Tuesday, November 25, 2014

More Ballard Lies: We Knew All Along Criminal Justice Center Would Cost At Least $500 Million

When the Ballard administration unveiled its plan to use a P3 agreement to construct a new criminal justice center a year ago through the City's shadow government, the Greater Indianapolis Progress Committee, it placed the cost of the new facility at a little over $300 million. Now the administration claims it knew all along the construction cost would be $500 million after receiving bids from three foreign-led investment groups. Deputy Mayor Adam Collins told WTHR's Mary Milz yesterday afternoon the administration had "estimated from the very beginning this facility would cost $500 million."

The true cost is several times that $500 million figure because the City will be locked into making payments to the private developer for the next 35 years. The RFP the administration illegally refused to make public until yesterday pegged those annual fees at $50 million a year. Collins told yet another lie to Milz in explaining why the administration refused to at least acknowledge it had told the bidders the City placed a cap of $50 million on the annual payments. "The reason we kept quiet is we didn't want to prejudice the market and allow (the bidders) to think how much we were willing to spend on a particular facility," Adams told Milz. The only reason to keep it secret, along with the entire RFP in violation of law, was because the entire bidding process was nothing but a sham.

When the administration finally released the RFP, local media was using that $50 million figure to estimate total costs over 35 years at $1.75 billion. Anyone with a clue knows these deals always have cost-of-living allowances. Sure enough, the RFP provided a payment schedule where those $50 million payments would grow to more than $68 million during the life of the agreement. Total payments would approach $2 billion, not $1.75 billion, or about four times the actual cost. "There's a possibility, not based on performance but based upon cost of living or something like that over a 30-year period," Collins said.

Collins goes on to tell yet another lie to Milz by claiming the P3 arrangement is cheaper than if the City relied upon traditional bond financing to build the facility itself. "Even so, Collins said leasing a facility would be cheaper than the city building one itself." "We're confident that whichever bidder we choose will provide the taxpayer with a significant cost savings above and beyond our own estimates," he said. Anyone with a brain knows that the huge fees built into a P3 agreement to benefit the private developer wind up costing far more than traditional financing and self-management costs. The P3 costs are at least 40% to 50% higher. A P3 approach is preferred because the corrupt politicians don't want to do a straight up property tax-backed proposal that would be subject to voter approval at a referendum, and because there is a greater opportunity for more kickbacks to the political insiders to profit from a P3 deal. Let's be honest.

UPDATE: According to the council's CFO, Bart Brown, the administration plans to help cover the cost of the payments from nearly $3 million it intends to collect in parking fees to for visitors when they visit the criminal justice center. The City provides free parking to Simon Property Group's employees, but if you have to visit the criminal justice center, the City is going to make you pay for parking, which sort of defeats the purpose of moving the complex outside of the downtown where free parking is a luxury. The jail is also adding at least 1,000 more bed spaces than it needs in order to rent bed space to the feds, which would supposedly generate $3 to $5 million a year. The administration is also assuming $10 million in personnel savings from the sheriff's office, which is laughable. We're talking about the same sheriff's office which actually managed to spend tens of millions more after the merger of the law enforcement functions of the sheriff's department into IMPD.


Anonymous said...

Three times the original cost???

It is obvious why Ballard didn't run for re-election!

"Corruption is as corruption does."

Anonymous said...

Why was this project not placed on a referendum to be voted on by the taxpayers?

Gary R. Welsh said...

Because the P3 route creates a fiction that no money is being borrowed or revenues pledged to pay for the project, even though that's what the City is doing.

Anonymous said...

EXCELLENT reporting. Concise, meaningful, truthful. Three words the Ballard Gang will never be accused of.

The deception, the outright lies, the insider trading, the breaking of statute(s)... in short- the hallmark of Greg Ballard and his political masters. That Cathedral High School is rumored to be considering this serial liar for a paying job is just beyond common sense. It will not come soon enough that Ballard will never walk onto the 25th Floor again.

With the above being said, we can expect that the covert connected crony CCC Democrats and crony Republicans will fully support this travesty of common sense.