Saturday, August 15, 2015

More Surprises From Westfield's Grand Park

Westfield's Grand Park is another gift that keeps on giving as corporate crony schemes go with municipal government in Indiana. A year ago, Mayor Andy Cook announced the City had attracted $20 million in investment from Holladay Properties to build an indoor soccer arena at Grand Park. That of course turned out to be a big fat lie. City taxpayers are actually paying $53 million over a 25-year period to lease the improved facilities from Holladay Properties, providing a very generous return on an investment to a developer with a cozy relationship with city officials. Indiana law required such a deal to be accomplished through a publicly-bid request for proposal process in accordance with the public-private partnership agreements act. The mayor and council ignored the law, and nobody in Westfield was competent enough to file a lawsuit challenging the corrupt mayor and city council from breaking Indiana law. A mayoral opponent of Cook filed an untimely lawsuit challenging approval of the lease by the city council for violating the state's Open Door law, which was quickly dismissed by a Hamilton Co. judge.

At no point during the shady process by which Westfield approved the deal last year was it mentioned the City didn't actually own most of the land upon which Grand Park is being built. It turns out that most of the land is leased from private landowners, and city taxpayers are stuck paying the property tax bills on the land, in addition to the payments it's making to Holladay Properties under the terms of a very one-sided lease agreement favoring the private developer. The IBJ reports the City has paid $87,000 in property taxes and $313,000 in lease payments for 215 acres of privately-owned land on which Grand Park is being built this past year. The City paid $2.4 million to acquire 185 acres of the 400 acres comprising Grand Park. Hamilton County Assessor Robin Ward tells the IBJ she has never seen anything like this arrangement before, which is saying a lot given all of the funky things Carmel's Mayor James Brainard has done over the past couple of decades. How much the final tab for land acquisition is going to cost is unclear. If the City waits until the end of the 7-year lease, the price will be at least $37,500 per acre, pushing additional land purchase costs up to $13 million.
Ward—who didn’t initially know about the lease agreements—said the assessed-value jumps worried her as property tax bills were sent out. Landowners can appeal assessments, and if successful, throw off property-tax-revenue estimates.
“We’re going to blow this assessment wide open, and this poor little guy is going to get the bill,” Ward said, speaking generally about the private property owners. “I didn’t want this guy to open up his tax bill and have a heart attack.”
She said she called Westfield officials to discuss her concerns and they told her not to worry about it—that an agreement was in place for the city to cover the extra costs.
“I’ve never in the years I’ve been assessing seen anything like that,” Ward said. “Nobody seemed concerned about it but me.”
The lease agreements for the private land are for seven years, which is when Cinderella's golden carriage turns into a pumpkin and the City has to cough up money to buy the land on which improvements have been built and pray its rosy revenue projections from the facility pan out to cover the multi-million dollar annual cost of supporting the facility. The City is paying the property taxes on the improvements to the land until that time. It's paying about $300 an acre to lease the land from the private landowners, who pay the property taxes on the unimproved value of the property as farmland. As the land is rezoned and reassessed at a much higher value, the City is picking up the tab for the higher property taxes. City officials say this is no big deal since Grand Park is located within a TIF district and it's essentially making payments to itself. In every other case where a governmental entity leases property from a private landowner, it's the private landowner who is responsible for paying the property taxes. This was just a way city officials could do the project on the sly so that taxpayers wouldn't learn how much Grand Park actually costs them until years down the road when there's no turning back.

The IBJ sought comment from the Indiana Fiscal Policy Institute's John Ketzenberger, who naturally thinks it's going to be a good deal for taxpayers. “It’s a risk, but it’s not an outrageous risk,” Ketzenberger said. “The potential for the community in terms of tax revenue based on the activity that will occur there will be much greater than it could have been as farmland.” Ketzenberger, incidentally, has no qualification as a fiscal policy analyst. He's a former State House reporter who was popular with lawmakers and lobbyists so they gave him a cushy job running the nonprofit organization controlled by a bunch of State House lobbyists. The only notable thing the organization does is sponsor the annual gridiron dinner where the lawmakers, lobbyists and reporters get together to get liquored up and entertain themselves with x-rated jokes, and to see who can succeed in  scoring a one-night stand with young State House interns. Any objective observer could only conclude Westfield's mayor and city council members are either grossly incompetent public officials, or they are entering into one-sided deals with favored private developers because there is something in it for them. Eventually, Westfield taxpayers are going to wind up with a big white elephant whereupon the finger-pointing will begin.


Anonymous said...

So Gary you're telling me Westfield built a permanent facility on ground that they leased for only a few years? Meaning the last very large bills won't come due until long after the project is complete? Wow. Is that remaining 215 acres under contract so they at least locked in the price? Also purchasing 185 acres for 2.4M is too cheap and suggests there's more to the story. Developable ground in this part of Hamilton County typically goes for 50k per acre. They only paid 13k. Thanks for posting this Gary!

leon dixon said...

John is connected with a group whose sole interest seems but to be the growing of government.

Anonymous said...

This is just so incredible. Not as though Advance Indiana hasn't been sounding the alerts. Call me a cynic but as I think about the utter stupidity of building a permanent structure on short term leased land.... I wonder if there most definitely a method to Mayor Cook's corrupt Grand Park... what a wonderful way for legal payoff(s) if no longer term purchase price lock in has been secured and freehold owners can demand all they want... what's Cook/Westfield gonna do, move the Park?

Yes, Anon 10:42, there must be far more to this story than meets the eye. And perhaps one of these days the Westfieldians will arise from their stupor and realize how they've been hoodwinked.

Anonymous said...

Ketchup-burger used to be a journalist. Those days are gone.

Gary R. Welsh said...

If the land is acquired at the end of the 7-year lease, the City will have to pay at least $37,500 an acre for it.

John Accetturo said...

Only government would be so stupid to build on property leased for a short period. They did this to lock in future elected officials into buying the property and avoiding the expense while they are in office. Elected officials have become experts at pushing the can down the road. Just ask the expert Mayor Brainard.

Anonymous said...

These "deals" invite the claw back provisions of existing law.

Sir Hailstone said...

Nothing amazes me about these clowns anymore. Andy Cook - bankrupting Westfield just like he bankrupted his trucking company.