Wednesday, January 12, 2011

Levee me this, Levy.

It took me a moment to understand why the title of this Tribune article so confused me. Then, noticing that the article itself provided no relief, it finally occurred to me. Spell check provides no relief when correctly spelling the incorrect word.

Levy: To impose or collect a tax.
Levies: Money, property, or troops levied.
Levee: An embankment raised to prevent a river from overflowing.
Levees: Multiple embankments.

If we were to ask Professor Erika (but why bother?), he/she probably would begin screeching that when it comes to $12 million for an uppity pergessive parking garage, levies levied for levees are a levy too far.

Or, in Italian: "Le imposizioni sono argini," or some such Papal Nuncio.

Meanwhile, don't forget: Tomorrow marks the return of Councilman Cappuccino and Li'l Stevie to Tribune column inches, with the latter of the historically conjoined yet again heroically abstaining from the levy/levee debate.

Perhaps New Albany's most underachieving politician in generations can be leveraged out of office in 2011.
$42M development may feature cut in levy: New Albany being asked to pay $12 million for garage, handle expenses of levy cut, by Daniel Suddeath.

The commission was not asked to approve any financing for the project, but Bobo requested the city pay for its own analysis of the development to get an independent estimate of how much tax revenue New Albany could yield, which the body approved by a 4-0 count.

Councilman and commission member Steve Price abstained from voting on the financial analysis hire, as he said he would need more information before feeling comfortable casting a ballot regarding anything to do with River View.

18 comments:

Randy said...

Thank you. I just begged them to edit the headline and story. Holy cow!

Iamhoosier said...

I wonder who was supposed to edyt that story?

Randy said...

levee
1719, "natural or artificial embankment to prevent overflow of a river," from New Orleans Fr. levée "raising, lifting, embankment," from French, originally fem. pp. of lever "to raise," from L. levare "to raise" (see lever). In an earlier sense borrowed from the literal French meaning, it was used for "morning assembly held by a prince or king (upon rising from bed)," 1670s.

levy (v.)
early 13c., "act of raising or collecting," from Anglo-Fr. leve, from O.Fr. levée "act of raising," noun use of fem. pp. of lever "to raise" (see lever). Originally of taxes, later of men for armies (c.1500). The noun meaning "an act of levying" is from early 15c.

The New Albanian said...

Of course, Erika has responded precisely as I'd imagined ...

http://voiceofnewalbany.blogspot.com/2011/01/another-parking-garage-another-12.html

... and without catching the levy/levee.

Same old shit from the superannuated hag.

Daniel S said...

Yep. My mistake, I accept responsibility. Randy please don't tempt fate, your newsletter last month had a few errors as well. Always easier to point out the mistakes of others. Cheers.

dan chandler said...

Potential benefits of the project are immense, including hundreds of new permanent jobs. But no one wants to see the City issue a bond, build a garage, and then have the project indefinitely stall. Since the $12 million TIF bond will be paid from increased property taxes from the $30 million in improvements that will be built atop the garage, the City cannot afford to build the garage unless there is 100% certainty that the entire project will be completed.

We on the Redevelopment Commission have a responsibility to ensure that the City does not expose itself to unnecessary risks. At yesterday’s meeting, I asked Mr. Bobo how this transaction might be structured to eliminate risks.

At yesterday’s meeting, we only approved one item regarding Mr. Bobo’s project; we agreed to hire a CPA firm to do a rigorous financial analysis. The analysis will determine if the projected increase in tax revenue truly will be sufficient to fully pay the off the TIF bond. If the CPA firm says the TIF proceeds will be insufficient, then Mr. Bobo either will need to rework his plans or take them to another city. If the CPA firm says there will be enough new tax revenue to pay off the bond, then we will consider issuing the bond.

Let’s be clear: Mr. Bobo does not get the money when we issue the TIF bond. We do not automatically break ground once we issue the TIF bond, either. The City will issue the bond and stick the $12 million proceeds in the City’s bank account. The proceeds will stay in the bank until all financial details on Mr. Bobo’s side are finalized. These details include Mr. Bobo closing on his $30 million construction loan with his private lender. It includes $30 million performance bond from the general contractor. It includes countless forms of insurance and reinsurance that will give the city no doubt the entire project will be completed even if, God forbid, Mr. Bobo is struck by a bus and we go through another financial crisis. If Mr. Bobo fails to finalize his side of the deal, the City will take the money in its bank account, buy the bond back, and move on to something else.

Other cities undertake projects like this on a regular basis. New Albany is not reinventing the wheel or charting new territory. All we are doing now is investigating the deal to see if it is feasible. The Redevelopment Commission is statutory charged with the duty of investigating deals like this to see if they will create jobs and attract investment. We would be derelict in our duties had we dismissed Mr. Bobo’s proposal without first investigating the details.

dan chandler said...

As for “giving” the garage to the developer, from Mr. Bobo’s response yesterday, I believe Mr. Bobo would be 100% fine with the City retaining ownership in the new garage if that arrangement made sense for the City. However, it does not make sense for the City to own the garage.

One reason he offered to accept title was so the City would not be responsible for the garage’s maintenance. Anyone who has followed the State Street garage’s story knows that maintenance is an ongoing ordeal. The members of the Redevelopment Commission, after thinking it over, had no problem allowing Mr. Bobo to be the one responsible with headaches over burnt out light bulbs and broken elevators.

Also, if the garage is publicly owned, it will be tax exempt and thus will not generate revenue.

The name on the deed is not the most relevant matter. The public still will have almost unlimited access to virtually the entire garage. An easement or similar agreement would be executed between Mr. Bobo and the City to ensure that the majority of the parking spaces and the plaza space are available.

Randy said...

Daniel, I meant to suggest to Roger that he take this down or revise it once the N-T Website is edited.

And I want all my errors pointed out, thank you very much, especially now that I'm personally writing my newsletters via blog.

The New Albanian said...

Like I said: Spellcheck doesn't help when you correctly spell the incorrect word. I make mistakes like this myself, all the time, and just as I did here, it's an opportunity to learn about words. No knock on the reporter from my end. Just an educational opportunity.

And, the opportunity to laugh at, not with, the conjoined mentality.

Daniel S said...

No that's not the excuse. I've written about our levee multiple times and I have no idea what I was thinking. Obviously I wasn't. It wasn't an issue of not knowing the difference. Probably an issue of being from Kentucky. Any who, not the first mistake or last I'll make. Randy, I won't put up with any lip from a UT fan is essentially what it boils down too:) Take care.

Iamhoosier said...

It's not because you are from Kentucky, it's that you went to UK.

G Coyle said...

Thank you for your concise and pointed comments Dan C. Perhaps we can get off the hee-hawing around and discuss this development as it benefits the community. I like to propose this topic not devolve into a childish back and forth with other bloggers about grammar et al.

I like this development if it's planned in a smart way. Smart is not what this town is known for. Cutting the levee...hum, wonder why that's never been discussed before? My personal estimation is the city will have it's hands full just pulling that off.

I also question why a private developer would want to put a private development on a foundation that is built by a "not real smart" local government entity? What are the legal liability issues for the town and the developer down the road when problems arise? What a "title" mess...why go there?

Or does the city build and then give back to the developer once the bond is paid off. Why? Why not continue making a profit on the garage?

Randy said...

Online story is edited. Life can now go on.

Anybody heard from bayernfan?

Jeff Gillenwater said...

"Why not continue making a profit on the garage?"

Agreed, G. If the city builds the parking garage, it should retain ownership and management. If numbers reported by redevelopment the past few years are correct, even the much smaller State Street garage is profitable. If downtown redevelopment efforts are relatively successful (with or without the Bobo project), the new garage will be a long-term cash cow.

dan chandler said...

A privately owned garage, assessed at $12 million, will generate close to $300,000 in new tax revenue each year. A publicly owned garage will generate no new tax revenue because it will be tax exempt.

If the garage is not generating tax revenue, then there will be less new tax revenue to generate TIF. If a TIF bond is issued assuming a $30 million increase in tax base instead of a $42 million increase in tax base, then the maximum size of the bond you can issue is about $2.5-$3.5 million less. That is, if the garage will not generate new revenue, then there will not be enough revenue to pay off the bond to build the garage, meaning you will not get a new garage.

I have not heard that Mr. Bobo does (or does not) plan to charge for parking. I suspect parking at the new 400 spaces would be free, but this could be a false assumption. If parking is free, then managing the new garage will only cost money, not make money. If the city owned the garage and charged for parking, you would have to prove that the income from the parking fees would be greater than the lost $300,000 in new tax revenue, plus maintenance, plus salary and benefits for parking attendants, plus liability insurance, etc.


Finally, if the city wants to charge for parking, there's nothing that says the city cannot enter into a long term lease agreement with Mr. Bobo to do just that.

Yes, under the proposal the city would give Mr. Bobo a garage, but Mr. Bobo is giving us 100% of the means to pay for that garage. The city still gets something very positive out of the deal. It gets many new jobs and a redeveloped waterfront. I’m not saying yet that it’s the right deal for the city. I am saying that insisting now, before we have all the numbers, on city ownership of the garage might make the deal unfeasible.

Jeff Gillenwater said...

As always, there are lots of options here, some of which we may be able to pay for in cash or a much smaller bond based on recent reports of reserve levels.

I think they should be examined during this process, rather than turning the current Bobo proposal into another all-or-nothing deal.

RememberCharlemagne said...

"Let’s be clear: Mr. Bobo does not get the money when we issue the TIF bond. We do not automatically break ground once we issue the TIF bond, either. The City will issue the bond and stick the $12 million proceeds in the City’s bank account. The proceeds will stay in the bank until all financial details on Mr. Bobo’s side are finalized. These details include Mr. Bobo closing on his $30 million construction loan with his private lender."


I would hope that the bonds wouldn't be issued until after Mr. Bobo has finalized on his end. If Mr. Bobo's end fails there still would be the cost of administering the bonds. A resolution of commitment would be enough for Mr. Bobo to close the deal with the banks. Then when everything is finalized issue the bonds and not a point sooner.

Also, the deal could be even better if a transportation grant is pursued to make the garage a multi-use bus terminal.
Other cities have done it, why not New Albany?

G Coyle said...

In terms of investigating the deal, which is the duty of redevelopment C, I guess the big question is - where is the money for the project coming from? If it's "New Markets" Money, then it's half coming from the tax payers. If the tax payers are paying for the majority of the project, full accounting and transparency would be helpful.