Had a jam packed meeting yesterday (parking rates, affordable housing trust fund, E Washington Ave. property, Southwest Safety Initiative, two-way Johnson and Gorham, etc., here’s some highlights:
It’s a brief, not extremely detailed blog . . .
PERSONNEL & QUICK ITEMS
They passed all their personnel issues items 1 – 7 – Rosemary Lee opposed items 1 – 5 because she thinks that we shouldn’t be increasing salaries for people who make more than $40K per year. She thinks the money should go to public safety and human services.
Items 8 – 9 pass without discussion, Items 10 & 11 placed on the table.
OLIVE JONES PARK
Items 12 – Improvements to Olive Jones Park, several people appeared in support. Satya Rhodes-Conway asks about the amount of private fundraising. They raised $200K and are still fundraising. Parks is funding it to get it done without the rest of the fundraising. Shiva Bidar-Sielaff explained but I’m not sure I got what she said. They are still fundraising, but it has been hard.
CONSENT AGENDA
13 – 36 pass on a consent agenda, except those items separated 14, 23, 24, 25, 27, 34. Verveer has questions on 19 and 30 which are also pulled.
TREASURER’S BRIEFING ON INVESTMENTS
14 – Treasurer’s briefing on the city’s investments. Dave Gawenda says they measure their success by 90 day treasury bills and return from the Wisconsin Investment Board – he says that is more important. That is the default of smaller and medium cities. The average return was .14 percent. We realized almost one percent. Yes, interest income is terrible, but we could have done worse. Also, there is a new rule that we have to take marketable securities and say what they would be worth if we sold them. Last year, we gained $1.6M. That was a good, but they fluctuate. The paper report looks good, but don’t rush off try to spend that money. Finally, he’s gotten three inquiries about who we do business with in terms of investment. He says there is a rigorous process, they have to fill out a broker/dealer questionnaire, they check references, then they look at the industry regulatory board, and one of the reason none of the national state banks are on list is because of their regulatory problems. The questions were all about Bank of America, people were thinking we had money in Bank of America. We don’t have any money with them and we won’t because of the trouble they have had in the last 5 years. Verveer says thanks for answering questions, do you have sole discretion to make those decisions? U.S. Bank is where we have our checking account and our money flows through, that is different than our broker/dealer firms where we buy and sell securities. In 2008 the council allowed the treasurer to choose the treasurer. It’s a practical matter so it can be done quickly. Passes.
ARTS GRANTS
19 – Arts grants question from Verveer, he wonders if there are still signature grants. Karin Wolf says that they give out one per year, but they allow them to apply for other grants if they don’t get them. Rhodes-Conway points out that there is a huge increase in requests and how little they fund. They chose to fund a little bit of more projects instead of just a few projects. She says the amount we put forward is insufficient. The Mayor asks if those folks are going to show up at the budget hearings? Mayor agrees it is important and he doesn’t disagree. Passes.
INCREASED FIRE DEPARTMENT STAFF
30 – Verveer has a question about the timeline for the Fire Department Grant and what the potential for success is. Fire Chief says that the earliest they would hear is June. The money is in three parts, to prevent layoffs, to maintain what people and and to expand. Our grant is to expand. They think they have a favorable chance cuz few cities applied for growth. The latest they will hear it September. Soglin says they hope to hear in time for the city budget. Passes.
SOUTHWEST SAFETY INITIATIVE
23 – Southwest Safety Initiative. Police say that this was passed in the last budget. The report is a plan that outlines how they will use the funds. The amendment has specific geography and objectives and this report says how they will reach the goals. They will do traditional highly visible patrol but also property assessments and evaluations to identify changes to improve safety. There will be officers on Metro bus routes, use the crime prevention gang officers for education and also training landlords through the Apartment Association. Subeck says they were pleased with the enforcement/visibility and the prevention. We feel it meets the goals and they appreciate the benchmarks. Mayor asks if there has been changes from last year. Vic Wahl says crime is consistent, which is an improvement given the early warm weather. Verveer asks about the timing, they haven’t used any money yet. Verveer asks about the building inspection piece, have they used overtime hours in the past. He says in 2007 they did something similar but he didn’t think it was overtime. Brian Solomon says that the concern was the preventative stuff during the budget, he asks about the Allied Drive Safety Plan and asks if it is being worked on. Do you see it integrating with this at all? Wahl says that he saw a version of it, he says it was considered when the plan was put together, these are things we routinely do and this gives us more flexibility. Rhodes-Conway likes the benchmarks, she wants to know about the difference in perception and actuality, not picking on this area, but how can you help shift that perception through this. Wahl says they struggle with that citywide, but in this area specifically. We will improve communications with neighborhood associations, we meet with them, but we need to work with concrete data and then encourage the association to get that information out. We will try to make better use of the district reports and they are looking at social media, Milwaukee does that really well and they want to do better. He says that they should communicate fast so that rumors don’t get out of control. Passes.
24 – No discussion, passes without comment.
PARKING RATE INCREASES
25 – They introduce the new parking operations manager. (Tom Wasnick?) Verveer says more opposition than usual to the three year parking rate increases. Can you explain the concerns. Bill Knobloch says there were 8 changes, it took 10% of the funds away, it was going generate $600K and now it is $500K. Capitol North was going to be a $1.10 per hour, now it is $1 per hour. Same with State St. Big areas were the periphery where they were going to go to $1.40 where it was District 6 and Shenck Atwood and Monroe St. That dropped to $1.20 and there were some smaller decreases. Verveer asks if all the changes were to ramps and lots. On-street and hang tags are decided by council and the ramp rates are decided by the Transit and Parking Commission (TPC). Verveer asks about extended enforcement time on Langdon and Overture areas. Has staff decided that we won’t increase those hours, what did TPC recommend? Knobloch suggested a “go slow” method. We had suggestion to enforce until 7pm, they asked MPD to do spot checks and they said they could. There was a suggestion to increase that to some streets by Overture and staff had no objections to the expansion. The concern was that there is not turn over after 6:00, but they still think they should “go slow”. Verveer says it could lead to confusion and appreciates the go slow, but is concerned that they don’t need approve the pilot project hours since the ordinance says different. Knobloch says other cities have different enforcement hours to get more turn over for businesses. Rhodes-Conway asks about why they objected to the increase? Knobloch says that there was a public hearing and it seemed to be a financial consideration, these are smaller increases than last time, this was a financial issue and some of the speakers didn’t like it at the meters help support the structures. We need the meters for the structures, without the meters we’d have to shut them down. Mayor says that is not new, the first ramp was built with that integration in mind. Passes.
SIDEWALK REPAIRS
26 – Verveer asks Rob Phillips, City Engineer, to explain. Phillips says that with the exception of some areas, property owners can make repairs to sidewalk or curbs on their own and ask the city to reimburse them. It’s been $2.50 per square foot for several years. This would increase to $3. This formalizes a long standing policy in ordinances and updates the ordinances. Verveer asks about permits and inspections. Phillips says it is improved and inspected ahead of time. Verveer asks if it is housekeeping? Phillips says it may have been authorized in resolution in the past. Bidar-Sielaff asks how people know about this policy? Is there something on the website? Yes, but it is not something they advertise much, but it is an option available. Contractor would need to be per-approved by the city and the city standards need to be met. Clausius asks if there is a list of per-approved contractors. Yes, they have that and use it. Phillips says that they repair sidewalks every 10 years and this would not apply in that area. Passes.
AFFORDABLE HOUSING TRUST FUND
34 – Rhodes-Conway asks about the RFP for the Affordable Housing Trust Fund, she is wondering why we continue to equally spread our efforts for affordable housing between ownership and affordable rental? It just doesn’t make sense to her in this market, that they would put any money towards homeownership. She appreciates the foreclosures issues with vacant properties being transformed, she appreciates employer assisted programs, but she would like to see the homeownership limited to those two things, she thinks that they need to focus on the affordable rental market and create affordable rental. She is worried about sending this out and getting back the usual programs that create housing at 80% AMI, just so everyone is clear, that is me. She qualified for programs when she applied. She doesn’t need assistance buying a home, she can wait, there are plenty of people who need help more than me. It concerns her that we continue to give that equal weight. She says that she is looking to vote against or refer. Hickory Hurie says that a healthy city needs both kinds of tenure options, the CDD division has striven to create the options in between. We need both kinds of housing because there are types of housing that lend themselves to stabilizing communities, there is a tipping point when a lot of households move and have low income. He points out that 60% of the funds have to be used for people at 60%. That tips it, but it might not be rental. He also says that they talk about workforce housing and that there is a priority for Single Room Occupancy. He says there could be a mixed income project that would fund the lower units. Rhodes-Conway says this document is better, it is edging towards lower income and rental. She says when we write an RFP that is what people are expected to be judged against. She thinks we are focusing in the wrong area, when she bought a house she could qualify for IZ. She didn’t have to buy a house then and she didn’t need help. There are people who need more help, but she would like to be more specific. Maybe we should devote more money for lower incomes or lower the incomes we are targeting. If the housing market comes back, we can look at that, this is a one time thing, that we are asking for right now, we should be able to get rental. At this point this is too open to homeownership at 80% AMI. She asks who she should refer it to. Bidar-Sielaff says she doesn’t remember this coming to the CDBG Commission. Mayor asks if there is a difference if someone has student loans. Rhodes-Conway says it is just based on income. Soglin is worried about the individual loaded with student loans. Hurie says this was before and after his time, he thinks it came to CDBG committee twice. Bidar-Sielaff says there was a discussion, but the language of the RFP hasn’t been there and the legislative file. Mayor asks when the next CDBG committee is. They say next week. They say they will lose two weeks. Mayor recommends that they refer to two places with a report back at May 15th. He asks for it to be referred to CDBG and his office. Verveer asks why it can’t come back to BOE too? They suggest May 7th BOE report. Solomon asks if the referral makes sense, do they know what we want. Hickory says is it income needs to be lower or rental increased. Rhodes-Conway makes a motion to refer to their next meeting, and in the interim the Mayor’s office and the CDBG Commission and that they consider the balance of funding going to tenure types (ownership vs rental) and the balance of funding going to various AMI. Passes.
ULI VS. METCALFE’S ON EAST WASHINGTON
Questions of the Developer –
Motion is to adopt number 10. Shiva Bidar-Sielaff asks about the phasing and why it takes so long. Tom Neujahr says that they have no interest in making it take longer. They want to rent to people, the timing is dependent on renters and lending. If they can close on the 3 prospects, and they can close on a construction loan, then they can go. He says there are several parts to the project. The city has told them they don’t want them to proceed with the apartments until the commercial is done and not until Otto Gebhardt has launched his project because he is proposing 215 apartments and the city wants him to absorb those apartments. We have 4 phases, we hope to start in the later part of 2013. They hope to start apartments as soon as the city wants us to go ahead. Bidar-Sielaff says part of the timing is city, Neujahr says correct. Mayor says they shouldn’t put it all on city staff, he wants to take some of the responsibility, when they negotiated with Gebhardt and he asked about getting his project done without competition from the 800 block, he agreed. Neujahr says it is reasonable too, its a lot of units to absorb. Rhodes-Conway asks about the timeline issue, the initial RFP was asking for a catalytic affect on the district. The reason for the landbanking was to make something move. She says they want to catalyze development, how will your project do that? Nuejahr says that commitment to quality design and construction, you have a lot of examples of that. Their projects are places people want to be. They have 177 commercial tenants with 93.4% occupancy. They are also successful in attracting first floor retail. They have 11 of those tenants. They hire good architects, they work with technology market leaders (Ebay, Google, etc). They think it is super important what the first building looks like, we have to create an environment where other people want to be, for our own self protection. We can’t be hanging out there with an office building and no one around it to support it. He talks about reduction of water and electric usage and Gold or Silver LEED certification. Rhodes-Conway says that a nicely designed building will get more people there? Yes, he says, look at Old Fashioned and how it spurred development, that was not their project, but it worked. Rhodes-Conway asks how they will activate that street? Neujahr says East Washington will never be a high pedestrian area with 50,000 cars a day, there are no residences and it will be hard to make it intimate. In terms of design they would break down the scale of the lower level, there is limited parking, that has to be mid-block or in the ramp. They will want to create something to neighborhood, Breese Stevens and the outside world. We can’t rely on just one of those markets. They have to make the retail feel like a neighborhood to attract employers. Rhodes-Conway asks how a 30K sq ft grocery store would be successful. Nuejahr says that they are talking to three groceries, it depends upon their model. He knows people don’t want Willy St, their model is 15K. They are talking with a 30K and they got an email out of the blue from another. They need standing to move forward. Rhodes-Conway asks about job creation and the quality of jobs. Nuejahr says that a grocery store and hotel is not a model for high paying jobs. Grocery store workers full-time make 18 – 19K per year and they have 2 employees per 1000 sq ft. A typical office worker is that they make 40 – 50K per year and there are 4 – 5 per square feet. He thinks there is a big difference in job creation. They think a hotel is not finance-able and it won’t create family sustaining jobs. Clausius asks about Breese Stevens Field and the increased parking it will create and asks about overflow parking for Breese Stevens Field. Neujahr says that they will make their parking available outside the 40 hour work week and it is in the letter of intent. Clausius asks about parking ramps. Nuejahr says they like to keep them out of site and underneath but that is not possible because of the water table. They have to build above grade, and if you want density you have to provide the parking. They cut out 71 spaces to create more open space, but they need structural parking to support the development, that is the financing challenge. $90 per space per month is what is costs and the users pay $40 per month, there are 3 spaces per 1000 sq ft of leasable area. Look at the problem with a grocery store, they need 5 spaces per 1000 sq feet and each space will cost $90 per space per month and the parkers aren’t paying. That is a major issue. And, a a grocery store doesn’t pay much in taxes, for office space it is $2.25 per typical suburban office building, grocery store $1.25. And this block is already assessed at $2.1M and it was already paying $49,500 a year. They did calculations and they think it will be $460 – 500K and that will support their need for TIF. Solomon says he’d have a hard time if he got a letter like this from a neighborhood. Neujahr says they don’t propose projects where an alder is opposed to us. Our primary thrust was employment for the needs of the city, Bridget approaches it as a neighborhood convenience. I think the two objectives can be met, we’d rather have support, and in the past we have enjoyed the support of neighborhoods. His understanding was they weren’t going to take a position, this was a meeting of 7 or 8 people in the neighborhood and it wasn’t properly noticed. Solomon asks how they are going to work with the neighborhood. Nuejahr says they don’t have standing yet and they did meet with them in August and early this month, and if selected we are open to meeting with the neighborhood almost as often as they want to. Bidar-Sielaff asks about Metcalfe and their possible proposal that is not before us since they haven’t submitted anything, have you talked to them? Ken O’Driscoll reached out to them and they said they already had a team in place.
Discussion –
Bridget Maniaci has a packet of information for them. She is concerned about some of the terms, she wants a catalytic shovel ready project, everyone wants to see it happen. Why is it falling short of her expectations. She says there are too many unknowns, the phasing (5 years) goes against why we’re doing this to get it back on the tax rolls. She has concerns that we will be on the hook for a lot if it doesn’t work out and we won’t know for 90 days, 12 months or a 6 month extension before we know if they have tenants. Maybe they build the housing, but then we have had problems with TIF and parking, that is a concern. The RFP did focus on employment, but at the committee level she spoke vocally that this was slated for community mixed use with residential and employment was on other parts of the project. She doesn’t fault ULI, that is what they do, but she is very concerned this is a square peg, round hole. If this is a catalytic project and you look at the office space available and she is concerned about cannibalizing the office space. She says that a nice looking building isn’t a big enough assurance for her that people will come here. She introduced the companion resolution because she doesn’t want step one to be a commercial building. If ULI goes forward, then others are out on the South site. There was a for sale sign up and we purchased the property to do better and she is concerned about putting a sign out. The TIF district has been open for 7 years, the implications of that phasing means it will keep the district open longer and it is not in good fiscal health. She can accept market reality is different than the vision, her real concern is the risk on the part of the city and how we are on the hook. She wants it solved sooner rather than later. She doesn’t see a guarantee this will be successful and off the ground. The terms in the letter might be the best we can do, but if this could be done much quicker, that would be much more advisable. You also have to think about what that means for build out and constant construction for the neighborhood. This is a lot of money, it behooves us to work hard and she has concerns about the terms outlined here. The other projects were rejected because they were not the whole site, and this doesn’t guarantee the whole site and the city could get stuck with it.
More Questions –
Solomon asks about the letter of intent and he was concerned about the length of time, he asks if there are any other options to strengthen it. Aaron Olver, Economic Development Director says the original request was to have a 10 year period to build it out. That was unacceptable to the staff and mayor and we negotiated what you see. We know the real estate market is strong and they were worried about a master plan because the residential portion could get financed and built today, but if it gets built in a way that is not compatible with some plan, it could leave the balance of the block undevelopable or what we get would not be optimal. That is why they want commercial before residential. There is a thorny problem with this is inherently a phased project, and no body knows how quickly this area can absorb the commercial since this area has been shedding it instead. No one knows how fast it will happen. The language requires purchase within 5 years, and that depends on the market and ULI, we have the right to buy it back if they don’t build the parking within a year. That would allow us to do a new RFP, the new developer would have to be very interested because they would have to build parking for not just their commercial development but ULIs. Solomon asks how staff feels about the complexity of this and that we are trying to do something catalytic, how are you feeling about it. Olver says there is a potential 200 acres in the corridor to be redeveloped, we felt it was important to position this as an employment district, stretching out the downtown and we find the proposal attractive and why they are excited about working with ULI is that they want technology employment early, so when the other 192 acres are thought about, they are guided by ULI and Gehardt. Bidar-Sielaff asks about Metcalfe, is there potential for a grocery store if not here, someplace else. Has that been discussed? Olver says there are other blocks are available. City owns property across the street, Mautz Paint has other property, there are buildings there to be preserved, there is the Land O Lakes and the bus barn and Breighton Lot and Union Corners, there are alos other candidate sites in between. Metcalfe thinks the only other block would Land O Lakes that is not currently available. Verveer asks about item 11 and the Rifkin proposal. What is the status of that? Olver says Rifkin partnered with a development company out of Milwaukee, they came to a conclusion that the market was not ready for commercial development of the type they were thinking of. They want to look at the numbers and their working assumptions. For instance, we have a policy for TIF not to exceed 50% and we think that the commercial projects will be substantially higher than that. That will quite likely be at 100% and they wanted to have a dialog with them about their assumptions, they haven’t had the conversations with them yet. They didn’t want them to walk away. Verveer asks about the process for moving forward would be. What is the intent with the committee. Olver says that there were three proposals to address that block, Rifkin was selected, ULI was interested in all three blocks and Ale Asylum withdrew. Our view of the world right now is that nobody is interested in the 800 south block with tenants in hand to make the block feasible, they are leaning towards recommending to list the property for sale, we’ve gone out once and said to the world that they wanted proposals. They want to list it and when we get someone with a real use for it, we can take that proposal and put it in front of you.
Mayor says that he has been involved in a lot of risky developments over the years and he doesn’t think this is all that risky. They moved the cars off State St, people thought that was the end of the world. Now it is a transportation corridor and it just gets healthier. We expanded the Capitol Concourse with public money. We acquired the Civic Center and that spurred development. They bought two parking lots and its not Capitol Center and now it is senior housing and that got market rate housing that everyone said wouldn’t work. We made a grocery store and a hardware store work. We applied some pressure to Jerry Mullins and we got the 1st E Mifflin block and had a partnership with ULI and you have seen the results there. And we have other similar projects on E Main that all involved risks. When the Smith/Metcalfe project came forward, there were several issues. They went outside the RFP and weren’t held to the same standards as others. His first reaction was that it was a dynamic proposal, especially the part about food, and you will see more and more on food from us. But, upon carefully reflection and looking at the history of the city and technology market, he came to the conclusion that for 150 years Madison was east and west side. East side was hospitals and university. The East side was manufacturing and Oscar Mayers and the last 40 – 50 years has given greater economic benefit to the west side. The other part is technology, up until recently they have followed the Microsoft model, the Epic model, to develop a large campus outside the city, but new younger companies are not doing that, at least not initially. They are looking at older parts of the city, loft space, well we don’t have a lot of loft space, but already we have seen the location of some of those companies near Willy St., so when you ask what can the east side become, he sees a 150 year change, an opportunity to develop technology companies. And look at the people to work there. If we nurture them, and we don’t ignore them, when they expand they will locate in the city, they will expand in the city. That is a change we will see forever on Madison’s east side beyond Union Corners. We can go with the ULI project, there is other land for the Metcalfe/Smith proposal. On the other hand, if they go with Metcalfe/Smith, we lose the dynamic which can have a century impact on the city. Mention was made of our plans, one of the things we have to understand with the plans is that we need to be nimble and responsive. We didn’t have young start up companies with 15, 25, 30 employees 10 years ago, 5 years ago populating the landscape they way they are now. Just as the companies are nimble and responsive, we have to be for their needs. He is looking at the employees renting in Madison and when they do that they are more likely to buy their first home in Madison instead of Verona or Mt. Horeb. And then comes all the commitments to an urban space that is so important to all of us. Rifkin has a dilema like ULI, when there is other development, that creates competition, but also synergy. If we don’t push Rifkin, they will stand on the edge for quite some time, and then as soon as things work, they will say remember us, we were one of the first to submit a proposal. I harbor no ill will, if they still have a viable proposal they will look at it. He was critical in the beginning, he’s not sure about the city role, he thinks the private sector could have done some of this without us, but we’re in it and committed to it, his primary goal is to make it work for the neighborhood and city and he thinks this proposal can do that.
Rhodes-Conway says it has been a very interesting process, difficult and enlightening. She has learned a lot about the development process and the absorption process for office and financing. She says it is a lot harder to develop land than she thought it was, she thought they could get more. Taller buildings, more density, more mixes of use. The market doesn’t support that right now. Plans call for more height and density, she was pushing for that and they looked at the proposals and she realizes we will not get everything we want and we need to prioritize what we want. She says the initial conception was the ability to get things going and get quality jobs and bring people into the district. It has start somewhere, thinks it was critical the city was involved. She wishes they were getting more. She hopes that in financing and land use approvals ULI will listen. She thinks the process with the neighborhood has not been as inclusive as it could have been, and she hopes that gets corrected. She hopes we can see a diversity of uses, especailly at the ground level. She’s supporting it, but it is not an easy decision – not representing the area, he concern is the long term economic health of the city.
Larry says this could have been sold a McDonald’s drive through, the city has the ability to hold on to property, the notion that we have to get this done now is kind of disingenuous. It’s clear that the good use of the property outweighs the quickness of the use of the property. To catalyze this as a high end employment is the best way of getting that started. We have a lot of property in the area, and the density will come, like the capital. If you create something people want to be involved in, that is the natural inclination to develop it more intensely. On the process matter, he has two goals, one is to support process and one is to support the alder, this is clearly a conflict. Do I support the process that didn’t go right, or the alder. The process was a learning curve, we had three alders, we had staff, that was a process that if we are happy with Gebhardt, we have to be happy with the process. Clearly we are not happy with the third site.
Bidar-Sielaff says it is not an easy decision for any of us, especially having discussed it with the alder. Her biggest concern is the timeline. With the vote tonight, she hopes between now and the council meeting that they can tighten the timeline, from a neighborhood concerns with construction. She would like to encourage more discussions on the timeline. The other reasons she will vote to support is something her grandmother said, something good never goes away for something better to happen so be careful what you wish for. She said that in another context, the Iranian revolution, but she was right. At that time it was something bad for something worse to come. This is a very good project, it is easy to get dazzled by something not before us, there are many opportunities for that to happen in that corridor. It is exciting that there are many things that can happen there, there is not a collision of courses or a choice to be made. It is sad when a neighborhood association is not happy and there has obviously been a break down in communication and she hopes that because this is initiating a process, that we have learned from this and that there will be more and ongoing communication and ULI will listen to large and small concerns of the neighborhood. She hopes they can work out the timeline between now and May 1st.
Palm says he has only been part of two RFP processes, Library and Garver Feedmill and both collapsed miserable. You design a process for what you think is right but little thing throw the train off the rail. At this point, you can’t throw the baby out with the bathwater. Like all processes, if something goes wrong, we put it back together.
The motion on 10 passes. They move to put 11 on file. Maniaci wants to know what happens with the 3rd propoerty now, she wants to go out for RFP on the south site, she wants to do more than put up a sign, there were 3 proposals the last time.
Mayor says he will be meeting with the staff and making recommendations about what to do. They also have some recommendations in the RFP process based on what they learned here.
Rhodes-Conway says there is still something on the south side floating out there in referral land, we will have to talk about that or it will have to be replaced, we can talk about it when that comes back. She recommends to wait and talk about it then.
Motion is to recommend placing on file.
