27
Jan
2003
The notion that Davenport's City Council doesn't get paid enough to be professional politicians, and thereby is not entirely accountable for its actions as a council, especially on complex issues such as Tax Increment Financing (TIF), is ludicrous. Whether these ten bodies are paid a nickel or 10,000 nickels is completely irrelevant?they chose to run, they are 100 percent accountable.
While TIF is a complicated matter, especially when it is worked on the sly for the sole benefit of a select few, or when outrageous covenants are attached, such as those imposed by Ryan Companies in the form of confidentiality agreements that prevent disclosure of the actual financials involved with the project, it is still able to be comprehended by anyone willing to take the time to learn.
But learning requires research and asking the hard questions. Clearly the current Davenport city council is unwilling to make the required effort, evidenced by the fast-tracking (a paltry six days from beginning to end) and disgraceful lack of discussion relative to the $3 million, 20-year TIF they approved for Ryan Companies to build new downtown headquarters for RSM McGladrey and Lee Enterprises (see River Cities Reader Issue 408, January 15, 2003). It is also apparent that this council is thoroughly intimidated not only by the issue itself, but also by the players involved, although why will forever remain a mystery to this editor.
Not a single alderman had the courage to investigate, let alone object to, the relative looting and pillaging of Davenport taxpayers because none wants to offend the Quad City Times (whose parent company is Lee Enterprises), especially in an election year. Mayor Brooke was an immediate recipient of what could be construed as quid pro quo for his support, demonstrated via the front-page article on him the very same week the TIF deal was approved.
Why 10 otherwise seemingly self-respecting individuals cave to developers' special interests is unclear. There doesn't appear to be monetary gain for any of them. And it certainly can't be about social climbing because regardless of how much any of them sells out by going along, they rarely, if ever, make the Christmas party lists of most of the developers, or their lawyers. So what's left? Perhaps it is as simple as getting that little bit of attention, shrouded in an ever-pervasive sense of urgency, that makes them feel important for the moment. It is just enough attention to fool themselves into believing that they are in the game, and allows them to abdicate their individual and collective responsibility to their constituents.
This time, the game included the Davenport city council giving a $3 million, 20-year TIF to subsidize the corporate headquarters of McGladrey and Lee Enterprises. If there was one company in this community that could afford to reestablish market rate rents for Class A office space downtown, it is Lee Enterprises, which reported $448 million in cash reserves as of December 2001 from the sale of various media holdings. Instead, taxpayers have been forced to subsidize the rents because they are being told that Class A offices cannot be supported in downtown Davenport with the necessary market rate rents to justify the construction. However, no financial evidence has been proffered that verifies this claim. The TIF will also benefit Ryan Companies, the developer and lessor of the new six-story Class A office structure in downtown, in its effort to realize a 10 percent profit margin on the project! Who wouldn't like a guaranteed 10 percent return, especially in this current economy? The question remains: Should Davenport taxpayers underwrite such a guarantee?
The fact that taxpayers are absorbing the first private development effort in downtown since Vision Iowa was initiated is rife with hypocrisy because taxpayers were assured that by investing in the revitalization of downtown, we would attract additional private investment that would contribute to the tax rolls to the extent that the more urgent capital improvements needed, such as sewer and street repair, would be financially feasible. Instead, the increased property taxes will not be used for the community's benefit, but instead will offset the developer's costs and improve the project's profitability. This was not what taxpayers bargained for.
Couple this with the real possibility that the Rhythm City Casino may close the Blackhawk Hotel within the year, and we've got serious problems in paradise. The Blackhawk Hotel is the only historic hotel left in the Quad Cities, not to mention its prominence in terms of its highly visible downtown location, and its key association with the Adler Theatre (targeted for a makeover as part of Vision Iowa) and Davenport's preeminent River Center convention facility. Closing the Blackhawk Hotel would give the entire River Renaissance a huge black eye.
When riverboat gambling was initially considered in Davenport, the redevelopment of the Blackhawk Hotel was part of the package and provided enormous incentive for supporting the casino. The public has an expectation that the hotel remains viable as part of the casino's operation. Apparently sensitive to this perception, the casino is negotiating with several interested parties to take over the ownership/management of the Blackhawk in a sincere effort to keep the hotel's doors open. At a minimum, however, should the hotel actually be closed, then the community must rethink its commitment to construct a skywalk across River Drive that would connect the casino with other amenities, especially if the casino's strategy is to build a hotel on the riverfront, thereby isolating its operation from the rest of downtown and limiting the economic multiplier that would otherwise thrive should connections be made to the Blackhawk Hotel, River Center, and other amenities throughout the River Renaissance corridor.
Meanwhile, it is reported that MidAmerican Energy is currently estimating the utilities for Home Depot at the site located next to Super Wal-Mart at Elmore and 53rd streets. Why would that work be occurring if Home Depot intends to develop at Duck Creek Plaza in Bettendorf? Could it be it has no intention of locating in Bettendorf, but the developers' ruse will secure a TIF for the property with the intent to change the site plan later? And/or will Davenport aldermen try and TIF the Davenport location by justifying its necessity in order to compete and lure it away from Bettendorf?
Finally, it was surreal reading the QC Times' editorial on the City of Bettendorf's proposed TIF for Duck Creek Plaza (January 22, 2003). This editorial board takes the prize in terms of arrogance or ignorance; arrogance if it is aware of its own participation relative to TIF for its parent company's new headquarters, or ignorance because it is actually not aware. Either way, it is colossal bad form to take Bettendorf to task for its TIF, when far worse is being perpetrated in its own back yard. It criticizes Bettendorf for "hurrying-up" in approving its TIF with myriad last minute changes, while ignoring that in Davenport the city council approved the TIF for Ryan Companies in just six days with last minute changes occurring right up to minutes before the community development meeting that introduced the project! While Davenport took care of similar business in just six days, introducing the project on January 9 and voting to approve its TIF on January 15 (2003). Bettendorf has so far been considering the issue over a three-month period, from November 2002 until the present. How much more out-of-touch can this newspaper get?
In the final analysis, the business component of TIF is sorely lacking in terms of concrete criteria that is enforceable, and economic impact analysis, which should necessarily include comparative financial analysis of alternatives, all of which the public has cried for but is consistently ignored by our public officials.
While TIF is a complicated matter, especially when it is worked on the sly for the sole benefit of a select few, or when outrageous covenants are attached, such as those imposed by Ryan Companies in the form of confidentiality agreements that prevent disclosure of the actual financials involved with the project, it is still able to be comprehended by anyone willing to take the time to learn.
But learning requires research and asking the hard questions. Clearly the current Davenport city council is unwilling to make the required effort, evidenced by the fast-tracking (a paltry six days from beginning to end) and disgraceful lack of discussion relative to the $3 million, 20-year TIF they approved for Ryan Companies to build new downtown headquarters for RSM McGladrey and Lee Enterprises (see River Cities Reader Issue 408, January 15, 2003). It is also apparent that this council is thoroughly intimidated not only by the issue itself, but also by the players involved, although why will forever remain a mystery to this editor.
Not a single alderman had the courage to investigate, let alone object to, the relative looting and pillaging of Davenport taxpayers because none wants to offend the Quad City Times (whose parent company is Lee Enterprises), especially in an election year. Mayor Brooke was an immediate recipient of what could be construed as quid pro quo for his support, demonstrated via the front-page article on him the very same week the TIF deal was approved.
Why 10 otherwise seemingly self-respecting individuals cave to developers' special interests is unclear. There doesn't appear to be monetary gain for any of them. And it certainly can't be about social climbing because regardless of how much any of them sells out by going along, they rarely, if ever, make the Christmas party lists of most of the developers, or their lawyers. So what's left? Perhaps it is as simple as getting that little bit of attention, shrouded in an ever-pervasive sense of urgency, that makes them feel important for the moment. It is just enough attention to fool themselves into believing that they are in the game, and allows them to abdicate their individual and collective responsibility to their constituents.
This time, the game included the Davenport city council giving a $3 million, 20-year TIF to subsidize the corporate headquarters of McGladrey and Lee Enterprises. If there was one company in this community that could afford to reestablish market rate rents for Class A office space downtown, it is Lee Enterprises, which reported $448 million in cash reserves as of December 2001 from the sale of various media holdings. Instead, taxpayers have been forced to subsidize the rents because they are being told that Class A offices cannot be supported in downtown Davenport with the necessary market rate rents to justify the construction. However, no financial evidence has been proffered that verifies this claim. The TIF will also benefit Ryan Companies, the developer and lessor of the new six-story Class A office structure in downtown, in its effort to realize a 10 percent profit margin on the project! Who wouldn't like a guaranteed 10 percent return, especially in this current economy? The question remains: Should Davenport taxpayers underwrite such a guarantee?
The fact that taxpayers are absorbing the first private development effort in downtown since Vision Iowa was initiated is rife with hypocrisy because taxpayers were assured that by investing in the revitalization of downtown, we would attract additional private investment that would contribute to the tax rolls to the extent that the more urgent capital improvements needed, such as sewer and street repair, would be financially feasible. Instead, the increased property taxes will not be used for the community's benefit, but instead will offset the developer's costs and improve the project's profitability. This was not what taxpayers bargained for.
Couple this with the real possibility that the Rhythm City Casino may close the Blackhawk Hotel within the year, and we've got serious problems in paradise. The Blackhawk Hotel is the only historic hotel left in the Quad Cities, not to mention its prominence in terms of its highly visible downtown location, and its key association with the Adler Theatre (targeted for a makeover as part of Vision Iowa) and Davenport's preeminent River Center convention facility. Closing the Blackhawk Hotel would give the entire River Renaissance a huge black eye.
When riverboat gambling was initially considered in Davenport, the redevelopment of the Blackhawk Hotel was part of the package and provided enormous incentive for supporting the casino. The public has an expectation that the hotel remains viable as part of the casino's operation. Apparently sensitive to this perception, the casino is negotiating with several interested parties to take over the ownership/management of the Blackhawk in a sincere effort to keep the hotel's doors open. At a minimum, however, should the hotel actually be closed, then the community must rethink its commitment to construct a skywalk across River Drive that would connect the casino with other amenities, especially if the casino's strategy is to build a hotel on the riverfront, thereby isolating its operation from the rest of downtown and limiting the economic multiplier that would otherwise thrive should connections be made to the Blackhawk Hotel, River Center, and other amenities throughout the River Renaissance corridor.
Meanwhile, it is reported that MidAmerican Energy is currently estimating the utilities for Home Depot at the site located next to Super Wal-Mart at Elmore and 53rd streets. Why would that work be occurring if Home Depot intends to develop at Duck Creek Plaza in Bettendorf? Could it be it has no intention of locating in Bettendorf, but the developers' ruse will secure a TIF for the property with the intent to change the site plan later? And/or will Davenport aldermen try and TIF the Davenport location by justifying its necessity in order to compete and lure it away from Bettendorf?
Finally, it was surreal reading the QC Times' editorial on the City of Bettendorf's proposed TIF for Duck Creek Plaza (January 22, 2003). This editorial board takes the prize in terms of arrogance or ignorance; arrogance if it is aware of its own participation relative to TIF for its parent company's new headquarters, or ignorance because it is actually not aware. Either way, it is colossal bad form to take Bettendorf to task for its TIF, when far worse is being perpetrated in its own back yard. It criticizes Bettendorf for "hurrying-up" in approving its TIF with myriad last minute changes, while ignoring that in Davenport the city council approved the TIF for Ryan Companies in just six days with last minute changes occurring right up to minutes before the community development meeting that introduced the project! While Davenport took care of similar business in just six days, introducing the project on January 9 and voting to approve its TIF on January 15 (2003). Bettendorf has so far been considering the issue over a three-month period, from November 2002 until the present. How much more out-of-touch can this newspaper get?
In the final analysis, the business component of TIF is sorely lacking in terms of concrete criteria that is enforceable, and economic impact analysis, which should necessarily include comparative financial analysis of alternatives, all of which the public has cried for but is consistently ignored by our public officials.
