A Lot of Questions Arising

Yesterday's raid on City Hall by the FBI was attention grabbing, to say the least.  The arrest of two City employees, one who ran the Land Bank (Reggie Walton), and one who had worked as a special assistant to Mayor Ballard himself (John Hawkins) and more recently as an aide to Walton, demonstrated how high up the alleged scheming crept.  Of course, the investigation continues and the recent cacophony of shoes dropping could continue apace.

U.S. Attorney, Joe Hogsett, held a press conference yesterday afternoon, part of which you can watch atop Jon Murray and John Tuohy's IndyStar article, and which I have embedded below.  If you can't watch all 5 minutes, I suggest tuning in at minute marker 4:15, where Hogsett sends a very clear message to those for whom corruption is a companion, beginning with "the era of corruption is over".

 

 

 

There are many things in this world I do not understand, but today I want to mention a few arising from yesterday actions and inactions.

 

Why do officials sell out for so little?  One of the charges alleged against Walton is that he took a $500 bribe.  It is almost heartening that the FBI believes the total take for all 5 people arrested may have topped $100,000.  Still, why would folks put themselves in line to go to prison for non-life-changing sums?

 

I suspect the answer lies in the culture of corruption itself and the individuals involved - some of whom may have more good than bad in them, but a powerful ability to rationalize their actions as just part of the game of 'public service'.  We all talk about the powerful folks putting certain folks into office so that the real gravy train of millions continues to flow to a handful of well connected individuals.  I look forward to the day when those people's fancy offices are subject to a warrant search.  But, for those lower on the food chain, the idea that the cracks in public policy should be exploited, not fixed, surely must fall out of the culture set by the big dogs.

 

I further have to wonder why any of the alleged sales of City-owned properties continued AFTER the IBJ article, written last November by Cory Schouten, exposed the Land Bank actions.  In fact, here is how Schouten's article began:

Reggie Walton sat down at his desk on the 20th floor of the City-County Building a few days after he signed off on the deal, and the thought hit him.

I just made someone a millionaire.

Once the light of day was shed on the Land Bank policy of selling without restrictions, one would have thought that a) restrictions would be placed on sales of City-owned property in the future and b) any corrupt practices would stop due to the exposure.  But, evidently not.  No restrictions were placed on either the policy or the corrupt practices.

On to the press reaction to Mayor Ballard's absence yesterday.  Reported by the Star this morning, is the fact that the FBI informed the Mayor's office Monday night, of its intention to execute a search warrant Tuesday morning.  Ballard and his administration had time to work out how to proceed on Tuesday.  Hiding all day was their answer.  This hiding, by our duly elected but frequently gone Mayor, seems to have stepped over a line for some in the media.  I'm happy that they had a line to step over, but I am kind of stunned that they didn't notice his absence from any real governing heretofore..

So, what's the recent count?  Two City Councillors.  One City attorney who worked as a business partner of a Prosecutor.  A Deputy Prosecutor.  A Code Enforcement Officer having cars towed, crushed, and sold for metal.   All those found or plead guilty.

Hopefully Hogsett and the Public Integrity Working Group will continue the joyful sound of dropping shoes; and do so until even those in high places trading power for millions, will take pause and wonder if its worth it to continue bilking the Citizens of Indianapolis.


Broad Ripple Parking Garage - $8 Million 'Value'

Cory Schouten's, IBJ reporter, latest revelations about the Broad Ripple parking garage and its new flood proofing scheme, got me looking over the permits that have been requested.  From the City's online permits feature, it appears that the flood proofing plans have been approved (FLD11-00216), the improvement location permit has been issued (ILP12-00845), and the structural permit(STR12-02419) awaits approval and issuance. (for those who know how to navigate this feature of the city's website - click here and input either the address 6280 N. College or search for the individual permits by the numbers I listed above)
What caught my eye was the "estimated value" line in the Application Information section of the structural permit.  This information would be supplied by the applicant, not the City.

$8 million dollars is the estimated value of this parking garage.  Not the oft repeated $15 million number.  And, this $8 million dollars would include the new flood proofing designs that were so onerous that the developer said it would kill the project.

The City taxpayers, through the up-front proceeds from the sale of the parking meter assets, is paying for this garage to the tune of $6.34 million.  We were told there would be 350 parking spaces and no more than 20% of the building devoted to retail and other uses.  The permit weighs in with 349 parking spaces, but the full first floor being retail (or 33% of the building) devoted to non-parking functions).  You will recall that the supposed need was for the parking spaces, not more retail.  Schouten reports that 100 of the spaces are actually required for all that retail, netting the taxpayers 249 spaces.

What to make of the $8 million "estimated value"?  Three possibilities leap to mind.  First - the taxpayers of Indy are paying $6.34 million, or the very hungry lion's share of the price for this garage/retail building.  Even if the per square foot construction costs of retail were equal to that of parking spaces (which I trust is no where near true), the cost of the parking spaces would be $5.33 million.  So, we have paid too much for what we are getting.  We have been led to believe that the costs were closer to $15 million by our City leaders, so our contribution would part of $10 million in costs for the two floors of parking.

Could the developer be so bad with money that he would spend $15 million and only create $8 million in value?  Possibly.

The last thought is that this $8 million value just might be what gets into the database for assessed values for property tax purposes.

I don't know what the costs truly are.  I have outstanding open records requests for just that information from the City.  But, the Ballard administration's self-proclaimed transparency is still not evident in its divulgence of public documents through City Legal.

Until further information is provided by the City, we are left with at least three possibilities - the taxpayers are paying more than their share of the building - the developer is very bad with money - or the true value of the new garage is deliberately being low balled.

IBJ On Topic Yet Again

The IBJ is on top of it, yet again.  In today's issue, Cory Schouten follows up on the issue of the Broad Ripple Parking Garage.  (Unfortunately for those without a subscription, the article is locked)

To summarize the article without trespassing too far into IBJ copyright territory...  the summary provided as a teaser to all says:

"City mum on economics of $15M Broad Ripple garage project"
Both city officials and the developer of a proposed 350-space parking garage in Broad Ripple have refused to share financial projections for its construction and operation, describing the documents -- as a "trade secret" exempt from public disclosure."

The article covers more than the public assess issue.  Schouten goes through the high points of each competing bid and offers quotes from many of the players.

Schouten has a fantastic quote from Ersal Ozdemir, CEO of Keystone Construction, a partner in the winning project.

“I think it’s a heck of a deal,” Ozdemir said. “We’re spending a lot of time and money developing this project. Do we want to make money? Sure. We won’t make the same profit as a private deal, but there are intangible values for us here.”

All I can say about that is -- if the garage was doable as a private deal, and they would make more money doing it that way, why are the taxpayers involved at all?

Of particular interest, to my eye, was the side bar that provides an IBJ analysis of the cost breakdown of the proposed garage project and how it might add up to $15 million.  This analysis includes $4.5 million for acquisition of the property.  The property will be leased, however, not purchased.  The cost of the land, therefore, becomes an operating expense, and not a cost of construction.

Schouten also touches on the 2007 study of parking needs in Broad Ripple, done by Walker Parking Consultants, another partner in the winning proposal.  This study determined that the current site was inadequate and also estimated the cost of construction, without land purchase or building demolition, at about half the price of the current proposal.

Schouten brings up Ozdemir's campaign contributions to Greg Ballard and his hiring of former Ballard Chief of Staff, Paul Okeson.

Schouten goes into the fact the the winning bid actually proposed two versions of this project FOR LESS MONEY.  Yes folks, thanks to the keen fiscal responsibility and business acumen of the Ballard Administration, the price tag went UP during negotiations between the City and the bidders with the winning proposal.   Wow ! Adequate words escape me.

Back to the public access issue.  As I noted in a previous blog entry (see "Are Taxpayer Dollars Being Flagrantly Misused?"), I was denied the financial analysis of the winning proposal, with the City stating it was information to be protected as a 'trade secret'.  I have filed a formal complaint with the State's Public Access Counselor.  I will have to amend that complaint to add the fact, ferreted out by Schouten, that other bids, losing bids mind you, had the financial analysis included in the materials provided to the public by the City.  So, how can they claim that only the winning bidder's numbers need protection.  In addition, Schouten reports that the City will release the winning bidders' financial analysis, once the deal has closed.  

So, let me summarize the Administration's position on public access to the key portion of the winning proposal.  Nope, you can't have it because it is a 'trade secret' and State law protects disclosure of 'trade secrets'.  Yes, you can have the financial analysis from non-winning bids.  No 'trade secrets' there.  Once we have the deal finalized and the terms become contractual obligations of the City and the City's taxpayers, then the financial analysis of the winning bid will be provided to the public.  At that point it will no longer be a 'trade secret'.  Anyone know what kind of logic is being applied here?