Economic Redevelopment $10M

[cruzrt]

What does everybody think of the proposed $10M for Economic Redevelopment? I don't mind having money set aside to help spur this kind of activity. BBBBBBBBBut, I am shocked at the definitions of where the Redevelopment would take place. Silas Deane Hwy and Berlin Tpk are fine, the Route 15 connector between Berlin Tpk and I-91 makes no sense. And the biggest stunner is that the corridors for these areas are 2,000 ft. wide. That takes in more than 1,000 private homes, which will make the Bond Question a surefire NO vote for me and I'm sure a NO vote for at least those 1,000 residents.

[standish]

Don't you want the power brokers, deal-makers and insiders of the political class to have condemnation power and development control over a quarter of the available land in town? How could that possibly hurt, with the infallible vision they have of what's right and good for Wethersfield (remember Comstock?)? Now, who do you think will benefit from this new found power... the average citizen through lower taxes (don't forget, they firstly want $10 million of taxpayer money from you), or the connected developers and their investors?

[oldetowne]

I agree with both of you. A $10MM blank check is a dangerous tool in the hands of the current town leadership, desperate for something tangible to show to the voters after years of flailing around in terms of economic development (skating rinks, horse rides, tax breaks, gift loans, master plans, corridor studies, etc).

[Dr.Ken Sokolowski]

I understand that Joe Soja (Rep) may be leaving the RedevCom to run for Town Council.

Does he have to resign before running? Or, can he run and, if successful in "ascending" to the Council, then resigns?

If/when he resigns, do the Republicans have the right to replace him on the RedevCom with "one of their own" instead of the Democrats appointing a Democrat-friendly "Republican" or "independent"?

[RGarrey]

I have not been to any Council meetings or gotten very involved in political issues recently but this issue will bring me back. I think this has the potential of being one of the most controversial referendums ever to hit the polls. In my opinion no municipality should be in the Redevelopment business. Leave that to the private investors and developers. The council should concentrate on getting the town to run efficiently and making sure that the town agencies are responsive to the needs of businesses so that they want to move into town or remain here. The town tried to get into the redevelopment business with it's small business loan program and despite what was reported in the paper it was a huge failure. From what I understand only one business has received any money and it took years to finalize the loan.

This $10 million dollars would end up in the hands of a volunteer commission who may or may not have the expertise needed to spend it wisely. I heard that one of the ways the money could be spent is to purchase properties so that the town could market them or develop them. Real estate can be a risky investment and I don't think that I want our council, using my tax dollars, becoming a real estate developer.

This is not a party issue either. I would feel the same no matter what party was in control. Government at all levels are trying to do things that they were never intended or set up to do and at the same time they are failing at the things they are supposed to be doing. Just look at the town hall renovation. They can't even renovate a 50,000 sq. foot building efficiently how are we to expect that they can suddenly become a developer and do that correctly. This is not an attack on any individual or particular council but a general opinion that government needs to concentrate on the things that they should be doing and stay out of areas that the government was never designed to be in.

[ThinkingMama]

Wonderfully said, Rick. I agree 100% with you.

[oldetowne]

I also agree with Rick, Cruzrt and Standish's points on this subject. This is a bad idea from every perspective imaginable.

In addition, the sheer arithmetic of the proposal makes no sense. The Town Manager's spread sheet attached to the 8-6-07 Council agenda shows principal and interest payments which would be due based on certain assumptions about how the money is used and advanced. The relevant figure there is that the taxpayers will be on the hook for $1MM plus per year for 11 of the next 15 years, with the amounts declining thereafter.

The largest hypothetical amount due in any one year would be $1.5MM of principal and interest. That seems manageable in the general scheme of things, but this is supposed to be an economic development bond. How much "economic development" in the form of increased grand list would be required to make this a break-even bond? $65MM.... (I will explain the math to anyone who cares enough to ask). In addition, this will all have to be new personal property or incremental increases in the value of the buildings since no new land is being created. It will also require that the personal property not be depreciated faster than the bonds amortize. Finally, this assumes that none of these new business will be asking for or obtaining any tax abatements or assignments of tax liens (we gave away almost $100K to get Pelton's to move to the Porch and Patio bldg for a nominal increase in tax revenues).

So, in addition to the legitimate concerns about eminent domain, abuses of discretion, favoritism to connected developers, political motives, and a general inability to manage projects, bear in mind that this bond will have to generate a minimum return equal to six times the investment before the taxpayers will see ANY economic benefits. The letter from the Redevelopment Commission members in the most recent Wethersfield Life seems to suggest that they hope that some of their projects could result in this sort of increase. But is that a chance that you're willing to bet $10MM of tax money on?

[Dr.Ken Sokolowski]

oldetowne wrote:

...The largest hypothetical amount due in any one year would be $1.5MM of principal and interest. That seems manageable in the general scheme of things, but this is supposed to be an economic development bond. How much "economic development" in the form of increased grand list would be required to make this a break-even bond? $65MM.... (I will explain the math to anyone who cares enough to ask)...

OT,
Please show us the math in such a way that even hired hands in Town Hall, the Pols of Wethersfield and the people at the polls will understand.

[oldetowne]

OK. Here's the gist of it, and I encourage corrections of arithmetic and methodology.

The largest annual P&I payment under the town manager's scenario would be $1,501,000 in 2014. Roughly half is principal, half is interest. (The cumulative payments of principal and interest on the $10MM would be $22.2MM over 24 years.)

In order to generate $1.5MM in new money, what amount of taxable property would be required at the current mil rate of 32.94. (Note that the mil rate will obviously fluctuate annually based on changes in the grand list and the budget).

Assume it's today's mil rate in 2014 just because we have no idea what it would be at that time. In order to generate $1,500,000, you divide that number by 0.03294 (which is how the mil rate works out as a decimal). The number you get is $45,568,000. That is the amount by which the grand list would have to increase to have the bond payment be revenue-neutral.

BUT, real property (including buildings) is assessed for purposes of compiling the grand list at 70% of its fair market value for purposes of the grand list, personal property can be assessed at up to 100% of its fair market value. I could have kept it at $45.6MM assuming all of the increase was personal property, but that is absurd given the condition of most of the buildings we're talking about here. Nobody would fill the Fun Zone with state of the art medical equipment and leave the building as is.

Instead, I went with the 70% figure and divided the $45.6MM by 0.7 to come up with the $66MM number. Some could argue that it assumes that all of the added value would be in the buildings and none in personal property. I accept that criticism, but as I pointed out in the original posting, it is probable that these new businesses would be seeing tax abatements of some form or another and the personal property depreciates very quickly. Therefore, I kept it at 0.7 when you could probably justify a different number that would be 10% one way or the other.

Obviously, there are an infinite number of variables that come into play. My only point here is that the economic benefits of the bond would have to increase the value of a particular property by between 4 and 7 times the amount of the investment before any benefit to the existing taxpayers will occur.

[standish]

I think Kevin Rogers has been replaced with Joe Soja. Let's see whether the old faces have any new ideas, and if they can present them in a meaningful platform. Perhaps they could even do something novel, like, consult with the electorate?

[standish]

Looks like Essex is considering an ordinance that will require all of the buildings in a defined, downtown village area to permit only retail on the first floor. This sounds alarmingly like the "option" that was forced by our illustrious planners on Ms. Skelly, which compelled her to abandon her plans for the Masonic Temple. Of course, in Wethersfield, it was done through coercion... the ordinance hasn't been introduced (yet). In addition, the Governor has created a (not-so) Smart Growth Tszardom and signed the bill into law.

Watch out for "regional assets", "regional tax-and-spend authorities", "regional planning & zoning" and other forms of Hartford-Lite for Wethersfield. Thus, the mother city will eat her closest children. We'll also find a manufactured "village center" with retail at critical mass and high density, lower-income residential housing forced on our former, real village.

Stop these fools before they destroy this town with redevelopment and idiotic (not-smart) "growth".

[Dr.Ken Sokolowski]

The following is a letter to the editor of the Courant, 8/15/2007, published on the editorial page.

"Putting Political Power To Use

Horses and buggies trotting down Main Street in Olde Wethersfield is a fine retro idea, but is it really feasible [Connecticut section, Aug. 10, "Horse-Drawn Rides Protested"]? After all, who would sweep up the horse manure after each pass?

A better idea is human-powered rickshaws. After the initial purchase price, rickshaws require little maintenance. The human power can be provided by the mostly male town council members who hatched the initial horse-and-buggy plan. We did, after all, elect them to serve.

And the best part? No horses would be harmed. Those who hatched the plan would have the satisfaction of seeing the plan executed all the way through. That's the hallmark of a politician I would like to see re-elected.

I bet we'd be the only town in Connecticut with human-powered rickshaws. Now that would be a tourist attraction.

Carol Szymanski
Wethersfield
The writer is a resident of Olde Wethersfield.

[Dr.Ken Sokolowski]

The following notice is a combination of that found on the TOW's website and the one published by the Courant.

Redevelopment Forum Oct. 15 (2008)

A Redevelopment Forum will take place Wednesday, October 15, 2008 from 7 to 9 p.m. at the Silas Deane Middle School Auditorium, 551 Silas Deane Highway. Citizens are invited to attend to learn about the Redevelopment Agency's plans for the future, as they discuss specific development opportunities available in town. Agency members and staff will be joined by guest speakers from the real estate community and the state Economic and Community Development Department. For more information, call the planning and economic development department at 860-721-2838.

Yes, folks that is a week from tomorrow.

This is the second trunch the WRA will have at the public, in an effort to "educate" the unwashed, uninvolved, uninterested mass of Wethersfield citizenry about the purported need to spend heavily to promote the pot of gold at the end of the highway: redevelopment.

This follows an earlier educational opportunity for the same reason in the waning days of spring this year. See their own report about that meeting and other things WRA.

The WRA is still simmering and seething over the decision by the electorate to can their extravagant request for essentially unfettered access to $10,000,000.00 for well-intended but ill-planned redevelopment for the benefit (meager) of our grand list without any acknowledgment that unless taxes overall are significantly constrained, growing the grand list will be of a minimal benefit. One of the presenters at that June meeting acknowledged that redevelopment at best might help beautify the town a little and thus improve our quality of life. They blame the loyal opposition for "misinforming" the public and claim that the misdirection lead to defeat of the bond question (oh, by the way, that defeat was 2:1). I in turn could argue that they provided their own misinformation (especially in the form of omissions) and their efforts to stack the deck in their favor.

Will I be attending that special meeting of the WRA on October 15, 2008 - you betcha! (wink!). I hope to see a meaningful number of unencumbered, uncommitted and unbeholden fellow members of public there too.

Please attend.

It involves YOUR taxes and your right to guide government, even if you did or did not elect the WRA or the Town Council. That is unless you are really enjoying the actions and inactions of government in/for the financial and credit markets recently.......

[RGarrey]

I would hope that the WRA has learned from the last vote that the citizens of Wethersfield are not ready to give that agency, or any agency that kind of money for risky development proposals. Especially in the current economy. If they are still thinking that the town should get involved in the this risky development business, they should look at Bristol as an example. The city of Bristol purchased the failing Bristol Center Mall about 2 years ago. They spent about $6.5 million to purchase the property then had the building razed and the property cleared. Of course their thought was that somehow they could market the property better than the professionals. They were wrong. With ongoing costs they are into the property for at least $8 million and there are currently no proposals on the table. The town was receiving around $90,000 a year in taxes now they are in the hole for millions. Even if they were to find a developer the town would have to either sell at a huge loss or enter into a lease type arrangement which would probably takes decades for the town to recoup it's investment.

Bottom line, municipalities should not be gambling with taxpayer money.

[standish]

Unfortunately, the WRA will continue to preach to the choir at their two forums. Attendees have historically consisted of their assembled minions and beneficiaries. Moderator(s) will marginalize or silence opposing comments. Efforts will be made to demonize any opposition to risky bond proposals for public/private piracy partnerships using taxpayer dollars. Then, these insider-benefactors become the beneficiaries for the next go-round. This insular, insider, political class has to be stopped from further preying on taxpayers. However, each time we do stop them, they employ their better access to the bully pulpit and make us out to be the bad guys. Thereafter, they're right back at the feeding trough. The question is how to permanently change the dynamic so we don't continuously face these assaults. Third party? Infiltration (DANGER: Co-optation)? Something else?