$3 Million of TIF Money (Taxpayer Money) Going To Enrich IndyStar

Resolution 2014-B-002 goes to the MDC for a vote Wednesday.

This resolution would float $5.5 Million in bonds as taxpayer investment in two projects - the "Pulliam Place" and "Millikan-On-Mass" projects.

The Pulliam Place project will take about $3 M of the money.  The agreement was worked out an unknown number of months ago, and has been wending its way through the MDC system - first being discussed at the Economic Development Committee meeting in early May, and then again by all of the Commissioners at their May 21 pre-meeting.

During this time, the Star failed to inform readers of its many editorials and opinion pieces that the deal was pending, a clear violation of the Code of Ethics as expressed by the Society of Professional Journalists.  Under "Act Independently", the third item on its Code of Ethics webpage, the SPJ says in part:

Journalists should be free of obligation to any interest other than the public's right to know.

Journalists should:

—Avoid conflicts of interest, real or perceived.
— Remain free of associations and activities that may compromise integrity or damage credibility.
— Refuse gifts, favors, fees, free travel and special treatment, and shun secondary employment, political involvement, public office and service in community organizations if they compromise journalistic integrity.
— Disclose unavoidable conflicts.

The Ballard Administration gift of taxpayer money would be repaid by revenues of the Consolidated Downtown TIF.

And what do you get for your gift?

 Some vaguely described improvements to N. Talbot, E. New York, and E. Vermont Streets, a dog park, and improvements of the existing Star building parking garage.

And how does this benefit you, the taxpayer?

Why the Pulliam Project is anticipated to create 49 new full-time jobs by mid-2017.  There is no mention in the resolution of the average salary of those positions.  And, there is no requirement that this number be reached.  That works out to a taxpayer investment of over $61,000 per job.  Of course the sales price of the Star building will rise concomitantly with the taxpayer gift.  One would also expect the time to sale would shorten with this sweetener, as well.

What also interests me is the last part of the resolution, where it states that the resolution to float the bonds will not be effective unless the Bond Bank "consents to and approves the adoption" of the resolution.  Anyone who follows City government knows that the person who envisions these projects is the same person to negotiates the taxpayer terms of these projects and is the same person who runs the Bond Bank; one Deron Kintner.  Why are they even pretending that there is any independent review of the taxpayer financing of these projects?

The taxpayers who pay attention to such things, are familiar with the extravagant accumulation of TIF funds and equally extravagant expenditure of the same, all while elected officials, including Mayor Ballard, seek tax increases to pay for basic services.  This one is different in that it calls into question the independence and integrity of the Indianapolis Star.

IndyStar Fails Journalistic Ethics Test

In two days, the Metropolitan Development Commission will vote on a $3 Million bond to enrich the Indianapolis Star owners by improving the existing Star building, thereby increasing its sales price.  Resolution 2014-B-002 bundles the "Pulliam Square" and the "Millikan-On-Mass" projects for a total of $5.5 Million in taxpayer dollars.  The project has already been through the MDC's Economic Development Committee and has been discussed at its Pre-Meeting.

The $3 Million gift from Mayor Greg Ballard to the Indianapolis Star has been in the works literally for months.  When approached by the Ballard folks about the gift, the Star could have said, "No thank you.  Such a handout would cloud the credibility we have built with our readers, and set up the perception of a conflict of interest."

But, they did not.

They also failed to alert readers of the many editorials and opinion pieces penned during these months, that supported Ballard or scolded those who did not agree with the Administration's policies, of Ballard's gift. 

The readers had an absolute right to know, and the Star had an absolute obligation to inform them, that they were awaiting $3 Million of taxpayer money.  Each reader had the right to decide for themselves if Ballard's gift was irrelevant to a Star position, slanted an editorial stance, or outright bought and paid for the Star employee's praise.  Each reader has the right to decide for themselves if this is an advance payment for another endorsement of candidate Greg Ballard in next year's run for re-election.

The Indianapolis Star failed its readers.  They also failed this fundamental test of its Journalistic Ethics.

We're Not as Big as They Say

Bravo - This researcher from IUPUI puts it all in a nutshell.  Arthur Farnsley II penned the following letter to the editor, which ran in this morning's IndyStar. 

We're not as big as we think, but that's OK

By any common-sense measure, Indianapolis is not the 12th most populous city in America. This is not a matter of academic nit-picking. When we think about urban issues like traffic, crime, mass transit, professional sports or Downtown jobs, we need to see ourselves as we really are.

A recent story in The Star, “Why you can’t see a good indie flick in Indy,” repeats this unhelpful “fact” about us being 12th biggest, but the misinformation routinely shows up elsewhere too.

Indianapolis is in fact the 12th largest “incorporated area” in America. Unfortunately, “incorporated area” is not a useful way to think about cities. As the name says, this category has mostly to do with how city limits are drawn.

Uni-Gov created a uniquely large incorporated area for Indianapolis, so by this measure we seem very big. But to accept that Indianapolis is 12th, you would also have to accept that Boston is 21st, Baltimore is 24th, Washington, D.C., is 25th and Atlanta is 40th. That’s right. Judging by “incorporated area,” Atlanta is half the size of Indy. But our common sense about cities tells us that is not true.

Much more useful is the measure is of primary statistical area (PSA), which takes in all of the outlying areas that are part of a city and pays no attention to arbitrary city limit signs. The Indianapolis PSA, for instance, includes Anderson and Columbus.

By this measure, the Baltimore-D.C. corridor moves to fourth, Boston moves to fifth and Atlanta to 10th, which we all know is closer to the truth about their relative size. The Indianapolis-Anderson–Columbus PSA ranks 29th, which we all know is also closer to the truth. (If you like, you can use the even-broader combined statistical area, by which Indy ranks 23rd.)

Here’s the thing: Being 29th is not a problem. I love the size of Indianapolis. I live here by choice. For the 29th biggest city in America, I love that we have hosted the Super Bowl, have the greatest motorsports venue in the world, and have two major-league sports teams. I love that we have a great urban public university and several great private ones. I love that you can walk safely Downtown and we have excellent arts venues, shopping, and restaurants, all with cheap parking and moderate traffic.

When we think about indie films or mass transit or Downtown employment, we should not make the mistake of thinking “12th most populous,” which means comparing ourselves to cities more than twice our size. Our comparison group is not Houston or Atlanta, but Kansas City, Columbus and Cincinnati.

In our hearts we know this. But somehow we keep using “12th most populous” either to make ourselves sound bigger or to lament how such a metropolis can be lacking whatever it is the speaker thinks we need.

We’re 29th biggest, and I’d take us over any other cities in our weight class. But let’s be realistic about who we are as we think about who we can be.
 

Farnsley is a research professor in the Indiana University School of Liberal Arts at IUPUI.

Huber Cashes Out of One Government Job to Another

IndyStar reporter Jon Murray is reporting that Deputy Mayor Michael Huber is leaving his post with the City and taking a spot at the Airport that pays a whopping $190,000 a year.  Deron Kintner, currently Director of the Bond Bank, is being supported by Mayor Ballard to step into Huber's old post.

So, Huber is moving from selling taxpayer assets, creating TIFs, and spending excess TIF funds on the projects of favored developers --- to -- keeping hundreds, if not thousands of acres of land OFF the tax rolls so that the airport can make $65 million more a year in clear profit.  This is the airport city concept I have mentioned before, that is a shell game swapping private property taxes paid by private entities on private land ---  for ----  airport profits from land leases of government owned property for private businesses that have no need to be located at an airport, nor which assist the airport in its mission of providing air transportation functions.

Its a double dip that keeps taxpayers digging deeper into their pockets, while favorite local developers become accustomed to large handouts and forgiven taxes.

Edited to add: I guess they didn't clear those folks out of the airport in order to save money after all.  The $200,000 'saved' is just about Huber's salary.

Indy Star Editorial Dead Wrong - More Information Needed to Substantiate TIF Expansion

The Indy Star Editorial Board wants you, Mr. and Ms. Taxpayer, and the City-County Council to buy a pig in a poke.  Not just any pig, mind you, its a downtown pig - so who needs details?

In today's Editorial, "Put Mass Ave on faster track", the Board repeats the same old, unfounded and untrue, myths about TIFs to push for the expansion of the consolidated downtown TIF to fund development along Mass Ave.  The alternative they are brushing aside is to actually implement the recommendations of the TIF Study Commission in order to set criteria for the proper evaluation of this TIF proposal.

Where to begin?

Lets start with the idea that before a TIF is created, it is reasonable for those empowered to make the decision to ask for data that demonstrates the need for TIF financing of a particular project.  Information that demonstrates the need for -- THIS TIF - in THIS place - with THIS footprint - for THIS project.

The public has the Council Proposal 15, the text of which lends no information of any value, and the MDC resolution, which I uploaded some time ago to Google Docs.  This resolution includes the  Mass Ave area as expansion #2.  It is 112 acres covering 132 parcels.  Beyond that, there is no information.

So, we do have information on what TIF is proposed, in what place.  But why does the footprint have to be so large?  What exactly is the project to be funded with the proceeds of the TIF expansion?  How much money is the City hoping to contribute to the project?  For what - just streets or are we footing the bill for developer costs? 

A really large question is why this proposed TIF would include the assessed value of EXISTING development.   It begs the question: If those people who invest in such bonds, need not only the security of the best performing TIF in Indianapolis (the downtown TIF) but also tax revenues from existing development in the expansion area - just how risky IS this project and its repayment?

And this leads to another really large question - if there is already development in this area, why do we need to tie it up in a TIF?  What happened to the 'but for' test?  This is the seat of your pants test that can't be described beyond - you just know it when I feel it.  The idea is that 'but for' the TIF financing, the project would not happen.  But development is already taking place here.  The free market is working.

What is the project?  All we know is that there are three finalists in the running - none of which have been disclosed.  In his article in yesterday's Star, Jon Murray reported:

The finalist teams have not been named publicly or their projects released.

Deron Kintner, executive director of the Indianapolis Bond Bank, said the initial proposals were submitted in October, and all the five proposals originally considered as contenders relied upon TIF assistance.

Really?  They ALL proposed TIF revenues as the exact form of government assistance???  Now how did that happen?   But, I get off the point.

We don't know anything about the magnitude of the government (taxpayer) assistance involved, for what, or for whom.  We do know that the City is so loose with money that the broker stands to make $1 million on the deal (see Cory Schouten's article "Mass Ave deal's brokerage fee raising eyebrows")

The TIF Study Commission recommended that key evaluators be applied to any proposed TIF so that it could actually be evaluated.  But, for the Star Editorial Board, this goes too far.  They are content with the limited information currently available, that gives no Councillor and no taxpayer any real tools to take an honest look at whether this TIF is in the best interest of the community at large.

So, where are we?  The Star editorial ignores the fact that we have few specifics with which to evaluate the proposal that the downtown TIF be expanded to include 112 acres and 132 parcels to finance the development of one parcel.

But, the editorial does not fail on that point alone.  They perpetuate the TIF myths once more.

Under TIF, a city locks in a site's property tax contributions at its current level.

I have gone into this several times before.  The base tax revenues are subject to being converted into TIF revenues if the district underperforms for any reason, including recession.  See yesterday's post for some of the gory details.  Suffice it to say, even our holy downtown TIF has 5 of 8 districts whose base has dropped to ZERO.  BUT, this statement is all the more egregious because the proposed Mass Ave district would include already developed parcels in the TIF, deliberately excluding them from the base.

To further attract development, the city also provides enhancements that can include street improvements, parking and landscaping.

Under this Mayor, TIFs are also used to provide $8 million more a year to the Pacers and give a nearly $100 million loan to a developer who could not qualify for a bank loan (the 'but for' test in action) - just to name two deviations from the mundane 'street improvements' meme.

The process certainly can be abused. Some communities have overused the tool, expanding it far beyond what is necessary to promote development. If an area's tax revenue is frozen for too long, schools, transit and other public needs can suffer. 

This is exactly what is going on with the downtown TIF - not just 'some communities' - OUR community.

Further development of Mass Ave and other areas in and near Downtown is needed to attract new residents, who in turn will increase the city's income and sales tax revenues. Those taxes are even more important for cities now that Indiana has capped property tax rates.

Further development of any area of our City will benefit us all.  Why does this area need any government subsidies to develop?  Isn't the free market already attracted to the area?  The Star has provided no justification for any public financing, much less TIF financing.  What is worse, the Ballard administration has provided no justification for any public financing in this area, much less TIF financing.

It's important for Mass Ave, the rest of Downtown and the entire city that the proposed developments be allowed to move forward without further delay.

Actually - NO.  Its important for the entire city that the proposal for any new TIF be clearly substantiated as to why this TIF - why this place - why this footprint - why this project before it is approved.  It is not asking much of our City officials to consider facts; not myths.  The recommendations of the TIF Study Commission need to move forward through the Council and the MDC with all haste, yes.  But any new TIF should wait until the criteria for approval are in place.

It is long past time that we stop relying on the old, untrue promises of TIFs and set up solid criteria for evaluation and monitoring of TIFs in Indianapolis.  The Star Editorial Board should insist on such things, instead of using the fourth estate to help muscle through what amounts to buying a pig in a poke.

Indy Star Calls Ballard's Comments Like They Were

Today's Indy Star editorial calls out the Kennedy campaign - softly, but still it calls it out - on their deliberate warping of the facts to suit their gutter politics (my accurate choice of words, not the Stars').  Here is what they had to say:

In response to a question about high unemployment rates among racial and ethnic minorities in Indianapolis, Mayor Greg Ballard, in an Oct. 15 televised debate, made reference to a "difficult population" in connection with his administration's efforts to create jobs in the urban core.


Was it the "gotcha'' moment of the 2011 Indianapolis mayoral campaign, an indication of the incumbent's lack of respect for or insensitivity to minorities in the city? Marion County Democrats clearly think so. They've been running a hard-hitting radio ad in support of challenger Melina Kennedy that blasts Ballard's quote as an "outrage."

Let's agree that the mayor's phrasing was awkward. Ballard never will be mistaken for an eloquent public speaker. But a fair reading of his comments, kept in context -- and, more important, his record over the past four years -- should dispel fears that Ballard doesn't care about or hasn't tried to reduce joblessness among minorities, especially for African-Americans and Latinos. One example: The city during Ballard's term has significantly increased the number of women-, minority- and veteran-owned enterprises that it does business with.

The fact remains, however, that the unemployment rate among blacks is unacceptably high. That's true not only in Indianapolis but also the nation as a whole. In August, the national unemployment rate for blacks (16.7 percent) reached its highest level since 1984. It declined slightly, to 16 percent, in September, but the long-term trend is discouraging. The unemployment rate for blacks has stayed above 10 percent for more than four years, and many economists predict that it will stay that high for years to come.

Several factors help explain why the unemployment rate among blacks is higher than in the general population. Black workers tend to be younger and less experienced and have a lower level of educational attainment than the American workforce on average. Those are stiff challenges -- difficulties? -- in the best of times. In a stubbornly weak economy, it's a formula for deep suffering and despair.

Given that reality, a few awkward words in the heat of a political debate should have little lasting significance. Far more important is ensuring that this community does all it can to create a fertile environment for jobs to be created, and to ensure that all racial and ethnic groups have the opportunities and skills they need to thrive in the workplace.

My party can do better than this and Democrats need to demand it.

Council Action - Last Week and This

This week we should have a really interesting meeting of the Rules and Public Policy committee of the City-County Council. I also want to backtrack to the full Council meeting a week ago and give you the vote on the smoking ban.

The Rules committee will meet this Wednesday evening at 5:30 pm in room 260 of the City-County Building. Two items are on the agenda. Finally coming to a hearing is Prop 303, authored by Councillor Ed Coleman. As mention in an earlier entry, this proposal would require all contracts with the City-County government be posted online within 7 days of being signed. This is a good step forward in convenient public access to information. I know I will be watching this vote very closely.

Also on this agenda is Prop 378 - the FedEx resolution - which was returned to committee at the last full Council meeting. This proposal, too, was discussed earlier. In short, the union trade rules that FedEx has been living under because of a special inclusion in the law, is now being taken from them under the current language of the "FAA Reauthorization Act of 2009". FedEx would like the Council to back its efforts to have that language removed. The nut of the issue is that FedEx employees must now unionize as a single, national union and act only if all agree. If FedEx were stripped of its special protection by the Railway Labor Act, and placed under the National Labor Relations Act like its competitor UPS is, then the employees could unionize by trade and by location, giving them more flexibility in organizing and negotiations. Whatever your view of unions, the rules for unionizing should be uniform and this resolution strays mightily in suggesting that making FedEx play by the same rules as UPS will cause layoffs here in Indy. In any case, the Rules committee has it back for renewed consideration.

The last full Council meeting did have a vote on the smoking ban. For full disclosure, I don't honestly know how I would have voted were I in the Councillors' seats. I find I fall into an internal debate between the rights of individuals to conduct a legal activity that has been the social norm for generations, the rights of individuals to find employment in smoke-free environments, and the acknowledgement that this is the path that freeing citizens from the toxins in cigarettes is and will be taking - one community at a time opting to narrow the places one can legally smoke. As a scientist I am very concerned about promoting data that any non-smoker who comes down with lung cancer must have been victim of second hand smoke and not IPL's downtown high-sulfur coal plant, or smog, or particulate release from urban mining operations. I don't want a spot on that bandwagon. But, nonetheless, smoking cigarettes will not be made illegal. Thus efforts to minimize smoking and its health risks to smokers will follow this now well worn path. For me the final question is not how Indy will reduce smoking, but when is the right time?

Enough about me. We all know, thanks to Matt Tully's column, that Mayor Ballard ducked that leadership thing once again and chose to do his best Boss Hog impersonation by appearing at the Republican caucus meeting prior to the Council meeting and let them know he did not want this ordinance to appear on his desk. No ordinance - no disclosure of a position - no harm to a reelection effort. No leadership. (I'd provide a link to Tully's column but its not available at IndyStar.com for some reason. Instead here's a link to Gary Welsh's Advance Indiana piece with an embedded link that may get reactivated some day.) Francesca Jarosz' Star piece, published 2 days prior to Tully's piece, which describes the Council's debate is still available on their website.

Here's how the Councillors voted on the smoking ban, Prop 371 : Yes (12) Republicans Hunter, Malone, Smith, and Vaughn, joined Democrats Bateman, Evans, Lewis , B. Mahern, Mansfield, Moriarty, Nytes, and Sanders. No (13) Libertarian Coleman and Democrats Brown and Oliver, joined Republicans Cain, Cardwell, Cockrum, Day, Lutz, McHenry, McQuillen, Plowman, Scales, and Speedy. Democrats D. Mahern and Gray abstained from the vote and Councillors Minton-McNeill and Pfisterer were absent all night. The vote failed.

While one cannot know how the Republicans would have voted had Mayor Ballard not instructed them not to let it get to his desk, one does have to wonder. And, one has to wonder whether any of the Councillors believe they have a duty as separately elected officials to act separately from their party and separately from the reelection efforts of the Mayor of the same party.

I do want to thank Councillors Hunter and Mansfield for authoring Prop 371 and Councillors Evans and Malone for signing on to it. A smoking ban is a discussion this community needs to have. And we will have it again because this is the path down which smoking in Indy will be curtailed. The only question is when.

The Role of the Press

I see two opinion pieces in today's Star regarding the train wreck that is this Legislative Session. First is Matt Tully's great column that reaffirms his writing and thinking talents. In 'Our lawmakers failed us again', Matt writes:

After four months of silly games and petty politics, lawmakers ended their 2009 session without fulfilling their only constitutional duty: passage of a new state budget. Despite a winter and spring spent cashing paychecks from taxpayers and enjoying free meals from lobbyists, the General Assembly failed Indiana.

and

First, the General Assembly is in dire need of new leaders. The annual brawls between House Speaker Pat Bauer and Republican leader Brian Bosma have turned the House into a gridlocked embarrassment. Second, there is a stunning lack of effective rebels in either chamber willing to challenge their legislative bosses and the old way of doing things. Third, if things don't change and if the legislature doesn't start thinking less about politics and more about policy, Indiana is going to sink even further behind other states.

The Star Editorial Board also took on the pathetic Session in an editorial titled 'A sad state of legislative leadership', which started with:

Rating the Indiana General Assembly's sessions is like rating Chicago Cubs seasons. The scale typically runs from disappointing to bad, to dismal to disastrous.

The legislative session that expired Wednesday night deserves a spot on the low end of that register for several reasons, including lawmakers' failure to complete a state budget before they adjourned. Now, taxpayers must bear the cost of a special session at a time when revenues are falling and services are squeezed. That's a minor concern in the scheme of things, but it does illustrate how ineffective and even irresponsible lawmakers were over the course of the session.

These are representative cases where the role of the Press in a free society is to call out elected officials who do not do the work of the people. This is a good thing.

But come election time, lets watch closely for who the Star endorses. While it is clear that Dan Burton will definitely feel the Star's wrath, will they settle for that token gesture? Will they do their usual thing of shedding crocodile tears for the state of our city, state and nation, then endorse all but one or two incumbents?

Use and Abuse of Bully Pulpits

I'm sure we'll get to campaign finance, lobbying, gerrymandering, and the 2 major political parties soon enough.

Right now, though, I'd like to take a minute to speak of the Press and its role in our elections and in the development and execution of public policy.

How do the newspapers you favor impact who you vote for? I don't know anyone who votes solely on basis of the Indy Star's endorsement of a candidate. But, the candidates all seem to want that endorsement, so it means something to somebody. I have two pet peeves about the Indy Star, and endorsements is one of them. Every year the editorial board shouts about the bone-headed stances and actions of various elected officials. Then, they endorse nearly every one of those folks for re-election. How can they reconcile those two views? Is it that they feel free to spout off until it might impact their business? What?

As for this year, they couldn't decide who to endorse for President. Nothing makes your respectability waiver quite as fast as checking the 'not sure' box of an important public opinion poll.

The other pet peeve about the Star is the market-driven structure of the east-west-north-south bureaus. If they want to chase the money to the suburbs, hey go for it. But, they are not fixing the structural problem they created for those of us who live in Marion County. That is - we may or may not get the section with our community or school news. Thus, the Star becomes a newspaper for only downtown news and whatever happens to spill in from the bureaus.

At a time when print newspapers are dropping like flies, one would think they would ask themselves - how can we keep the readers we have?

The role of the fourth estate in a democracy may be inexorably shifting to cable news and internet blogs. For good or for ill, the next round of endorsements you ignore may be from those newer outlets.

What opportunity is there to open up public access to records, create real public input in decisions of government, and real debate of public matters using the media resources that are fading as well as the ones just coming into their own?

Let's talk.