New Dark Store Agreement Worse than Taxpayers Envisioned Print
Commentary/Politics - Editorials
Tuesday, 22 May 2001 18:00
There is no more denying it. It is time to take the blinders off and face the discouraging truth about the current Davenport City Council. With the sole exception of 5th Ward Alderman Wayne Hean, this council betrayed us for the second time by voting for development along or near 53rd Street, giving developers a leg up utilizing public financing tools meant for blighted and neglected neighborhoods. Some of these elected officials had not even read the contracts they so callously committed taxpayers to when they voted in favor of rezonings and SSMIDs for a new Super Wal-Mart center. Nor did they care enough to ask for the time to do so. They voted in favor of $60 million worth of development without any of the due diligence required by law, let alone common sense and competent stewardship.

The contracts themselves leave taxpayers open to serious risk, and possible deterioration of property tax revenues, which this council lauded as the rationale for supporting this development. By allowing this development to proceed without all the necessary protections in place, it is obvious that they upheld the interests of the developer at the expense of the taxpayers. And this is not the first time.

Alderman Hean had the presence of mind to ask for waivers of any property tax exemptions that THF Realty and Wal-Mart might be eligible for as part of the development agreement with THF Realty. THF complied, with a small little ‘but’ in the language of the deal. They will waive all exemption rights ‘except for’ what is allowed under Iowa Code 427. What it doesn’t say, and what the council isn’t telling us (I’m not sure they even know—God forbid they would bother to research the contracts, let alone read them thoroughly) is that 427 provides ample wiggle room.

The exemptions listed in Iowa Code 427 that apply to developers include exemptions for “Speculative shell buildings of certain organizations…for-profit entities in order to become speculative shell buildings.” This should have provoked a demand from this council to strike that portion from the agreement. Apparently this concern is being dismissed on the grounds that it takes an ordinance by the city council to allow the exemptions in 427. Hello! This council is the same group that just voted for two ordinances creating Self-Supporting Municipal Improvement Districts (SSMIDs) for green development, an application of the law that is a complete aberration of its intent, and never before done in Iowa. Why should we trust that this or some future council would shy away from creating an ordinance allowing for the exemptions under Iowa Code 427? What this means is that taxpayers are once again hanging out there unprotected thanks to our shortsighted council. Nine aldermen (the exception was Alderman Hean) voted in favor of the SSMIDs, making the vote 9-1 for, just as it was when they voted for Tax Increment Financing (TIF) for Sentry Insurance along 53rd Street, near Utica Ridge Road.

The old saying “Watch what a man does, not what he says” is most appropriate here. Three times now, when the opportunity to “do” what they have “said” presented itself, most of these aldermen did not stand behind their own convictions. The biggest disappointments come from the faithful old guard—aldermen Ray Ambrose and George Nickolas. Neither of these individuals, by their own admission, bothered to read the agreements before they voted in favor of the SSMIDs at Wednesday’s council meeting (May 16). Both aldermen also voted in favor of TIF for Sentry Insurance, after promising the public that they would prevent such abuse of this law on their watch. And both these aldermen abandoned the platform of reform that they backed in tandem with Citizens United for Responsible Vision (CURV) once they were re-elected. These actions are in direct conflict with their stated missions to protect against abuse of laws for new development that are meant for blighted neighborhoods. Sadly, both individuals have failed the public just when their votes counted most.

I can’t say it strongly enough. Aldermen Nickolas and Ambrose had the pivotal opportunity to stand up for their beliefs and make a difference, as did Aldermen Caldwell and Ahrens. Each of these aldermen had an obligation to the public to slow this development down to give everyone time to digest the enormous amounts of information and to ensure that all the appropriate safeguards were in place. They deliberately chose a different course of action. Equally disturbing is that these very actions put them at the same table with Aldermen Moritz, Sherwood, Englemann, and Brown, all of whom, after taking office, have consistently conducted themselves contrary to their campaign promises.

Particularly offensive is Alderman Caldwell, who consistently expresses his criticisms, especially relative to the process the city perpetuates relative to unplanned development, but votes in support of it nearly every time. He accurately identifies the problems, but then behaves as if it is someone else’s fault that things are not being handled properly. By voting in favor of these items, not only is he every bit as responsible, he ultimately sacrifices his own credibility because of the hypocrisy behind it. At the May 2nd council meeting, Alderman Caldwell was asked how he could elaborate on such serious issues of development without adequate planning for infrastructure improvements, or the means to pay for them, then turn around and vote in favor of rezoning land that would permit exactly what he claimed should be avoided. He responded that he only voted in favor if it so he could bring it back for reconsideration at the next meeting (which is the only time it can be brought back). He explained that if he had voted against it, he would not have been in a position to bring it up for reconsideration later, that only those who voted in its favor could make such a motion. So did Alderman Caldwell do what he said he was going to by bringing the rezoning back for reconsideration at the May 16th meeting? No, he did not. In fact, he also voted in favor of the SSMIDs, abandoning his previous strategy. In other words, he says one thing, but clearly does another.

Interestingly, when Alderman Hean polled the council to see how many had actually read the documents prior to the meeting, the mayor suggested that there had been plenty of time to digest all the material before Wednesday night. Unless you are a speed-reader with a law degree, it is an unreasonable expectation considering the council had the first round of final agreements Thursday, May 10; another round of edited versions on Monday late afternoon, May 14; and final red-lined agreements mid-afternoon, May 16, after which they proceeded to vote that same evening—hardly adequate time to process, research, and clarify all the relevant data.

As for the largest perpetrator of sprawl on the council, Alderman Bob McGivern, most of us are well aware of his allegiance to developers. His declaration that “there is no stupid growth” tells the story best. It was amusing to watch him state during Wednesday evening’s council meeting that he doesn’t consider the Reader to be a real newspaper, while he proceeded to defend his own statements in the Reader relative to his infamous dark store agreement. At no point did he challenge a single sentence of the Reader’s report, nor did he refute or disclaim any of the information, instead declaring that he had been “confused” on some of the details of the agreement. Alderman McGivern now contradicts himself by claiming that the agreement is “better than he envisioned” (this is totally contrary to what he originally told the Reader), and that he is “proud of the agreement,” which only further reflects his disingenuousness. More importantly, we emphatically do not need a “confused” alderman negotiating agreements that could put taxpayers’ dollars at risk, which is exactly what this dark store agreement has the potential to do.

Predictably, on May 18th, Wal-Mart sent its latest revisions to the already once-revised dark store agreement that McGivern claims is better. This new dark store agreement gives even more latitude to Wal-Mart, making the agreement’s efficacy practically nonexistent. Of course the counter offer came after the council had already voted on everything Wal-Mart wanted on Wednesday, May 16. The concept of leverage appears to be foreign to this council, evidenced by their proceeding with the votes on rezoning and SSMIDs without conditions such as these finalized and in writing.

So here’s an idea people: Because the dark store agreement is a condition of the rezoning, and safely assuming that Wal-Mart wants to keep such rezoning if they are to proceed with their project, the council is in the ideal position to “ensure” the agreement reflects the interests of the citizens of Davenport by insisting that Wal-Mart accept any fair-market-value-or-better offer if one should present itself from the date of the signed agreement. This would allow Wal-Mart to divest itself of a property they obviously no longer care to occupy; the property gets recycled, remaining on the tax rolls at full or potentially higher value, so that there is actually a 100 percent gain of property taxes when Super Wal-Mart opens; the taxpayers aren’t forced to become realtors; and the city avoids obsolescence of an established commercial corridor. Everybody wins. Alderman McGivern objects to this because he does not think it is fair to force Wal-Mart to sell to a competitor (even though their new location is a good mile from the old one). Where was this thinking when he voted in favor of rezoning that would permit Super Wal-Mart to move right across the street from Super Target? Now who’s practicing “managed competition”?

Finally, the fact that this council did not insist on even the most fundamental studies and reports sends the message loud and clear to small, independent business owners that they are on their own in Davenport. Without such due diligence, we are truly flying blind as to the real impact of such decisions. Remember, we are not talking about putting a stoplight in, or developing a single fast food joint. We are talking about an estimated $58 to $60 million development project. This is big stuff and the impact hardly insignificant. Yet this council did not see fit to insist on an economic impact study.

Some aldermen justify their support for THF’s development because they claim it will bring $60 million to the local unions in the form of jobs. When asked to verify that figure, none could, only claiming that THF assured them that this would be the benefit. Supposedly, there are impact agreements in place that cause THF to hire union labor for all of the construction, but there are concerns from union people that the only jobs involved are for management positions, not laborers in general. Since several of the aldermen claim they are not privy to the impact agreements, we won’t really know until we do an actual head count once construction begins.

Meanwhile, the council is throwing around the concept of “1.1 million square feet of retail development” like it is a corner lot. In reality, this land mass qualifies for a potential mega mall-sized development, not a few retail shops in a strip mall. But nobody’s discussing such plans, at least not openly. If this concept hits Planning & Zoning in the relatively near future, don’t be surprised. And if it does, don’t buy for a second that certain members of this council haven’t been paving the way (no pun intended). Another mega mall to rival the one in Coralville does not come without a price. We do not have the population or retail base to sustain four malls in this metropolitan area, so any such development will be at the expense of our existing malls. Furthermore, this council has just confirmed that we cannot count on them to look out for our existing retailers. Therefore, local merchants and established retailers must organize themselves to get in front of any such possibilities. Their interests need to be accounted for, and this means holding this council accountable until we can elect a new one in November. Whether or not another mega-mall is on the drawing board is pure speculation at this moment. But the mere hint of it (and certainly 1.1 million square feet of retail development area qualifies as a hint) justifies at least asking the questions and keeping keenly alert. Then we just might see some of that heretofore invisible writing on the wall.

Editor’s note: Due to the constantly changing circumstances, and the volatile, need-to-know information that occurs daily, if not hourly, relative to city business, I will post frequently updated “Words from the Editor” on this Web site. There is so much information to share with our readers, and so little space each week to do so; therefore the website is an ideal place to convey such information and data, as well as hear back from our readers about these important civic issues.