Tuesday, January 14, 2014

City-County Council Committee Postpones Vote On Subsidized Luxury Apartment Building To Ensure More Kickbacks To Minority Firms

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The Metropolitan and Economic Development Committee last night heard Proposal 366, which authorizes the issuance of up to $23 million in bonds by the downtown TIF district for the construction of a 28-story, $81 million luxury apartment building by Flaherty & Collins. When you factor in interest costs on the borrowing and the value of the free land the city is donating to the politically-connected developer that stuffs a lot of money in the politicians' campaign committees, taxpayers are essentially funding at least 45% of the $81 million cost. The City's economic development guru, Deron Kintner, told the council members that unless taxpayers made this minimum contribution to the developer's project, the building could never be constructed because the downtown market doesn't support high enough rents to generate sufficient revenues from apartment rental to justify a luxury apartment project of this scale. In other words, a city like Chicago has a market for high rise luxury apartments with rents of at least $5,000 a month, while Indianapolis is lucky if it can find a sufficient number of tenants who will pay $2,500 a month for high-rise luxury living downtown with comparable amenities. If the market can't support a luxury apartment building, then why are taxpayers forced to fund the project? And these are the same assholes that keep complaining that there isn't enough money to fund public safety because we aren't paying enough in taxes.

Interestingly, Kintner pointed out that the land in question, the former site of Market Square Arena, is not within the downtown TIF district since it has been owned by the Capital Improvement Board and no property taxes have been paid on the parcels for decades. Although the downtown TIF district is responsible for repayment of the bond debt, Kintner told the council members that it is so cash rich that it can afford to repay the debt even though the new property tax revenues paid on the luxury apartment building will be allocated to other taxing districts. A suggestion by the committee that the city's contribution be converted to an interest-free loan rather than a grant was a non-starter according to Kintner. Eventually, the committee chose to postpone action on Proposal 366 only because my council member, Vop Osili, didn't believe the private developer was utilizing minority hiring for at least 40% of the project, a goal he had written into the TIF ordinance when he successfully pushed for the expansion of the downtown TIF district a year ago. Taxpayers should know that Osili, an African-American, owns an architectural business that makes money from compulsory set-aside work for minority firms. Presumably, the extra time afforded before a vote is taken by the committee may help certain individuals ensure that certain businesses get their share of the work on Flaherty & Collins' latest project being built courtesy of Indianapolis taxpayers.

It's hard to believe any of this is legal. Only in Indianapolis are taxpayers expected to provide substantial subsidies to virtually every major development project that occurs within the city limits. The city's taxpayers have given away billions of dollars to private developers over the past several decades. Countless number of pay-to-play contractors have been made multi-millionaires thanks to this corrupt policy adopted by our city leaders, which prosecutors turn a blind eye towards. I would highly encourage corrupt developers to relocate to Indianapolis from other cities like Chicago where you can grease the right palms and get public funding for your projects that require the taxpaying public to shoulder all the risks so you can live the life of the top 1% without fear of being prosecuted for crimes that are prosecuted almost anywhere else in this country. It's pretty disgusting that I'm represented on the council by someone whose only concern with the public subsidizing a luxury apartment building to this extent is that it include the compulsory hiring of a certain percentage of minorities. Detroit South is becoming a more appropriate name for Indianapolis with each passing day.

12 comments:

Anonymous said...

Show us one contact that Osili has won since he has been..come one,show us just one….

Gary R. Welsh said...

I'm assuming you mean "contract." The burden of disclosure is on him to remove doubts. I've previously pointed out older projects that his former firm worked on shortly before he joined the council. The financial disclosure law for council members is so weak that the statements they file with the city are of little value to the public. Even if he didn't receive work on a project funded at least in part with government funding, how would we know he's not performing work for a developer or subcontractor who receives public funding on another one of its projects that is not paid with government funds? There is more than one way to crack the nut. When you are in a particular line of business while serving as a council member, taking a very active interest in an area that benefits your vocation in general is naturally going to raise suspicions with anyone trying to be a watchdog. I find it appalling that he would sit there and demand that a certain percentage of these projects be fulfilled by people with the same skin color as him without regard to qualifications or economics as a condition. So much for judging someone by the content of their character as opposed to the color of their skin.

Veracity said...

So your answer means you don't have an example, right? You claim the burden is on the other party to show your unsubstantiated claim is false but as a lawyer you know that you can never prove a negative. I would not call this being a watchdog.

Flogger said...

It may have started before the Construction of Hoosier Dome, but that IMHO was the beginning point in the Corporate Welfare, Crony-Capitalism schemes that are wrapped all around Marion County now. When our elected officials past and present can justify building stadiums for the Mega-Billionaire Owners of Professional Sports Teams, you have laid the foundation for further Corporate Welfare Schemes.

It is positively breath taking and sickening at how easily Crony-Capitalism functions in this County. Some get the Goldmine of Corporate Welfare and the bulk of us living in Marion County get the shaft.

No matter who the Democrats nominate for Mayor in the next election you can bet the nominee will be carefully vetted. There will be no discussion of this Web of intrigue.

The only hope might be is if the Libertarian Party nominates someone with enough fire in their belly at this outrageous behavior that they make Corporate Welfare a Campaign issue and force the Republicans ,and Democrats to defend it.

Gary R. Welsh said...

It is an undisputed fact that he has received government-funded work in the past based on his status as a minority contractor. He doesn't dispute that. What the post criticizes him for doing is basing his support on publicly-funded projects like this one on the basis of a high percentage of the work being set aside to be fulfilled by minority firms. The commenter raised the question of whether he has received any government funded contracts since he's been on the council. I can't answer that question because there are so many ways he could receive work that would never be disclosed on any public document. Firm A could subcontract work to Firm B, which could, in turn, subcontract some work to him. The fact is that's how he makes his living and he's sticking his neck out demanding that a certain percent of the work be awarded to a subset of firms like his own as a condition to supporting the project. The whole Monroe Gray debacle centered around non-disclosure of work he had received as a subcontractor on a government-funded project. As we saw in that case, there is no legal consequence for not disclosing. I hear minorities complain all the time about the fact that only a select group of firms controlled by the same usual suspects wind up getting all of the set-aside work for minority firms.

Gary R. Welsh said...

I should add that this committee's membership has a history of feigning objections to someone's economic development project for specious reasons until the developer grovels at their feet, throws them a few bones (i.e, campaign contributions, free tickets to sporting events, jobs for relatives, etc.) and then the pumpkin suddenly turns into a golden carriage and the previously questioning members heap praise on the same developer they had just recently served up a helping of criticism all for show. This ain't my first time at the rodio. I saw firsthand how the shakedowns happen during my six years working for the Illinois legislature. I witnessed the same thing happening over at the State House as a lobbyist, and I've watched the same thing repeatedly happen before this corrupt city-county council we have. Both parties actively seek to block anyone who would attempt to get elected to this council who would serve out of civic virtue. They only want people beholden to them who can be bought to serve on the council, and with the exception of a few, that's pretty much the sum of what we have on this council.

Anonymous said...

Will "Sweet Pea" Monroe Gray be making out like he did with the no-bid airport contract?

Gary R. Welsh said...

I thought Gray no longer owned a concrete business.

Anonymous said...

IHCA, MCHH, Roads, highways, tolls, parking, TIF's, Referendums, and more of these special interests all around over the last 10 years with knowledge of many....
Speak up louder Gary!!! Keep it up.

Anonymous said...

Be safe dear sir...It's coming some and many hope...This drama needs to stop at so many levels...Whom is willing besides you to end it all..We wait and watch...All Hoosiers do and many from my research and more are fed up..FED UP.

Anonymous said...

Hey Gary,,you really do need to do your homework….Guess the last year that Osili got a contact with the city of Indianapolis?

Hint: Ballard was not Mayor,,,but,nice try

Gary R. Welsh said...

Hey, anon, do your homework. We're not just talking about direct contracts with the City of Indianapolis. You have to include all work for any developer who is receiving public funding from the various governmental entities and who, in turn, hires various professionals to perform the work. That's the fulfillment work Osili is concerned about in this discussion; not who the city is hiring for work. He wants to dictate to Flaherty & Collins that in order to receive public funding for their high-rise building, you have to hire X percent of minorities for fulfillment of work on this project. On a project of this nature, just how many qualified minority contractors are available for hire in the local community, particularly when we're talking about the architectural/engineering component of the project? It's the same small group of minority contractors with the same undisclosed members/shareholders who are winning the lion's share of this work. The Chicago U.S. Attorney's office has exposed all sorts of corruption in this arena. This lousy, poor excuse for a U.S. Attorney's Office we have here in Indianapolis won't do to a damn thing about any of the corruption reported to it. They're more likely to go back and tell the people involved in the corruption who is ratting them out than conducting a serious investigation.