoefer to come and explain.

More side discussions . . . I took a break, went to get a soda.

When I got back Clear was explaining that there was not enough time to do it right, there are two suboptimal choices, version 1 will most satisfy the Joint Review Board.  If they had more time, staff would do what they could, they have been helpful and ready to go to the mat for the extra work , but clock is their unhappy master and rules are what they are.  He explains there is also an issue with this how needs to be submitted, the state has a “one and done”  policy on errors and mistakes.  If they, screw up they have to come back next year, all of us know consequences of that – that is why made the motion he did, wants them to support, he thinks this is the best of a couple of suboptimal options.

Verveer asks if he said his amendment was friendly on the the 100 block of W Gorham public right of way?

Clear says it is not up to him, but he doesn’t see it as a problem with it.

Verveer explains that he has been in discussion with Olinger back several years, he should have archived the emails to chronicle it.  He has tried to include the historic Mansion Hill neighborhood in the State St. district since before they had any idea about the Edgewater hotel.  Efforts to include that neighborhood go back way before Dunn came to him with the proposal.  With that said, and many of you have been victims of my lobbying so you know, he wanted to include Mansion Hill sooner rather than later for two reasons, infrastructure in neighborhood is poor at best, streets and underground utilities are the worst in his district.  He says that he and Larry Nelson have joked that the sewers, which have been here since before the city was incorporated should be landmarks.  He also says there are some of the most beautiful homes in city, they need a robust small cap tif program.  Steve Brown was divesting in properties a few years ago and that is when they started talking about Mansion Hill being in the TID.  They already did the blight study before the Edgewater, so that they could get more owner occupied residents to do renovations.  So he was distressed when not he was consulted in the TID 32 amendment.  This is a departure from all of his experiences over the years in the many TIF districts established and amended in his district.  You might be wondering why I’m so late, but its not his doing.  And that is why there are various versions in the packet.  He appreciates where Clear coming from, he understands joint review board concerns and his colleagues, but this is a bitter pill to swallow and as much as he want Mansion Hill in the district, when he saw the map the Mayor and Maniaci map in legistar, he was distressed that it did not include much of Mansion Hill.  The map only includes the bare minimum to get from State St to the Edgewater to make it work, and then he praises Alder Maniaci’s strong advocacy to get James Madison included in its own way – so as many of you know, others have tried to satisfy my concerns, version 3 the staff did a lot of work and the plan commission adopted that amendment in July.  Now they are being asked to go with original not plan commission version.  As you know the neighborhood was not supportive of Edgewater and they were told the benefit will be improvements to their neighborhood, small cap and public improvements, even his colleagues have thought of amendments to include historic preservation.  He doesn’t want to get into merit of Edgewater, but they debated this  somewhat in May, 5 or 7 am but he wanted to remind his colleagues that the Edgewater grant has a record number of exceptions to the TIF policy, there is no equity kicker, no equity participation, it doesn’t meet the 50% rule, it is not self supporting, there is no personal guarantee in two respects.  He expects a similar vote as with Edgewater, but he thanks those who tried, he wanted to bite his tongue, hold his nose and support despite $16M but not able to do that.

With that, they vote, it is a 3-3 tie (Verveer, Rhodes-Conway, Sanborn vote no, Clear, Bruer and Clausius vote aye.  Mayor breaks the tie in favor.)

So much for a clear demand from the community – this is no slam dunk.  And so much for the promises to the neighborhood about what they would get out of the Edgewater project.  Neighborhoods, you have gotten the clear message right.  No matter what you want, the alders know better.  Where is our representation?  I’ve lived in my neighborhood for nearly 20 years (6 years as a renter, the rest in two different homes I have owned) and others in my neighborhood association have lived here even longer . . . shouldn’t that count for something?