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Mayor Henry and the Tough Year

His first year of office behind him, Mayor Henry talks about Fort Wayne’s economic challenges and exploring possible other sources of revenue for the city

By Michael Summers

michael_summers@fortwaynereader.com

Fort Wayne Reader

2009-02-10

During an ordinary year, governing a sizeable city with its various ongoing projects, plans for the future, and general daily needs is no small responsibility.

But 2008 was no ordinary year. It was an extraordinary year, and not in a good way. The problems that plagued the country in 2008 — mortgage crisis, financial collapse, economic downturn, loss of jobs, etc. — came home, and Fort Wayne found itself beset by what Mayor Tom Henry, just ending his first year in office, euphemistically calls “economic challenges.” “So much we wanted to do in 2008 really slowed down because of the economy,” he says. “Some of these projects we thought were moving along at a good pace slowed down significantly. That was certainly a challenge nobody would have anticipated this time last year. But it hit us, and now we’re having to adjust accordingly, to try to make do with what we have and ride this thing out. It’s going to change eventually, but it’s going to take some time.”

2008 wasn’t all bad, of course. We played host to several Democrat presidential contenders, probably for the first time since the Kennedy era. The Mayor held two summits — an Employer/Educator Summit and Social Service Summit — both of which were very well attended. There was also a Purchasing Summit, which brought together different cities and counties and other governmental organizations to develop ways of purchasing together and gain savings through economies of scale. “Our salt purchasing alone in a cooperative effort is going to save us collectively about a million dollars,” he says.

Every little bit counts. It’s going to need to, because while the things the Mayor sites are all worthy accomplishments (and things he mentioned wanting to do during his campaign), he also acknowledges that most of the headlines from 2008 were not the good kind. As a result of tough economic times, a lot of the high-profile downtown development projects that Fort Wayne had in the works hit a wall.

The Harrison Square project had advanced to the point where the stadium and parking garage were far enough along to meet their projected opening date, but the hotel, retail, and condo parts of the project — essential for the success of the entire venture — have been stalled because of difficulty procuring financing.

Renaissance Pointe, the public-private venture between the city of Fort Wayne and Mansur Real Estate Services that called for the construction of nearly 400 new homes and the rehabilitation of over 100 existing homes in the area bounded by Hanna, Creighton, Anthony, and Pontiac, fell far short of expectations. Only 14 homes were built, and the developers announced just recently they were considering building 50 rental properties.

And remember that task force that was created to explore possible uses for what’s called the North River Property, the OmniSource-owned land on the north bank of the St. Mary’s? That’s not going to happen, either. Not any time soon, at least. “We had a number of meetings with the owners,” the Mayor says. “They’ve been very good to work with, but neither they nor the City of Fort Wayne has found a suitable developer for the property.”

Mayor Henry believes the people of Fort Wayne and Allen County understand the situation and will be patient with these setbacks. He still hears a lot of enthusiasm for the projects, and points to the great crowds that showed up at many downtown events last summer as evidence of a real desire to make downtown a thriving, exciting area. “I think they’re willing to be patient to see this happen because they want it to happen,” he says. “The majority of our citizens realize that the slow down was not any one person’s fault. No one dropped the ball. I think the majority of citizens realize that we in the city administration, that the developers themselves all want this stuff to go forward, and what we’re trying to do is buy some time to get through this rough period. I think a year or two from now, if they don’t see anything happen, people are going to be really upset, and I would be right along with them.”

City government itself is looking at some severe belt-tightening in the near future, thanks to House Bill 1001. Designed to ease property tax bills and reduce the state’s reliance on revenue from property taxes, HB 1001 caps individual property tax bills while allowing local government to make up for lost revenue with a local income tax. According to a press release from City Controller Pat Roller, city council’s decision to reduce the levy in 2006 and 2007 will combine with the effects of HB1001 to create a $5.8 million deficit in 2009 and a $13.1 million shortfall in 2010. Ouch.

There are also a number of other projects in the works, such as an unfunded federal mandate that requires Fort Wayne to update its antiquated sanitary and clean water system to comply with the Clean Water Act. Many other communities are facing a similar mandate, and Fort Wayne has actually made quite a lot of progress in addressing the issue (which is good, since we don’t really have a choice). But still, it’s a pricey project at a cost of around $240 million, and another economic challenge in an area that seems to have enough of them.

So, amidst a budget shortfall, several stalled development projects, unfunded mandates, and a general economic malaise, it probably isn’t surprising that the controversial issue of gaming in Fort Wayne is getting a lot of attention right now. A bill was introduced into the state legislature last month that would allow Hoosier Park to move 500 electronic slot machines from its facility in Anderson to Fort Wayne. Hoosier Park already has an off track betting establishment on Washington Center road, and (as we reported in FWR #118) one project in the works would move the OTB facility and the slot machines to a location downtown.
The Mayor’s office has been cautious on the issue so far, saying nothing specific is on the table and committing only to studying the effects of gaming and discussing whether or not it would be a good option for Fort Wayne. “We haven’t sat down with any developer or proposal yet and got that specific, but we need to find out what these types of operations bring to a city,” says Mayor Henry. “If it’s millions of dollars a year… that’s hard to turn your back on.” The city has hired a couple of different consulting firms to study the social and financial impact of gaming in the community. Mayor Henry says one company is tackling the social aspects, the other is looking into the financial.

In addition, Tim Haffner, a partner at Baker & Daniels, and Steve Brody, a retired attorney who serves on a number of boards in the area, are talking to “community leaders” at the request of the Mayor about gaming in Fort Wayne. They hosted a series of invitation-only meetings at Baker & Daniels’ offices on January 30 and February 2.

Mayor Henry doesn’t think we should use any tax dollars to bring gaming to the city, but adds that if the studies show the positives outweigh the negative, it would be important for the city to “stand up and say we’d like to take a look at that for Fort Wayne.” He’s well aware that there’s a certain stigma attached to gaming, but thinks that has changed in the last few decades, especially in Indiana. “Indiana happens to be the fourth largest gambling state in the country,” he says. “A lot of that is due not only to the 10, 12 licenses that are out there now — the ones that you know about in Evansville and all those other places — but also, per capita, Hoosiers buy a tremendous amount of scratch-off tickets, Powerball tickets, lottery tickets. They buy a ton of them. So it’s obvious… Hoosiers like to gamble. Now, if that’s in fact the case, do we say ‘well, we don’t like gaming, even though a lot of citizens like to, we don’t like it, therefore, we’re not going to put ourselves in the position to capitalize’? Or do we say ‘let’s take a look at this as a potential revenue stream’?”

“From a social perspective, Fort Wayne could be a heck of a point of destination, not only for all of Northeast Indiana but Northwest Ohio because they don’t have gaming in Ohio,” he adds. “So they could bring people from Defiance and Paulding and Van Wert and so on, which would stimulate hotels and more restaurants and all the hospitality part of the community, so that whole sector could profit from that.”

But is bringing gaming to Fort Wayne is a matter of desperate times calling for desperate measures? Would this be something the city would even consider if we weren’t facing so many “financial challenges”? “Again, I think it all depends on how you look at gaming,” he answers. “If you look at it as strictly a financial issue, that’s one thing, but if you look at it as, again, putting Fort Wayne on the map as a destination point, where adults can come to enjoy this form of entertainment, because a lot of people look at it as just that. Every weekend, busses of people leave the city to go to Anderson, they go to Gary, Michigan City, they go up to the state of Michigan to gamble. I hear people say ‘Mayor, if they’re going to do that anyway, why don’t we have something in Fort Wayne and we keep the money here?’”

And if the studies come back saying that gaming can, overall, have a positive effect on a community (or at least not a bad one), that the revenue stream looks good, that the bill in Indianapolis actually gets discussed this year rather than just dying in committee… that all the myriad other pieces fall into place and gaming comes to Fort Wayne, Mayor Henry doesn’t think the money should just be thrown in to the general fund. “I think it should be dedicated to something that benefits the entire community,” he says. “I’m just brainstorming here. It can be anything from dedicating a certain amount to green applications and green technology in our community, to putting a certain amount into a capitol investment board so we can begin to invest in the buildings and structures of our community. Maybe part of it can be put into park enhancement. Again, I’m just thinking out loud.”

It’s possible that Mayor Henry will have something more definitive to say about the gaming issue during his State of the City Address on Thursday, February 12. By then, they should have the results of the studies they’ve commissioned, and if the Mayor’s office decides to lobby state lawmakers for a gaming license… well, time is of the essence. But for now, the Mayor wants to talk about other programs he wanted to implement, programs that the city was in the midst of researching when the economy went pear-shaped. “The economy and other issues stretched our resources, financial and otherwise, so we really had to do a lot of re-prioritizing of what we wanted to do.”