Tuesday, June 14, 2011

Trickling back: It's about gravy, not gravity.

One can be for the River View project or against it, although like most New Albanians, not much of a damn is given at all, but to me, the most regrettable aspect of the proposed development just might be the inexplicable decision of its proponents to describe the potential economic impact on downtown as "trickle back."

I personally heard these words spoken at the recent public hearing at the library, and DNA repeated them in its mailing yesterday -- because that's what happens when you're looking off someone else's paper come exam time.

(By the way, congratulations to OSIN's Daniel Suddeath for including the "trickle back" passage in his account of the coming council vote on inclusion of River View in the TIF area)

Understanding that historical perspective is fleeting in a place like New Albany, it must be stated for the record that "trickle" as an economic (and perhaps linguistic) principle has considerably bad (and dated) connotations, going back to the far-off 1980's and Ronald “Supply Side” Reagan's program to enhance and preserve the wealth of the enriched, crumbs of which inevitably would reach the poor, or so we were told.

For all the hue and cry to date, during which River View's backers have all but suggested that the condo project with $180,000 studio flats would cure the common cold and make Charles Atlas out of the puniest of male anatomies, is it really a positive selling point to define the project’s economic benefits as "trickling back" to the remainder of downtown?

For $53 million (without a TIF pledge, it's so far an imaginary sum), don’t we have a right to expect something more than a trickle? Is the usage of this term unintended buffoonery, cluelessness, or just plain bad writing?

Given the stock caricatures of beautiful, white, Merlot-sipping stock traders gracing the back page of Mainland's prospectus (above), I'm guessing the latter. The acclaimed conversation from yesterday continues here: Mr. Haney, DNA support "trickle back" from River View.


dan chandler said...

Roger, would you be less offended by the picture if they were drinking Schlenkerla?

I agree "trickle" is very poor word choice. But let's distinguish the project's merits from the merits of its marketing campaign.

As for the $180K price point, New Albany's outskirts have seen new construction in the past few years of houses selling for $200K+. Nationally, the median new home price in 2010 was $221,800.

I don't know the answer to this question; I'm asking rhetorically. At what point is discriminating against higher priced homes a legitimate government goal? I'll note that pricy houses are not necessarily bigger ones or ones that use more non-renewable resources. For example, the starting price for a 1,100 "passive house" is around $300,000. When does price matter?

Iamhoosier said...

Dan, Roger and Jeff can certainly speak for themselves(and usually me)but it isn't about discrimination. It's about the viability of the project if it depends on selling these units--which obviously it does. They have not gone well in Louisville and just go look at Shiloh place.

dan chandler said...

Shiloh Place is a very different project. As for Louisville, some have done well and some have not. If Glassworks is your model, they should do well.

Jeff Gillenwater said...

Mark got it.

If it's their own money as part a totally private land deal, RV can build only million dollar babies for all I care.

However, if the public is supposed to give up that piece of land and subsidize the project, I need to feel like the developers are on the right track. I don't.

It's an anecdotal smattering to be sure, but several real estate agents I've spoken with don't think they'll be able to sell what they're offering at the price points listed.

I wouldn't invest my own, private money in the project as proposed so I don't think the public should contribute to it, either. There are philosophical differences in terms of development approach but one bottom line is that I think it's a bum steer.

dan chandler said...

It's about the viability of the project if it depends on selling these units--which obviously it does.

Let's talk worst case scenarios. When a condo deal goes belly up, the bank and the developer take a hit.

Here are some examples:



Bank and developer take a hit but the taxes still get paid. Now, if you think the TIF analysis should include a bigger cushion in case post construction prices are lower than initial estimates, that's fair enough. But once units are there, they will pay taxes, whether they're owned by Mr. Bobo, by his lender, or by a subsequent developer.

Iamhoosier said...

That doesn't address the "empty shell" sitting there on prime real estate that NA used to own.

dan chandler said...

Mark, as we discussed before, there are established ways to mitigate this risk. It's entirely fair to ask the administration about this. Did you ask? What was the response? It's an important question.

Iamhoosier said...

No, not directly.

dan chandler said...

Mark, Thursday's vote is just on whether to include RV in the TIF district. That in itself doesn't put the city on the hook for $12M or risk a city-funded "shell."

But before the city commits to a TIF-bond, I think it does need to convincingly address your concern. I'm sure Mr. Bobo can share some details at the next Q&A but obviously Mr. Bobo does not represent the city. A Q&A with the city's outside construction and bond council might help, wouldn't you agree?

Iamhoosier said...

I understand we are not committing to "anything" yet. I'm not hopeful on getting answers. Only one concern out of many has been answered and that is that the city won't be on the hook for the bonds if the development fails. Still not sure how that could be but I will accept that it is so.

You may ask, how do I expect answers if I don't ask them directly and it would be a fair question. My concerns and the concerns of others have been regularly posted and discussed on these pages. It's a fact that they pages are read by the powers that be. They could address them in the public meetings and/or they could address them here. Or, as Carl did once, on the city website. Much more efficient than Carl/Shane answering me, then answering Roger,then answering Jeff, then answering you, then ... I actually do have some respect for these people's time but, perhaps, I do need to push a little harder sometimes.