Word on the street is that Soglin’s Capital budget, due out later today, will cut the Edgewater TIF from $16M previously approved down to somewhere in the $4M-$5M range, though I’ve heard it could be as low as $3M. (Why can he do this, you ask? Because if the money isn’t spent in a year, it has to be reauthorized for the next year, and it doesn’t seem like the Hammes Company is going to be able to start construction this year.) Just some quick thoughts:
– First, to Tim Bruer: You cannot be both “concerned and outraged.” If you are outraged, you are past concerned; if you are concerned, you are not (yet) outraged.
– I don’t really think this is that serious. It only takes 11 votes to change the funding back to $16M (or $8M in the first year and $8M the following year) and if the Council really is outraged, they should be able reauthorized the money easily.
– The drum Soglin is beating is debt service load over the next decade – it’s not the money this year. He’s been very transparent about it – in this blog post in August he made it clear that debt payments during the latter half of this decade cannot be as high as they’re projected to be, and he’s cutting as much now as he can to avoid it. The Edgewater changes appear just to be another in a number of similar moves he has made to make his next term (or whoever follows him as Mayor) more manageable.
– This being Soglin, he’s doing it by throwing an elbow, and trying to jam the Council politically. He’s making them justify the Edgewater again, in an economic environment that shows no signs of improving soon and huge cuts to aid from the State government. The projected economic impact and the number of jobs to be created by the Edgewater were completely inflated and everyone knew it (this memo to the TIF Joint Review Board nails all of it.) Would we really do the Edgewater again today? He’s giving the Council the opportunity to act as an equal branch, but they have to step up to do it. This could actually be very good for the Council if they can make a principled argument.
– My challenge to the Alders who are going to try to restore this TIF funding: Explain in detail what jobs the Edgewater will create, short term and long term. The long term number is not “300-400 jobs.” The Edgewater itself will not create that many jobs, and the multiplier is not that high (e.g., the Edgewater will not cause a number of ice cream stands to open nearby, which in turn would need more accountants and delivery drivers and ice cream stand painters, etc. A luxury hotel in this spot just isn’t going to seriously drive new business around it, nor does it do much to drive up property values.) You’re only going to beat Soglin on the numbers.
– This is a big win for the school district and MATC. Without the Edgewater, TID 32 could close in the 2015-2017 timeframe, and in the years that follow the taxes from the increase in property values in TID 32 would be able to go to the schools, too. With the smaller Edgewater TIF support, the TID could still close much earlier than the projected date of 2022 (or later, if construction keeps being delayed) under the original deal.
– Here’s my tinfoil-hat conspiracy theory, for which I have absolutely no evidence and am simply making up because I think it’s a fun possibility: Someone connected with the project asked for this to happen. The financial projections in the TIF request were way too optimistic, and while the City went along because they just wanted to build something and “get to Yes”, the banks who have to finance the thing are not buying the numbers and getting financing is not happening. As a face saving measure, the TIF request gets cut, which then makes the project infeasible and after a bit of handwringing, it dies with a cover story and we all move on.
I’m glad this request is getting cut. The public is getting screwed under the old TIF agreement, and the public access agreement gave the Edgewater far too much control over the new space. It was a bad deal for $16 million.
Completely agree that the TIF was a bad deal. I didn’t care all that much about the form of the building, but stayed up until 2 AM (or later?) to testify that the Council shouldn’t OK the TIF. They broke three of their own TIF policies, after spending quite a bit of time hashing out those policies just a couple of years before.
If I recall correctly MATC voted for the TIF. I agree that a smaller TIF is in their interest, but their Rep went for the big one. MMSD in contrast did a thorough analysis and said no thanks.