Three amendments only took 4.5 hours . . .
There was a little staged labor rally outside the city-county building from about 4:30 – 4:50 which I found a little odd. Most alders probably never saw it because by 4:50 they ran up stairs to get their seats for the meeting. Very few alders were there at that point, so I have to wonder who they thought their audience was? Seemed a little strange.
Of course, getting started was problematic as usual. Once the mayor took his seat at 5:43 he had to wait for Bruer to get back in the room. Maniaci only one missing at the time they called the meeting to order.
AMENDMENT 11
Agency/Project:Planning and Community and Economic Development / New Project – Land Banking
Page(s): 118
Sponsor(s): Alds. Sanborn, Pham-Remmele, Cnare, ComptonRemove funding for Land Banking. Board of Estimates Capital Amendment No. 17 added funding of $5,000,000 for Land Banking.
Reduces $5M in borrowing, $647,523 in levy
Sanborn says we need to think carefully about land banking. We are borrowing money to buy land, pay principal and interest, maintain the property and then inject politics into how we want it used and ask staff to not sell it at a loss – if we strip the options for what the land can be used for we reduce the value of that property. Will this program expand and we will have pressure to buy more property, will we end up taking a loss? If there is anything in the capital budget we can cut, this is it.
Compton agrees with Sanborn. Asks May a question. She asks what happens if they have a good parcel with a good development for example at East Washinton and Milwaukee like Union Corners. That developer spent a lot of money, got a good plan going, we held him up in the process which jeopardized his financial capabilities. This feels like revisionist history, I had never heard that the city was holding the project up – it was my understanding that the remediation and other site difficulties were what held up the project – not to mention that billboard. And, might I add, we let him demolish the French Battery Factory for what? Nothing. We created the situation where he is losing his development and then we are going to land bank. We now have the plans with recommendations at his expense, so very carefully does that put us in jeopardy of major lawsuit.
May says that he is not aware of any basis for a lawsuit for that development but generally, if we did something improper, they could bring a lawsuit. Doesn’t change if we buy the property later. Presumably we will only buy when there is a willing seller. Doesn’t see that this type of program will affect the developers right. May or may not have rights but not impacted buy our subsequent purchase.
Compton says she doesn’t agree with the City Attorney’s answer. Agrees with land banking if they use the land for diversification of neighborhoods and only develop with the school free lunch statistics in mind and not take a parcel and demean it, demean a neighborhood. Doesn’t want to give it all to non-profits and create pockets of poverty. Doesn’t see that here as a protection. Doesn’t see a protection for the city – we are not competitors with other developers and doesn’t think that is a good place for the city to be. Won’t support it, would need more thought and more protection for the consumer and private citizen. It gets too close to condemnation for her and takes away right of person to do their independent business. Until protections are in place, she can’t vote for it.
Cnare is also a co-sponsor. Thinks cities or governments should only buy land when we have a public purpose, only parks and streets and land for libraries and public facilities fall into that category. We don’t need to set aside land for development. We are not not Detroit or Flint Michigan. We also have a safeguard and need to hearken back to zoning code, neighborhood and development plans we have. We have sufficient control and guidance to influence land development. She is sorry the land is sitting there vacant. The idea of land banking is a concern. She wonders how will we afford to buy the entire northeast neighborhood plan, we don’t have the money, we should rely on plans and zoning code and economic development and developers to get the city what we want. Parks, streets and facilities we should buy land for, but that is it.
[Small Crazy Thuy Alert – drunk and buying land on the moon.]
Pham-Remmele says that when left the meeting this morning, what was in her mind was Ald Verveer saying we are not criminals. [I think he actually said it was criminal.] We are not acting like drunken sailors and that was before we continue and now come back and at amendment 11 she is a co-sponsor and heard Sanborn, Compton and Cnare say whatever they feel about the amendment, doesn’t need expert or legal advice, talking as a plain lay person, she has four things to bring up. First, as strange as this land banking is, it is unnecessary and adds to debt of city without any benefits to the city, why are we proposing this? Second, purchase of land from current owners is at above market costs, if they could sell it at better price they would not go through hoops paperwork and approval of the city process, why are we doing it for who benefits? Is it really such a bother that we have to jump and do it. It’s like buying land in Florida or on the moon and this is really a gift to the current owners, this is the cure. Third, this takes the land off the tax roll and once we buy it becomes our property. How are we taxing it, are we at such an advantage that we are going to do these silly things, are we drunk? At the same time we repeal incentives to do anything. Her last point is there is no evidence . . . [I don’t think she completed that thought.]. When they think about it, is this the reasonable time to do this? for whose benefit? She has no special interest, no connections, who is making deals behind the scenes? This is ludicrous, are we at a point when we can say $5M for land to get a better price? Are you kidding me? If the market runs around in a few years and sell at a better price, reluctant to have city invest and buy lands and set conditions for developers to develop it. For this item to be in the budget is very [?]. Not only co-sponsor, be careful voting, everyone in the city is watching us and we are not drunk.
Clear says he is not drunk, not yet. He wants to explain what this is and what it is not. Concerns are related to what is not here. Current economic conditions created opportunities to acquire land for which development plan has been approved but didn’t happen due to the economy or financial condition of the developer. Below market price condition is in the amendment. We will maintain those parcels so they are whole and not get sliced up for these locations and hold on to them until market conditions improve and make the taxpayers whole. That is important to him, covering holding costs, borrowing costs and the foregone property tax revenue. [That’s a pretty big promise and seems unrealistic that we could buy the land so cheap and recover all those costs in the resale price.] So when we go into the purchases we need to make sure that this is the objective in selling the parcel. Does not obligate us to buy property, just budget authority and the council has to vote to buy and sell. Need to go in eyes open, get a good deal and when sell it we have to make a good deal for the taxpayers. Agrees with Sanborn’s and Compton’s concern, there is risk in this. We may make a bad decision about purchase or sale and that is a risk that voters take with us when they put us into office. Idea is to keep our eyes open, get the best advice we can from staff and educate ourselves about our opportunities and do it for the economic benefit of all the tzxpayers of the city. We need to maintain the large parcels with plans and have the risk of not moving forward or being split up.
Palm asks staff – says this is broad, but a lot of dollars and how would staff handle it, could they accomplish similar things with other money or through other agencies and would it result in positive land use for the city?
Olinger says that Levitan said it has been on the CDA agenda for a long time and he has been pushing for it. Concurs with Clear, even tho brevity of language, it gets to the issues he talked about. We are preserving the opportunity to build on key pieces of property that the council has already acted on in some way. Council wants it and it is at a risk. Says that original economic development strategy from 1983 said we should buy land. We bought 450 acres in industrial parks, turned a profit, um . . . covered our costs at the sale at all levels. That was part of the plan in 1983 and they came back to the council for approval of acquisitions and gone about creating jobs and growth for Madison businesses. This program is in the same vein. These are parcels we want to see good development happen and are concerned that we might not get what we wanted and the opportunity to acquire with council approval and hold it til time is right, and cover costs upon sale. Not radical departure, provides opportunities and we can think strategically. They are not making more land, opportunities to support this we will be more frequent as city grows and we need to figure out how we want to make these things happen.
Palm asks if this will be a capital revolving fund or just pay back debt. Olinger says they would come back with how the fund would operate, he likes cap revolving fund but he can’t answer the question at this time cuz they don’t have enough guidance.
Palm was an original sponsor of Clear’s resolution, shares concerns of Pham-Remmele and Sanborn, says this has a sort of negative impact on the budget. We don’t spend money until a plan and agreement to move forward. Little harm in approving this as a placeholder. Some areas will be studying if they have land that is appropriate for this and will work with staff. Those opportunities will be presented to the council for the approval. If vote against because too much debt service he understands, but part of economic development and jobs is to make sure land not used or that has a low use get redeveloped into positive non-blighted, industrial space.
Rummel agrees with Palm, we purchased Supersaver and that became a mixed income housing project near Allied Drive. We have a history of doing these projects, exciting opportunity to invest in places we want to see things happen. Several parcels would fit into this language such as Don Miller, Royster and Union Corners and probably more. Opportunity to do something and in the process we could answer a lot of questions and make sure it accomplishes broader purposes.
Sanborn says that they say they will buy below market rate, but if there is a willing seller, then that is the market rate. If you think market will go up that is speculation, if so certain, why is it not selling without the city. Highest and best use is a subjective and political thing – market might think something different than the politicians. Interested to hear that we would cover interest and purchase price and now holding costs and prooerty tax revenue. We will buy property, dictate how it is used and then expect them to buy it from us and follow conditions. We might be elected with risk we might make bad decisions, but not elected to be a land speculator.
Clear says that Olinger said it could be a revolving fund, that wasn’t the intent and views it as a one time program if it is successful that would be something to think about. He thinks money would go back to the general fund. This type of project can’t be compared to other projects that have expenses. This is an investment and will cover our costs.
Compton asks Olinger if they are going to develop it for industrial and non blighted development as Palm says, what do you see us doing with it?
Olinger says initially nothing, need to come back with a program, several parcels out there that are problematic and blighting influences that have plans. The proposed uses are the kinds of things that add to or complete neighborhood plans, revitalize and stabilize neighborhoods and add tax base. We would buy, hold and release an RFP to put the land back into productive use. Could be a variety of uses beyond industrial.
Compton says that Royster is of interest to her, also knows that two or three good developments have come in and not gotten anywhere and now city wants Habitat or nonprofit to get the land, is that what you see happening?
Olinger says they will not buy property and immediately turn it over to nonprofits. There is a small area plan that includes residential, mixed use with employment and commercial. They would create the opportunity to make that plan a reality. Don’t know all the details in why other proposals did not move forward, but demolition costs are extensive, environmental remediation is expensive and in meetings they had recently, there are funds available for cleanup costs for municipalities that might not be available to others. This could strip away impediments that make it hard to get it redeveloped. Rather do that then have them come to us to close gaps on the back end. This is all hypothetical, can get money to demolish and remediate the land. We can work on front end instead of back and try to knit things together.
Compton talks about the high free and reduced lunch school populations that surround Royster and says that it has one of the best affordable entry neighborhoods in the city and we are going to put more low income property in that site. Taking a risk and it is high for her. Doesn’t want to increase the free lunch at schools. We don’t say we have enough of this and don’t need any more – doesn’t hear that from the city. Remediation and DNR issues is something that developers deal with every day, when you buy you know you need to remediate it. City doesn’t have to step in, state has funds, there is money available to anybody, all they have to do is go in and get it. Without controls, are we going to have more Allied Drive or commercial and industrial development. Are we boosting value of homes or creating more pockets of poverty around the city. Doesn’t put this on the west side, but this is what we do. Where are the controls, are we only going to use it for industry? Not going to vote for it.
Pham-Remmele has question for staff. She asks for the City Assessor. He is not there. [I’m pretty sure he got put on the list for Janet to chastise in the morning, as all staff was instructed to be there, regardless of if they have amendments on the agenda.] She asks Brasser instead because she says any time she has money questions she asks Brasser because he controls the money, she hopes he gives me a very good answer, she trusts him and his integrity. She says correct me if I am wrong, in doing this, does the city take the land off the tax roll for an unknown length of time?
Brasser explains that taxes are calculated January 1 of each year, if we buy it we are responsible for the taxes until the next year when taxes are calculated again. It would be off the tax rolls the next year.
Pham-Remmele and Brasser exchange comments clarifying the above.
PR asks if there is evidence that within a reasonable time we may be able to sell it at a profit?
Brasser says it depends upon circumstances of the land we buy.
Pham-Remmele asks even with all data and magic you can’t tell me the answer?
Brasser repeats that it depends on the circumstances of the individual property.
[Crazy Thuy Alert! Just reaad it.]
Pham-Remmele says that I trust you and I hope you don’t mind, consider money like your family budget and I’m a family member coming to you with this offer – make me your wife for example, in that case, this is a really good idea?
Brasser quips – in that case, if you’re my wife, its a great idea.
A whole bunch of silliness ensues . . .
Palm, says that this is not a referendum on Royster Clark and the special area plan, they have an accepted offer and not trying to meddle with what they are doing. This is citywide, don’t make this about one parcel. Second, he has been accused of being too liberal, when I said industrial, meant industrious, something we work hard to make better and you are being to liberal with interpreting what I said. This is not creating smokestacks, they already have an abandoned factory. Apologize if used an askew word, all proprieties have multiple uses. Royster only has incubator space to create jobs to create employment. Should we put our money where our mouth is? (I might have missed some at the end there.)
ROLL CALL
AYE: Pham-Remmele, Compton, Sanborn, Skidmore, Cnare.
NO: Palm, Rhodes-Conway, Rummel, Schmidt, Schumacher, Solomon, Verveer, Bidar-Sielaff, Bruer, Clausius, Clear, Eagon, Kerr, King and Maniaci.
[Once again Maniaci passes when called on to vote the first time and waits to vote last.]
Motion FAILS 5 – 15.
AMENDMENT TWELVE
Agency/Project: Planning and Community and Economic Development / No. 6 – TID 32 – State St. Corridor
Page(s): 121, 148
Sponsor(s): Alds. Schumacher, Rummel, Sanborn, Pham-Remmele, Solomon, Compton, SkidmoreRemove the funding of $8,000,000 in years 2010 and 2011 and amend the narrative as follows: “strike>$8,000,000 each in 2010 and 2011 is included for financial assistance for the expansion of an existing hotel and $300,000 is for Small Cap Loan funding.”
Removes $8M in borrowing, 1,036,037 in levy.
There was hours and hours and hours of discussion on this item. If you want to see what they did/did not do, you might want to read this.
Meanwhile, I’ll just give you the motions and votes on this.
This is the substitute resolution that they started with, sponsored by Schumacher, Bruer, Solomon, Clear, Cnare, Schmidt, Skidmore, Palm, King, Clausius:
Add the following language to the narrative:
Prior to providing TIF assistance for the hotel project, a funding Resolution prepared by City staff must be approved by the Common Council setting forth: (a) the terms of the TIF loan, (b) the repayment schedule for the loan, (c) a detailed underwriting analysis indicating whether the value of the completed project will generate sufficient increment to justify project funding under existing City TIF policies, and (d) the terms that will govern and permanently establish the public access to the public improvements built as part of the project.
As part of the Development Agreement(s) between the developer of the hotel project and the City, the developer will.
1. Establish a workforce development program that sets forth a strategy to encourage the recruitment and employment of a resident-based labor force for the project. The program will address issues important to the development of the workforce such as:
– Training through apprenticeship of other community outreach programs;
– Project and workforce safety programs;
– Leadership training and skills assessments;
– Labor market resources and assistance;
– Project safety;
– Cooperative education programs;
– Referral and job placement assistance.2. Meet all customary insurance requirements as required by applicable law or contract specifications, including general liability insurance, workers compensation insurance and unemployment insurance requirements;
3. Pay all craft employees that it employs for public works financed by teh City the wage rates and benefits required under applicable prevailing wage law, Sec 23.01, MGO;
4. Fully abide by the equal employment opportunity and affirmative action requirements of all applicable laws, including City ordinances then in effect;
5. Provide a good faith estimate of the number of construction and post-construction jobs associated with the project.
Rhodes-Conway added an amendment that would add a requirement that the developer:
– Provide a signed project-labor agreement for construction and
– Agree to card check neutrality for all positions in the hotel
That motion failed 7 – 13.
AYE: Rhodes- Conway, Rummel, Solomon, Verveer, Bidar-Sielaff, Cnare, Kerr
NO: Maniaci, Palm, Sanborn, Schmidt, Schumacher, Skidmore, Bruer, Clausius, Clear, Compton, Eagon, King and Pham-Remmele (this time Pham-Remmele had to skip voting til the end.)
Solomon added an amendment that items 1 – 5 have to be approved by the Common Council. That was friendly.
Verveer added an amendment that:
This appropriation has no implications on the city land-use and TIF approval process. The inclusion of this funding should not suggest any advantage or disadvantage as the proposal moves through the city approval process. Specifically, the project design, including setback from the right-of-way, height, volume, parking and traffic design and capacity and compliance with zoning requirements will need to be addressed through separate approval processes. The appropriation impacts in no way the ordinary, orderly work of city staff and relevant city boards, committees and commissions.
That was also considered friendly.
The final vote on the Edgewater was as follows:
AYE: Maniaci, Palm, Rummel, Schmidt, Schumacher, Skidmore, Solomon, Verveer, Bidar-Sielaff, Bruer, Clausius, Clear, Cnare, Compton, Eagon, Kerr, King
NO: Rhodes-Conway, Sanborn, Pham-Remmele (again had to pass, then voted at the end.)
AMENDMENT THIRTEEN
Agency/Project: Planning and Community and Economic Development / No. 6 – TID 32 – State St. Corridor
Page(s): 121, 148
Sponsor(s): Alds. Sanborn, Pham-Remmele, Cnare, SchumacherRemove the funding of $300,000 in the CIP for Small Cap TID Loans.
Simply removes the $300,000 in borrowing.
Sanborn says that this is about small cap TIF. Its hard to understand how they think this program is a good idea. Taking money from taxpayers to give to people who are not low income in name of social engineering. Some people think they know best the proper mix of neighborhoods and taking money for purpose this vague and inconsequential is almost legalized theft.
Maniaci is leaning towards supporting the amendment. Mostly because it was tied in with 12. There is not a lot of residential houses in the TID that would qualify for the small cap TIF like used in Bassett. In the best of circumstances we would have a generator, it would take a bit to get it on line and develop a program to apply for the neighborhood. She would be supportive of small cap TIF in the future in expanded TID 32 and interested in hearing colleagues opinions.
Bruer makes it a question for Olinger even tho she wasn’t asking staff.
Olinger says that there are not many structures, until they expand the district.
Verveer opposes the amendment. Says it is identical to the Board of Estimates rejected amendment. Like many of Sanborn’s amendments they are based on principal and offers the same ones every year. Uses it as an education process. In the small cap TIF program, it is not currently in place, was in place for less than a year in now closed TID 28 in Bassett. There was some success. Limited success because of short time. Much like debate of last four hours, he sees this as a placeholder amendment. Reminds us that there is a program called the small cap TIF, one that they tried in the past, but believes merits of this are worthy, this is meant to encourage owner occupancy in rental neighborhoods. Financial assistance is not multi-million for large developers, this would provide small amounts of seed money. First time homebuyers used the money in Bassett including County Board Chair McDonell, his wife Megin and their daughters. Yes the criteria need to be looked at, but like amendment debated for several hours, it is a placeholder. No program right now, no amendment to TID 32 yet. Hopefully seeing amendment to amend TID 32, that has to happen for the Edgewater to get money, needs to be done sooner rather than later because he needs the street reconstruction money. Doesn’t see a downside to keeping this in the budget. Have history of a program, this was rejected except for Sanborn at BOE.
Cnare says that despite Sanborn’s note, supports this because federal government giving away money to first time homebuyers. So they can devote money to the things like streets, urge them to support. Not taking anything away.
Sanborn says that he offers these amendments again and again. Thinks we should continue to think about these things, primarily because this is a public body and we represent Madison and a minuscule portion knows about this program and if they knew about the program, if polled it would go down in flames 90/10.
Rummel says it is a good amendment. So many people she talks to think TIF is money for large developers. This is a good idea.
Motion FAILS on a voice vote.
FINAL DISCUSSION
None.
FINAL VOTE
There was a voice vote. Only Sanborn and Pham-Remmele voted against the budget, I think . . .
At this point it was 9:55 and they took a recess.
