Sunday, December 10, 2006

More Welfare For The Rich

You've got to hand it to Mayor Bart Peterson (D). When it comes to helping the rich, there's no mayor in America who can claim he does more to help this oppressed class. Whether it's $25 million and free parking for the Simons and their employees at their glittering new corporate headquarters shadowing the State House, or three-quarters of a billion dollars to build the nation's best football stadium for Jim Irsay's Colts, Mayor Peterson is willing to make the working men and women of Indianapolis bite the bullet and dig deeper into their pockets to support the lifestyles of the rich and famous. And now he's preparing to make you all sacrifice again to the tune of about $55 million to subsidize the construction of a luxury hotel by one of his mega-millionaire friends and political supporters. The Star's Jeff Swiatek reports today on the big decision the city will make regarding the construction of another hotel:


Will Downtown's biggest and grandest hotel yet be built by a team headed by one of Democratic Mayor Bart Peterson's major political donors? Or by a rival group that includes a former Republican Party operative and one of Indiana's richest businessmen?

A mayoral committee will recommend one of the two competing hotel proposals later this month, in a politically charged decision that will commit millions of dollars in city money to a skyline-changing project.

One option is a soaring 44-story tower that would hold a luxury hotel under the banner of British-based InterContinental Hotel Corp. It would rise on Pan Am Plaza, across from the main entrance to the RCA Dome, but the team has yet to buy the site.

The team's lead developer is Michael G. Browning, a major Peterson contributor who originally developed Pan Am Plaza.

The other proposal is a cluster of four Marriott-brand hotels, with the flagship a 25-story JW Marriott Hotel holding 800 to 1,000 rooms. The Marriott team's deep-pocketed investors include Whiteco Industries of Merrillville, controlled by 83-year-old billionaire Dean V. White. Its lead developer is one of Browning's former business partners, Michael W. Wells, who now runs REI Real Estate Services in Carmel and was once campaign manager for a Republican mayor.

Each team is asking for about the same amount of city subsidies -- $40 million to $55 million to help pay for a huge new ballroom, a parking garage and pedestrian walkways linked to the Indiana Convention Center.

Let's answer the first question. It's politics stupid. Of course the Mayor is going to take care of his close friend and biggest political supporter, Michael Browning. Does anyone think he's going to reward Michael Wells? Remember, former Mayor Steve Goldsmith (R) gave the development rights to the site of what's now the Conrad Hilton to Wells, only to have it taken away from him by Mayor Peterson so Peterson could reward his political cronies with his first big downtown development deal. While the selection committee members, including city-county councilors Monroe Gray and Marilyn Pfisterer, insist the selection committee will not play favorites, the deck is already stacked in favor of the InterContinental proposal pushed by Browning. Gray told Swiatek: "I'm kind of neutral. I'm waiting to see the final presentations." Gray, of course, initially denied having any role in the 300 East bar at the Julia Carson Government Center. It later turned out his wife owned an interest in the bar, along with the man Mayor Peterson appointed as President of the Indianapolis Airport Authority, Lacy Johnson. Browning, coincidentally, is a client of Lacy Johnson's.

The next question is why the city feels it necessary to offer a tax subsidy to yet another business venture downtown. Swiatek writes, "The city is willing to put taxpayer money into a privately owned mega-hotel because it would help lure more and larger conventions, boosting spending on hotels, restaurants, rental cars and the like." Now remember that taxpayers are already forking over close to $300 million to expand the convention center to lay the golden egg in the form of larger conventions to fill up downtown hotels. The city would have us believe that noone would risk building a large hotel adjacent to the expanded convention center unless the city provides a substantial subsidy for the project. Here is a very telling item within Swiatek's story about Marriott's plan to build a new hotel regardless of the outcome of the city's selection process:


If Marriott team loses the contest, it likely will go ahead and build one or more of its proposed hotels anyway, adding 500 to 600 rooms, Wells said.

That news "might make financing a lot more difficult" for the InterContinental project, by providing more competition to it, Wells pointed out.

Also missing from the discussion is the Hyatt Hotel. Simon recently moved its employees out of that building to its new corporate headquarters across the street, opening up a lot of vacant space in the building, which could be easily converted to new hotel rooms to support more convention business. The city's excuse then will be that none of them have a large enough ballroom to support the increased convention trade--that's because the city is removing the ballroom it has in its existing facility and not including plans for one in the expanded facility.

So it seems we're left with the proverbial question: Which came first, the chicken or the egg? In this case, the answer is whichever one assures a huge financial windfall for one of the Mayor's cronies.

9 comments:

Anonymous said...

Wow, it's becoming more and more like Chicago everyday. The mayor takes care of his cronies, the taxpayers get the shaft, and in the end, he gets re-elected just like Daley.

Citizen Kane said...

Yeah, but downtown is so wonderful! I'll have to admit, they don't allow the link in the chain to be broken. They keep it going from an arena, to several hotels, to a luxury hotel, to a headquarters building, to stadium to a convention center, to another luxury hotel. And, of course, they all have to be subsidized because it wouldn't happen otherwise and we wouldn't have such a wonderful downtown - for visitors!

I think anyone would be hardpressed to find one aspect of the so-called tourism industry that is not subsidized substantially by tax abatmement and all sorts of other subsidies. But no one seems to care; whether it is the Democrats or the Republicans, they will always make sure their friends get their rightful share of the giveaways.

He is still trying to give someone an opportunity to get rich (so far his fomer deputy mayor has not been to succesful) on developing the Market Square Arena site. Let's see who gets the next chance to build and sell overpriced condos.

It is all so corrupt and sickening. We need a revolution in this country, as it is clear that no one in charge is really interested in the betterment of the larger communty; they are only interested in the betterment of themselves and their "friends."

arnie said...

Why in the hell would the mayor do anything at all with Mike Wells. His time on the tit past with Goldsmith. Come on. Get real.

Anonymous said...

Mayor Bart will take credit for creating hundreds of jobs (read: union construction workers - mindless 'Rat voters) with this deal.

Realist said...

The Intercontentinetal hotel is absolutly the right project.

It's bold, its skyline changing.

It's the best use for that parcel (which, by the way, will no longer have a skating rink after May regardless).

As for your "crony" argument, if you want to be a developer, your political connections are part of the deal. Ask Mitch Daniels about all the contracters, developers working on his projects (Major Moves, Stadium, et cetera). Its how the game is played, its not corrupt.

Anonymous said...

Didn't Murray Clark (the CURRENT GOP STATE CHAIR) work with current Governor Daniels on getting Honda here? Obtaining development work is about connections with elected officials is par for the course. It works on both sides, AI.

Anonymous said...

Clearly the Lucas/Irsey Stadium is going over budget and the promised 100% increase in the convention center has already been reduced 25% to cover the shortfall.

Don't kid yourselves, the Browning project has already been choosen and the subsidies are being hidden by shifting revenue producing parking and ballroom space from CIB to the Browning project. Wells already knows this.

Whats Next?

Details for the new hotel at the new midfield airport should shift from the backrooms to the Indianapolis Star soon when everything has aready been decided and additional incentives have been promised. Dont be surprised if Wells team wins this.

Anonymous said...

Arnie is right.

This deal is a little shady.

But where was all the righteous indignation when Mike Wells lined his pockets with one, two, THREE deals downtown, subsidized at city taxpayer expense? The last one being the Emmis headquarters on Monument Circle. FOr which zero tax incensitves were actually needed.

Wells is one of the more corrupt and greedy dealmakers from the past administration.

Doesn't make this turn of events correct, but someone needs a llittle sense of history and proportion here.

The Intercontinental is the more exciting bid. I've read both packages. They're both full of incentive requests.

Who knows how it will end?

We all just know it won't end. That's the point.

Sadly.

Anonymous said...

The Intercontinental may be the more exciting bid but who is going to pay their room rates? The FFA kids? The firefighters convention? Seems a little pricey to me.