It's been 20 years since Circle Centre Mall opened in downtown Indianapolis after city taxpayers kicked in $187 million of the $320 million it cost to construct the Simon-controlled mall. According to the IBJ, the City still owes $145 million on the original bonds issued for the mall's construction as it struggles to remain viable. Simon and the 19 local companies that contributed $75 million in equity as part of Circle Centre Development still owe lenders about $67 million.
The mall is located in the downtown TIF district so all property taxes paid by the businesses which occupy space in it stay within the TIF district. There is $2.7 billion worth of assessed property in the downtown TIF, which generates about $75 million annually in revenue. In 2013, the mall generated $3.2 million in property taxes. Last year, the City cut a deal with Carson Pirie Scott that saved the department store about $300,000 a year in rent. Its lease was converted to an operating agreement so it no longer has to pay property taxes on its space. The number one priority seems to be to ensure this last anchor store doesn't pull out like Nordstrom.
The gist of the story is that it's all good. Downtown would have become Bill Hudnut's proverbial hole in the doughnut if massive public subsidies weren't instituted to subsidize private development at a whole new level. Initially, this was supposed to be a temporary thing. Now it's become permanent and expected for every new development downtown. It's quite a profitable racket for the few who benefit from the taxpayers' generosity. Circle Centre Mall continues to produce healthy profits for its private investors, even as the mall's performance drops significantly. In 2013, profits stood at $7.8 million, down about 18% since 2007.
7 comments:
By definition, public-private partnerships and so called P3 deals are subsidies and handouts. These welfare deals
benefit not those paying for the deals (the taxpayers) but benefitting the crony wealthy insiders and the politicians who bestow public money not even theirs to begin with. It is so easy giving away something that you never had to toil hard to achieve, isn't it?
If there were a need, the private market would supply it. Would the private market supply a cricket field, urban Indy electric car rentals, urban Indy bicycle rentals, etc? Of course not. But thanks to bloated corrupt Democrat and Republican politicians and their manipulators who own them, never fear. Another hare-brained scheme to suck money from Indy taxpayers who have not yet been born is surely on the horizon.... if not under the totally corrupt Ballard then under the just-as-corrupt Joe Hogsett.
Does government benefit for any reason other than to benefit those connected therewith? The best thing to restrain this type of debt-driven nonsense is currency backed by gold.
So what if taxPAYERS owe $145 Million for the Simon Mall property that is so dangerous you might get shot there on a weekend evening. (Click on link) You might see hundreds of violent youth "wilding." -And you also can see Riot Police in action.
At least we have a Cricket Field, downtown prime parking is obstructed so everyone can see electric cars on exhibit (the rate increase in our electric bills to pay for those to be here was denied this week by the IURC) and Bike Lanes in Broad Ripple.
...and did one of the professional sports teams that play in our taxPAYER-funded venues disgrace the city by getting arrested again today? -We can count on that trend to continue. At least it brings the name of our City in to the National Spotlight...(for embarrassing reasons). Our elected officials know what they are doing with OUR TAX MONEY and it is NOT what taxPAYERS want.
If Indianapolis disclosed all of its off-the-books debt, it would have a credit rating just above that of Detroit.
The Whole idea of a "Downtown" Mall was on the failure path from the start. Downtown shopping like many of us Baby-Boomers remember and exemplified in various Holiday Movies was going extinct by the early 1960's. The expansion of the Interstate System, the explosion of housing in the suburbs and the Suburban Malls doomed the Downtown Stores.
The only choice was to Create a Downtown heavily subsidized by the tax payers with direct and indirect subsidies. Each new Development (with tax payer subsidies) was touted as necessary. The fact is none of this development could have been built using Capitalist Principles. It was a requirement that the costs would be socialized.
My suspicion is the hypothesis by the politicians, developers and Mega-Media that the Downtown area will become this magnet for High Income wage earners is another Myth, like Big Foot and Perpetual Motion Machines.
But we have bike lanes in Broad Ripple, a beautifully landscaped Regional Operations Center with a great lease, and a Cricket Field!
It's time to refute the half-pregant "logic" of public / private partnerships; an abuse of the public purse & assault on the private / productive sector, which doesn't need bureaucrats to provide or teach it about the free market.
We representatives; not free market professors.
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