Tuesday, February 27, 2007

Harrison Square financing

The News Sentinel ran a GREAT editorial today. Please read it:
<http://www.fortwayne.com/mld/fortwayne/16794298.htm>

OK, so it may not be great; however, it is mine...

I will be generating a list of questions to ask the City about the financing.

What would you like for me to ask?

Mike Sylvester

24 comments:

scott said...

I have some questions for you, Mike, out of genuine curiosity.

No matter what you are told about the financing, would it ever be reasonable to you? What is your criteria? What is acceptable?

I really would like to know.

LP Mike Sylvester said...

Scott:

I am not sure Scott.

What I am currently concerned with is the financing. I feel that the residents of Fort Wayne have a right to know exactly what this project will cost and exactly what they will be expected to pay for it.

I believe in an open and transparent government...

If the financing makes sense I will certainly oppose the project LESS then I will if the financing is "Sciende fiction."

Does that answer your question?

Mike Sylvester

scott said...

Not really. What is your criteria or acceptance level for the financing? Does it have to be 100% private money to get the Sylvester Seal of Approval? That's what I'm getting at here. What does the makeup and structure of the financing have to be in order for you to say that you have no problems with it, or at least, have minimal reservations?

Tim Zank said...

This is just a guess of course, and I don't have a dog in this fight, but I think Mikes comfort level would increase in direct relation to the taxpayers financial liability decreasing.

LP Mike Sylvester said...

Scott:

Good question...

I want to see a project with as much Private Financing as possible.

I want to see a project that will NOT lose money long term.

I want to see a project that uses reasonable and measurable benchmarks...

I am not sure that I could put a number on the amount of public financing that I think should be used. I for sure cannot support a project that will involve 50% or more public financing.

Scott I have a question for you.

What level of Public fianncing is accpetable to you?

Mike Sylvester

scott said...

Over all the phases of the project, it is said to be a 50% public/private split.

That is acceptable to me, especially since no general property taxes are being used. A 50/50 split with essentially no money coming out of taxpayer dollars is acceptable to me.

Yes, public money is being used, but it's a completely different beast compared to the FWCS building costs, for example.

LP Mike Sylvester said...

Tim Zank:

Perfect summary partner...

Scott:

You stated:

"That is acceptable to me, especially since no general property taxes are being used. A 50/50 split with essentially no money coming out of taxpayer dollars is acceptable to me."

How can 50% of the project be paid for with "no money coming out of taxpayer dollars?"

Is Fort Wayne going to start printing money?

Here is another question for you Scott... Where did the money come from to purchase the land that is to be given to a private company?

And the last question for you Scott. What if the project is paid for 60% public and 40% private? Would you change your mind?

Just curious...

Mike Sylvester

scott said...

How can 50% of the project be paid for with "no money coming out of taxpayer dollars?"
No money coming out of taxpayer dollars in the sense that the library expansion and FWCS building project have.

Where did the money come from to purchase the land that is to be given to a private company?
"At his disposal, he had about $4.3 million set aside from previously approved redevelopment bonds. Four properties along Jefferson Boulevard will be bought with money set aside through a tax-increment financing district approved in 2005."
source

What if the project is paid for 60% public and 40% private? Would you change your mind?
For this project, I would not be in favor of such a scheme.

LP Mike Sylvester said...

Scott:

So you think that the only tax we pay is property tax?

He had 4.3 million in bonds. Yet Belmont Liquors cost about 3 million once legal fees are considered, the land price of the smaller properties is at least 6 million once everything is counted and The Palace is another 2.5 million. So a grand total of 11.5 million has been spent by The City for the land alone... Where did that money come from Scott?

How about 55% Public and 45% Private Scott?

Mike

Angry White Boy said...

I have a ton of questions. Can I come along? :)

scott said...

What's the deal Mike? Are you going to keep asking me about the percentages until it's back down to 50/50? :)

You indicated that you will oppose this project, maybe less, but still oppose it. Are you going in to ask questions with an open mind or with an expected outcome?

LP Mike Sylvester said...

AWB:

I would be happy to have you along AWB. Just give me a ring...

Scott:

I just want to know the financing arrangement Scott... It seems like a simple request...

Mike Sylvester

Anonymous said...

Mike,

I fully support your right to review all of the numbers with the Richard Administration. All citizens should get their questions answered whether it be in public meetings like the one on March 8th or in invidual meetings.

I am trying to figure out, however, what expertise you have to be the "community analyzer" of all the finance issues relating to this project. The fact that you are a tax accountant does not make you an expert on all aspects of development and municipal financing. It seems a little over-reaching for you to be holding yourself out as the community's auditor.

I do however, hope that the Richard Administration sets down with you and other citizens to answer questions whether it be in individual meetings or further group meetings like the one on March 8th.

Sam T.

Jeff Pruitt said...

Sam,

I don't think Mike pretends to be a community auditor.

The community as a whole is the auditor - that assumes of course that the administration provides the details in a timely manner.

The more people involved in the oversight of this project the more likely it is to succeed. I think this is the point that critics of the skeptics are missing. If the administration knows there are numerous people out there openly skeptical and demanding answers then they are more likely to make sure all the i's are dotted and t's crossed.

It seems like the skeptics are being treated as if we just don't understand the project and that's why we're skeptical. To that I would respond - correct. But NO ONE fully understands the project at this point so I'm not sure why EVERYONE isn't somewhat skeptical.

To answer Scott's question (even if he didn't ask me) - this is the criteria I would judge the project by:

1. No public money outside of what's generated in the special taxing district can be used for long term sustainment

2. Analysis showing how the parking garage will stay in the black

3. The stadium revenue splits have to be fair (fair is undetermined at this point) to the city as we are the primary financer

4. Analysis (including assumptions) showing expected hotel occupancy and how this will generate all the necessary revenue for the project.

5. Benchmarks for which the project can be measured against - added tax dollars, employment, etc.

This would be a good start. To date, none of this has been done. However, the mayor has assured us it will so we are patiently (well maybe not) waiting...

Anonymous said...

The cost of the land was Economic Development funds.. (which I believe are tax payer dollars) are these monies included in the total cost of the project..

No tax payer dollars used...... don't think so..... Economic Development monies are tax payer dollars

Andrew Kaduk said...

Perhaps Mike could just take a stab at translating the mayors "company line" Six Sigma horseshit so that the rest of us can fully understand that which outwardly appears to be comprised of the following components:

1. A moving target
2. Woefully euphemistic
3. Suspicious at best
4. Horribly flawed at worst
5. Moving forward at a curiously high speed

brian said...

Jeff,

I think you made some great comments in response to Scott's questions. Those are the objective responses that many of us agree upon.

"1. No public money outside of what's generated in the special taxing district can be used for long term sustainment"

I agree. This is a big factor for many people. I believe that this is one of the major factors that are still being finalized. We are all awaiting the final numbers and plans now, but it is still a work in progress. The hotel proposal was received within the last two weeks and the Palace was purchased within the past two days.

"2. Analysis showing how the parking garage will stay in the black"
I know that this is one of Mike's biggest concerns and staying in the black is obviously important. I do disagree with Mike and think that this garage is in a much better location than the city-county garage, thanks in part to a brand-new, much hyped hotel, 24/7 housing, and paid Lincoln employee parking.

"3. The stadium revenue splits have to be fair (fair is undetermined at this point) to the city as we are the primary financier"

Our DFWB blog interview with Jason Freier mentions that Hardball is interested in looking into revenue splits with the city. I am interested to learn more about the potential here as well.

"4. Analysis (including assumptions) showing expected hotel occupancy and how this will generate all the necessary revenue for the project."
"5. Benchmarks for which the project can be measured against - added tax dollars, employment, etc."

Again, I agree and I think these are things we are all looking forward to learning more about, but it is not yet finalized. There may be figures for a hotel w/o Harrison Square development, and figures with the project. What about the future of Memorial Stadium? Last I read, options are still being reviewed by the parties involved.
Obviously these are all details that I am eagerly awaiting to post on the DFWB blog.

Good comments, I enjoyed reading through them.

Anonymous said...

Brian,
Those most of details should be available BEFORE a deal is done. Its called research and planning.

Also, I understand that the Mayor's office is giving you as much of their stuff as is possible. Please understand that they are using your blog as a PR campaign for Harrison Square.

If you want people to take your observations on this project more seriously then your analysis needs to be more objective. At this point it looks like you are regurgitating the Mayor's press releases.

brian said...

Anonymous:

I appreciate your comments. Do you want hypothetical "research and planning figures," or do you want final numbers? Personally, I prefer final data over figures that could change next week.

Yes, I have received information from the city. It is as simple as a computer and an internet connection. You could call or write a letter, but I find email to be easiest.

We have asked for information from multiple groups just as anyone else can. Sylvester has met with the city. Is his site a PR campaign? I am a citizen that is asking questions, although I make the answers public for all whom may have the same questions.

Our blog was created out of curiosity for downtown development. My brother and I got tired of searching all over the internet for related articles and comments. We did not find one place for all information- so we created it. We post all related information that we find: pro, con, and in between.

If our blog allows citizens of Fort Wayne to learn more about opportunities in their city, then great. That is the point.

Anonymous2 said...

Brian,
There is a difference between your communications with the mayor's office and lets say someone like Mike.

As somebody who is unlikely to criticize the Mayor's office is quick to give you information.

They aren't nearly as quick to respond to Mike's requests as he is more likely to criticize them should he find something that doesn't jive.

LP Mike Sylvester said...

Jeff Pruitt listed the five following items that he thinks we need to understand. After the meeting I had today with Pat Roller and Greg Leatherman I can answer them for you Jeff:

1. No public money outside of what's generated in the special taxing district can be used for long term sustainment.

UNKNOWN. NO PROJECTION EXISTS YET.

2. Analysis showing how the parking garage will stay in the black

UNKNOWN. NO PROJECTION EXISTS YET.

3. The stadium revenue splits have to be fair (fair is undetermined at this point) to the city as we are the primary financer

UNKNOWN. NO PROJECTION EXISTS YET.

4. Analysis (including assumptions) showing expected hotel occupancy and how this will generate all the necessary revenue for the project.

UNKNOWN. NO PROJECTION EXISTS YET.

5. Benchmarks for which the project can be measured against - added tax dollars, employment, etc.

UNKNOWN. NO PROJECTION EXISTS YET.

What do you think Jeff Pruitt?

Mike Sylvester

brian said...

Mike,
Thanks for helping me explain my point.

LP Mike Sylvester said...

Brian:

You are right, there are NOT enough details in place to really understand the financing aspect of the project...

Can you believe that they want to have a deal completed and signed by April 1st?

Do you have any idea why they want to "ram it through?"

Mike Sylvester

brian said...

Mike,

I believe that it may have to do with the deadlines for some financing options.

"..but the city had to move now to purchase the land because of an April 2008 deadline on the $10 million downtown bond the city took out in 2004."
(http://www.fortwayne.com/mld/
journalgazette/news/editorial
/16818585.htm)

I'm not sure if a signed and completed deal by April 1st is expected. However, certain aspects of the project could very well be completed by that date.

I don't understand why people are saying that the deal is "being rammed through." Maybe you can help explain. I was expecting the project to move along more quickly considering the planned demolition for involved buildings, and potential ballpark opening for Spring 2009- maybe I am impatient!

This would be a huge project for downtown Fort Wayne. Many details need time to fall in place- you know this firsthand from your meeting. I believe that the public will have plenty of time to discuss/blog/ask questions about the project before a vote occurs. I don't think it needs 4 weeks like you have mentioned previously. We both know that bloggers like ourselves and others will be all over any forthcoming information. Look at all of the discussion/criticism that the project has already generated. I find that exciting.

Instead of asking for the financial details and working from there, I would like to see a post from you describing your "ideal proposal" if the project should happen to move on.

I would happy to add any thoughts/information.