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Money, money, money…
By Jim Sack
Fort Wayne Reader
Ah, the GE Conundrum.
The 27th of February, council again discussed the GE project and voted, with more than a bit of frustration, to endorse the project. The wan support came in the form of a non-binding resolution carrying the weight of a large feather. Councilman Michael Barranda said as much when he made the meh of a “do-pass” motion. According to some, the resolution is a signal that the community is behind the developers in their efforts to raise construction loans, but the 7 to 2 vote came after a ponderous slide show and disjointed Q&A and was hardly enthusiastic. In frustration, Mr. Barranda all but said, it doesn’t matter, it’s non-binding, let’s just move on.
Meanwhile, four floors up in the mayoral palace there was and remains little enthusiasm for the project, and that, according to more than one councilman, undermines that resolution, and the project. In fact, our friends in the administration seem prone to throw up cautionary red flags in a sort of no-endorsement-endorsement. The GE deal is a mess.
ROI, return on investment, was the underlying discussion point at council’s meeting. Again, the close-to-the-vest developers and supporting proponents made the assembled wade through a presentation that seemed to make obfuscation a goal. It was not until an hour after the vote, during citizen open-mic time, that Tim Pape, a former councilman, gave the first spirited defense of the project. He enthusiastically waxed on jobs creation, benefits to the surrounding struggling neighborhoods and a burgeoning tax base…someday, perhaps 50 years out.
More meetings are in the offing and behind the scenes proponents will be working on the mayor to drag him fully onboard. In short, this is the biggest decision we as a community will have to make in many a moon, so getting it right is critical. So far, the proponents have not answered key questions, instead letting the dark idea of leaving GE fallow work as their ally to weigh on every councilman’s mind.
So, to go out on a limb, judging from the body language and chagrined facial features, fear of doing nothing outweighs the sketchy, the-check-is-in-the-mail financial promises.
Inertia is a part of the rationale. Recently, Bookings.com listed downtown Fort Wayne hotel rooms at well over $200 per night, sans breakfast! By comparison, you can get a very nice hotel room in vibrant Paris or attraction-studded Berlin for much, much less. In short, that explains why new hotels will soon break ground downtown under the law of supply and demand. Thanks to a decade of successes, including all the pending construction, the sense of invincibility, that we are on an unstoppable roll, that we can make it work, has taken over. Wir schaffen dass. Animal spirits abound.
Sadly, for the average citizen to figure out who has skin in the game and who is banking on your “OPM” is very hard indeed.
Financing redevelopment is increasingly complex, reaching well beyond the abilities of most citizens to understand the nuances of TIFs, NMTCs, LITs and all the other acronyms that have entered the local development lexicon. Additionally, some of our councilmen, who we count on to reduce the complex matters to their basic elements, and then explain the essence to us, seem themselves incapable of following the financing jargon, or to see what’s missing on a balance sheet. Councilman Jason Arp asked some probing and most straight-forward questions of the developers at the meeting, focusing on who is getting all this money, what skin do the developers have in the game, and why are we paying so much on a quite sizeable gamble, but they did not answer, instead taking the first tangent available to deflect his questions. No councilman followed up to clarify answers. The same happened when Mr. Jehl asked questions — just vague rambling responses from the developer that never came close to answering Jehl. An opportunity was lost to get real answers about who wins and who pays for those wins.
There lingers resentment and mistrust that our tax dollars are accruing to the benefit of a few developers whose pecuniary interests come well ahead of the public good. The public’s “skin-in-the-game” is largely unsecured, so, should the whole thing go bust, our gamble is all but gone. That is one of the mayor’s office concerns, that we are putting too many of our chickens in one basket, not to mention the developers are not bringing enough of their own money to the table.
Counting noses the Legacy portion of financing will probably be passed, if only to harvest the promised $100 million in federal and state grant money that are all but promised for the $500 to $600 million project, but the roll call vote will echo with more than the normal bit of anger from Arp and angst from a few other councilmen. Like the ball field drama of a decade past, citizens are destined to foot most of the bill to redo GE, while developers will pocket the profits, with only the promise that someday in the distant future the local tax base will benefit from our significant investment.
While the ball field development worked out, if mostly to the benefit of the Atlanta-based investors, it has been on balance a good catalyst for more surrounding redevelopment, albeit tax (yours) subsidized to the hilt. But, council is expected to decide soon whether this much large and more complex deal will also benefit the city like the ball park, just cost too much and end up blighted and run down like Southtown Mall.
Bottom line, it is high time for council to review its policies that lead to you taking all the risk and developers pocketing the profits and skipping on taxes.