Last night, the council spent quite a bit of time looking in the weeds at detailed questions about Judge Doyle Square and the alarming amount of questions that are not yet answered while they are expected to move things along. I’m glad they did that and set out clear expectations, but what about the big picture. Is this a change we want for the city and is it worth $40M in TIF? Here’s my observations.
This is a more detailed version of my testimony last night.
TEAR UP THE TIF POLICY
The 15 or more exceptions to the TIF policy required to move this along last night, detailed on pages 13 -16 of the report, should be alarming to everyone. The way TIF should work is the city identifies a blighted area that needs a boost in economic development, they create a TIF district, then developers create proposals in the area, if they are taking a risk in a blighted area, leading the way in a neighborhood or doing something that goes beyond what other developments do, and they have gaps in their financing, the city reviews the financing and determines what the gap is and funds the gap through TIF dollars. That’s not how this one works. Here’s some of the oddities in this TIF process:
1. There is no TIF application.
2. There is no analysis of a gap – how much does the developer need? Who did that analysis? How do we know there is a gap to provide financing for? Almost every developer comes in asking for more than they need. Remember this same developer said he needed $16M in TIF for the Edgewater and when he didn’t get it, guess what, the project got built anyways. How do we know they need $40M, maybe its $30M, or $20M or $10M. How do we know?
3. There is a provision for a gap analysis waiver in the policy, but there is no evidence presented by the developer showing that we need to use that waiver.
4. It’s not in a TIF district. In fact we need to certify one TIF district (45) and expand another (25) so there are two approvals of TIF districts required.
5. The process to put this in a TIF district must be reviewed by a board (includes other taxing entities such as MATC, school district and the county) and that expansion (25) has not been approved.
6. That expansion (25) and creation (45) then needs to be approved by the state, that hasn’t been done.
7. We require the developer to put in at least as much as the city does, but we don’t have proof the developer is putting in the same risk of $40+M.
8. TIF isn’t supposed to advantage one business over the other, but make them equal. All indications are that Exact Sciences will be paying a lower lease rate than most businesses in the downtown (and be providing 600 free parking spaces for their employees)
9. There will be no personal guarantee of the TIF, if the project goes belly up, who do we seek our losses from? Not an individual, but an LLC that is set up specifically to avoid personal responsibility, if the project goes belly up, we have no recourse except parking revenues from evenings and weekends, and that will take a long time to pay back $40M. If the parking is even built at that point.
10. Normally TIF is used partially for the developer and partially to make infrastructure improvements to the surrounding area, in this case it will be used 100% for the project.
There are even more details, but this will suffice for now. Many of these exceptions are required because the city is working on a rushed timeline to get this project done in a ridiculous amount of time or Exact Sciences is going to go elsewhere. The question is, why should we decimate our policies and procedures put in place for good reasons, for the largest TIF the city has ever done, over $40M. What is the greater good we are achieving? What do we get that is worth this herculean effort?
THIS IS WORTH RUSHING THROUGH FOR WHAT GREATER PURPOSE?
What benefits, what greater good, is the community getting for $40M
A bike parking facility? Maybe, but that will be figured out later.
Good jobs? There are no details on that.
Hiring diversity? There are no details on that.
Increased property tax base? My cynical comment on this is that half our budget goes to police, fire, public safety. So, we get more tax base, more taxes are collected and they are given to the police to arrest people of color. There is the trickle down theory that these large developments help pay for social services, but seriously, do you see that happening? Have you seen any great increase in social services? Any great investments?
Equity Lens?
Ok, equity, equity, equity, it’s the latest and greatest buzz word. Let’s see it.
crickets . . .
Where is it?
This building, in my estimation, will have this impact on poor people, mostly people of color. Gentrification. Gentrification means that people are priced out of the area as we tear down affordable housing, build huge apartment complexes with apartments starting at $1000 or more, don’t replace the affordable housing, drive people out of the downtown where their jobs are. It takes a workforce to support all these high end restaurants, stores and services to clean the offices etc in the downtown area, but the people who provide those services have to live further and further away from where they work, increasing their transportation costs. They can’t afford the parking downtown, so they ride the bus, but the buses stop running at night before their work shifts are over, so they have to call a cab. This all adds costs to the lowest paid workers who can’t live where they work. Meanwhile, my middle class home goes way up in value, my taxes go up and my neighbors all disappear to the suburbs. Next, employers cry out for more bus service because their employees can’t get work. At the same time they put pressure on the police to get rid of the unsightly homeless people in the downtown area because their employees are afraid. Do we get expanded police services or bus services or affordable housing with these increased taxes? We get whatever the businesses want, more police, a small program with a van or two to get people home from work which will get cut when there is no longer a cry from the businesses about it and no affordable housing. And just think, I didn’t even mention childcare.
What about other equity issues? Who is applying the equity lens and doing that analysis on this $40M deal?
SECRECY
Closed Session Meetings
Since the council meeting in May when they approved exclusive negotiations with JDS/Exact Sciences, both the meetings they had were held in closed session at the Board of Estimates, there are no minutes from that closed session. No public input whatsoever, probably because the agendas said it would be in closed session. All the information the alders have from the closed session is not being shared with the public, so we don’t know what they are considering when they voted to move this forward last night. And as the public, we have no clue if we support or oppose this because we don’t really know what “this” is.
Lobbying
Hmmm, no lobbying registrations or reports are available for JDS or Exact Sciences. Go figure.
Last minute information
Where were the mayor’s objections about things not being in Legistar now? A last minute late breaking memo came out yesterday afternoon and was provided to alders at their desks. The mayor threw a fit over this when he vetoed the homelessness as a protected class ordinance, but didn’t say a peep last night.
Roll Call!!!!!!
Even the vote was secret. I can guess who voted yes and who voted no, but we will really never know since there was no roll call vote to hold people accountable. I think and this is just a guess, that the no votes on the floor were, in order of certainty . . . Ahrens, Kemble, Rummel, Baldeh, Zellers, McKinney . . . Skidmore, Schmidt (well, I guess we know how he voted). Maybe. I was there, but I have no clue in reality, but that sounded about right.
OH, AND ALL THOSE OTHER QUESTIONS
Those were the bigger global concerns, but yes, all those questions the alders asked, down there in the weeds, are equally important. Very important. My post was designed to just bring up some other issues I didn’t hear talked about last night and didn’t cover yesterday in my blog post. The only alder I heard talk about issues here except TIF, was McKinney’s questions about the jobs and what turns out to be a “just started talking about” pipeline of workers coming from the Urban League.
This project is once again, a boondoggle. The rush job is appalling at best. The secrecy is disturbing and what happened to our Madison values? Equity, meh.
CASH (Citizens against Subsidized Hotels) is calling for an independent review of this project. I couldn’t agree more.
