About this new Downtown Facade Improvement program ... our interest in the topic goes all the way back to 2004.

Scroll down for the reprint of an article I penned in 2004, shortly after this blog's inception. Things have changed ... and they've stayed the same.

First, here is the city's description of the rationale for new downtown facade improvements, as revealed for the first time last Tuesday.

horseshoe-foundation-gives-5-million-gift-to-city">Downtown Facade Improvements

New Albany has a plethora of beautiful, historic buildings in its downtown. Unfortunately, over the years, some of these buildings have had windows shuttered and closed off, original brick walls painted over, and historic character lost. Some buildings have even been painted together to appear as one structure. This project will seek to revitalize, refurbish, and redevelop buildings and facades in the downtown area, reinvigorating these historic strcutures to their original historic look, including improved windows and uncovered original brickwork.

It should be noted that for a very long time, the Urban Enterprise Association has had a successful facade improvement matching grant program. The announcement on Tuesday seems to hint at an expansion of it, and yet obviously the paragraph above seems written to describe Schmitt Furniture, above all others.

The devil's always in the details, and this new program will be no exception. It doesn't mean I oppose it. Rather, I need to see the fine print. We all do.

There are other examples, of course.

Then there are these piles.

Prescient readers will note that on Tuesday, the city of New Albany accepted $5 million dollars of seed money from the Horseshoe Foundation and tied the grant to projects advocated by this blog for a number of years.

We're delighted to have been so far ahead of the curve in a conceptual sense, though it remains to be seen what percentage of the total required for these projects that $5 million proves to be -- most or only some?

It remains that we've supported the Greenway, the use of Loop Island Wetlands, and the clean -up of QRS (Riverside) Recycling.

We've praised the potential of the under-utilized amphitheater, and wondered why something couldn't be done about the horrendously neglected overlook structure.

We've pushed the idea of narrowed, two-way streets and enhanced walkability, as on the two blocks of Market from State to Pearl.

And, since the beginning, we've sought adaptive reuse. These past 12 years, many windows (and their buildings) have benefited from restoration as entrepreneurs put their money where their aspirations are, and downtown has come a long way as a result.

This is a very important point.

TIF bonds and similar corporate welfare subsidies have been largely absent from these privately impelled improvements. On Tuesday, the mayor had not one word to say about private investment, only the many ways the city itself takes credit for what has happened.

This was shortsighted. It's inaccurate. Still, in spite of Gahan's ineptitude, this new facade grant program, whatever its shape, might prove to be a good thing. However, it also has the potential to be controversial, especially if there is any hint of favoritism.

Consequently, I'd suggest that Team Gahan spend more time than it usually does making sure that downtown's stakeholders understand what's happening and why.
 
Is that too much to ask? Now it's back to November 22, 2004.

---

Windowless views of Scribner Place

As previously noted, I attended the outdoor press conference in early October during which New Albany Mayor James Garner unveiled plans for Phase I of the Scribner Place downtown redevelopment project.

Envisioned by Garner’s predecessor as a bold stroke on a grand scale, the Scribner Place project has been subjected by the incoming regime to a stringent editing process that has left much of the original proposal on the cutting room floor.

All portions of the Scribner Place plan that might require heavy lifting (i.e., hotel, retail, condominiums) have been discarded or deferred, rendering it fiscally responsible and far better suited to the current administration’s signature lack of imagination.

The YMCA, swimming center and parking garage slated for the first phase can be financed in large measure by annually mandated guilt abatement kickbacks from Caesar’s Indiana, whose million-a-day gross continually reminds us (a) that we’re all in the wrong business, and (b) that ordinary people are incredibly stupid.

In a press conference replete with unintentional humor, one of the funniest moments came when a representative of the Louisville media grew tired of waiting for the New Albany Tribune’s Amany Ali to ask a significant question and quizzed Mayor Garner as to his comments to the effect that that Scribner Place would bring people to live downtown.

With no housing plan in sight, where will these new residents live?

A confused Garner could do no more than mumble and point to the perennially unoccupied second and third floors of nearby buildings as if to suggest that their owners would miraculously see the light after decades of willful negligence and begin creating condos overnight.

It so happens that one of the structures standing behind Garner was the majestic Schmitt Furniture building, which hasn’t had windows above the ground floor since some time during the Johnson administration. In fact, on the entire length of the Schmitt Furniture block running along Main Street, there are no windows above the ground floor on any of the buildings.

If anyone is to live there, they’ll not be enjoying a very good view of Scriber Place.

During his speech, Garner insisted that the citizens pf New Albany should be thankful for certain “families” (among them the owners of Schmitt Furniture) who agreed to sell their properties to make space for the Scribner Place project.

These properties, located between Main Street and the flood wall, contain warehouses of no architectural value built atop brownfield areas where forges and other 19th-century industrial enterprises once operated.

So, if we are to believe Garner, families running businesses in buildings without windows, and who sell virtually worthless properties in need of some measure of toxic clean-up to the city at somewhere close to market value are patriotic.

Opportunistic businessmen, perhaps. Patriots? Name a street after them, and get on with it.

Flashbacks in the Annals of NA Dysfunction: BOW and City Hall ignore speeding on Elm Street.

In this jam-packed update from a long time ago, we see that so very much has changed.

Uh huh.

---

October 27, 2013: Freshly paraphrased newspaper highlights, including speeding (by design) on Elm Street and a Dutch Treat for the city.

Over yonder, behind Bill Hanson's graffiti-covered 'Bamabuilt paywall, there's an angry letter to the Jeffersonville-based editor from Grace Transue, who takes the New Albany Board of Public Works and Safety quite sternly to task for blithely ignoring persistent complaints about reckless driving and speeding on the city's one-way Elm Street racing corridor between the Interstate 64 ramp and Vincennes Street.

She makes pointed note of her perception of the board's cavalier attitude and dismissive body language, which actually serves to direct us to several fundamental truths in what SHOULD be a two-way discussion:

• A street designed for speeding will (duh) duly produce speeders
• The Board of Works apparently needs weekly exposure to informative weekly recitations highlighting bold new trends in urban modernity, ones mostly dating back to the city's founding
• The Board need not await unnecessary traffic studies to just do something about one-way streets designed for reckless and unsafe driving -- as previous boards have been asked to do for ten years running, or longer
• City Hall continues to gaze numbly upon this and other pressing aspects of the two-way street discussion with an expression resembling that of the proverbial wayward deer in the headlights of an Elm Street driver
• The police department's thoughts on speeding enforcement are, shall we say, cursory

We turn to a more detailed, non-metered source on the police department's recent (and brief) Elm Street observations, as Randy "The Bookseller" Smith explains all at The NewAlbanist:

“Move Along, Nothing to See Here”

In response to a request by a resident of Elm Street (you know who you are), Maj. Keith Whitlow offered up a report to the Board of Public Works and Safety at their regular Tuesday meeting.

As most anyone can tell you, and as everyone who lives on Elm Street can tell you, speeding is a chronic problem there, especially on its one-way stretch from I-64 to Vincennes Street.

In what was reported as a “shift” by Community Newspaper Holdings, Inc. of Montgomery, Ala., a police officer observed the traffic flow on Elm Street, presumably to ascertain whether there was, indeed, a problem with speeding.

On a street where the speed limit is generally 30 mph, and is highly trafficked at all hours, Maj. Whitlow says his assigned officer observed … 45 cars. (read the rest of the story)

Thank you, Randy.

---

In other news, it has been revealed that amid a budget crisis of their own making, Floyd County's bumbling governmental officials haven't yet appropriated the county's annual share of the Scribner Place YMCA payment. In fact, the city of New Albany has paid both its $137K bill AND picked up the tab for the county's $137K balance due.

Remember back when the county approved the yearly Y expenditure even as the city council's Gang of Four still sought to railroad it? We sure do: County backs Scribner Place, Gang of Four scrambling for new excuses (September 14, 2005).

That's right. We've been doing this for a while, haven't we?

At this point, dwelling any further on our county government's breathtaking bankruptcy -- a nadir not so much about cash as a gaping chasm of intellect and leadership -- would merely constitute a tasteless piling-on, so instead, let's consider the unexamined component, namely that the city's annual $137K payment for the Y comprises pretty much the entire expanse of its economic development plan for downtown, apart for periodic dribs and drabs from what's left of the Urban Enterprise Association since it was Norwooded.

Ah, but I have a dream: The city of New Albany spends a few thousand to repair a sidewalk untouched since the Inman Administration BEFORE an entrepreneur agrees to drop a cool million into rehabbing the building sitting behind it, rather than after.

Pro-active? It's a forgotten concept here by sanity's edge.

Weekend Update: Freshly paraphrased newspaper highlights, including speeding (by design) on Elm Street and a Dutch Treat for the city.

Over yonder, behind Bill Hanson's graffiti-covered 'Bamabuilt paywall, there's an angry letter to the Jeffersonville-based editor from Grace Transue, who takes the New Albany Board of Public Works and Safety quite sternly to task for blithely ignoring persistent complaints about reckless driving and speeding on the city's one-way Elm Street racing corridor between the Interstate 64 ramp and Vincennes Street.

She makes pointed note of her perception of the board's cavalier attitude and dismissive body language, which actually serves to direct us to several fundamental truths in what SHOULD be a two-way discussion:

• A street designed for speeding will (duh) duly produce speeders
• The Board of Works apparently needs weekly exposure to informative weekly recitations highlighting bold new trends in urban modernity, ones mostly dating back to the city's founding
• The Board need not await unnecessary traffic studies to just do something about one-way streets designed for reckless and unsafe driving -- as previous boards have been asked to do for ten years running, or longer
• City Hall continues to gaze numbly upon this and other pressing aspects of the two-way street discussion with an expression resembling that of the proverbial wayward deer in the headlights of an Elm Street driver
• The police department's thoughts on speeding enforcement are, shall we say, cursory

We turn to a more detailed, non-metered source on the police department's recent (and brief) Elm Street observations, as Randy "The Bookseller" Smith explains all at The NewAlbanist:

“Move Along, Nothing to See Here”

In response to a request by a resident of Elm Street (you know who you are), Maj. Keith Whitlow offered up a report to the Board of Public Works and Safety at their regular Tuesday meeting.

As most anyone can tell you, and as everyone who lives on Elm Street can tell you, speeding is a chronic problem there, especially on its one-way stretch from I-64 to Vincennes Street.

In what was reported as a “shift” by Community Newspaper Holdings, Inc. of Montgomery, Ala., a police officer observed the traffic flow on Elm Street, presumably to ascertain whether there was, indeed, a problem with speeding.

On a street where the speed limit is generally 30 mph, and is highly trafficked at all hours, Maj. Whitlow says his assigned officer observed … 45 cars. (read the rest of the story)

Thank you, Randy.

---

In other news, it has been revealed that amid a budget crisis of their own making, Floyd County's bumbling governmental officials haven't yet appropriated the county's annual share of the Scribner Place YMCA payment. In fact, the city of New Albany has paid both its $137K bill AND picked up the tab for the county's $137K balance due.

Remember back when the county approved the yearly Y expenditure even as the city council's Gang of Four still sought to railroad it? We sure do: County backs Scribner Place, Gang of Four scrambling for new excuses (September 14, 2005).

That's right. We've been doing this for a while, haven't we?

At this point, dwelling any further on our county government's breathtaking bankruptcy -- a nadir not so much about cash as a gaping chasm of intellect and leadership -- would merely constitute a tasteless piling-on, so instead, let's consider the unexamined component, namely that the city's annual $137K payment for the Y comprises pretty much the entire expanse of its economic development plan for downtown, apart for periodic dribs and drabs from what's left of the Urban Enterprise Association since it was Norwooded.

Ah, but I have a dream: The city of New Albany spends a few thousand to repair a sidewalk untouched since the Inman Administration BEFORE an entrepreneur agrees to drop a cool million into rehabbing the building sitting behind it, rather than after.

Pro-active? It's a forgotten concept here by sanity's edge.

Really? I didn't know she had a brother.

It was 2005, or maybe 2006. It's hard to remember the exact year when the song always remains the same. The placards were constructed for wielding during the Harvest Homecoming Parade party at the homestead. I found them yesterday while toting boxes into storage downstairs.

Another year, another destructive Coffey Plan ... and the madness goes on, and on, and on ...

The agenda for tonight's city council meeting, which Dan Coffey will remember in years to come as his very last unimpeded breath of political job security, is mercifully light.

And yet, it's hard to imagine a council night anti-climax mere hours before the dominoes start falling on Tuesday. Perhaps Li'l Stevie will conjure imaginary Nazis, or CeeSaw will produce a last-second appropriation for One Southern Indiana.

Anyone going?

NA in the Indiana Brownfields Bulletin.

From Mike Ladd of the UEA comes this good civic PR from the Indiana Brownfields Bulletin. Follow the link, scroll to page 7, and enjoy the photos.

On November 15, 2008, the City of New Albany celebrated the grand opening of its new YMCA and Aquatic center ...

... This brownfield redevelopment project is in a formerly contaminated area of New Albany along the Ohio River that has a long history of industrial blight. The site was assessed using an Indiana Brownfields Program (Program) assessment grant and cleaned up using a portion of $400,000 in cleanup grant funds from the U.S. Environmental
Protection Agency ...

Read the rest at Indiana Brownfields Bulletin.

The YMCA's coming, and the Gang of Four should be denied invitations to the party.

Steve Kozarovich of the Tribune sent this link to Kevin McGloshen’s "slideshow timeline" of Scribner Place construction as the YMCA gets set to open its doors this Saturday. It's also on the marquee at the newspaper's website.

Scribner Place slideshow

The publisher writes: "It took nearly two years to complete!"

The senior editor of NAC says: "It took almost three years before that to convince the Gang of Four to endorse the check handed to the city by Caesar's (now Horseshoe) Foundation!"

I wonder if the Schmidts, arch-opponents of Scribner Place, will be there Thursday for the donor reception? King Larry? The Conjoined Councilmen (Coffey and Price)?

The Tribune should commission McGloshen to take their pictures if any of them dare to attend. Wretched councilmen are a New Albanian birthwrong, but bad actors?

We can do without them, can't we?

Shouldn't we?

Son of “back on your heads”: Council takes a field trip tonight.

Wanna bet they’ll drive the two blocks, not walk?

The Tribune’s Daniel Suddeath previews tonight’s city council meeting: New Albany City Council will vote on freeing funds for cash flow.

Interestingly, and perhaps uniquely, the scheduled meeting will be preceded by an instructive educational opportunity.

Council members will meet at 6 p.m. Monday for a work session to tour the set-to-open Scribner Place/YMCA. The YMCA is scheduled to open Nov. 15.

Ahh, I’m feeling the tug of nostalgia.

For many months, as conscious elements in the community valiantly struggled to spend $20 million of someone else’s money on the Scribner Place/YMCA project, the council’s Gang of Four unreconstructed obstructionists did everything it could to thwart it.

The Gang of Four is no more; Slippery Larry mercifully retired, and “Somnolent” Schmidt was summarily unseated, but Dan “Wizard of Westside” Coffey and Steve “Accidental Councilman” Price remain on board to advocate turning the calendar pages back to the golden age of prevalent hardwood forest, when taxes and expenses were sublimely low, and do-gooder progressives weren’t breathing down the necks of congenital low bar underachievers like them.

Will Coffey and Price make the trip to the Y? Or will they sulk outside and spit in the general direction of the soon-to-open structure?

As we await the hilarious answer, here are two excerpts with links from NAC pieces in 2006.

UPDATED: A great day for NA.

... With the union of the YMCA, Caesar’s Foundation, LifeSpan, Floyd Memorial Hospital, New Albany and Floyd County about to be solemnized, and at precisely the moment when Pastor LaRocca intoned, “Speak now or forever hold your peace," the Third District councilman Steve Price attempted to bungee from a passing helicopter and put a stop to the ceremony, which he had previously denounced as “forcing those Frankfort Avenue people right down our Pandora’s Box.”

Unfortunately, Price’s “Sam’s Club” cord was too short, and he was thrown with visible force against the façade of Schmitt Furniture, sliding unobtrusively down the building’s side, and into a featured sale-price Ottoman on the sidewalk below.With luck, he'll remain there until the item is delivered, but never mind; the East Spring Street Neighborhood Association represented CM Price's long-suffering district.

Scribner Place groundbreaking this morning -- BTW, has anyone seen CM Coffey lately?

... We’ll be watching to see if Councilman Cappuccino sets up shop on the opposite corner and convenes the council’s dulcet-toned obstructionist barbershop quartet, the The Gang's Gong of Four, to sing a stirring rendition of their golden classic hit, “We Hate the Sort of People Who’ll Be Coming Here (And We Wish They’d Leave Us to Our Squalor).”

A special meeting of the Redevelopment Commission on Tuesday, July 14.

The following edited version of a piece previously published late last night when my consumption of restorative, progressive pints precluded fact checking, comes to you in altered form thanks to an alert reader, who graciously informed me of a factual error. I have nothing to say in my defense, save that when it comes to distinguishing between conjoined Luddite councilmen, I sometimes find myself utterly unable to discern, and question whether it really matters.

To be more specific, and as it pertains to the city of New Albany, if the Redevelopment Commission must include two council representatives, is there any difference between the 1st district’s Dan Coffey and the 3rd’s Steve Price occupying one of the two obstructionist chairs?

The press release below is about Scribner Place Phase II feasibility. Throughout the process of initiating the current phase, which includes a YMCA and swimming facility, CM Coffey continually vowed to self-immolate on the steps of the City-County Building rather than permit local government to improve prospects for the Wizard of Westside’s own fiefdom – then, lacking modern spark-making technology, failed to follow through with the projected fireball owing to the time required to rub two sticks together.

(There – found a way to include that section, anyway. Hah.)


Phase II presumably will stretch eastward, into CM Price’s realm, and he can be expected to oppose any potential council district upgrade just as vociferously as Coffey. I say that either of them being associated with any manifestation of “redevelopment” is the sort of ironic, cosmic and cataclysmic guffaw that the master of the universe routinely issues to residents of the city of New Albany to incite (as opposed to insight) the consumption of more Big Bufords.

Oh, well. Not to intentionally mimic the random legal document generator pioneered by the fraudulent Erika over at Freedom to Screech (Yellow), here’s the official notice as provided by the Redevelopment Commission:

NOTICE IS HEREBY GIVEN for the following New Albany Redevelopment Commission Special Meeting to be held on:

Tuesday, August 14, 2007
5:30 - 7:00 p.m.
New Albany Floyd-County Public Library Auditorium

RE: Scribner Phase II Feasibility Study Findings Presentation

The meeting will include a presentation by Browning Investments, Inc. regarding the Scribner Place Phase II feasibility study.

Dated this 24th Day of July 2007.

New Albany Redevelopment Commission

John Rosenbarger, Director

REWIND: Councilman Cappuccino declares city administration null and void, invites YMCA to form provisional government with himself as regent.

(Originally published on June 23, 2005. The "Coffey plan" was unceremoniously rejected, and in spite of persistent Luddite opposition, Scribner Place is rising during the summer of 2007, with completion scheduled for 2008)

Councilman Cappuccino shifted uneasily in his venerable Lazy-Boy, the flickering images of an infomercial about amazingly inexpensive industrial-strength cleaning products bouncing off his tall, fat tea glass, the ice long since having melted during his period of contemplation.

He reached for a book … then remembered he didn’t read.

It was getting late in the game, and if Cappuccino didn’t do something soon, his city’s vital issue of the day might slip forward into reality, but there was a big problem with the project, and he simply must find the answer – and soon.

A trained expert in many fields of human endeavor, his cherished Bazooka Joe diplomas in civil engineering, mink ranching, cold fusion and underwater Peruvian basket weaving placed carefully alongside mortgage and insurance papers in the lockbox buried out back by the grill, Cappuccino jammed his eyeballs shut and flipped through the ancient yellowed file cards gathering dust in the nether regions of his buzz-cut cranium.

What was the nagging concern about the forthcoming project that kept him awake at night?

Fondling the public toilet keys that a grateful constituent had fashioned into a commemorative “thank you” bracelet, Cappuccino furiously inventoried.

Was it drainage this time? No, that didn’t sound right, and neither did sewer seepage, although both might be used to trump various other development proposals somewhere down the line.

Cappuccino’s gearbox hummed and moaned. Was the hillside too steep? Traffic too heavy? Reclamation costs too high? Bonding options offensive? Would the planned development result in the wrong type of snobby people crossing the boundaries of his district to inflict undesired modernity on his simple but utterly devoted tribe?

Yes and no; all these objections seemed relevant in one way or another, and to be sure, the very notion of progress symbolized by the development project violated his sworn oath to the creed of the Luddite civic forefathers, the Cappuccinos of old who watched, whittled and wailed as the city was built around their non-compliant selves, but none of these matters caused him indigestion.

What was nagging him?

Glancing out at the photos of his life arranged in meticulous chronological order on the dust-free mantel shelf, Cappuccino saw himself as a rosy-cheeked young man, fresh out of junior high, with a hall pass in his pocket and his whole life ahead of him.

The brittle image now stared back at the aging public servant, who felt his eyes moisten as a surge of conviction gathered force and struck him across the forehead with all the finality of a turbo-charged vintage Mustang tearing down I-64 toward Holiday World.

Why hadn’t it occurred to him before this?

The development proposal that so plagued Cappuccino surely was missing its single most important ingredient, the key fundamental element, the one crucial aspect without which there could be no hope for his approval, no chance for the project’s ultimate success, and no progress at any price.

Why, Cappuccino himself.

The councilman’s indelible stamp was nowhere to be found. Neither had he giddily appeared on television, nor had the public seen his stern and statesmanlike visage displayed in the local newspapers.

Kept infernally busy interfering daily with affairs in council districts other than his own, Cappuccino had thus far played a negligible role as the development project was debated and inched forward, and now, with the clock ticking, how could he yet manage to claim credit for moving the project forward – or, as the case may be, for tossing the decisive spanner into the works to have the project stopped or altered, thus discrediting his major political enemy?

Not that politics should enter into it, mind you, Cappuccino giggled to himself.

The councilman needed a plan, and he needed it fast. He knew that mundane considerations like environment concerns, even if conjured from thin air with the assistance of embittered and opportunistic local office seekers, would put the voters to sleep faster than pointy-headed classical music or those boring, word-filled screeds on economic development in the 20th century, so he needed to go straight for the jugular, just the way he’d been taught so long ago while taking the correspondence course from the fine folks at the George C. Wallace Academy of Populist Demagoguery.

As a last resort, hit ‘em in their wallets, blind ‘em with finances – and don’t stop until they squeal.

Cappuccino would interject himself into the debate by creating a tragic financial logjam where none existed before, then rush like the 7th cavalry to the rescue, with a grand compromise to save the city from ruin, and restore the Cappuccino luster in the run-up to maintaining his place on the public payroll during elections two years hence.

Finally, it all made sense.

Heart pounding and head spinning, Cappuccino quickly jogged into the kitchen, reached into the crock pot, and transferred a considerable glob of slowly simmered barbecued bologna into his waiting mouth.

Rewards like this made public service worthwhile.

But there was more to come. The councilman's last-minute compromise had to have a name.

Why not the Cappuccino Plan!

Abruptly pausing in mid-chew, Cappuccino’s face suddenly turned crimson. There was one small problem with the solution to the problem he’d created. He needed numbers – any numbers would do, so long as they looked imposing on paper, and added together, were ambiguous and capable of being molded like waiting clay – not unlike his loyal acolyte in the 3rd district – into whatever form was needed at the time of presentation.

Numbers weren't Cappuccino's strong point, but fortunately, he knew where to reach out for help, fondling his rotary dial phone and inserting a stubby, sauce-smeared finger.

“Anna? Hi, how are you? They’re fine, thanks. Listen, Anna, I need some numbers … ”

Playing the Percentages

In yesterday’s discussion of city finances, many tax abatement misconceptions were dispelled but the issue of Indiana’s 2% constitutional debt limit was again raised. And, again, it was asserted that New Albany had unconstitutionally surpassed it by financing a small portion of the Scribner Place development. Ever vigilant, our Senior Editor asked an extremely pertinent question:

the new albanian said...
Con-Dem wrote: We are constitutionally bound to a 2% debt limit, which we surpassed with Scribner Place.

We hear this repeated all the time, but is that really true?

Con-Dem answered that it is.

The fact of the matter is that the City of New Albany didn’t issue any debt for Scribner Place. The New Albany Redevelopment Authority, as a legally recognized separate entity, did. The Redevelopment Authority’s 2% is calculated independently of the city’s, meaning that taken together they can issue debt equaling 4% of net assessed property value.

While that’s good information, it’s irrelevant in this and most cases of Indiana public finance. The bonds issued were done so as part of a lease structure, a perfectly legal and commonplace financing method not bound by the 2% debt limit. The truth is, Scribner Place financing doesn’t affect our debt limit at all.

As the State Board of Tax Commissioners explained in a preliminary fair market value report to an Indiana General Assembly study committee in 1996:

Local governments in Indiana, like most local governments throughout the nation, rely on the local property tax base to generate revenue to repay debt issued to finance capital improvement projects. Local governments can sell general obligation (GO) bonds which are supported by the full, faith and credit, or unlimited taxing power, of the entire taxing unit. But there are state constitutional and statutory provisions that restrict the ability of local governments to issue GO debt in Indiana. 


Article 13, Section 1 of the Indiana Constitution limits the total principal indebtedness of any political subdivision to no more than 2 percent of the net assessed valuation of taxable property within the taxing unit. The debt limitation applies to 2 percent of net assessed valuation, not 2 percent of true tax value. The constitutional debt limit applies to each municipal corporation individually, and not in the aggregate to municipal corporations which may cover the same area or include the same taxpayers. This has led to the establishment of many overlapping municipal corporations (e.g., school, jail) and special taxing units (e.g., special districts such as fire, library, parks and recreation, sanitation, and redevelopment authorities) that use the same property tax base as the general government to finance capital improvements.


Local government property-tax backed debt in Indiana consists primarily of non-GO bonds because of these debt limits. Most local property-tax backed bonds sold in Indiana are lease rental bonds. During 1992-1995, more than $2.3 billion in lease rental bonds were sold, compared to only $218 million in unlimited tax (GO) bonds. Lease rental bonds account for 88 percent of all of bonds sold by local entities in the state. Most general governmental and school corporation lease rental bonds are repaid directly from lease rental payments that are raised from property tax revenues.


Lease rental bonds are popular with local governments precisely because they are not subject to the 2 percent debt limit.

In our case, the city’s portion of the lease rental payments are covered with Economic Development Income Tax funds, with property taxing authority used only as a backup mechanism in order to secure a better interest rate.

In a discussion of TIF districts, Ball State’s Center for Economic and Community Development explains the lease arrangements thusly:

When other tax revenues are pledged to enhance a TIF financing, Indiana constitutional debt limit restrictions often dictate that the financing be structured as a lease. Under this structure, a separate entity known as a redevelopment authority is created by ordinance of the unit's legislative body. The redevelopment authority then issues bonds, constructs the project, and leases it back to the redevelopment commission. The commission then pays lease rentals to the authority from TIF and the other pledged revenues in an amount sufficient to pay the authority bonds.

Lease rental bonds are a fundamental method of local government finance across the country and have been since the 80s. Their use gives municipalities flexibility to finance projects while creating more attractive situations for investors.

As the Tax Commission clarifies:

Unlike most lease rental bonds sold throughout the nation, Indiana lease rental bonds do not contain an annual appropriation-out clause enabling the government to annually withhold debt service payments.

In effect, such lease rental bonds are structured as synthetic GO bonds. This provides Indiana lease rental bonds with two additional layers of repayment security that is absent most other lease rental bonds in the nation. The additional layers of security have been fine tuned over the years so that, research shows, investors favorably view Indiana lease rental bonds since they exhibit interest costs no different than GO bonds.

With weight loss inducing regularity, generally accepted modern practice has been met with alarmism and rumor mongering in New Albany. It’s difficult to tell exactly how such rumors get started, but it’s easy enough to figure out who preys upon the fears of those factions that insist on their perpetuance.

In a supposed statement of his core values, 3rd District Council Member Steve Price let’s us know that he was the one who informed citizens “how we by-passed the 2% constitutional debt limitation” in financing Scribner Place as if it were some sort of conspiracy he’d personally uncovered. Mind you, he’s the same guy who once told a room full of constituents that we were spending all of our EDIT money on Scribner Place. We’re actually spending less than 10%.

Given that important decisions need to be made concerning the other 90%, it might be best not to rely on 100% ignorance and those who think that's all we can do.

Scribner Place rising, obstructionist stock plunging.

Just thought I’d augment a Tribune piece from Sunday with a few photos.

Crews working on Scribner Place foundation, by Eric Scott Campbell (News-Tribune).

With support pilings in place — and the incessant clanging noise created by their installation no more — Scribner Place construction workers are laying the fitness and aquatic center’s foundation before erecting the building’s steel skeleton late next month.

Naysayers are that way for a reason, probably genetic, but it's getting more and more difficult to reconcile the gloom and doom scenarios with reality on the ground in downtown New Albany.

For more: Interest Up in Historic New Albany, from Our History in New Albany.