Saturday, March 10, 2007

It's All So Cozy In Bart's Little World Of Real Estate Developers

The incestuous relationship Mayor Bart Peterson has with a select group of rich and powerful real estate developers in this town produces yet another smelly outcome in the decision to award construction of a new hotel at Indianapolis' new midfield airport terminal to Mansur Real Estate Services, Inc. Observant AI readers will recall I flagged this issue when the IBJ first reported on efforts by the Indianapolis Airport Authority to land a hotel deal.

As the IBJ reports, there were three developers competing for the project: White Lodging Services, KMI Realty Advisors (Kite) and Mansur. According to the IBJ's Jennifer Whitson, White Lodging, dropped out of the bidding for the airport project after it was awarded the convention hotel project downtown for a J.W. Marriott Hotel, along with about $50 million in public subsidies. Although Kite lost out to Mansur on this project, remember that Kite and Mansur were originally working as partners on the downtown Conrad Hilton project into which the taxpayers kicked about $25 million. Kite later bought out Mansur's interest in the project.

On that downtown convention center hotel project, you may recall the Westin originally competed for that project last year by proposing an expansion of its existing hotel, but it dropped out of the running before the projects were evaluated by the city. So what hotel brand will Mansur be building at the airport? Westin would be the correct answer. Doesn't everything just work out so conveniently for all of Bart's big contributors and friends in the real estate industry.

Bart's family, of course, has made a fortune in real estate development in the Indianapolis area. The airport authority is run by Ice Miller partner Lacy Johnson. Bart is a former law partner at Ice Miller. One of Ice Miller's leading clients, according to the IBJ, is Kite. The firm also does lots of work for the City of Indianapolis, and it is providing legal services to the state for the stadium authority which is constructing Lucas Oil Stadium for the Colts.

So how much money will the taxpayers have to kick into the pockets of Mansur for the airport hotel project? “I think this would be a predominantly privately financed project,” [Mansur's Chuck] Cagann said. “What the discussion is about now is what condition the site will be delivered in. … We’ve made a specific proposal. They may have plenty to say about that.” The IBJ's Whitson added, "Hotel construction projects increasingly rely on public money to be viable, and one consultant thinks Mansur would need at least $10 million in assistance if the airport hotel comes in at $60 million." I think it's safe to say the taxpayers will be kicking in at least $10 million for this project.

19 comments:

Anonymous said...

These guys are all acting like strawmen for one another to make it appear these deals are competitive when Bart awards a deal to one of them. The feds should look into these deals.

Jay said...

Bart is acting more like a Chicago mayor every day. Pretty soon he'll plow up the streets downtown and then charge you to get your car out. Wouldn't want just anyone driving into downtown, now would we?

I hope he moves into one of these new hotels since we'll be paying for the rooms.

Anonymous said...

Typical Bart, I mean are we really that surprised this happened? "On the backs of the taxpayers" would be a great re-election slogan.

Anonymous said...

AI, did you notice Jim Schelinger's architectural firm got a contract for the project as well? He would be Bart's handpicked candidate for the Democratic gubernatorial nomination next year. His job is to ensure the Democrats lose to Daniels next year so Daniels can keep doling out legal contracts to Ice Miller. I guess this is an advance payment to Schelinger for taking a fall for the good of the cause.

Anonymous said...

Give us a break Chuck, "I think this would be a predominantly privately financed project." Not everyone is as stupid as you would like to believe.

Anonymous said...

Does anyone else notice Wilson is suspiciously quiet on this matter? Could it be he has had a "moment of clarity" about our crooked real-estate developer/mayor? GREED will drive even the most honest people to do very dishonest things.

Wilson46201 said...

Don't try to hijack this thread again! I have no knowledge about this sort of financing so I wrote nothing - I just got around to reading this posting.

Can we be assured that the GOP mayoral nominee (whatever might scrape through the primary) will come out four-square solidly against new hotels and development in Indianapolis?

GaryJ said...

New hotels in Indy is a good thing, Wilson. We could use them to get the convention business. Just NOT att the expense of the taxpayers. Bart has GIVEN taxpayer money to Irsay and the Simons. Millions of taxpayers dollars given to a drug addicted team owner and the owner of a bunch of high paid thugs. Let the hotel owner pay for it him/herself.
What does it tell future visitors when Indy doesn't have enough cops to keep the citizens safe? Maybe that 45 mil. could have been used to hire more cops?
Oh. thats Bart we're talking about. He needs the money to get more light posts in the high crime areas so that the thugs can see sho they're shooting at! :)

Wilson46201 said...

Illuminating city streets has long been an anti-crime measure. Every city in the world has street-lights to minimize crime. I am so astonished that such a common-sense measure would cause any controversy whatsoever!


Crawfordsville boasts about being the first city in the world to use electricity to light dark streets. Do you think they did it just to keep horses from bumping into each other? It was a basic public safety measure. Evildoers shy from the light.

Anonymous said...

It was a basic public safety measure. Evildoers shy from the light.
Is that why the daytime crime rate is going up? The evildoers aren't being blinded by by the streetlights?

Anonymous said...

Looks like the DemocRats are milking the "fat cow" taxpayers for every dollar they can get while in power.

Who ever said the Republicans Party had all of the miilioniare campaign contributors. Can't find enough money to fund public safety and hire more law enforcement officers to keep the citizens safe, but the Mayor seems to find the development funds for all of his friends to build special projects with cost overruns. Peterson is the private developer's best friend. Wait until homeowners get their new property tax bills after this year's election. DemocRat voters can't blame Republicans for this one.

Anonymous said...

Anon 757 - and the reason the Einstien bagel at 86th and Purdue was robbed and employees put in the freezer at 600 AM?

Anonymous said...

"Illuminating city streets has long been an anti-crime measure."

Illumination can't hurt but won't help. The money would be better spent on more officers and overtime. Street sweeps in the heaviest crime areas are the answer. Feel good maneuvers do nothing to resolve crime.
Wilson quit drinking Peterson’s Kool-aid, your hair is already starting to turn orange.

Anonymous said...

in study after study, lighting helps deter crime. It's really common sense.

And 7:57, whoever told you daytime crime is rising was not being truthful. It's not.

(It's all too high, regardless of the time of day) Butg back to the original post:

Bart's cozy real estate developer world is one filled with risk and reward. Al Kite is a perfect example. He screwed up Glendale, with some subsidies, and comes back to the city for help bailing his sorry ass out of trouble. And we did it. Again.

One thing, though, is certain: these folks usually demean government "interference" in their business or, God forbid, their personal lives.

Until:

they need public help for private projects

and they want to tell me whom I can marry and not marry.

The world is full of these public/private hypocrites. Al Hubbard, Mark Miles, Mark Lubbers, all the Petersons, the Simons...it's a bipartisan libertarian lament.

And if they can continue to get government to pony up subsidies, tax abatements, infrastructure, or whatever...why shouldn't they continue to ask?

Shame on us for continuing to say "yes."

Someone needs to end this insane cycle--nationally. It's rampant all over, and projects here would be waylaid or abandoned if we didn't jump into the mix and compete with subsidies.

It's a sugar teat problem, and it isn't pretty.

Unfortunately, we're in up to our necks. We need a world-class airport to be competitive. To have a world-class airport, it's generally-accepted we need an airport hotel at the terminal. To do that, a subsidy is commonplace.

I have no idea where the cycle ends. But, unfortunately, it probably can't be now or here.
(sigh)_

Mazarin said...

Just in case anyone has forgotten, Mansur was in charge of the Fall Creek Place development, which was total disaster for anyone that was originally involved in it, despite what you hear on tv. More than half of the properties in Phase I of that project are not owned by the original buyers because half of the builders closed or went bankrupt. Believe me, I know firsthand because I've been involved in a legal fight with mine for over 5 years. Anyway, Mansur did a crap job screening the builders and at least 65 prospective purchasers lost their houses there. I'd be very hesitant to let Mansur ever, ever, ever deal with anything involving this city ever again. FCP was FUBAR'd from the beginning mainly due to their total incompetence, and yet they still remain working on Phase III, and now this project. What gives?

Advance Indiana said...

mazarin, the real crime was how much Mansur was being paid for the FCP project. They made more off each house built there than most of the builders--and they got most of their money up front before the house was even built. The financial problems the builders had was largely because of the way Mansur and the city managed the project. They chose mostly small builders and leaned on them too adhere to an aggressive building schedule they weren't financially able to sustain. The demand for homes exceeded the capabilities of many of the builders. Then the city and Mansur set out to personally destroy builders who complained about the way the project was being managed (i.e. negative calls to their homebuyers, negative calls to their bankers, MDC inspectors showing up every day writing up the builder for bogus building code violations, etc., attorneys from firms like Ice Miller and Tabbert Hahn showing up on the scene to represent clients adverse to the homebuilder, etc). I represented one of those builders and am well aware of the facts. We tried to get the media to look at it, but it required more investigative work than the average local reporter was willing to tackle. The GOP council members wouldn't look at the issue because too many of the homebuyers in HPC were gay, and they didn't want to help out the gays. It was one big pathetic mess. Yet, Bart and the city one big accolades for the project.

Anonymous said...

He spends all this money on things that we dont need as badly, instead of restoring our oldest neigborhoods, getting mass transportation, more jobs, more cops, and better development for EVERYONE. Soon downtown will be a gated white straight only neighborhood. The mayor never goes to the lower class neighborhoods, he doesent even live in central township area, shows what loyalty he has, he lives in a rich annexed suburb, what a fregin richy rich snob.

Mazarin said...

While I can buy there were issues with Mansur, and there certainly were with the way they'd mete out lots to builders with only earnest money from buyers on the table, but would turn away individual customers asking for information until they had an actual preapproval, among other stupid things, I'd hesitate before giving a pass to all of the builders. My builder tried to completely screw me over and the court agreed, so we are currently at an impasse and I've purchased a house elsewhere while waiting for mediation. But, that's not the subject of this particular post, and I'll certainly agree with you on Mansur's complete ineptness/underhandedness dealing with any of these projects.

Honestly, the whole project was such a fiasco I can't believe it didn't get any attention from the media at all, for any of the reasons above and many more.

Chris said...

Actually, the hotel project will probably NOT receive local taxpayer dollars. The airport expansion is funded by fees assessed against the airlines which choose to land at the airport. No property taxes, sales tax, or local income taxes are used for the airport expansion, and any funding for the new hotel will most likely come from the same fees assessed by the airport on the airlines.

I do believe the Peterson administration needs to focus more on crime prevention, and I think there are many legitimate issues to take the current administration to task. However, I just don't think the planned Mansur hotel is one of them.

Finally, if we are going to speak of property tax abatements and taxpayer subsidies--it would be a more honest discussion if we mentioned the following: The $244 million that Bill Hudnut gave to United Airlines (which basically took the money and then bailed some years later)--this doesn't count the millions that the state kicked in. Or other projects, such as, the $187 million or so both Bill Hudnut and Stephen Goldsmith gave to the Simon's for the Circle Centre mall, or the $214 million Stephen Goldsmith gave to Eli Lilly, or the $80 million that Stephen Goldsmith gave to the Pacers; or finally, the $33 million Stephen Goldsmith gave to developers to build the current downtown Marriot--and these are just a few of the many hundreds of millions which went to private corporations under the previous mayoral administrations.

Personally, I think BOTH major political parties have had too cozy of a relationship with developers--and big business in general. Perhaps some of these subsidies have been worthwhile investments of public funds and generated more tax dollars than the cost; however, I think corporations in the Indianapolis area and the rest of Indiana have been on the public dole for decades, and we should all demand serious scrutiny of the public subsidies they receive.