Study Shows TIFs Claiming $320 Million Annually

The politicians and their mouthpieces in the media want you to believe that schools in Indiana don't have enough money to operate because of Indiana's property tax cap law that limits the maximum percent of a property's value that can be taxed. A new study released by Ball State University shows that TIF districts statewide siphoned off about $320 million in property tax revenues annually from other taxing districts. Schools are impacted the hardest. Not surprisingly, Marion County takes top billing. Here's a rundown of how much municipalities in area counties siphon away from other taxing district to fund mayors' slush funds:

• Marion County-$63.1 million
• Hamilton County-$21.5 million
• Hendricks County-$10.6 million
• Madison County-$8.7 million
• Johnson County-$5.8 million
• Boone County-$2.3 million
• Hancock County-$1.9 million
• Shelby County-$1.8
• Morgan County-$897,000

An interesting finding in the study produced by Michael Hicks was that consultants are getting paid about $30 million a year to encourage municipalities to exploit Indiana's TIF law. "Hicks said it could be a reason why TIF regulations haven’t improved. Those firms want TIF use to continue." "It’s a cash cow, and I get that," Hicks said.

Marion TIF Funds Provided To Mayor's Business Partner, Later Let Off The Hook Financially

The Marion Chronicle-Tribune exposes more transactions involving the use of tax increment finance district funds by the city that benefitted businesses owned by the business partner of Mayor Wayne Seybold, who is seeking nomination at next month's state GOP convention for the office of state treasurer. In the latest disclosure, the Chronicle Tribune reveals two transactions where loans backed by TIF district revenues were made to two businesses, Western Place and Active Properties, both owned by Jim Swan. According to the newspaper report, Swan co-owns with Seybold a portable ice rink company, Ice Rinks 2 Go. Swan is also a member of the city's Board of Public Works and Safety, whose board members are appointed by the mayor.

In December, 2008, city officials approved the use of $1 million in TIF loan proceeds for Western Place to make improvements to retail property that was later used for Moe's Southwest Grill and Culver's frozen custard franchise. The restaurant franchise is a partnership involving Swan and several other partners, while the Culver's is owned by Swan and another immediate family member. The portable ice rink company co-owned by Swan and Seybold is located in a building adjacent to the building where the TIF funds were invested by Swan. Swan's Active Properties also received $1.6 million to redevelop what is described as a brownfields site. The loan proceeds helped with environmental clean-up to make the property which formerly housed a factory operated by Active Products suitable for reuse. Swan leased the property to JSG Processing, a company which processes spent limestone for reuse. It is owned by Christoper Gandolfo of Fort Wayne. JSG Processing also received $500,000 in TIF funds.

The Chronicle-Tribune reports that although the original bond documents listed Swan's companies as the borrower responsible for repayment of the loan proceeds, the documents approved by the city's Redevelopment Commission, most of whose members are appointed by the mayor, pledged TIF revenues to repay the borrowed amounts. Swan's companies were only expected to repay loan proceeds to the extent TIF funds were inadequate to repay the bond debt. Swan defended the investment of the city's TIF funds in his businesses, noting their use for out-of-town interests. "If we're giving increment to people coming from out of town," he said, "I need that competitive (edge)."

The newspaper previously reported that Marion officials had provided $2.5 million in funding to a Korean businessman, Michael An, to redevelop a former YMCA building for a mixed use. Mayor Seybold's brother worked for a company that An established to redevelop the building. The City's building commissioner, Larry Oradat, also owned a construction company that performed work on the building. An's project later failed to come to fruition, and his property was ordered sold at a sheriff's sale after he failed to pay taxes on it. Oradat's construction company has filed a lawsuit against An's company for money it claims it is owed for construction work it performed on the building. The Chronicle-Tribune previously reported that city officials refinanced the debt owed on the YMCA project as part of a larger bond issue and relieved him of all liability for the $2.5 million in loan proceeds provided to him for his project. Marion city officials were unable to account for how over $2 million in bond proceeds issued to An were spent.

It turns out that the bond refinancing deal in 2009 for An's debt also included a refinancing of the prior bond proceeds that benefitted Swan's projects. Like An, Swan's businesses were released from any liability for repayment of the debt as part of the bonds issued to refinance the old debt. Swan told the newspaper that he was unaware that the debt had ben paid off until he got a letter saying that it was done to obtain a better interest rate for the city. The Chronicle-Tribune cites city council meeting minutes where the city's attorney, Barnes & Thornburg's Bruce Donaldson, had assured council members otherwise. "The city would not have any liability on it," Donaldson told council members at the time the TIF funds were approved in 2008 for Swan's Western Place. "If that (TIF) doesn't generate enough to pay them, then the company would be on the hook for the difference."

Seybold is favored to win his state GOP nominating race for state treasurer next month where he will be opposed by businessman Don Bates and treasurer's office employee, Kelly Mitchell. Seybold is backed by many party leaders around the state. Democrats are expected to nominate Mike Boland, a former Democratic lawmaker from Illinois who moved to Fishers, Indiana from the Quad Cities in Northwestern Illinois in 2012. Boland represented a district in the Illinois House of Representatives for 16 years before losing the Democratic primary race for lieutenant governor in 2010. He also lost a 2012 state senate primary race in Illinois before moving to Indiana later that year.

Indianapolis Diverts Nearly $120 Million Annually To TIF Slush Funds

UPDATED: Fellow blogger Pat Andrews continues to do yeoman's work ignored by the mainstream media about the financial hole created in Indianapolis' city-county budget through the diversion of property tax revenues to TIF slush funds used to finance development projects for the politicians' campaign contributors. The latest numbers she's obtained from the Marion County Auditor's Office show that Indianapolis' far-flung TIF districts are expected to capture close to $118 million this year in property tax revenues. The consolidated downtown TIF district alone will capture $68 million. About $2 billion worth of the assessed value of real property in Indianapolis falls within a TIF district. These figures don't even account for the hundreds of millions of dollars lost annually through property tax abatement passed out by the administration and council to reward campaign contributors.

The numbers for the new North Midtown TIF are quite startling. In its first year of operation, the TIF district went from a zero increment to $470,000 despite the fact that there was no new construction to add to the TIF's increment, $283,000 worth of property within the district was demolished and over $755,000 came off the tax rolls due to tax abatements awarded by the council. So how could $470,000 be attributed to the increment? According to Andrews, all property tax abatements granted prior to the creation of the TIF district are attributed to the newly-created TIF district. Note: Andrews corrected her initial number for the North Midtown TIF, which was incorrectly stated as $470 million instead of $470,000. She now estimates the old abatements will spin off about $4 million to the TIF district over the next decade.

Meanwhile, the Ballard administration is gloating over another planned downtown development being announced today that Cummins intends to build a $30 million corporate office building downtown on the remaining Market Square Arena property adjacent to Flaherty & Collins' planned 28-story, high-rise luxury apartment building to which the downtown TIF will contribute at least $40 million over the next 25 years. According to the Star, Cummins will receive a 10-year tax abatement and will be donated the land valued at $4.3 million. The City will also spend $3.3 million to build a new parking garage and other infrastructure improvements for Cummins. Add up all the benefits and city taxpayers are fronting at least one-third of the cost of constructing the $30 million building. The office building will house up to 400 employees, about 100 of which will initially come from office space the company currently leases at two other downtown locations. Cummins plans to transfer about 150 employees from its Columbus office to the new location.

You people need to ponder these numbers very carefully. This administration and our city-county council will be going public with a plan to raise your taxes within the next few months, which you will be told is absolutely necessary to adequately fund public safety and pay for basic city services. That's in addition to the new income tax the mayor and council intend to levy on you to pay for an expansion of the mass transit system into a regional system that extends into the suburbs. In 2007, your income taxes were raised 65% for what was dubbed as a public safety tax increase. This administration and council diverts more money to the TIF slush funds every year than you started paying in higher taxes back in 2007. We don't have money to pay for basic services because these rat bastards believe that funding the private development projects of their largest campaign contributors is more important than spending our money for the purposes it was intended to be spent. TIFs are nothing more than a criminal racket that grants a license to our elected officials to steal our tax dollars and give them away to people stuffing money in their pockets. Until you rise up and stop this madness, this criminal racket will continue unabated, your taxes will keep rising and your standard of living will continue to fall as it has precipitously over the past several years. You must get in the politicians' faces, show them your intense anger and make them fear for their political lives if you expect any changes to come.

Yesterday, Gov. Mike Pence signed into law massive tax cuts for businesses that will do nothing more than create a shift in taxes to individuals. The corporate tax rate is being slashed to a rate Gov. Pence boasts will be the second-lowest in the country. That legislation also allows local governments to award super tax abatements to businesses for up to 20 years on their personal property business taxes. That's likely to set off a competition among communities across the state to see who can outdo other communities in offering larger tax breaks to attract businesses to move within the state to localities promising the least amount of taxes. Somebody has to pay for all of this madness, and the burden will ultimately fall on individual taxpayers. You mark my word.

State Auditors Office Says Marion Officials Should Have Documentation For More Than $2 Million In Missing Bond Funds Spent On Failed Project

Last month, I discussed the discovery of a Chronicle-Tribune investigative report that uncovered the fact that documentation for more than $2 million Marion city officials spent from a $2.5 million bond issuance for redevelopment of the old YMCA building cannot be furnished. In 2009, Marion Mayor Wayne Seybold's administration obtained city council approval to issue $2.5 million in bonds to aid a Korean businessman from California, Michael An, in redeveloping the closed YMCA building for a mixed use purpose. Two years later, Marion officials refinanced that debt after the project failed with little work to show for the investment and the building still vacant and the property subject to sheriff's sale for failure to pay property taxes. When the Chronicle-Tribune attempted to obtain documentation for how more than $2 million of the bond proceeds was spent, city officials claimed no documentation for the spent funds existed.

The State Board of Accounts tells the Chronicle-Tribune's Karla Bowsher that the $2.5 million in bond proceeds, by law, should have been deposited into a dedicated construction account. "You should have been able to track all those (construction fund expenditures) beginning to end," the State Board of Accounts Charlie Pride told Bowsher. City officials provided the Chronicle-Tribune no bank statements detailing the construction fund account, including receipt for vendor invoices detailing any expenditures spent on renovation work at the YMCA building in response to its public records request. What little documentation was provided showed that renovation work on behalf of An's Global Investment Consulting had been paid out to another company owned by An, World Enterprise Group.

Raising alarming conflict of interest concerns is the fact that Mayor Wayne Seybold's brother, Chad, was employed by and earning money from World Enterprise Group. According to the Chronicle-Tribune, Seybold served as a director of operations and construction for the company at the time. A company owned by Marion Building Commissioner Larry Oradat, Erma's Home Improvement, is suing World Enterprise Group for construction work it claims it is owed by An's company for work on the building. City council members tell the Chronicle-Tribune that they are becoming increasingly concerned, particularly since Mayor Seybold's administration won't comment on the missing documentation for the more than $2 million debt the city is on the hook for repaying with TIF funds.

Meanwhile, a Whitley County businessman, Bill Reece, tells the Chronicle-Tribune that his company, RCM Real Estate, has entered into a contract with An's Global Investment Consulting to purchase the YMCA building. Reece declined to discuss his plans for the building or any work that was supposed to have been completed with the more than $2 million in missing construction funds.

Another Taxpayer Boondoggle In The Making In Greenwood

Who needs tax and spend Democrats when we have plenty of Republican elected officials in this state who are equally as irresponsible in handling public expenditures? Greenwood Mayor Mark Myers promised his city taxpayers that a new $10 million aquatic center in Freedom Park would pay for itself. Now that the project has been approved and construction is set to begin next month, a consultant is telling Greenwood officials they'll need to find $200,000 a year to cover the costs of operating the aquatic center. Mayor Myers tells the Indianapolis Star that he will try to make up the shortfall with design changes or charge higher fees. Where is the money coming from to build the aquatic center? A TIF district, of course.

Council Committee Approves $23 Million Gift To Big Campaign Contributor To Build Luxury High-Rise Apartment Building

The theft of public funds in Indianapolis continues to accelerate. The Metropolitan & Economic Development Committee tonight gave approval to awarding a $23 million gift to Flaherty & Collins in appreciation for all of the campaign dough they're stuffing in the politicians' pockets to fund their 28-story luxury apartment building to be built on multi-million dollar prime real estate downtown that was stolen from the taxpayers and given to this selfish, greedy developer to develop for use by the top 1%.

TIF funds are being used for this project at the site of the former Market Square Arena even though it's not located within the downtown TIF district, something that is not supposed to happen. The rules can be bent any way they like when there is a big campaign contributor to reward. Because the money is being borrowed, you're really gifting this developer about $40 million when interest is included.

Once upon a time, any elected official who would misappropriate public funds the way our elected officials in the City of Indianapolis do with our taxpayer dollars today would be prosecuted and sent to prison for lengthy terms. The members of this committee played a dance with this real estate developer for the past several months, pretending that they found the deal presented to them to be unacceptable. We now know that it was a game to extort favors in secret discussions to which the public was not privy. They adopted the proposal exactly as it was served up to them by the corrupt Ballard administration.

Until the FBI and the U.S. Attorney's Office get off their butts and start doing their jobs, we are going to continue to see hundreds of millions of tax dollars be pilfered to reward those who are stuffing money in the politicians' pockets. Make no mistake about it. Indianapolis is the most corrupt city in all of America. There is nothing on the scale of public corruption that is taking place in any other city in this country right now. It is clearly going to take a taxpayer revolt to turn these bastards out of office before we have any hope of restoring sanity to our local government. These people are so out of touch with their constituents it is beyond belief.

UPDATE: I want to correct misconceptions being reported in the local news media that the council committee obained a concession from the developer on local hiring. A TIF ordinance previously passed into law by the council requires businesses that receive TIF grants for their development projects to achieve a goal of hiring at least 40% of the workers used for construction on the project from Marion County unless they can demonstrate that despite good faith efforts the goal couldn't be achieved. The City and this developer take the view that the local hiring ordinance doesn't apply because the project is not located within a TIF district, even though TIF funds are being used to finance it. Again, we have another case of the rules being bent to serve one's ends. We don't have to follow the rule that TIF funds only be used for projects within the TIF district, but we're not going to be bound by the rules that are supposed to apply to TIF projects.

The developer agreed to a target of 30% but will only be penalized if it achieves 25% local hiring; however, there is no penalty. The city's economic development director Deron Kintner suggested that the penalty might be a claw back of some of the monies disbursed to the developer. That won't happen. No developer has ever been penalized by this city for failing to do something they promised to do with our tax dollars. This developer will not reach the local hiring goal, and you can take it to the bank that contractors on the work site will utilize a large number of undocumented aliens who are paid well below the prevailing wage rate for construction workers in Marion County and receive no benefits. If any of them get injured on the job, they will be transported to Eskenazi Hospital for medical treatment where they will be provided free health care courtesy of the taxpayers per standard operating procedure in this county. That's the ugly truth the dishonest news media in this town will never tell you about. And contrary to the media meme, this is not what council members have been debating with this developer and the Ballard administration for the past few months; they've been debating behind closed doors what's in it for me if I vote for this multi-million dollar give away.

This developer claims it has a lot of skin in the game. Au contraire. Not one dime of the developer's personal funds are at stake; the developer is relying on taxpayer dollars and borrowed funds that will go to this newly-created limited liability entity. If it fails, the developer will file bankruptcy on the legal entity and walk away just like occurred with its high-rise development in Charlotte, North Carolina that sat vacant for years.

Company Owned By Marion Building Commissioner Suing Korean Businessman Who Failed To Redevelop YMCA Building After Receiving $2.5 Million In TIF Funds

Advance Indiana recently told you about how a Korean businessman from California managed to land a $2.5 million TIF grant from the city of Marion to redevelop the former YMCA building but failed to carry though with the redevelopment plan as promised. The Chronicle-Tribune reports today that a company owned by the city of Marion's building commissioner, Larry Oradat, is suing Michael An's company for construction work it says it performed on the building for which it was never paid. Mayor Wayne Seybold's brother, Chad Seybold, worked for An's company at one time.

 . . . Erma’s Home Improvement — whose agent and president is Larry Oradat, Marion’s building commissioner — is involved in a dispute with World Enterprise Group. The registered agent and president of World Enterprise Group is Michael An. In 2009 and 2010, World Enterprise Group was listed on invoices totaling about $2 million for renovations to the former YMCA building. An also employed Chad Seybold, the brother of Marion Mayor Wayne Seybold, for a time.

The lawsuit claims World Enterprise Group “breached (a) contract by not paying the amounts due and for not allowing the defendant to complete the work that was contracted,” according to a lawsuit filed Nov. 14 in Grant County Superior Court I.

Court documents do not state where Oradat’s company performed work for An’s company. Nor does it state the amount owed. According to the defendant’s written response to the lawsuit filed Dec. 10, the two parties did enter into a contract for construction work to be completed by Erma’s Home Improvement for World Enterprise Group. Citing the quality of the work, World Enterprise Group contends Erma’s Home Improvement is not owed any payment.

“The work that the plaintiff did do was of a shoddy, unsatisfactory and unworkmanlike quality,” the document reads. “Plaintiff is in breach of the said contract and, due to such breach, defendant has no duty to pay any amount to plaintiff.” No further documents have been filed on the case then, and records show the case remains pending . . .

An's original plan for redeveloping the YMCA building included a hotel, restaurant, spa and men's and women's clothing stores. No visible work has been performed on the exterior of the building since An purchased it, and the property has subsequently been placed on the auction block for failure to pay the property taxes owed on it. The city of Marion has since refinanced the original $2.5 million bond issue.

A public records request by the Chronicle-Tribune recently failed to produce documentation of where more than $2 million raised from the bond issue was spent. Oradat's lawsuit against An's company doesn't indicate how much Oradat claims he is owed by An. It's unclear why the state's conflict of interest law wouldn't have prohibited Oradat's company from participating in a construction project financed with public tax dollars while he served as the city's building commissioner. Per standard operating procedure, no criminal investigation is opened by federal or state prosecutors in this state when public funds are pilfered through TIF financing schemes.

Fishers' Taxpayers Contributing $9.5 Million For Private Development

I don't know what it's going to take before the people of this state finally wake up and figure out the large theft of public funds that is taking place up and down this state with the assistance of bond lawyers and financial consultants at big Indianapolis firms who pretty much pull the strings of all of these local officials like puppets. WRTV's Kara Kenney has a story on a new TIF project for Fishers where taxpayers are being required to pony up $9.5 million for a private developer's $28 million plan to demolish the town's 18-year old train station to make way for a mixed used development that will feature apartments, retail space and a parking garage. The $9.5 million is to be used for construction of a parking garage.

The Town of Fishers has awarded the project to Loftus Robinson, a three-year old Indianapolis development firm whose principals are Drew Loftus, Kyle Robinson and Terry Myers. The town's tax increment finance (TIF) allocation area will be tapped to fund the $9.5 million parking garage. Presumably, bonds will be floated by the redevelopment area, which means the actual cost to taxpayers will be considerably more when you add in the interest charges on the long-term debt. The $9.5 million also doesn't include the three acres of prime land the town is donating to the developer's project. There's no indication on the appraised value of the land.

What has irked several candidate for election at Fisher's municipal election this year, its first as a city, is the fact that this project was awarded to Loftus Robinson as a no-bid contract. While the town council put out for bid a project across the street from the train station through a request for proposal process, no RFP process was utilized for the train station project, although it was subject to council approval.

Kenney took her questions to town council vice president Pete Peterson who explained the train station project is part of the town’s master plan.

“I think if you look at the original RFP we talk about a vision for the downtown area,” said Peterson.

“There were six original bidders which absolutely knew there was a phase 2 and what we were going to be looking for there.”

Peterson said the town contemplated putting the phase 2 portion, also known as the train station development, out to bid.

“The town looked at that, that was a possibility,” said Peterson. “There was a group that approached us where we were able to negotiate the best deal for the citizens.  Many times you can put out an RFP and it kind of locks your hands up.”

Peterson points out the mix of apartments, retail and parking will bring in approximately $300,000 in property tax revenue to Fishers’ coffers.

“The negotiated deal was a super deal for the residents,” said Peterson. “It’s going to be a terrific development when it’s done.  They’re going to see a much improved train station.”

Peterson said some of the criticism is suspect.

“Absolutely, it’s politically motivated,” said Peterson. “We’re getting ready to head into the first city election.”

Peterson disputes claims the project was not transparent.

“We’ve had over 20 public meetings on the downtown project, from phase 1 to phase 2, to the amphitheater, there’s been 20 public meetings on the project,” said Peterson.

Kenney questioned town manager Scott Fadness, a candidate for mayor, about a $250 campaign contribution he received from Loftus Robinson and whether that influenced the decision. "With regard to your question about campaign contributions for the mayoral race, my campaign has raised nearly $150,000 and the Loftus Robinson company contributed $250," said Fadness in an email to RTV6. "Any large policy decision and any expenditure over $50,000 must be approved by the Town Council." More telling were the large contributions Fadness reported receiving from various law firms that do business with Fishers, along with a host of civil engineering firms, construction firms and other development interests who've benefitted directly from past decisions made by the Town of Fishers.

On a disappointing note, the Senate Tax and Fiscal Committee gutted a bill that set out to reform Indiana's TIF law. The committee removed a cap HB 1266 would have imposed on the percentage of assessed valuation in a county that could be placed within a TIF district. The cap would have been set at 12% of AV in a county, except for Marion County, where it would have imposed a cap of 10%. There were at least five counties in the state where TIF districts consume more than 12% of the AV. Marion County also easily exceeded the cap HB 1266 would have imposed on it. So when the politicians tell you that there isn't enough money to fund basic government services because of property tax caps, tell them they're full of it. There's not enough money to fund government because the politicians choose to hand out property tax abatements like candy and divert a substantial percentage of property tax revenues into the TIF slush funds so they have plenty of public dollars to hand out to their big campaign contributors.

UPDATE: There' more TIF madness in Indianapolis.  Mayor Greg Ballard is holding hostage a plan to fix up Tarkington Park until he gets approval of a $5.7 million payoff to the politically-connected Browning Investments, whose owner contributes shit loads of money to the politicians, to fund his Whole Foods development project in the booming Broad Ripple Village. The Tarkington Park project would get just $1 million in TIF funds from the same TIF district that extends over a good portion of the city's central north side, in exchange for the deal. The park project would get an additional $3 million in ReBuild Indy funds, the slush fund generated by the extremely corrupt sale of the city's water and sewer utilities, and another $1 million from the Indy Parks foundation. It's a damn auction down here in Indiana. Get the hell out of Chicago and get to Indy right now where our public officials have billions of dollars to hand out as long as you grease the right palms. The best part of it is that you don't have any pesky prosecutors down here to look over your shoulders; they're all in bed with the criminal rackets that control our government here. Even better, the media down here, particularly the Indianapolis Star, will portray you as a great civic leader while you're doling out bribes to everyone instead of conducting the investigative journalism people of their profession are supposed to do.

Marion City Officials Unable To Account For $2 Million In TIF Bond Proceeds For Failed Redevelopment Deal With Korean Businessman

The Marion Chronicle-Tribune continues to perform investigative journalism virtually every other major newspaper in Indiana has ceased doing. "Where did the money go?" seems to be a common theme of their reporting of late and for good reason. In 2009, the administration of Mayor Wayne Seybold obtained approval from the town's council to issue up to $2.5 million in tax increment financing ("TIF") bonds to a little-known Korean businessman from Ontario, California, to purchase and redevelop the city's recently-closed YMCA building on Third Street. Five years later, the building sits undeveloped and has been put on the selling block for unpaid taxes. No visible work has been done on the building, and the property generated no bids when it was offered at a tax sale last year. When the Chronicle-Tribune set out to learn what happened with the money through a public records request, it learned that city officials couldn't account for how at least $2 million of the bond proceeds had been spent.

This saga began when Korean businessman Michael An's Global Investment Consulting, a Nevada corporation, approached city officials in 2009 about redeveloping the vacant YMCA building. An's local business representative was Chad Seybold, brother of Mayor Seybold. An's $6 million redevelopment plan included adding a dry-cleaning business, men's clothing store, women's clothing store, spa, hotel and restaurant to the vacant building after renovations. An told city officials that the project would add between 80 to 90 new jobs with an annual payroll of between $1 to $2 million. Anyone who drove by this location, knew a little about Marion's economic situation and turned on his or her brain for a few minutes would quickly conclude it was a half-baked deal that had no realistic chance of success. Unfortunately, no due diligence was performed before proceeding with the investment of public tax dollars in the project.

An was described to local officials as "a Korean-born investor and retired businessman in California." According to Nevada Secretary of State corporation records, An appears to be the sole shareholder of Global Investment Consulting. An individual by the name of Claude Brock, who serves as a registered agent for multiple businesses, is identified as the company's registered agent. A Google Earth view of the business address for Brock shows a high-rise residential building a few blocks off the Las Vegas strip. A business address in Santa Ana, California is also listed, which appears as a small residential house on Google Earth. The Indiana registered address for Global Investment Consulting according to the Secretary of State records is the vacant YMCA building with An listed as the registered agent at that address. That foreign registration occurred the same month that Marion's common council approved the issuance of $2.5 million in TIF bonds for the project. Global Investment Consulting's business address is listed in its Indiana filing as a post office box in Cucamonga, California.

Further research reveals that Global Investment Consulting is listed as one of the few regional centers in Indiana certified for the controversial foreign immigrant immigrant visa program known as EB-5, although it doesn't appear to have operated as a regional center. Under this immigrant visa program, foreign investors can get a green card for investing at least $1 million in a qualified American investment, or $500,000 if the business investment is made in an area that qualifies as a depressed economic area.

The EB-5 program's controversy was raised in a December 15, 2012 investigative series by the Indianapolis Star titled, "The China Letter." The investigative series focused on Monica Liang and her controversial role as a former consultant to Mayor Seybold and the Indiana Economic Development Corporation's former executive director, Mitch Roob. Liang, a Chinese immigrant, had defrauded a Chinese billionaire out of $50,000, which she represented to the billionaire was part of a plan to invest in a building that she owned in downtown Marion that was to be redeveloped as a nursing home for veterans.

According to the Star, Liang had misrepresented to Ao Yuqi, the Chinese billionaire, that Gov. Mitch Daniels, Mayor Seybold and Mitch Roob were shareholders in the company that planned to redevelop her building. Ao had expected to obtain a green card as part of his investment in the project as an EB-5 investor. Liang, who was in her early 40s, later died under bizarre circumstances after going into cardiac arrest while a Chicago attorney, Thomas Gehl, who was advising her on the EB-5 program, was visiting her at her apartment in Carmel a short time after Roob had fired her as a consultant to the IEDC after learning of her misrepresentations and fraud and had stepped down as head of the state agency. Roob denied to the Star that he had a sexual relationship with Liang, who had traveled on trips to China with Gov. Daniels and Mayor Seybold as part of larger trade delegation to Asia. It is unclear what, if any, role Liang may have had in introducing Michael An's investment to Marion city officials, although it would have been consistent with her economic development activities with the city during that time period.

An's Global Investment Consulting entered into a loan agreement with Marion for $2.5 million as part of the redevelopment plan for the YMCA building he acquired in February, 2009 in which the city agreed to take out the $2.5 million bond "for financing the construction of the project to create additional employment opportunities in Marion, Indiana, and to benefit the health, safety, morals and general welfare of the citizens of Marion and the state of Indiana." The bond indenture and related loan agreements were prepared by Barnes & Thornburg's Bruce Donaldson, while London Whitte's Bob Swintz acted as the city's financial adviser on the transaction. First Farmers Bank & Trust, which held a $5 million mortgage on the YMCA building, acted as trustee. Repayment of the bonds were to be paid out of TIF revenues generated by Global Investment Consulting's redevelopment project. Obviously, no revenues have been generated by the now-defunct project to pay debt service on the bond issue. According to the Chronicle-Tribune, the city refinanced the outstanding bond obligation less than two years later  in February, 2011 as part of a new $5.8 million bond issue. Swintz told the Chronicle-Tribune that the refinancing was undertaken to get a lower interest rate. The bonds are not scheduled to be paid off until 2021.

Shockingly, Marion city officials were unable to produce bank statements, receipts, vendor invoices, or check or wire transfer records to account for how more than $2 million in bond proceeds were spent for An's project. Mayor Seybold, who is a Republican candidate for State Treasurer this year, refused to comment on the missing documentation according to the Chronicle-Tribune. Naturally, An was nowhere to be found. The city's development director, Lisa Dominisse, produced just 16 pages of records in response to the newspaper's request. The documents were primarily invoices from business entities tied to the redevelopment project. Half of the 16 pages, according to the newspaper, pertained to expenses related to renovation and construction of the former YMCA building. "Three Global Investment Consulting invoices from 2009 and 2010 list purchases or services like 'roofing' and 'brick work,' but none was accompanied by supporting documents like receipts for the purchases or vendor invoices for the services," the Chronicle-Tribune reported.

Together, the invoices contain 27 line items. Five line items, totaling $98,033, are listed under “Michael An,” the CEO of Global Investment Consulting: “building purchase” ($54,754), “architectural drawings” ($15,000), “attorney fee” ($20,120), “accountant fee” ($6,000) and “water removal cost — basement — new sump pump” ($2,159).

The other 22 line items, totaling more than $1.9 million, are listed under “World Enterprise Group Inc.” with a federal tax identification number next to the company name. These line items include the “roofing” and “brick work” as well as “elevator,” “HVAC” and “plumbing,” for example.

World Enterprise Group was created by An, who is also listed as the company’s president, on May 6, 2010, according to state corporation records.

The city’s record-keeping has repeatedly been cited in annual state audits. Concerns noted in multiple years’ audits include omission of entire city hall departments from annual financial reports, transfer of funds without city council approval and inconsistent bank balance reconciliations.

After Gallaway deferred questions about bond financial records to the bond trustee at the bank, First Farmers Bank & Trust Vice President Tade Powell referred questions to the bank’s general counsel, Stephen Wilson.

Wilson confirmed the bank’s role as trustee, essentially meaning the bank was hired by Marion to hold and disburse the bond proceeds.

“The bond proceeds were deposited into an account held and maintained by the Trust Department of First Farmers Bank & Trust, and these bond proceeds subsequently were disbursed by the Trust Department in payment of (i) the costs of the issuance of these bonds, and (ii) costs of the of renovating the former YMCA building in the City of Marion, including site development,” Wilson said by email.

Wilson did not respond to follow-up questions about the lack of records like bank statements for the account that held the loan proceeds.

The Chronicle-Tribune also detailed bond proceeds paid out to the bond lawyers and financial advisers for the transaction:

• $35,000 went to national law and lobbying firm Barnes & Thornburg, which served as bond counsel;

• $25,000 went to Indianapolis-based financial firm London Witte Group, which served as financial adviser;

• $10,000 Marion-based law firm Kiley Harker Certain, whose partner Thomas R. Hunt served as counsel for Marion’s Economic Development Commission;

• $10,000 went to Marion-based law firm Spitzer Herriman Stephenson Holderead Musser and Conner, whose lawyer Herb Spitzer served as counsel for Marion;

• $2,500 went to First Farmers Bank & Trust Wealth Management, which served as trustee; and

• $25,000 was kept by First Farmers Bank & Trust, which bought the bond.

Advance Indiana uncovered another 200 pages of documents online related to the original bond issue, which can be accessed by clicking here.

The Chronicle-Tribune has blasted Seybold's management of the city's finances at length in recent editorials. A recent editorial accused Seybold of "aggressively spreading untruths about public matters that will affect the city for decades," including a claimed $2 million surplus in the city's budget. According to the editors, the surplus was only made possible because Seybold chose not to pay back the amount due on a $1.7 million loan to the water utility, which was originally scheduled to be repaid  in 2012, and delayed payment of other bills "until next year and beyond." The editors insist that Marion's financial situation has been propped up by piling up more debt to be paid off by future generations. The newspaper attacked Seybold for spending $7,000 in public funds to tout a surplus it claims truly doesn't exist.

One of the running feuds Seybold has with the editors of the Chronicle-Tribune is over the categorization of TIF-related debt. Seybold insists that it's not really city debt because repayment of the debt relies on property tax revenues generated by TIF economic development projects. The developers are the one's repaying the debt he argues; however, when the projects fail as has happened frequently in Marion and elsewhere around the state, the taxpayers are left holding the bag. As the Chronicle-Tribune's editors say, "That is a distinction without a difference." The editors point out that the city has been forced to redirect money generated by other projects within TIF districts to repay all of the projects like An's that failed to pan out.

The Chronicle-Tribune's Karla Bowsher has taken Seybold to task for doling out city contracts to the same people who are backing his campaign for State Treasurer, including Barnes & Thornburg's Bob Grand, who co-chairs his committee with Lake County attorney Dan Dumezich, and Jim Higgins, a partner at London Witte.

London Witte Group has served as financial adviser to the Seybold administration on general matters and particularly on bond transactions since at least 2005, making in the neighborhood of at least $25,000 to $30,000 per transaction, records shows. Barnes & Thornburg has served as bond counsel since at least 2005, making in the neighborhood of $35,000 to $50,000 per transaction.

Seybold pointed out that he has also worked with other firms on such matters during his three terms as mayor, although he has for years regularly used London Witte Group and Barnes & Thornburg for bond transactions.

"You're barking up the wrong tree. I don't make decisions of that kind," Seybold said. I try to hire really good people.

Grand agreed with Seybold ’s hiring of Barnes & Thornburg. "He did the best thing for the city because be got the best firm for the city, he said. "Our qualifications we could put up against anybody."

Barnes & Thornburg partner Brian Burdick, named on Seybold's campaign letterhead, is general counsel for the Indiana Bond Bank, according to the firm's website.

The Indiana Bond Bank is one of the boards that the state treasurer chairs in addition to his duties as the state's chief investment officer. Of the 13 boards the treasurer sits on, the Indiana Bond Bank may be the busiest, said Ball State University political science professor Ray Scheele, because so many local governments are authorized to raise money via bonds.

The Indiana Bond Bank helps local governments secure various types low-cost financing. According to the 2013 annual report of the current state treasurer, Richard Mourdock, the bond bank issued about $517 million in debt on half of local governments during the 2013 fiscal year . . .

It's unfortunate that you won't see this kind of reporting in the Indianapolis Star. Previously, this blog built on original reporting by the Chronicle-Tribune on how state and Marion city officials invested tens of millions of our tax dollars in a company founded and controlled by a California businessman who defrauded more than 500 investors out of $160 million through a Ponzi scheme remarkably similar to the one perpetrated by Indianapolis businessman Tim Durham. The public in Indianapolis doesn't have a clue about what's happening with the hundreds of millions of dollars that have been borrowed and invested in TIF projects, virtually all of which benefit developers that have contributed heavily to Mayor Greg Ballard's and other local politicians' campaign committees. The City of Indianapolis is paying huge fees to the same bond lawyers and financial advisers upon which the City of Marion is relying. We've demonstrated time and time again that city finances are being dictated by those same players. The Indiana State Treasurer's Office is similarly controlled by these same people and apparently will continue to be if these self-serving people get their way. Meanwhile, the taxpayers always wind up getting stuck with the bill for the bad deals this corrupt bunch of actors concoct on behalf of public officials whose decision-making is obviously blinded by the campaign support they receive from them.

Citizens Must Demand U.S. Attorney's Office Launch Criminal Investigation Into The Passage Of Proposal 15

Councilor Vop Osili (D)

What we witnessed at tonight's City-County Council meeting was one of the most blatant criminal acts in the history of Indianapolis municipal government to ramrod into law a proposal that is so clearly designed to steal public funds from much-needed governmental uses and divert them directly into the pockets of pay-to-play contractors and developers who appear to have purchased votes from City-County Councilors to ensure the measure's passage. Councilor Vop Osili (D), the sponsor of the Proposal 15, which expands the downtown TIF district to include some of the most valuable parcels of property in the City to the TIF area, had a direct conflict of interest in the legislation he sponsored because the architectural firm he co-founded, co-owned and in which he owned an interest up to and including this past year, has been compensated to perform work on at least three of the projects contained within the TIF expansion area that will benefit from the passage of Proposal 15.

The debate over the passage of Proposal 15 took a very curious turn when Councilor Vernon Brown, a battalion chief for the Indianapolis Fire Department, announced that he was abstaining from voting on the proposal because he had received a campaign contribution from a developer whose project stood to benefit from the TIF expansion proposal. Brown also stated that his campaign manager was lobbying for the proposal's passage. Oddly, Brown's campaign disclosure statements from last year's municipal election reveal no contributors with a direct interest in the affected projects. This begs the question whether Brown received campaign contribution only recently from the developer in question to influence his vote. No sooner had Brown announced his abstention than came a request by Councilor Bill Oliver to abstain from voting because he claimed to have received campaign contributions from a developer that would benefit from the proposal's passage. Like Brown, Oliver did not disclose the source of that contribution or when the contribution was received. A quick glance of his campaign disclosure statements from last year's municipal campaign, however, reveals two possible contributions he was referencing, including contributions from the law firm of Ice Miller and from Bud Myers, the executive director of the Indianapolis Housing Authority.

Council President Maggie Lewis obviously became concerned after Oliver requested to abstain, suggesting that campaign contributions alone should not prevent a councilor from participating in a vote. Lewis' independence as council president has been questioned since she negotiated and obtained a large grant from the City for her employer, the Dove Center. Lewis also pressured Marion County Assessor Joseph O'Connor to rehire her husband after he was fired by his predecessor, Greg Bowes, for sexually harassing female co-workers in the office and using his office computer for inappropriate purposes. Some critics of Lewis believe she negotiated a quid pro quo whereby she would secure support from her Democratic caucus members on key measures sought by the Ballard administration in exchange for funding for the nonprofit organization that employs her as an executive director. Senior members of Ballard's staff have admonished Lewis not to allow Councilor Brian Mahern, the council vice-president, to accompany her to meetings with the mayor and his senior staff members. Mahern has been a vocal critic of the misuse of TIFs due to the massive loss of property tax revenues for basic governmental services and school districts. Ballard's staff believes it cannot engage in candid discussions with Lewis if Mahern is present at the meetings because of his watchdog approach.

The council's attorney, Fred Biesecker, read to members the text of the city's conflict of interest ordinance, which clearly implicated Councilor Osili but not Councilor's Brown or Oliver. Biesecker added, however, that Councilor Brown was at liberty to request to abstain from casting a vote on a measure if he believed that by participating in the vote that it would create an appearance of a conflict of interest. Councilor Osili, on the other hand, has refused to publicly address his blatant conflict of interest. He even voted against an amendment offered by Councilor Mahern that would have excluded from the expanded TIF area one of the projects on which his architectural firm, A2SO4, had been compensated to perform work, including the  Millikan project being built adjacent to Barton Towers by Flaherty Collins in conjunction with the Indianapolis Housing Authority. According to Deputy Mayor Deron Kintner, Flaherty Collins is also a finalist for the firehouse project across the street and its reviously approved Millikan project is tied to the firehouse project.

Shockingly, despite the disastrous implications Proposal 15 poses to future funding of basic city services and other local units of government, in particular, IPS, not to mention the fact that the proposal was deemed dead under a city ordinance because it remained tabled for more than 6 months, there was absolutely no debate or discussion on passage of Proposal 15 other than brief comments made in opposition to it by Councilor Mahern. Councilor Osili, who has displayed a total lack of knowledge of the content of his proposal throughout this entire train wreck, other than to ensure that projects that directly benefited his architectural firm, benefited from the expansion of the downtown TIF district. The proposal passed on a 25-2 vote, with Councilors Mahern and Zach Adamson casting the only two no votes. Councilor Brown abstained. [Note: An earlier post mistakenly indicated that Councilor Oliver abstained. He voted yes after asking to abstain.] Councilor Angela Mansfield was the only councilor not present for tonight's vote. Mayor Ballard's office e-mailed a press statement lauding passage of the measure that will directly benefit some of his largest campaign contributors. "I thank the City-County Council for its bipartisan vote, which allows us to move forward with catalytic new projects such as the redevelopment of the Mass Ave Fire Station and the 16 Tech corridor that will revitalize our neighborhoods and create and support thousands of jobs," Ballard stated.

The claim that thousands of jobs will be created is a patent lie. Ballard's office rejected a proposal from at least one developer to pay the city $2.5 million for the firehouse parcel and redevelop the property without a dime of money from the city. Ballard rejected that and other more palatable proposals because he insisted that your tax dollars be given directly to contractors and developers who have bankrolled his campaign, lavished gifts on him and his wife and have provided high-paying jobs to his cronies. As we've hammered home many times, these affected parcels have developers ready and willing to develop them without creating a TIF and diverting precious property tax revenues away from funding basic governmental services.

A lawsuit filed by citizen activist Clark Kahlo will proceed in an effort to declare Proposal 15 dead under the revised city code. If U.S. Attorney Joe Hogsett is as serious about combating public corruption as he claims, he will immediately convene a grand jury and begin investigating all of the criminal activity that has occurred over the past several months to ensure passage of Proposal 15. And if the City-County Councilors who voted for Proposal 15 tonight are honest to their constituents, when they have to adopt deep cuts in public safety spending in the coming weeks, they will apologize to them for choosing the interests of the fat cat contributors who bankroll their campaigns over the public safety concerns of their constituents. When they tell you they opposed reducing the number of police officers protecting your neighborhoods, cuts in funding for libraries, IndyGo and city parks, call them a liar because that's what they are. Their vote tonight was to cut funding for all of those services.
This video shows Councilor Mahern's unsuccessful attempt to offer an amendment that would have exempted two projects on which Councilor Osili's architectural firm performed work and which had already been announced prior the introduction of Proposal 15 by Councilor Osili earlier this year.


This video shows the peculiar requests by Councilors Brown and Oliver to abstain from voting on Proposal 15 because of campaign contributions they received and the explanation of the council's conflict of interest ordinance by the council's attorney, Fred Biesecker.

City-County Council Committee Approves TIF Proposal Deemed Dead By City Ordinance

[Updated] Tonight, the Metropolitan and Economic Development Committee unanimously approved Proposal 15, a major expansion of the downtown TIF district to include some of the most vibrant and booming areas of the city economically. Even Councilor Steve Talley, the former chairman who stepped down in disgust as other members of his party took up the measure last month after he gaveled a committee meeting adjourned, voted for it. It is believed that Councilor Talley was told he would be fired from his city job unless he supported Proposal 15. That's how these people conduct business. Proposal 15 is actually dead by virtue of a city ordinance that deems any proposal that lies on the table without action for a period of more than 6 months dead. Nonetheless, the City-County Council is taking a second stab at passage by the full city council after it procedurally botched the adoption of an amendment offered by the proposal's sponsor, Vop Osili, who represents some of the area affected by the TIF expansion, during the committee's action on the proposal last month. [At-large Councilor Zach Adamson was the only no vote among the sitting committee members. An earlier post indicated the vote was unanimous. The voice vote was taken quickly and Adamson's no vote was not audible on the video recording of the meeting on WCTY]

Coincidentally, an architectural firm co-founded by Osili, AS2O4, and in which he declared a financial interest in as of the filing of his financial disclosure statement filed with the council in February of this year following his introduction of Proposal 15, performed work on three projects contained within the expanded TIF district as introduced. One of those projects already completed, Trail Side, was removed from the proposed expansion as a result of Osili's amendment. Two other projects, however, remain a part of it, including the Lockerbie Square mixed commercial/housing proposed by The Whitsett Group, and the Millikan project adjacent to Barton Towers. Osili claims he no longer owns an interest in AS2O4, but the work on those projects likely started before he claims to have divested his interest in the business. Councilor Osili took no opportunity to publicly clarify his relationship with AS2O4 at tonight's council meeting despite the troubling conflict of interest raised by this blog.

I've added five clips from tonight's council meeting that should cause all citizens of Indianapolis great concern about the reckless abandon manner by which the council is pursuing the adoption of this supposed "do or die" economic development opportunity. Fellow blogger Pat Andrews, in particular, does an excellent job dissecting the problems with Proposal 15, while protestations by Councilor Brian Mahern were met with deaf ears by his fellow councilors. Chairman Leroy Robinson literally cut off any debate on final passage of Proposal 15 and shut off Councilor Mahern's microphone in mid-sentence and walked out of the room while he hopelessly attempted to speak. This is an example of what happens when you have a council populated by folks on the government dole or on the take representing you.

Councilor Vop Osili attempting to explain his amendment to Proposal 15.



Councilor Brian Mahern questioning a befuddled Councilor Osili about the change in job commitments from a 40% target to a 25% target.




Fellow blogger Pat Andrews effectively punching holes in Councilor Osili's poorly and hastily drafted amendment and reminding the councilors that Proposal 15 is actually dead by virtue of a city ordinance because it laid on the table for more than 6 months without action. For the record, neither the sponsor nor the administration responded to any of the excellent questions she raised.



Citizen activist Larry Vaughn bringing comical relief to the absurd and illegal consideration of Proposal 15 and drawing the admonition of Chairman Leroy Robinson for calling Councilor Osil illiterate for obviously failing to comprehend his own proposal.

Councilor Brian Mahern tries in vein to bring some reason to the discussion before the measure is passed on final adoption and Chairman Leroy Robinson literally cuts his microphone off in mid-sentence,gavels the meeting adjourned and walks out of the committee hearing.

Osili Must Provide Full Disclosure Of Any Financial Interest In TIF Legislation

UPDATED: The biggest proponent of the controversial downtown TIF district expansion along Mass Avenue has been City-County Councilor Vop Osili. By trade, Osili is an architectural engineer. He was a principal and co-founder of the A2SO4 firm located at 300 S. Meridian Street in the Union Station building adjacent to the powerhouse architectural engineering firm, R.W. Armstong. A2SO4 is a certified minority business according to state records, which gets spin off work from government contracts that contain compulsory MBE requirement goals. Osili supposedly sold his interest in the firm to Sanford Garner when he ran for Secretary of State. When asked by radio talk show host Amos Brown whether he had a financial stake in the expansion of the downtown TIF district, Osili adamantly denied that he did. Osili replied with words to the effect, "I ain't got no nickel in that dime." His Linkedin listing, however, still identifies him as an owner of the firm. Osili brokered an amendment to his proposal with the Ballard adminstration that will specifically benefit minority businesses. More importantly, the financial disclosure form he filed this year after becoming a councilor states that he received from A2SO4 compensation in excess of $5,000 in the previous year, which he identifies as his employer. Osili completed and signed his financial disclosure form on February 1, 2012.

According to the firm's website, A2SO4 is partnering with Ratio Architects on the Millikan on Mass Ave project adjacent to Barton Towers and directly across the street from the firehouse parcel in the 500 block of Mass Ave. A news announcement on the firm's website reads:

The project, tentatively dubbed The Millikan on Mass Ave after an apartment building that once stood on the site, is being designed by Ratio Architects and A2SO4. Millikan on Mass Ave will be a $23 million residential and retail development planned for the land surrounding the Barton Tower apartments along Massachusetts Avenue between Michigan and East streets. The project is a partnership between Flaherty & Collins Properties and Insight Development Corp. It calls for a mix of 144 affordable and market-rate apartments and retail/restaurant space along Mass Ave.

That's not all. The Mass Ave TIF district expansion will reach over and include property two blocks east of Mass Avenue in the Lockerbie neighborhood where I reside. I attended a meeting of the Lockerbie People's Club neighborhood association where The Whitsett Group tendered its proposal to redevelop the vacant property bounded by Michigan and College. The design firm which presented the renderings for the Whitsett Group was none other than A2SO4. The presenters of this minority-owned firm at my neighborhood meeting were all white. Originally, the developer stated that it intended to utilize government housing credits to develop affordable apartments as part of the mixed use project. Later, the developer told the IBJ it was moving forward with the project without the government tax credits. The same news was communicated to the neighborhood through the neighborhood newspaper, "The Urban Times." From the IBJ:

The developer of what was to have been a tax-credit-financed project in Lockerbie Square now intends to develop market-rate housing instead.

The Whitsett Group announced last summer that it would build 190 affordable and market-rate apartments and 44,000 square feet of retail and office space in three mid-rise buildings at the northwest corner of Michigan Street and College Avenue.

Whitsett was counting on selling state-issued affordable housing tax credits to finance the $27 million project, but it wasn’t among the projects awarded credits by the Indiana Housing and Community Development Authority earlier this year.

“We came up just a few points short,” said company principal Joseph E. Whitsett. “But we own [the land] and we are going to develop it.”

Whitsett said his company anticipates breaking ground next spring on essentially the same project, minus the affordable housing component. By that time it should be the second market-rate project for Whitsett, which up to now has focused on affordable housing.

Interestingly, A2SO4 is renovating the old church facing North Street, which is just north of the vacant property that The Whitsett Group is developing, as its new offices. That parcel is included in the expanded TIF district as well. According to A2SO4's website, the firm was also architect on the recently completed Trail Side project at the north end of Mass Ave. The original TIF expansion included this property as well, even though work on it had already been completed. It sits across the street from the Coca-Cola building the Ballard administration has included it in the TIF for redevelopment once IPS' transportation center is relocated. TIF money is to be used to relocate the transportation center.

At tonight's committee hearing, Deputy Mayor for eoncomic development Deron Kintner told committee members that this parcel was included in the Mass Ave TIF expansion plan because develpment of this parcel was contingent upon the pending development plans for the firehouse property two blocks away. Either Kintner is a liar, or Joe Whitsett is a liar. Whitsett said nothing about his development plans for the property in my neighborhood being contingent upon the expansion of the downtown TIF district, or more specifically, the development of the firehouse property on Mass Avenue. My neighborhood includes some of the highest assessed residential property on a square foot basis in the state of Indiana. We don't need your public tax dollars to make development occur in our area. Don't believe their lies.

The Ballard administration has already secretly decided upon a development plan for the firehouse property, but it refuses to release that development plan to the public and explain how much and who is going to get public tax dollars for their private development projects. Kintner repeatedly lied, claiming that this parcel could not be redeveloped without a TIF district. He knows damn good and well that there are developers out there who would gladly purchase that parcel on the open market and redevelop it without a dime of taxpayer dollars. I've also learned that Simon Property Group is willing to develop the IPS transportation center/Coca-Cola building into a new shopping area that would be anchored by a Whole Foods. This is nothing but crony capitalism of the worst order that is putting this city on the fastrack towards bankruptcy. These TIF districts are depleting much-needed property tax revenues for funding basic city services. IPS is broke. The library district complains that it lacks adequate funding. Police and fire budgets are being cut, while crime skyrockets. We don't even know where they plan to move the firehouse, which is needed in the heavily and growing downtown populated area that includes tall skyscrapers and government installations that are a prime target for terrorist attacks.

The taxpayers need to demand an immediate investigation of what is really behind the expansion of this TIF district. I assure you that you will uncover all kinds of self-serving, insider deals that have been transacted behind closed doors to force this TIF expansion project through the City-County Council to line the pockets of the pay-to-play contractors and developers who own our elected officials. The Indianapolis City-County Council and Mayor Ballard do not represent you. They represent the corrupt fat cats who bankroll their campaigns. It's government at its worst. Everyone who testified at tonight's committee hearing in favor of this proposal has a financial stake in its approval. The only resident of Lockerbie who testified in favor of tonight's project, Fred Hash, makes his living off doing these deals. At least he disclosed his interest. That's more than I can say for my councilor, Vop Osili. It's time that he provides full disclosure about his past and current relationship with A2SO4 and how it stands to benefit from the TIF expansion he is proposing. You don't matter. Only the people making money off the government's ability to pick winners and losers matter. The taxpayers are always the losers. They're always the winners.

Indianapolis Has Been Bailing Out TIF Districts For Years

Fellow blogger Pat Andrews unearths a revelation from the City of Indianapolis' past budgets that other tax resources, including property taxes, have been tapped to the tune of tens of millions of dollars to cover shortfalls in the cost of maintaining TIF districts. If you exclude the downtown and airport TIF districts, revenues from elsewhere had to be found to cover a nearly $30 million shortfall in the remaining TIF districts in the city. While the cost of operating these TIF districts was $80 million, the TIF districts generated only $53.3 million in revenues. So where did the money come from to cover this huge shortfall? According to Andrews, the City tapped several sources, including property taxes collected from outside the TIF districts, including:

• $1.2 million from local option income taxes;
• $6.1 million from city-owned parking garages;
• $16.6 million transferred from the downtown and airport TIF districts; and
• $16.6 million from property taxes paid by property owners outside the TIF districts.

"It bears repeating, property taxes OUTSIDE the TIFs was raised to cover costs associated INSIDE the TIFs, in addition to income taxes and transfers from two better performing TIFs," Andrews writes. Shockingly, the Ballard administration is demanding that the city-county council approve six new TIF districts, including areas like Mass Ave that are already booming with economic activity at the same time it is asking city agencies that provide basic city services, including police and fire, to find ways of cutting their budgets to close a $50-60 million deficit the city is facing in its 2013 budget. Andrews further learned that the Economic Development Bonds Fund was suppose to end the 2012 budget year with a $5.3 million positive balance. Instead, it is now projected to end this year's budget with a $2 million negative balance, which will grow to $6.7 million by the end of the 2013 budget year. "What happened to cause a $7.3 million swing in the 2012 budget for a fund whose annual costs amount to only $4 million?" Andrews asks.

Per the usual, if you want to know the truth about the city's true financial state of affairs, you will have to turn to the blogs as your news source. The Ballard administration is lying to the public, and the mainstream media is simply parroting the administration's propaganda that further TIF district expansions are necessary to sustain economic development in Indianapolis. The only reason for expanding TIF districts is to continue this shell game of redirecting tax dollars away from the funding of basic city services towards economic development projects to allow the transfer of hundreds of millions of public dollars directly into the pockets of the developers who have bought and paid for the politicians we elected to represent the people, who will tell us that we have to choose between paying higher taxes or accepting fewer city services. Crony capitalism is job one for the Ballard administration, and the mainstream media has become its number one cheerleader.

The Cost Of TIF Districts

Fellow blogger Pat Andrews is doing yeoman's work as usual at her blog producing information about the horribly unfair taxing policies implemented by the City of Indianapolis for the sake of economic development. Indianapolis/Marion County now has 40 TIF districts and the Ballard administration is trying to start up even more TIF districts. The combined assessed value of the TIF districts represents $4.81 billion. Taxing districts included within the TIF districts are allowed to collect taxes currently on only the base assessed value, which is suppose to be determined at the time of the creation of the TIF district. According to figures Andrews received from the county auditor's office, the base AV for the 40 TIF districts in Indianapolis/Marion County is $1.45 billion. That means the taxes paid on the $3.2 billion representing the incremental increase in TIF district's AV is captured by the respective TIF districts, which totals more than $90 million in annual property tax revenues. Note that those figures don't include property taxes the taxing districts lose from property tax abatements that may be awarded to businesses and homeowners within the respective TIF districts.

What comes as a total surprise is Andrews' discovery that the base AV for TIF districts can actually decline rather than being frozen as we've always been told it is. Naturally, the base AV of a TIF district won't increase during its lifetime, but one has always assumed it would not drop either. Yet as property assessments have fallen across the county, so has the base AV upon which taxes are assessed for the other taxing districts within the taxing districts even though total AV within the TIF districts grew. According to the most recent figures gathered by Andrews from the auditor's office, all 40 TIF districts combined represented $203 million in real AV growth. At the same time, however, the base AV within the TIF districts fell by $43.4 million. This problem as Andrews notes is further exacerbated by the fact that TIF districts are never retired as they were intended when they were originally created. Instead, new projects are constantly being concocted to continue their life seemingly in perpetuity.

Remarkably, Andrews learned that the base AV in 15 of the TIF districts has actually sunk to zero, which suggests an erosion of the base AV has occurred over a number of years. Andrews notes that two of those 15 TIF districts with zero AV base entailed all government-owned property, which explains the zero AV base, but it does not explain the zero base AV for the other TIF districts. So under the rules of TIF districts the base AV may never increase but nothing prevents it from being decreased all the way to zero, which results in no tax revenues flowing to the affected taxing districts. What this all means is just more tax shifting to the rest of the taxpayers. Those of us who don't enjoy the direct benefits of the projects undertaken within TIF districts are required to pay higher property taxes to support basic governmental services such as police, fire, streets, sidewalks, schools and welfare services.

Ballard Administration Continues To Bleed Taxing Districts With Abatements

Nearly a decade ago, the City of Indianapolis awarded Navistar a tax abatement deal that saved the company $18 million with a promise of retaining 1,800 jobs at its Indianapolis foundry. Instead, it began shutting down the facility a few years ago, failing to meet the promises it made. The Ballard administration clawed back only $5 million of the tax abatements the company took, but the City retained all of those funds for use on its own economic development activities despite the fact that all taxing districts contributed towards the abated taxes--nearly half of which would have gone to the school district. You may recall the Ballard administration gave that $5 million to the ICVA and the City's economic development corporation.

The company is back again with its hand out and the City is approving yet more give-aways to the company after it recalled a very small workforce. Yes, for creating a measly 250 jobs, the company will get millions more in tax abatements even though it defrauded the taxpayers out of tens of millions of tax dollars by failing to meet its earlier job promises. The IBJ's Scott Olson explains the insanity of the Ballard administration's taxing policies:

The company received $18 million in tax breaks from the city in the past decade, but agreed to repay $5 million in early 2010 for failing to retain more than 1,800 jobs at the plant. The huge east-side facility employed as many as 1,650 workers in 2005, but began mass layoffs amid the recession as the auto market tanked.

Still, the city is set to preliminarily approve another tax abatement because Navistar acted in “good faith” when recognizing that it fell short of meeting job commitments, said John Bartholomew, spokesman for the city’s Department of Metropolitan Development.

The Metropolitan Development Commission approved Navistar’s abatement request at its Wednesday meeting. Final approval could be granted July 20.

“They weren’t trying to fight us; that worked in their favor, so they’ve got a clean slate now,” Bartholomew said of Navistar. “This hopefully will prevent a huge industrial site from going off the tax rolls. This is a great opportunity to bring in new jobs.”

Joanne Sanders, Democrat minority leader of the City-County Council, said she is pleased the city is helping to save jobs but thinks it should have collected more from Navistar for failing to meet the requirements of the first tax abatement.

"To say they are starting with a clean slate is disingenuous," she said. The real clawback would have been close to $20 million."

Navistar has recalled 150 workers who were laid off when Indianapolis Casting Corp. stopped production in late 2010. Long-term plans include hiring 100 more employees by 2013 and investing $19 million in technology and supporting equipment.

Not surprisingly, the workers at the facility had to agree to a wage cut simply to breathe new life into the facility. I don't know who is suppose to be representing the interests of the schools and other taxing districts that are adversely impacted by the City's insane economic development policies, but clearly nobody is sitting at the table representing either the taxpayers or the other affected taxing districts. These idiot decision-makers at the City continuously make decisions that permanently erode the other taxing districts' tax bases and the only entity that ever receives any benefit from them is the City--because it establishes TIF districts in these areas that capture all of any new tax revenues generated within these areas after the abatements go away. These other taxing districts have no room to complain, particularly the schools, when they sit idly by and allow this to occur without objection.

UPDATE: Pat Andrews has uncovered the fact that the MDC also just reactivated two dormant TIF districts, the Dow Elanco TIF at 86th & Zionsville Road and the Naval Air Warfare Center in Warren Township.

Daley's TIF Slush Funds Drawing Protests In Chicago

Perhaps this is what needs to happen in Indianapolis to stop the insanity of diverting all of downtown's tax  revenues into TIF funds that are nothing more than slush funds the Mayor can tap to pass out to big campaign contributors for their private business development efforts. Protesters took to the streets in Chicago to protest $2 billion skimmed by TIF districts that are short-changing other taxing districts so Mayor Richard Daley can pass out the money to businesses like Grossinger City Autoplex that received $8.5 million in TIF funds for its northside auto dealership. The Sun-Times reports:

About 150 teachers, parents and activists marched into the Grossinger City Autoplex and demanded a check for $4 million Saturday.


That would be the “TIF” money — protestors called it “The Mayor’s Slush Fund” — diverted from the public schools and given to developers such as those who built the autoplex.

The incensed auto-dealers had two protest organizers arrested for trespassing.

“They came in and disrupted my business,” said Grossinger General Manager Brian Wenberg. “I understand they have the right to protest but not in the middle of my showroom. They can do it outside. They’re talking about the TIF money — none of my employees know anything about it.”

The Tax Increment Financing or TIF districts have operated below the radar screens for decades until the current financial crisis forced cutbacks in government spending that would not have to be as severe if the TIF funds did not divert money away from schools, libraries and other taxing bodies, critics say.

In a TIF district, the property taxes sent to the city and other taxing bodies are frozen for 20 years. Any revenue collected above that first-year level is put into a special fund to be used to encourage economic development in that district. That can include road repairs, street lights and other infrastructure improvements.

The largest single taxing district in Chicago is the public schools, which would be in line for 50 percent of the $500 million in property tax dollars diverted into TIFs every year.

“There’s a giant myth being spread all across this land ... that local governments have no money, they need to take it out of the backs of teachers, take away their pensions,” Cook County Clerk David Orr told the cheering protestors. “Chicago ain’t broke. Chicago has put $2 billion tax dollars that the public doesn’t know about into these TIFs and there’s another $500 million being added every year. There needs to be a moratorium on these TIFs because there has been enormous abuse. They are supposed to go to blighted areas. It’s gone to Willis Towers. It’s gone to Grossinger. It’s gone to other major corporations. As we uncover the mayor’s slush fund, which this is, we’re going to discover that money can go to help the schools.” . . .

The protestors rallied outside Jenner School on the Near North Side, then marched to a Bank of America Office that got TIF money, then to Grossinger, which got $8.5 million in TIF money.


The protestors said they were “peaceful.” Weinberg said some protestors used abusive language toward his staff . . .

The Daley administration's reaction to the protesters complaining that the schools are losing out to these revenues is classic:

The Daley administration argues that the public schools’ tax levy remains the same so money is not really diverted from education — the schools just reach deeper into homeowners’ pockets than they would without the TIFs.

The problem we have in Indianapolis is that the local news media is on the scam. They fully embrace the downtown Ponzi scheme whereby virtually all of the downtown property tax revenues are skimmed by TIF districts that continue to fund new projects promoted by the campaign contributors of the Mayor within the Mile Square to the detriment of the rest of the City and its taxing districts. They won't even discuss it. Instead, we're treated to one story after another of the success of Indianapolis' downtown while the rest of the City is going to hell as people flee to the safety and comfort of the surrounding counties. Nobody wants to live in these crime-infested neighborhoods or send their children to public schools that fail to educate their children. As long as we have sports palaces, ritzy hotels and fine dining experiences for our out-of-town visitors, that's all these so-called civic leaders care about.