Voice For Liberty

Category: Wichita city government

  • “Thank You, Wichita Eagle”

    Mustering all the sarcasm she can, Sharon Fearey says “Thank you, Wichita Eagle.”

    Speaking from the bench at the December 16, 2008 meeting of the Wichita City Council, she’s referring to reporting that newspaper did that uncovered problems in the past of the person referred to as the principal developer of a project.

    Wichita city council member Fearey simply does not understand the concerns of the citizens of Wichita. Combined with her tasteless joke a few weeks ago (see Sharon Fearey’s Bad Joke for video), Wichitans can be thankful that term limits are bringing an end to her time on the city council.

    I and most of the citizens of Wichita are truly thankful for the reporting the Wichita Eagle has done on this matter.

  • Wichita City Council: Put better procedures in place before proceeding

    Remarks that may be delivered to the Wichita City Council at its meeting today.

    Update from city council chambers: The proposal has been withdrawn for now, so I won’t be delivering these remarks.

    Mr. Mayor and members of the council, developments surrounding the Renaissance Square project in the C.O.R.E. Redevelopment District are unfolding so rapidly that we need to step back and think about the wisdom of proceeding with the current plans. As things stand now, citizens can have little confidence in this project and the way the city has handled it.

    For example, we’re told that a new entity, Joel Associates, LLC, has been formed to develop this project. Now, what type of investigation has been performed on this new corporation? Do we have its financial statements, and statements for its principals? Does this corporation or its principals have the financial resources to back up the guaranty the city asks them to provide? How much did Joel Associates, LLC pay Grant Gaudreau for his ownership interest in ICDC, LLC?

    I would submit that a little shuffling of the ownership structure of the project is hardly assurance to Wichitans that this project is on the up-and-up. Further, what does it say about the judgment and the business acumen of the remaining owners if they thought Mr. Gaudreau’s past would not be uncovered, or when uncovered, would not be perceived as a problem?

    Mr. Mayor, members of the council, we have a problem. A noted journalist said this on a public affairs television program last week regarding this project: “This is a project the city has been working on for years, and it was absolutely astonishing to me that in a relatively short period of time I was able to come up with something — I mean, they have a development department, they have a legal department, they have a police department, they have two ex-investigative reporters on staff. So why this came to light literally on the day of the vote was just astonishing to me.”

    Reporting in the Wichita Eagle makes it clear that the City of Wichita does not have procedures in place to protect the interests of its citizens. It appears that a citizen wanting to finance an automobile or obtain a credit card is scrutinized more closely than are potential city business partners. Worse, it appears that the city is willing to enter into agreements and extend millions in financing to people who couldn’t get an automobile loan or a credit card. This does not qualify as stewardship of citizens’ resources.

    So now the ownership of the business entity behind this project has been restructured to eliminate the developer whose past problems lead to delay. But there’s still a taint on this project. Citizen confidence has evaporated.

    As reporting in the Wichita Eagle and my own investigation has revealed, there is no credit available for projects like this. Even if the city council were to approve this project this week, it would likely be some time before the project gets moving.

    Time is not of the essence. Let’s wait before proceeding. Given the confusion at Wichita city hall that the Wichita Eagle has reported, citizens can have no confidence in proceeding with any projects like this until better procedures are put in place. Then, we’re not going to take city staff’s word that these procedures are in place, as recent events give us little confidence in its capabilities or judgment. We’ll need some independent confirmation that city staff and council members are to be trusted in matters such as these.

  • Wichita City Hall confusion leads to evaporation of confidence

    New procedures and perhaps new personnel are required to regain citizens’ trust.

    Reporting in the Wichita Eagle by Brent Wistrom (City vows to better vet its partners, Sunday December 15, 2008) has revealed a city staff confused as to basic procedures for safeguarding citizens’ taxes, not to mention their trust.

    I won’t go into the details of Mr. Wistrom’s reporting, except to quote him as concluding that “city officials offered confusing and sometimes conflicting versions of how they analyze private business partners who ask for city assistance.” The city officials referred to include interim city manager Scott Moore, Allen Bell, Wichita’s director of urban development, and Van Williams, Wichita’s Public Information Officer and former Wichita Eagle reporter. Also mentioned was the city’s law department, which is headed by Gary Rebenstorf.

    It appears that the city uses Google to gain information about its potential business partners. But there’s a few problems with relying only on free public search engines like Google and its competitors. For example, not everything on the Internet is in Google. Court records and other documents may reside on the “hidden Internet,” websites that require a user account and perhaps a subscription fee. Google and other search engines generally can’t see and index material on these sites.

    But what’s really troubling is that while the city extract guarantees from developers that they will cover any shortfalls in tax revenues that will pay off the TIF bonds, evidently no credit checks are performed. What good does it do to get a guarantee of responsibility for potentially millions of dollars in tax revenue shortfall, when the guarantor person or company has few assets and little ability to make good on their promise?

    It appears that a citizen wanting to finance an automobile or obtain a credit card is scrutinized more closely than are potential city business partners.

    The ownership of the business entities behind the Renaissance Square project in the C.O.R.E. Redevelopment District has been restructured to eliminate the developer whose past problems lead to delay. But there’s still a taint on this project. As reporting in the Wichita Eagle has revealed, there is no money available to borrow for projects like this. Even if the city council were to approve this project this week, it would likely be some time before the project gets moving.

    Time is not of the essence. Let’s wait before proceeding. Given the confusion at Wichita city hall that Mr. Wistrom reported, citizens can have no confidence in proceeding with any projects like this until better procedures are put in place. Then, we’re not going to take Allen Bell’s word that these procedures are in place, as recent events give us little confidence in his capabilities or judgment. We’ll need some independent confirmation that city staff and council members are to be trusted in matters such as these.

  • Wichita Public Hearing Action Not Evidence of Leadership

    In an op-ed piece in Sunday’s Wichita Eagle, Interim Wichita City Manager Scott Moore makes the case that “the [Wichita city] council’s Dec. 2 vote demonstrated leadership and an ability to respond decisively to urgent community matters after appropriate public deliberations.” (Scott Moore: TIF Parking Change Showed Leadership, December 15, 2008)

    Mr. Moore explains the problems with the public hearing that was held on December 2: “However, because of the holiday closure, the revisions did not reach council members until Monday afternoon, Dec. 1, the day before the public hearing. Better staff follow-up during the holiday break would have provided better public notification.”

    The revisions referred to are the addition of up to $10 million in TIF funding for parking. To add some precision to Mr. Moore’s accounting, these revisions appeared on the city’s website sometime after 4:30 p.m. This was on the same day that the first version appeared. If someone fetches a document at noon, should they also have to check again later that day to see if the document has been updated? I didn’t. It appears that Wichita Eagle reporters and other news media didn’t either. Why would they?

    As Mr. Moore explains earlier in his piece: “Nonetheless, city staff should have revised all documents appropriately so that the correct items could have been submitted to the council and the media and posted at the Web site www.wichita.gov for the public.” Also: “Although the process could have been conducted more openly …”

    Mr. Moore and Wichita Eagle editorial writer Rhonda Holman agree that there were defects in the public hearing. (See The Process Should Be Most Important for analysis.) But Mr. Moore goes farther and actually praises Wichita city leaders for their leadership.

    This is not leadership. Leaders own their mistakes and accept their consequences. Mr. Moore acknowledges city officials made mistakes, but he and other city officials and council members will not accept ownership. They will not accept the consequences of their mistakes.

    Leadership at the December 2, 2008 meeting would have meant city staff or council members apologizing to the public for the last-minute changes to the plan and the defective notice. Leadership would have required a council member making a motion to delay the public hearing until citizens receive proper notice of the actual contents of the plan. Leadership would have required unanimous consent to this motion.

    Except for council member Jim Skelton’s questioning, none of these leadership actions took place. Therefore, I must disagree with Mr. Moore’s characterization of city staff and council members as leaders.

  • Dion Lefler: Problems With Wichita Developer Uncovered

    On the KPTS television public affairs program Kansas Week yesterday, Wichita Eagle reporter Dion Lefler talks about problems he uncovered with a developer the City of Wichita wants to partner with. I chime in a little.

    Related coverage:
    Wichita TIF Developer’s Ownership Restructuring not Very Reassuring
    Wichita Eagle: 35 suits in developer’s past
    No Diligence in Wichita City Hall
    Wichita’s Faulty Due Diligence
    Sharon Fearey’s Bad Joke

  • Problems with Open Government in Wichita

    On the KPTS television public affairs program Kansas Week yesterday, I spoke about some problems with a public hearing regarding a controversial matter in Wichita.

    Related:
    Wichita TIF Public Hearing Was Bait and Switch
    Randy Brown: Reopen Downtown Wichita Arena TIF Public Hearing
    Letters to Wichita City Council and Sedgwick County Commission Regarding Downtown Wichita TIF District

  • Wichita TIF Developer’s Ownership Restructuring not Very Reassuring

    Recent reporting by the Wichita Eagle uncovered troubling facts from the past of a developer the city is considering partnering with. (See the Wichita Eagle story 35 suits in developer’s past and my blog post Wichita’s Faulty Due Diligence.)

    Referring to the C.O.R.E. Redevelopment District project, Wichita Eagle reporter Dion Lefler said this on the KPTS television public affairs program Kansas Week yesterday: “This is a project the city has been working on for years, and it was absolutely astonishing to me that in a relatively short period of time I was able to come up with something — I mean, they have a development department, they have a legal department, they have a police department, they have two ex-investigative reporters on staff. So why this came to light literally on the day of the vote was just astonishing to me.”

    So now that it’s been reported that this potential city business partner has some problems in his past. What to do? Here’s some material from the agenda report for the December 16, 2008 Wichita city council meeting:

    “ICDC, LLC was formed by Grant Gaudreau and Joel Associates, LLC several years ago to undertake real estate development projects. Joel Associates, LLC is wholly owned by Joseph L. Cramer and Len Marotte. Due to recent developments, ICDC has been reorganized to vest sole ownership of ICDC in Joel Associates. To eliminate any possibility that former ownership interests could adversely impact the viability of the development project, Joseph L. Cramer and Len Marotte have formed a new entity to act as developer of the project. The new entity is Renaissance Square, LLC (the “Developer”), whose sole member is Joel Associates, LLC.”

    So in less than two weeks, the person that Wichita economic development director Allen Bell referred to as “principal developer” is now thrown under the bus so that the project can proceed. I would submit, however, that a little shuffling of the ownership structure of the project is hardly assurance to Wichitans that this project is on the up-and-up.

    (There’s some confusion as to the spelling of the name “Cramer.” On the document he is to sign, his name is spelled “Kramer.”)

    Here’s some unanswered questions:

    • Did Allen Bell and city staff know everything about the background of Grant Gaudreau that the Wichita Eagle was able to uncover in a day and a half of reporting? If no, then why not, given the resources the city has at its disposal?
    • If they knew these things, what should we make of Allen Bell and city staff’s judgment, in that they thought these things weren’t a problem?
    • How much did Joel Associates, LLC pay Grant Gaudreau for his ownership interest in ICDC, LLC?
    • And finally, the most important question: when did Wichita Mayor Carl Brewer and city council members learn of these problems?

    Until we get some definitive answers to these questions, approval of this TIF development should be not be considered.

  • No Diligence in Wichita City Hall

    Rhonda Holman’s Wichita Eagle editorial today (Need vetting of City Hall partners) correctly states that city staff “missed the mark in vetting negotiator Grant Gaudreau.” Or is the proper title “principal developer,” as stated by Wichita’s director of urban development Allen Bell? (See Wichita’s Faulty Due Diligence for video.)

    There’s a lot of confusion over this matter, and times like this let us get a closer look at what’s going on in city hall. We can also learn a lot about the attitudes of government officials and city staff. For example, a Wichita Eagle news story reported this:

    “Grant was never a big money player in this,” Fearey said. “He’s always just been the person who had time to come to the city and work through things and also knew a lot about who to go to in the city and how to work the system.”

    First, note the disparity between Allen Bell’s “principal developer” and Wichita city council member Sharon Fearey’s “never a big money player.” But what’s really troubling is that Fearey acknowledges that there’s a “system” at city hall that someone knows “how to work.” This doesn’t say a lot for openness and transparency in Wichita city government. It also perpetuates the realization that there’s a network of insiders who know how to milk the halls of government power for their own benefit.

    Then, the Eagle news story contains this: “[Wichita Mayor Carl] Brewer said he wants to ensure that developers can complete the project in a reasonable time and that there are no other problems.” If our mayor can figure out some way to eliminate the risks that entrepreneurs take, more power to him. If successful, I might consider voting for him, should he decide to run for re-election.

    The fact is, however, that real estate development is a tremendously risky endeavor. Entrepreneurs — people with their own money at stake, with their ears to the ground every day and the experience, power, and discretion to alter plans as the situation dictates — are the people best suited to assume and negotiate this risk. Politicians operate in a different environment with a different set of incentives.

  • Wichita’s Faulty Due Diligence

    In the Wichita city council meeting on December 2, 2008, council member Jim Skelton questioned Allen Bell, Wichita’s director of urban development, about developers the city is considering working with on a TIF district. Specifically, Skelton asked if there was anything in the backgound of the developers that the council should be concerned about. Bell referred specifically to Grant Gaudreau, naming him as the “principal developer.” He said that the matters in Gaudreau’s past had been “resolved,” and had “no bearing” on this project. Video is available below.

    According to Wichita Eagle reporting in the story 35 suits in developer’s past, Gaudreau’s past problems include bankruptcy and lawsuits regarding bounced checks and nonpaid bills. The bankruptcy is not troubling to me, as many entrepreneurs suffer through this as part of their acceptance of risk. Bounced checks at the grocery store and pet clinic, plus a recent auto repossession, are troubling. If someone won’t make good the checks they write at the grocery store, that’s a problem. The city should not partner with such a person.

    Further, the Eagle story reports that the developer has an outstanding warrant for unpaid taxes in a neighboring county. That would contradict Mr. Bell’s claim that matters have been resolved.

    Here’s the problem I have, and I think many citizens share this concern: Either Allen Bell and city staff didn’t know of all these things in Gaudreau’s past, or they knew about them but didn’t think they were a problem. The first case tells us that Mr. Bell’s office is not doing a thorough job. The second case tells us that Mr. Bell’s judgment does not reflect the concerns of the citizens of Wichita. In either case, there’s a problem at city hall.