Saturday, May 16, 2015



the downtown kleptocracy money churn and burn
TO Chris Shatto -- This post is in response to your comment below. My response was too long for "reply", so I'm posting the response here with a notation below.
Chris -- Here's the thing. Downtown has been the focus of consistent and substantial funding for the past 15 years. That 15 years has seen the expansion of the Downtown Library, the Grand Wayne Center, the construction of Parkview Field, the Harrison, the current Ash "Cash & Slash" Brokerage project (where an old abandoned parking lot valued at $10,000 was first artificially inflated, bought by the Downtown Development Trust, and eventually sold to City Council for a "loss" of $900,000+), a renovated parking garage (Rousseu Center garage) that is losing money, the construction of a second parking garage (Parkview Field/The Harrison) that is losing money, and a third parking garage (Ash "Cash & Slash" Brokerage) that will likely continue the trend of losing money---as all parking garages do that are owned in part or wholly by county or city entities. Parkview Field is not self-sustaining and is heavily taxpayer subsidized. Same for the Grand Wayne Center, the Library and pretty much anything else that involves the City. The infrastructure Downtown is by far the best maintained -- it has few if any significant potholes, no non-functioning street lights, etc. Its time for the public sector to get the heck out of the way and let the private sector take over.
In terms of Downtown properties being on the tax rolls for 100 years -- Yes, that is true. But real estate taxes primarily support government functionality and operations. Most recently, this is due to property tax caps, but way back in the day it was because government stayed out of the real estate development business. Most of the recent ventures have been financed with residential income taxes, such as CEDIT (County Option Economic Development Tax), COIT (County Option Income Tax) and LOIT (Local Option Income Tax)--although in fairness, LOIT was supposed to be used to help defray public safety costs. From 2012 forward, a great portion of development projects will be financed through backdoor sales taxes imposed on residents, such as the Food & Beverage Tax that was suppose to pay for renovations to the Coliseum (a debt still outstanding) and now is being diverted to the Capital Improvement Board to pay for "economic development."
Also, do you remember when economic development was about creating jobs? Somehow we moved from creating jobs to retaining jobs. That is indicative of a City that is dying and destabilizing, not a City that is maintaining its own and definitely not a City that is growing. Have you driven around Fort Wayne outside of Downtown--especially outside of the 5th District? (Btw, the 5th District contains all of Downtown, the Indiana Tech campus and Jefferson Pointe.) Coliseum Blvd has more buildings left vacant, abandoned, up for sale or lease than ever before. Empty big box stores litter the entire city--north and south. The Southeast part of Fort Wayne is so badly deteriorated, the Mayor can't find a company willing to take a risk in developing a business on "free" land. In the areas of North Highlands, Anthony Blvd, Waynedale and others, there are serious sewage issues.
You (and Mike Anderson) cite how your downtown homes have been on the tax rolls for the last 100 years and have paid for suburban sprawl and other forms of development. But so have many homes in the Southeast (6th District) and South Central (5th District outside of Downtown)--- like Southwood Park, Indiana Village, Williams-Woodland Park and more--and what do they get for their tax dollar? Street lights that don't work. Sidewalks and curbs in disrepair. Pothole-filled streets. Sewage and drainage problems. How is this fair to those homes that have been on the tax rolls just as long as your downtown home?
Also, the proposed riverfront development area contains 90+ properties, the majority of which are already county-owned properties. This means that county taxpayers (which includes Fort Wayne residents) will first pay to acquire and maintain these properties pursuant to the whims of the County Commissioners and the rubber-stamped approval of County Council. Then couty and city taxpayers pay to support the Downtown Improvement District, which turns around and does business as the Downtown Development Trust---which is headed up by the Deputy Mayor at the bequest of the current Mayor--so that the Downtown Development Trust can "acquire" these properties by buying them from the County directly or waiting until a capital crony investor buys the property from the county for pennies on the dollar. If an "investor" purchases property, then you will likely see that property go through a process where it is passed back and forth between a couple of private companies to artificially inflate the price, so that it can be sold to the Downtown Development Trust for a price that is more than what the property was originally bought for but less than the newly, artifically-inflated valuation, so that the property can be bought for a "loss." (wink, wink, elbow nudge, elbow nudge) Finally, the Downtown Development Trust will "sell" the property to City Council---ok, technically it will be a "reimbursement"---but whatever you call it, City Council will rubber-stamp the deal. The Mayor will sign the deal. The crony capitalist "investory" makes out like a bandit. And then comes the development of the real estate and a whole new process begins benefitting a different group of crony capitalist on the taxpayer dime.
Focusing just on the real estate acquisition process -- Fort Wayne residents end up paying taxes over and over and over again for the same property. Here's how:
Fort Wayne residents pay monies to the County coffers to first buy and maintain these properties.
Fort Wayne residents pay monies to the County and City coffers and some of that money gets funnelled to the Downtown Improvement District (operational expenses), who pays someone to act as the Downtown Development Trust (i.e. deal architects--Deputy Mayor, an attorney or two, etc). Fort Wayne residents pay COIT and CEDIT, which are county-based income taxes--a majority of which goes back to Fort Wayne. (Yes, County taxes paid by residents of New Haven, Monroeville, Leo, Grabill, Woodburn, Zanesville, Arcola, Zulu and Eel River are paying for Fort Wayne "economic development"--including all this "downtown development" and "riverfront development." Translation--You guys are really getting shafted here.)
Fort Wayne and County residents pay monies to County coffers via Food & Beverage tax. That money gets diverted to Capital Improvements Board, who funds Downtown Development projects.
Once the taxpayer-funded Downtown Development Trust purchases properties that the taxpayers originally owned, the DDT goes before City Council for reimbursement and get paid that reimbursement through taxpayer dollars.
This is how a $10,000 piece of taxpayer-funded, government-owned property gets bought for $900,000 by....taxpayer dollars. Chris Shatto -- I'm not against development. I'm against waste. Some people might call this scheme theft and fraud. And remember, this is only the land aquisition portion.
Before you have land acquisition--you have consultants for this and consultants for that. The City paid a consultant 1/2 a million dollars just to draw pictures ("concepts") of what Fort Wayne could do with its rivers. These drawings were very misleading. (And I'll explain why at a later date.) These drawings were designed to build excitement, gain the public's approval, increase desireability (much like toy commercials during Christmas time) and distract taxpayers from thinking about just how this project was going to be funded.
After you have land, then you have more consultations--engineering, architect, environmental, etc. Review the Mayor's campaign finances for the complete list of potential consultants already on stand-by. With each consultation comes legally binding contracts outlining who is doing what for how much money and for what period of time---which mean legal services will be required. Again, please review the Mayor's campaign finances for the complete list of attorneys/law firms already on stand-by.
After all the consultations and land acquisition is completed -- then comes the real work. And where the building and trades groups make their well as their material suppliers, like steel structural beams, steel pipes (not just "art work" anymore), bricks, concrete, etc. And who do you think these suppliers are? C. Henry Steel (Henry family owned), Midwest Steel & Pipe (Henry and Shine family owned), and more.
Now sometimes---before, during or after land acquisition--you also have demolition of existing buildlings. Companies come in and are paid by the county and/or the city---again using taxpayer dollars--to demolish existing buildings and haul the debris away. Ironically, most of the "debris" is recyclable--copper wires, steel beams, bricks, concrete, wood, etc. These private companies first make money by getting paid and then they make more money by recycling the debris.
I could really just go on an on here, but I won't. At the end of the day, what concerns me the most is that we are all over-taxed and under-beneffiting from that taxation--to our detriment but to the benefit of a select few in this community. Now, I am all for people making money and I am all for people getting rich, but there has to be a balance.
Fort Wayne is full of unmet basic needs. These needs are going unmet because the current Administration feels its more important to build and decorate a roundabout than it his to make sure roads, sidewalks and sewer lines are properly maintained. Again, its time to‪#‎TransformthePriorities‬.
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  • Gina Burgess John Amos, David C Roach, David Christopher Roach, James A Jim McCoy Jr., and Dean Robinson -- I am tagging each of you in the hopes that you will archive and save the information in this post, especially you John and Jim--since you are both out of the country. Thanks, in advance, for your help. I really appreciate it.
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