Tag Archives: Wichita city council

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Update from city council chambers: The proposal has been withdrawn for now, so I won’t be delivering these remarks.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

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.

Wichita and Sedgwick County Agenda Deadlines Are Too Short

Both the City of Wichita and Sedgwick County have policies that limit citizens’ ability to address these bodies on timely matters. Each body requires, effectively, at least one week notice to appear on the public agenda. That’s the part of the meeting where citizens can speak about any topic, not just those matters that are being considered that day.

Here’s an example of how these restrictive deadlines work against citizens. On December 2, John Todd and I spoke at the Wichita city council meeting, as part of a public hearing. As shown in the posts Wichita TIF Public Hearing Was Bait and Switch and Randy Brown: Reopen Downtown Wichita Arena TIF Public Hearing, the public hearing was defective. Further, there’s a time factor involved, in that the city council set in motion a process that must be resolved within 30 days. With the upcoming holidays, time is tight.

So John called the Wichita city clerk, but we can’t get on the agenda for the next city council meeting. By the time we can get on the agenda, it’s nearly too late for the council to take the action we’d like to ask of them.

A reasonable policy is this: When something happens in a meeting one week, there should be time for citizens to get on the public agenda for the next meeting.

The policy of the Wichita City Council is “Members of the public desiring to present matters to the council on the public agenda must submit a request in writing to the office of the city manager prior to twelve noon on the Tuesday preceding the council meeting.”

For Sedgwick County, I wasn’t able to find a policy on its website, but while watching today’s commission meeting on television, chairman Winters asked the public to contact the county manager’s office “at least a week or ten days before our meeting” if they wanted to address the commission.

Note: when an item is on the agenda, citizens usually get to speak about the item. The public agenda is where citizens can speak about items that may or may not be on the meeting’s agenda.

Letters to Wichita City Council and Sedgwick County Commission Regarding Downtown Wichita TIF District

John Todd has prepared letters that we hope will influence local governments regarding the downtown Wichita TIF district. One, to the Wichita City Council, asks them to conduct a proper public hearing. A second letter to the Sedgwick County Commissioners asks them to not consider passing this TIF district until Wichita conducts a proper public hearing. A third is a letter to the Wichita Eagle explaining citizens’ concerns.

If you’d like to sign these letters, please contact John Todd at john@johntodd.net. Here’s the one to the Wichita City Council:

Mayor Carl Brewer
Wichita City Council Members
Wichita City Hall
Wichita, Kansas

Subject: Citizens request for a new and open City Council public hearing before implementing the Center City South Redevelopment TIF District, commonly known as the downtown Wichita arena TIF district.

The December 2, 2008 public hearing as conducted by the Wichita City Council concerning the expansion of the Center City South Redevelopment TIF District was not a true and meaningful public hearing. Therefore, we ask that you withdraw the proposal until a proper public hearing can be held before the City Council. This issue needs to be sent to the District Advisory Boards (DAB) for their review. Wichita citizens in general and DAB boards both need all the details and a complete cost analysis for this TIF district scheme.

Let me refer you to Randy Brown’s letter in the Eagle (see “Reopen TIF issue” Dec. 7), referring to Bob Weeks’ letter in the Eagle (see “TIF public hearing was bait and switch” Dec. 5) that hit the nail on the head by saying, “conducting the public’s business in secret causes citizens to lose respect for government officials and corrupts the process of democracy.” Brown further states, “… we (the people) had a mockery of the public hearing process rather than an open and transparent discussion of a contentious public issue. The Wichita officials involved should publicly apologize, and the issue should be reopened. And this time, the public should be properly notified.”

The citizens of this community deserve open, honest, and transparent government. The Wichita City Council needs to hold a new and open public hearing on this issue before proceeding with the implementation of this project.

Randy Brown: Reopen Downtown Wichita Arena TIF Public Hearing

In a letter in yesterday’s Wichita Eagle, Randy Brown comments on my recent op-ed piece in the same newspaper. He is senior fellow at the Elliott School of Communication at Wichita State University, and also the executive director of the Kansas Sunshine Coalition for Open Government. He’s done a lot to promote openness and transparency in government. His experience as an editorial writer for the Wichita Eagle shows in his use of vividly descriptive language like “under cover of Monday evening’s darkness” and “aggravated assault on its spirit.” I wish I could write like that.

Here’s Randy’s letter:

Reopen TIF issue

I’m fairly well acquainted with Bob Weeks, our extraconservative government watchdog. It’s fair to say that I agree with Weeks no more than one time in every 20 issues. But that one time is crucial to our democracy.

Weeks is dead-on target when he says that conducting the public’s business in secret causes citizens to lose respect for government officials and corrupts the process of democracy (“TIF public hearing was bait and switch,” Dec. 5 Opinion). And that’s what happened when significant 11th-hour changes to the already controversial and questionable tax-increment financing plan for the downtown arena neighborhood were sneaked onto the Wichita City Council’s Tuesday agenda, essentially under cover of Monday evening’s darkness.

This may not have been a technical violation of the Kansas Open Meetings Act, but it was an aggravated assault on its spirit. Among other transgressions, we had a mockery of the public hearing process rather than an open and transparent discussion of a contentious public issue.

The Wichita officials involved should publicly apologize, and the issue should be reopened. And this time, the public should be properly notified.

Randy Brown
Executive director
Kansas Sunshine Coalition for Open Government

Sharon Fearey’s Bad Joke

At the Tuesday December 2, 2008 meeting of the Wichita City Council, a property owner was present. This man, owner of the Nifty Nut House, a popular store for nuts and treats, was in front of the council when council member Sharon Fearey asked this question:

“Do we all get free nuts or anything?”

(Laughter from the council and audience.)

“Just kidding! You can’t buy our vote!”

It’s troubling to me when elected officials think things like this are funny. Why was she even thinking of this? The Nifty Nut House has great products. I was thinking about them as I sat in the audience at this meeting. But why did council member Sharon Fearey think it would be funny to suggest that the council members get free nuts?

Incidents like this are why citizens have a poor attitude towards government and its officials.

Wichita TIF public hearing was bait and switch

This appeared in today’s Wichita Eagle.

On Tuesday December 2, 2008, the Wichita City Council held a public hearing on the expansion of the Center City South Redevelopment District, commonly known as the downtown Wichita arena TIF district. As someone with an interest in this matter, I watched the city’s website for the appearance of the agenda report for this meeting. This document, also known as the “green sheets” and often several hundred pages in length, contains background information on items appearing on the meeting’s agenda.

At around 11:30 am Monday, the day before the meeting, I saw that the agenda report was available. I download it and printed the few pages of interest to me.

At the meeting Tuesday morning, I was surprised to hear council member Jim Skelton expressed his dismay that a change to the TIF plan wasn’t included in the material he printed and took home to read. This change, an addition of up to $10,000,000 in spending on parking, is material to the project. It’s also controversial, and if the public had known of this plan, I’m sure that many speakers would have attended the public hearing.

But the public didn’t have much notice of this controversial change to the plan. Inspection of the agenda report document — the version that contains the parking proposal — reveals that it was created at 4:30 pm on Monday. I don’t know how much longer after that it took to be placed on the city’s website. But we can conclude that citizens — and at least one city council member — didn’t have much time to discuss and debate the desirability of this parking plan.

The news media didn’t have time, either. Reporting in the Wichita Eagle on Monday and Tuesday didn’t mention the addition of the money for parking.

This last-minute change to the TIF plan tells us a few things. First, it reveals that the downtown arena TIF plan is a work in progress, with major components added on-the-fly just a few days before the meeting. That alone gives us reason to doubt its wisdom. Citizens should demand that the plan be withdrawn until we have sufficient time to discuss and deliberate matters as important as this. What happened on Tuesday doesn’t qualify as a meaningful public hearing on the actual plan. A better description is political bait and switch.

Second, when the business of democracy is conducted like this, citizens lose respect for both the government officials involved and the system itself. Instead of openness and transparency in government, we have citizens and, apparently, even elected officials shut out of the process.

Third, important questions arise: Why was the addition of the parking plan not made public until the eleventh hour? Was this done intentionally, so that opponents would not have time to prepare, or to even make arrangements to attend the meeting? Or was it simple incompetence and lack of care?

The officials involved — council members Jeff Longwell and Lavonta Williams, who negotiated the addition of the parking with county commissioners; Allen Bell, who is Wichita’s director of urban development; and Mayor Carl Brewer — need to answer to the citizens of Wichita as to why this important business was conducted in this haphazard manner that disrespects citizen involvement.

Additional coverage:
Wichita TIF Districts Mean Central Government Planning
Downtown Wichita Arena TIF District Testimony
Jim Skelton is Frustrated
Downtown Wichita Arena TIF District Still a Bad Idea
Wichita Mayor and City Council Prefer to Work Out of Media Spotlight
Wichita’s Naysayers Are Saying Yes to Liberty
Tiff over Wichita TIFs
Downtown Wichita Arena TIF District
Do Wichita TIF Districts Create Value?
Wichita City Council’s Misunderstanding of Tax Increment Financing
Tax Increment Financing in Wichita Benefits Few
Tax Increment Financing in Iowa

Downtown Wichita Arena TIF District Testimony

At the December 2, 2008 meeting of the Wichita City Council, John Todd and I testified against the expansion of the Center City South Redevelopment tax increment financing (TIF) District, commonly known as the downtown Wichita arena TIF district.

You can read John’s remarks here, or watch a video from YouTube here. Bob’s remarks are here, or click here for the YouTube video.

Jim Skelton is Frustrated

At yesterday’s meeting of the Wichita City Council, council member Jim Skelton expressed his frustration with last-minute additions to the plan for the Center City South Redevelopment tax increment financing (TIF) District, commonly known as the downtown Wichita arena TIF district.

The problem is two-fold: First, when plans change at the last minute, there is no time for any debate or discussion about the changes. Citizens, and even newspaper reporters, don’t have time to prepare. Second, when a major project — one costing many millions and requiring multi-year commitments by local governments — is apparently planned on the fly, it doesn’t inspire much confidence in the people in charge.

Wichita Center City South Redevelopment TIF District Testimony

From John Todd.

Update: Watch John’s testimony on YouTube here.

Testimony delivered by John Todd before the Wichita City Council on December 2, 2008 in opposition to the proposed Tax Increment Financing (TIF) plan for the Center city South Redevelopment District located generally around the new Intrust Bank Arena.

In 2004, proponents of the new Intrust Arena were assuring voters that their approval of the new arena would provide the “economic boost” and the “synergy” needed for effective downtown redevelopment without the need for increased property taxes. No mention was made at that time of the need for additional taxpayer subsidies for downtown development.

In recent testimony before the City Council, I heard a staff member advise the Mayor and this City Council that county property appraisals in the area adjacent to the new Intrust Area had increased more than 10% in the prior year. Does this proposed TIF District sound like a blighted and declining area headed for economic stagnation? Or is it time for private developers to seize this development opportunity our Mayor envisions, and of course without the need for risking the taxpayer’s wallet that is a common element in private/public partnerships?

Since the parcels of land around the new Intrust Arena appear to be owned by dozens of small private property and business owners, private developers will need to assemble the parcel(s) they need for development through voluntary exchange rather than through government’s involuntary and coercive taking of property by either the threat of eminent domain or the actual use of eminent domain. Street improvements, if needed for the project(s), should be paid for by the private developers or through the use of special assessment financing. Can anyone believe that city and/or county planners failed to plan for the street improvements needed for the new arena and a method of paying for them prior to beginning construction of the arena? (Note: In addition to the nearly $12 million TIF proposal for streets, a last minute change added an additional $10 million the TIF for a parking garage.) Also, I believe the original Arena project the voters approved in 2004 included $14 million dollars for a parking garage.

One doesn’t have to look very far around our city to see and appreciate the success of our many risk-taking private developers who through their knowledge of the market and their problem solving abilities, plus most importantly the investment of their own money, continue to expand our tax base, create jobs, and enhance our quality of life. Perhaps these are the people you need to call on to bid on downtown development work without the need for a massive public subsidy?

Late Changes Don’t Inspire Confidence in Wichita Government

At today’s Wichita City Council meeting, Councilmember Jim Skelton revealed that the plan for the downtown Wichita arena TIF district had changed. A provision for up to $10 million in parking was added.

I had looked at the agenda report less than 24 hours before the start of the meeting. The plan for parking spending was not mentioned. I looked right now, and yes, it’s there.

There’s a problem when things change so quickly. Citizens can’t prepare themselves on such short notice. That’s a problem for openness and transparency in government.

This problem is in addition to the apparent uncertainty as to what’s needed for this TIF district to succeed.

The TIF district passed, with all city council members voting in favor.

Wichita Mayor Carl Brewer’s Reformulated TIF Plan Still a Bad Idea

Today the Wichita City Council holds a special meeting to consider a reformulated plan to provide tax increment financing (TIF) for the area surrounding the downtown Wichita arena. It’s still a bad idea.

It appears there are two major changes in the new plan. First, the TIF district is smaller. Second, spending on the district would be 70 percent of the new property taxes — the “increment” — instead of 100 percent.

Why is this plan a bad idea? Why, you may be asking, aren’t I in favor of development and progress in downtown?

To me, there’s a difference between entrepreneurs working in markets and government centralized planning. That’s one of the reasons why I oppose this TIF district. It represents government making plans for us, rather than people deciding themselves what they want. It’s the difference between political entrepreneurs — who work to please elected officials — and market entrepreneurs — who work to please customers.

If it turns out that when people express their preferences freely that they don’t really want much downtown development, that’s okay with me. I, for one, do not feel that I have the superior knowledge needed to tell people where they should go for fun and entertainment. I’d rather let people decide themselves.

I’m not willing to use the blunt tool of government to direct people and their money to where I think it should go. I wouldn’t do that even if I was convinced I was right.

But there are people in Wichita who don’t share my view of free people trading freely in free markets. Mayor Carl Brewer and several city council members — Sharon Fearey and Lavonta Williams being most prominent among them — and quasi-governmental organizations such as the Wichita Downtown Development Corporation feel differently. They feel that they know better than Wichitans do where development should be happening, and they’re willing to use the tools of government to force their vision upon you.

This is what’s happening at this time. This is why Wichitans need to oppose this TIF district.

Other article about TIF districts in Wichita: Do Wichita TIF Districts Create Value?, Downtown Wichita Arena TIF District, Wichita City Council’s Misunderstanding of Tax Increment Financing, Tax Increment Financing in Wichita Benefits Few, Tiff over Wichita TIFs, and Wichita City Manager’s Warning is Too Late.

City Council divvies up tax dollars for the arts

A Wichita Eagle news story today tells how City Council divvies up tax dollars for the arts.

Can you imagine sitting through these meetings with people like Joan Cole and other members of the Arts Council as they decide who gets — and who doesn’t get — government largesse?

I imagine that these people actually think they have a heightened vision of what Wichitans should experience for their art and culture.

Why not let ordinary Wichitans decide what they prefer for arts and culture? Why not let the people decide which institutions they want to support, and to what extent?

As I explain in the post Government Art in Wichita: “Is this not a sterling example of an oxymoron? Must government weasel its way into every aspect of our lives?”

Wichita Mayor and City Council Prefer to Work Out of Media Spotlight

In a statement read at the August 26, 2008 meeting of the Wichita City Council (see City Council Acts on Arena Area Redevelopment), Wichita Mayor Carl Brewer expressed his concern that “The naysayers have gotten too much media attention while those who are engaged and do the hard work are too often ignored and criticized.”

I think the mayor’s assessment is a little overblown. Can a tiny group of citizen volunteers — a ragtag group, some might say — manage to outmaneuver the vast resources of the City of Wichita and its allied quasi-governmental organizations such as Visioneering Wichita, Wichita Metro Chamber of Commerce, Greater Wichita Economic Development Coalition, Wichita Downtown Development Corporation, and the Greater Wichita Convention and Visitors Bureau?

It doesn’t seem likely.

The mayor has the editorial board of the Wichita Eagle, the state’s largest newspaper, squarely behind almost all of his initiatives. Except for the fiasco surrounding the hiring of would-be city manager Pat Salerno, I can’t recall criticism of the mayor on the Eagle’s editorial page, except from citizens who write letters.

I can’t imagine any news reporter in town who, upon receiving an invitation from the mayor to come to his office, would not hurry over to City Hall and report on whatever the mayor said. At length.

The city has a Community Relations Team, consisting of three people (and perhaps other staff) with experience in media. The city’s website fares well in Internet searches, with its pages placing high in the search results pages of Google and other search sites.

We must also remember that the people doing the “hard work” the mayor mentioned are often city staff working at a job just like anyone else. Or, they might work for quasi-governmental groups like those mentioned above.

Importantly, remember that many of these people working for passage of the mayor’s economic initiatives stand to profit handsomely from them. These people — Wichita’s class of political entrepreneurs — prefer to earn their profits mining the halls of government power and the pockets of taxpayers rather than by pleasing customers in free markets. It’s a lot easier to please the mayor and a majority of the city council rather than working hard in the marketplace. These people get their share of media attention. They richly deserve criticism.

I believe that the mayor and the city council thought that passage of the expansion of the TIF district surrounding the downtown arena would be business as usual. But thanks to council member Paul Gray and a few snippets of coverage here and there in the newspaper, things didn’t proceed as usual.

Wichita’s Naysayers Shortchanged in Council’s Record

On August 12, 2008, the Wichita City Council considered the establishment of a TIF district that would benefit Reverend Kevass Harding and his real estate development team. At the council meeting Reverend Harding spoke, and then John Todd spoke, and then myself. We all spoke for, I would guess, roughly the same amount of time.

On Monday August 18 I looked at the city’s website to read the minutes from that meeting. I printed the part of the minutes that covered this item. My printout may be seen in this image. But you don’t need to look at the printout to see what concerns me:

Reverend Harding’s remarks are covered using about 227 words in the minutes.

John’s remarks are covered using 24 words.

Mine are covered using 11 words.

Why the discrepancy? The mayor calls John and I “naysayers.” It is as simple, and as blatant, as that?

(John’s testimony may be read in the post Testimony Opposing Tax Increment Financing for the Ken Mar Redevelopment Project, and mine may be read in Reverend Kevass Harding’s Wichita TIF District: A Bad Deal in Several Ways. I make these remarks available on this website before I deliver my testimony, and I email notice of its posting to all council members plus a few other people at city hall.)

Even more curious, after we three testified, Mayor Carl Brewer delivered his “covered wagon” speech. You can read my transcription of it in Wichita Mayor Carl Brewer, August 12, 2008, and some commentary in Wichita Mayor Carl Brewer Saves Us From Covered Wagons.

But nowhere in the minutes is it recorded that the mayor spoke, much less what he spoke about.

Then, even more curious, the minutes of this meeting are not available on the city council’s website today (Wednesday August 20, 2008). The minutes of the August 5 meeting are missing, too. A short while ago I wrote and asked for an explanation.

August 21, 2008 update: The missing city council minutes have been located. I forgot that they’ve been moved. The page Council Meetings Video On Demand is where minutes may be found.

Wichita Mayor Carl Brewer, August 12, 2008

Wichita Mayor Carl Brewer delivered these remarks after John Todd and I testified against the creation of a tax increment financing (TIF) district benefiting Wichita minister Kevass Harding. My remarks can be read here: Reverend Kevass Harding’s Wichita TIF District: A Bad Deal in Several Ways. John’s remarks are here: Testimony Opposing Tax Increment Financing for the Ken Mar Redevelopment Project.

I took the time to transcribe the mayor’s remarks not only because I think Wichitans need to know more about his philosophy of the way government should work, but also because they reveal a few of the mayor’s beliefs that I found astonishing. The mayor appeared to be speaking informally, without prepared remarks.

Commentary on the mayor’s remarks is here: Wichita Mayor Carl Brewer Saves Us From Covered Wagons. Video is at Wichita Mayor Carl Brewer on role of government and free enterprise.

Wichita Mayor Carl Brewer: You know, I think that a lot of individuals have a lot of views and opinions about philosophy as to, whether or not, what role the city government should play inside of a community or city. But it’s always interesting to hear various different individuals’ philosophy or their view as to what that role is, and whether or not government or policy makers should have any type of input whatsoever.

I would be afraid, because I’ve had an opportunity to hear some of the views, and under the models of what individuals’ logic and thinking is, if government had not played some kind of role in guiding and identifying how the city was going to grow, how any city was going to grow, I’d be afraid of what that would be. Because we would still be in covered wagons and horses. There would be no change.

Because the stance is let’s not do anything. Just don’t do anything. Hands off. Just let it happen. So if society, if technology, and everything just goes off and leaves you behind, that’s okay. Just don’t do anything. I just thank God we have individuals that have enough gumption to step forward and say I’m willing to make a change, I’m willing to make a difference, I’m willing to improve the community. Because they don’t want to acknowledge the fact that improving the quality of life, improving the various different things, improving bringing in businesses, cleaning up street, cleaning up neighborhoods, doing those things, helping individuals feel good about themselves: they don’t want to acknowledge that those types of things are important, and those types of things, there’s no way you can assess or put a a dollar amount to it.

Not everyone has the luxury to live around a lake, or be able to walk out in their backyard or have someone come over and manicure their yard for them, not everyone has that opportunity. Most have to do that themselves.

But they want an environment, sometimes you have to have individuals to come in and to help you, and I think that this is one of those things that going to provide that.

This community was a healthy thriving community when I was a kid in high school. I used to go in and eat pizza after football games, and all the high school students would go and celebrate.

But, just like anything else, things become old, individuals move on, they’re forgotten in time, maybe the city didn’t make the investments that they should have back then, and they walk off and leave it.

But new we have someone whose interested in trying to revive it. In trying to do something a little different. In trying to instill pride in the neighborhood, trying to create an environment where it’s enticing for individuals to want to come back there, or enticing for individuals to want to live there.

So I must commend those individuals for doing that. But if we say we start today and say that we don’t want to start taking care of communities, then tomorrow we’ll be saying we don’t want more technology, and then the following day we’ll be saying we don’t want public safety, and it won’t take us very long to get back to where we were at back when the city first settled.

So I think this is something that’s a good venture, it’s a good thing for the community, we’ve heard from the community, we’ve seen the actions of the community, we saw it on the news what these communities are doing because they know there’s that light at the end of the tunnel. We’ve seen it on the news. They’ve been reporting it in the media, what this particular community has been doing, and what others around it.

And you know what? The city partnered with them, to help them generate this kind of energy and this type of excitement and this type of pride.

So I think this is something that’s good. And I know that there’s always going to be people who are naysayers, that they’re just not going to be happy. And I don’t want you to let let this to discourage you, and I don’t want the comments that have been heard today to discourage the citizens of those neighborhoods. And to continue to doing the great work that they’re doing, and to continue to have faith, and to continue that there is light at the end of the tunnel, and that there is a value that just can’t be measured of having pride in your community and pride in your neighborhood, and yes we do have a role to be able to help those individuals trying to help themselves.

Testimony Opposing Tax Increment Financing for the Ken Mar Redevelopment Project

Testimony of John Todd, opposing the formation of a tax increment financing (TIF) district, delivered to the Wichita City Council on August 12, 2008.

Mr. Mayor and members of the Wichita City Council, thank you for allowing me this opportunity to speak before you today. My name is John Todd. I stand before you today as a citizen in opposition to the Establishment of a Redevelopment District, Tax Increment Financing for the Ken Mar Redevelopment Project. (District I)

There are dozens of neighborhood shopping centers across Wichita that have a greater need for redevelopment than the Ken Mar shopping center that you are considering for public taxpayer assistance today.

The question that needs to be answered today is, “What is the Proper Role of Government Relating to Economic Development Activity?” And the specific question the council needs to answer before granting public money for this project is: “Why is the Ken Mar shopping center being considered for public money, and not the dozens of similar shopping centers across our city, with particular emphasis on those dozens of centers possessing greater redevelopment needs than Ken Mar?”

It is my understanding that the proposed Ken Mar TIF is $2.5 million dollars. A commercial real estate broker friend of mine advised me that in his opinion, the Ken Mar center redevelopment project would not work without the $2.5 million public cash infusion. My reply to this observation: 1. If the potential owners/buyers for Ken Mar have not closed on their purchase transaction of the shopping center, perhaps as part of their contract “due diligence” clause, they need to negotiate $2.5 million dollars off the purchase price of the Ken Mar center, and in the event they fail to obtain the lower purchase price, they need to either scale back their plans for the redevelopment of the center or to simply walk away from the project since the project is not economically feasible for them. 2. Or, if on the other hand, the current owners of Ken Mar paid $2.5 million dollars more than the shopping center was worth, what makes them immune from taking responsibility for this $2.5 million dollar error in judgment? And 3. If this City Council were truly acting as stewards of the public treasury, why would you even consider using public money to correct this alleged $2.5 million developer-problem?

In a free-market economic system, private business enterprises should have the opportunity and the freedom to succeed and to enjoy the fruits of their success. By the same token, they should also have the freedom to fail and suffer whatever consequences that brings. Thousands of other businesses enterprises across our city play by these rules every day without the government parachute or the backing of the public treasury that is being considered for this private group. Why should the Ken Mar shopping center group be an exception to these rules?

Please vote against the proposed TIF.

Wichita City Council’s misunderstanding of tax increment financing

On July 8, 2008 I testified at a public hearing at a Wichita city council meeting. Afterward, a council member told me that I had a “glaring error” in my arguments. I won’t identify this member in order to avoid embarrassing the member. The minutes of the meeting don’t identify the member who said this, but video is available.

My purpose in testifying that day was not to question the merits of tax increment financing (TIF) districts. Instead, I was identifying an ethics problem that a Wichita school board member has regarding his involvement in a proposed TIF district. (See Reverend Kevass Harding and His Wichita TIF District.) In my testimony I stated, with a qualification, that the applicant for this TIF district was asking for relief from paying some of the property tax for his real estate development. After my testimony, a council member told me that I was wrong, that the TIF district won’t allow someone to avoid paying property taxes. True, I said. It was sloppy for me to have said that without clarification, but it wasn’t the point I was making that day.

But since the city council member brought up the point, let’s examine how TIF districts work. I am sure you will be able to agree that the use of TIF districts allow developers to effectively avoid paying some of their increased property taxes.

In material prepared by Wichita’s Office of Urban Development and presented at the March 18, 2008 city council meeting, we may read this: “The developers have identified a financing shortfall of $2.5 million, for which they are seeking tax increment financing assistance. The preliminary project budget presented to City staff indicates that TIF funds would need to be used for site acquisition costs in order to spend $2.5 million on project costs eligible for TIF funding.”

So without the formation of the TIF district, the developers are $2.5 million short. With the TIF district, they’ve got the money they need. We must conclude, then, that the TIF district financing, no matter what it is used for, is worth $2.5 million to the developers.

Now if the developers borrowed that money from a bank, they’d pay back the loan over some period of years. Each year, out of the cash flow the project generates, the developers would have to make the loan payments, and also, just like everyone else, they’d have to pay their property taxes. (Those taxes have increased as now the development is worth more due to the improvements made by the developer. That’s the “increment” in TIF.)

But with a TIF district, the “bank” is the City of Wichita, which issued bonds to pay for the benefits the developers needed to make the project work. So the developers have to pay back the city. But instead of making payments on a loan from a bank and their property taxes, all the TIF developers have to do is pay their property taxes. By merely paying the same taxes that everyone else has to pay, their loan (the bonds issued by the City of Wichita) is repaid.

That’s why a TIF district allows developers to effectively avoid paying some of the increased property taxes on their development. When a development is undertaken without the benefit of a TIF district, developers have to repay loans and pay higher taxes. With a TIF district, all the developers have to pay is higher taxes.

It is as simple as this.