Harrison Square Walkway - $1.85 Million

The Redevelopment Commission unanimously approved the walkway plans that will connect the Courtyard by Marriott with the Grand Wayne Center. This walkway will be an indirect connection that will span from the new hotel to the Indiana hotel and then attach to the existing Embassy walkway.

The cost of this project will be $1.85 Million. The Goldstein Foundation will generously supply $550k of that amount, $1 million was already budgeted and the other $350k will come from either the interest on the HS bond or the proceeds from the land sold to Barry Real Estate for the condominium development - both these options were unallocated in the HS budget. The Redevelopment Commission will be responsible for the maintenance and utility cost for this walkway which Steve Brody estimated between $6-7k/year.

The commission has broken the project into two parts - the first benefits the hotel developer and the 2nd benefits the Embassy and the Indiana Hotel. The first part includes the walkway, pedestrian corridor, stairway connecting the corridor and existing walkway and a lift for accessibility (~$1 Million). The second part includes a storage area, new elevator shaft (on the west side of the embassy), constructing a stairwell and installation of an elevator (~$850k).

Greg Leatherman saw this as a "win-win" that would satisfy the hotel developer's needs and bring the Indiana Hotel that much closer to redevelopment. Leatherman said he wasn't sure if this would interest the hotel developers enough in the Indiana Hotel for them to redevelop the site but others were interested.

The agreement still needs the approval of the Historical Preservation Board which meets in the Omni Room tonight at 5:30pm but Brody expected the board to approve the plans and that they would be executed tomorrow.

As usual, readers should check out DFWB for the actual drawings and documentation which should be posted shortly...

Great News for SE Fort Wayne

The Casselwood Shopping Center will be remodeled and reopened next year with the help of $65,000 in CEDIT funds. This is GREAT news to local neighborhood residents!

I spent most of my life in Southwick Village, which nearly backs into this shopping center. The only thing between my former addition and this center was an apartment complex created and developed by the father of my childhood schoolmate, Ron Bunt. After it closed back in 1998, we were forced to drive an extra mile and a half to Mark's City Market on South Anthony or a 4-5 mile trek to New Haven when we needed groceries. In our current home, we are no further than 10 minutes from at least six grocers.

I recall this center as being anchored by a Marsh store when we first moved to the area in 1970. It went through several reincarnations including Maloley's and Super Value. I'd spent alot of time in other businesses in the plaza and others nearby as well. There was a Dan Purvis Rexall drugstore next door to the grocery store that also evolved through several name and ownership changes; yet the same smiling faces were there to greet me through the years. There was the coin-laundry with the friendly manager who was always trying to hook me up with her daughter, the Coney Station that never matched Coney Island but was still worth the occasional perusal, and Jimmie's Pizza Inn nearby.

I ran a Journal-Gazette route in the area around and including Casselwood when I was a teenager; my Dad later started a motor-route nearby and we teamed up to serve the entire area. The local Texaco station on Hessen Cassel Road was purchased by Jon Lassus in the mid-eighties, and I worked my way up into mgnt there before moving on to higher pursuits. I never lost my sense of pride in MY part of town. I'm tickled to death to see Casselwood follow in the steps of Menards and Wal-Mart at the former Southtown Mall site.

Here's the article By Kathleen Quilligan of The News-Sentinel:

If there was a makeover show for shopping centers, Casselwood Shopping Center at the corner of Hessen Cassel and Paulding Road would make a good candidate.

“Right now it's a big dump,” admitted the center's owner, local real estate developer Barry Sturges.

But that could soon change. At its meeting Wednesday morning, the Board of Public Works approved allowing $65,000 in Community Economic Development Income Tax (CEDIT) to go to the center. Forty-thousand from the three at-large members of City Council will pay for lighting in the parking lot; another $25,000 from Councilman Glynn Hines, D-6th District, will go toward overall improvements.

Each council district receives $450,000 a year in CEDIT money for improvement projects, and the three at-large council members share another $450,000, which is also available for improvement projects.

Julie Sanchez, a redevelopment specialist with the city, said the center could be the new home of a discount grocery and a dollar store, but Sturges said nothing has been confirmed yet. He hopes to have details finalized within the next 10 days.

Sanchez said construction at Casselwood is scheduled to begin before the end of the year, in time for a February 2008 opening. She said a total overhaul of the center will total almost $2.5 million.

Zoning restrictions would prohibit new tenants from selling tobacco or liquor, as well as guns unless a sporting goods store moves in. No pawn shops, massage parlors or check-cashing establishments would be allowed, either.

The center's former anchor store, Tom's SuperValu, closed in 1998 after its fifth armed robbery in two years.

City Controller Channels Baghdad Bob

If you don't remember Baghdad Bob he was the Iraq Information Minister during the 2003 Iraq war. He would give statements of propaganda during press conferences that were so ridiculous people started tuning in just to see what outrageously bogus information he would come up with next. My all-time favorite was a quote describing the mass suicide of US soldiers as they entered Baghdad and saw the unstoppable Iraqi army:

I can say, and I am responsible for what I am saying, that they have started to commit suicide under the walls of Baghdad. We will encourage them to commit more suicides quickly.

Before we get to City Controller Pat Baghdad Roller's response, let's take a look at what the State Board of Accounts audit said about the Redevelopment Commission's purchase of land to be used for Harrison Square. This blogger pointed out back in April that the Redevelopment Commission violated state law by not getting appraisals for the Harrison Square properties before purchasing them. I've stated this numerous times and to date have not seen anyone contradict this. So I was not surprised to see the State Board of Accounts agree with my position:

The Redevelopment Commission purchased the above properties prior to obtaining two independent appraisals to determine the fair market value. The Redevelopment Commission has subsequently obtained two appraisals for the properties. For the residential properties, the purchase price exceeded the average of the two appraisals by a combined total of $1,025,030.

Indiana Code 36-7-14-19(b) states in part: “(b) The redevelopment commission shall first approve and adopt a list of the real property and interests in real property to be acquired and the price to be offered to the owner of each parcel of interest. The prices to be offered may not exceed the average of two (2) independent appraisals of fair market value procured by the commission except that appraisals are not required in transactions with other governmental agencies...”

Clearly the SBA is pointing out that Redevelopment Commission did not follow the proper procedure. Of course that's not how Baghdad Roller sees it. Unbelievably, she concludes that the auditor's statement listed above somehow concurs with her idea that they did nothing wrong: (p12)

"We agree with your audit position that the procedure used by the Redevelopment Commission to purchase land for the Harrison Square Project was appropriate and in conformity with state law."

How in the world did she draw that conclusion? Never mind, I forgot city attorney Tim Manges is still around for another week so she probably consulted with him on that statement. Maybe Roller should use the following Baghdad Bob quote for her official defense:

"The American press is all about lies! All they tell is lies, lies and more lies!"

Still At Least One Unanswered Question About Harrison Square

Today's News Sentinel has a nice feature piece about Harrison Square critic John Kalb. John has been tireless in his efforts to derail the project and he's certainly honest about that fact:

“(Kalb's) taken the role of a watchdog, not to protect Harrison Square, but to kill it,” Leatherman said.

That's true. Kalb said his goal is to slow the process to the point it gets killed, to the point Hardball Capital, the Atlanta-based company that owns the Wizards and is contributing $20 million to the project, isn't interested anymore.

I think many of us fought the good fight on Harrison Square and now it's time to move on. However, there is still one remaining issue (I'm sure Mike Sylvester has 58 more) that gnaws at me almost daily. Readers may remember my posts (here and here) detailing how I thought the Redevelopment Commission violated state law by not getting appraisals before buying the property. I was particularly skeptical about the argument from Leatherman and Wernet (Redevelopment Commission attorney) that they didn't need the appraisals because they didn't acquire the property through eminent domain.

I still believe that argument was completely incorrect. I know that the Gang of 3 on the city council recently inquired about this and I was told that the city was no longer putting forth that explanation. What I want to know is - what exactly is their explanation for not getting the appraisals as required by state law? And why were they using the eminent domain argument with the public in the first place? It should also be noted that the local media took the eminent domain argument from the city without ever questioning them about it.

The city may want to sweep this under the rug but they will not succeed in doing so if I have anything to say about it. I'm firing off a series of requests to Leatherman, Wernet and the Gang of 3 to have my final, lingering question answered...

Kalb Strikes Again - Harrison Square to be Competitively Bid?

Mike Sylvester has a copy of the letter that John B Kalb has sent to the Redevelopment Commission requesting that they not approve the recent Harrison Square agreements due to the fact that they may be in violation of state law if they do so:

Commissioners:
I am writing to ask that you NOT approve the subject resolutions, which pertain to the baseball stadium license and management agreements, because I think that Indiana state law mandates that you may not enter into an agreement for the management of a public facility without first making a public request for proposals. In particular, I direct your attention to IC 5-23-2-2(which defines “board” and which definition I think encompasses your Commission), IC 5-23-2-7(which defines “operating agreement” and which definition I think encompasses the proposed Hardball/ stadium agreements), IC 5-23-4-1(which grants the Commission the authority to enter into an operating agreement for the management, maintenance, etc. of the stadium) and IC 5-23-5-1(which requires that the proposed agreements be preceded by and pursuant to a public request for proposals).

What's interesting here is that the management of the stadium will likely be up for competitive bid. However, the operations are all under Hardball Capital's domain and were certainly not going to be competitively bid. In the unlikely event that the Redevelopment Commission decides to follow state law and bid this competitively, I would encourage all Harrison Square opponents to work together to put forth an independent bid. I've worked on a significant proposal or two in my day and I would be willing to help.

And I suppose a few more subsidies might be in order too - why not...

Subsidy Square

Today's JG story covering the downtown hotel agreement points out a couple of items that should irritate even the most adamant Harrison Square supporters. First, the idea of revenue sharing between the hotel and the city:

The city also agreed to share in revenues and losses with the hotel.

I know this got slipped into the story as almost an afterthought but THIS IS A BIG DEAL. To my knowledge this has never been publicly discussed and certainly wasn't part of the memorandum of understanding. Early on, Mark Becker discussed the idea of the hotel sharing profit above certain benchmarks and this was put into the MOA:

11. The Commission and Development Team agree to negotiate, in a final Development Agreement, a provision to give the Commission and/or GWC an economic interest in the Hotel in the event, after the first full five calendar years of the Hotel's operation, the Hotel is then achieving and expected to continue achieving certain minimum threshold investor returns.

I remember discussing this with Mike Sylvester and we both agreed that this was cleverly worded to provide a way for the hotel to mitigate any possible future losses. It was simply not plausible that the hotel would give away profit without the possibility of the city taking on losses. If Lanka's reporting is accurate then the city needs to explain why this was left out of the MOA. I would not be surprised to find out that they deliberately left it out as it certainly would've been a contentious issue.

The next disturbing part of the story covers the idea of a city-subsidized walkway:

The hotel agreement is contingent upon the city constructing an enclosed walkway from the hotel to Grand Wayne Center at the city’s cost. Becker said such a bridge would cost less than $1 million. The skywalk had not been discussed publicly before, and Becker confirmed it will be an additional public subsidy for the project.

This was not in the memorandum of understanding. We're already building them a parking garage, giving them all the land for the project, and giving them $2.5 Million in cash - with another possible cash subsidy 10 years down the road. Why should we kick in an extra $1 Million for the walkway? It certainly can't be argued that the walkway is critical to the business operations of the hotel. Hell, why not subsidize the whole damn thing for them? Is there anything the city and the redevelopment commission would say no to at this point?

Let's not forget that the projected hotel occupancy rates border on President Bush-like delusion. Who in their right mind would use the most optimistic numbers possible when deciding to invest in a project? These occupancy numbers are a perfect example of the city's wanton disregard for our tax dollars...

Do City Attorneys Understand the Open Records Law?

Time and again, I've discussed the contempt this administration has shown for citizen oversight - at least I thought it was contempt. Now, I'm leaning towards incompetence. Yesterday, the News-Sentinel posted a piece about public accountant Ron Reinking's request for information regarding Harrison Square financing. The amazing part isn't that the city hasn't responded in the timeframe required by law, it's that they don't even KNOW they are in violation:

A week ago today, Ronald Reinking, a Fort Wayne accountant, sent a letter on behalf of the Indiana Policy Review Foundation to the city’s Redevelopment Commission asking for more financial information about the $125 million-to-$160 million downtown revitalization project.

Reinking said he has yet to hear any response to his query.

Redevelopment Commission President Christopher Guerin said he received it Friday but understood from talking with city attorneys and Greg Leatherman, deputy director of community development, the request would need to be filed under the Freedom of Information Act because Reinking asks for information that will require new documents to be created at a considerable investment in time.

Freedom of Information Act? That's the federal law governing information requests but the state has it's own law - the Open Records Law. Granted many people, including myself, throw around the term FOIA in regards to information requests but city attorneys should know the difference.

Still, he said the commission would supply all the information under the right circumstances.

The right circumstance? State law allows for citizens to make their requests in person, over the phone, fax, email, letter, etc. So what exactly is wrong about this circumstance? Is it simply that the city doesn't want to comply? That would be in line with their modus operandi. Since city attorneys have failed Mr Guerin, let me remind him that he is ALREADY in violation of the law by not responding within 7 days. My suggestion would be for Mr Reinking to contact Indiana's Public Access Counselor to get a ruling on this matter...

UPDATE: Looks like the city is going to comply w/ Mr Reinking's request afterall. Quite a change since the story in yesterday's News Sentinel - did the mayor just return from the US Mayor's Conference and start cracking skulls? Whatever the reason, their response to the records request is a welcomed sign...

It's Not About Matt Kelty

I don't have any issue with Matt Kelty as a person. I tend to give people the benefit of the doubt and I'm sure he's good, honest, hard-working guy. This issue isn't about disgracing him personally or even removing him as a candidate. It's about the rule of law. I've heard several people claim that the "loophole" needs to be closed yet nobody has offered a definition of what this "loophole" is or how to close it. Personally, I don't believe there is a loophole. The law is quite clear and Kelty violated it regardless of the partisan whitewash ruling we saw today.

Kelty's loans aren't the only issue here. As I previously blogged, the Redevelopment Commission has also violated state law by not getting appraisals before purchasing the Harrison Square properties. Yet instead of being held accountable, their attorney is actually saying that the law doesn't apply while giving erroneous references to the Indiana Code.

But it doesn't end there. Our current mayor has not responded in the time alloted by state law to numerous Open Records requests. Our Sheriff, Ken Fries, had an illegal sign up during last year's campaign and nothing was done. Kelty, too, had an illegal sign and his campaign tried to say it didn't violate the law because it was a banner and not a sign. Recently the Yellow side of the FWCS petition drive has illegally placed signs in various spots throughout the city. We also have electronic signs and campaign signs that are violation.

If we don't want these laws or we think they're pointless then get rid of them but we cannot condone blatant disregard for the law. I feel like Walter Sobchak from The Big Lebowski:

Smokey, this is not 'Nam. This is bowling. There are rules.

Has the whole world gone crazy? Am I the only one around here who gives a shit about the rules? Mark it zero!

Redevelopment Commission's Argument Doesn't Square with State Law

Previously, I wrote about members of the city council bringing up the idea that the redevelopment commission might have violated state law in the way they acquired Harrison Square property. Well it looks like Councilmen Schmidt, Smith and Shoaff are still questioning the purchases. One recent quote from the redevelopment commission's attorney is quite disturbing:

Wernet argued that the commission wasn’t even required to get appraisals for the land because it didn’t use eminent domain. He said appraisals were done after the fact to gauge the value, and those appraisals should be completed by Monday’s commission meeting.

Greg Leatherman, deputy director of development, has repeated this claim and frankly it's just not supported by anything in state law. My previous post covered this and listed the statute -IC 36-7-14-19 - Acquisition of real property; procedure:

The redevelopment commission shall first approve and adopt a list of the real property and interests in real property to be acquired and the price to be offered to the owner of each parcel of interest. The prices to be offered may not exceed the average of two (2) independent appraisals of fair market value procured by the commission except that appraisals are not required in transactions with other governmental agencies. The prices indicated on the list may not be exceeded unless specifically authorized by the commission or ordered by a court in condemnation proceedings.

There is absolutely nothing in that part of the code that deals with eminent domain. In fact just look at the title - "Acquisition of Real Property; procedure". This statute deals with ALL Real Estate Acquisition. Compare that with the title of the next section of the code (36-7-14-20) "Eminent Domain; procedure". This covers eminent domain but it is completely independent from the statute I've listed above. To argue that 36-7-14-19 somehow only deals with eminent domain when it doesn't even use those words AND there is another statute specifically entitled "eminent domain" just seems outrageous.

They should not be allowed to get away with this argument without vigorous debate. Namely, they should cite the exact statute they are referring to when they make statements like those above. I think it's clear that the Redevelopment Commission violated state law...

Harrison Square Welfare

The JG reports that the city will ask the Redevelopment Commission to add a new subsidy for the new Harrison Square hotel that is already heavily subsidized:

City officials plan to ask Grand Wayne Center to contribute $2.5 million over 10 years to help subsidize the almost $50 million hotel that is a part of the larger Harrison Square project.

Keep in mind that the city is already building them a parking garage as well as giving them the property they disgracefully took from Belmont Beverage through the use of eminent domain. But that's not enough.

The thing I don't get is that THEY WERE THE SOLE BIDDER; if they didn't have the money to build the hotel then why didn't they just subtract $2.5 million from the bid? I know, I know, they thought certain money from the state would become available and it didn't - but guess what? That's called RISK and the city shouldn't be on the hook for the hotel developer's poor decisions.

There was another part of the article that caught my eye:

In the initial non-binding contract with the hotel developers, the city agreed to work with Grand Wayne’s board of directors to allow the new hotel to recoup some of the room tax charged to hotel guests. Leatherman said the hotel developers will no longer get a direct rebate of the room tax, but the city hopes to use the $2.5 million as additional incentives for the hotel.

I think the reason they can't get a direct rebate of the room tax is because IT'S AGAINST THE LAW. The following piece of legislation states the tax must be paid to the state.

IC 6-9-9-2 (c) The county fiscal body may adopt an ordinance to require that the tax be reported on forms approved by the county treasurer and that the tax shall be paid monthly to the county treasurer. If such an ordinance is adopted, the tax shall be paid to the county treasurer not more than twenty (20) days after the end of the month the tax is collected. If such an ordinance is not adopted, the tax shall be imposed, paid, and collected in exactly the same manner as the state gross retail tax is imposed, paid, and collected under IC 6-2.5.

IC 6-9-9-3 indicates that this money comes back from the state to the county's capital improvement board and can be used to promote tourism. Hopefully our resident member of the redevelopment commission, Karen Goldner, can help us understand how exactly the Redevelopment Commission fits into this. And, if Karen is so inclined, I think readers would be very interested to hear her opinion on the subsidy in general...

Fort Wayne Redevelopment Commission Appears to Have Violated State Law in Harrison Square Land Acquisition

Last night's Fort Wayne city council meeting was the first to really address the Harrison Square issue. Deputy mayor Mark Becker and other city officials presented the memoranda of understanding for the hotel developer as well as Hardball Capital.

The council had a very lively discussion about the project and it started out with a bang when Tom Smith asked how the Redevelopment Commission could spend over $12 Million dollars without council approval and without appraisals. The city responded by saying that 2005 CEDIT bond allowed them spend money on "major projects that would be a catalyst for downtown". They also stated they used this bond money to pay for $4.2 Million of the land acquisition with the balance coming from the Jefferson Pointe TIF which only purchased properties along Jefferson. The city also claimed that they didn't need the appraisals because state law gives them the right to purchase land above appraised value.

Don Schmidt quickly countered this by quoting the Indiana Code that seems to suggest while they can purchase land above appraised value they must still have the appraisal first. Read the statute for yourself:

The redevelopment commission shall first approve and adopt a list of the real property and interests in real property to be acquired and the price to be offered to the owner of each parcel of interest. The prices to be offered may not exceed the average of two (2) independent appraisals of fair market value procured by the commission except that appraisals are not required in transactions with other governmental agencies. The prices indicated on the list may not be exceeded unless specifically authorized by the commission or ordered by a court in condemnation proceedings.

It appears to me that the Redevelopment Commission can certainly pay MORE for a property but only after they get appraisals and offer the averaged appraised value. I think it's quite clear that the Redevelopment Commission violated state law in purchasing the Harrison Square land.

Greg Leatherman's response was that the above statute only applies to Eminent Domain which is a RIDICULOUS argument as anyone that reads the statute can see. The council attorney was going to look into the issue and report back...