I'm glad that the Pringle Square/Boise Cascade development here in Salem has sprung back to life. This is a PDF version of today's Statesman Journal story.
Download A closer look at the new Boise Cascade proposal
The rush to rubber stamp the new development approach bothers me, though.
Geez, tomorrow the City Council is planning to approve tax breaks for Mountain West Investment, along with paying a sweetheart purchase price of $2 million for 3.8 essentially undevelopable acres that would be added to Riverfront Park.
This project has been stumbling along for quite a few years. How about taking a month for the public to weigh in on the pros and cons on the deal that the City of Salem and Mountain West Investment have brokered?
And only revealed a few days ago.
Oh, I think I know the answer: City officials are worried that citizens will have good questions, the answers to which might lead to some changes in the deal that would be more beneficial to taxpayers.
Below is a message that Richard Reid sent to City Councillors and other officials today. He asks some excellent questions.
I'm not saying that some honest answers would derail the new project, which for sure is much better than the previous incarnation that got blocked by citizens objecting to a takeover of Riverfront Park land for an access road that, even if approved by the City, would have required National Park Service approval that was unlikely to be granted (because the Park was built with federal funds).
What's the harm in postponing Council action on the deal until Salemians can ask questions and get some answers?
Dear Councilors,
A closer look at this article raises some interesting questions
Why are taxpayers likely to pay $2 million for property appraised at $700,000 to $800,000? The article refers to the “groundswell” of community support for completing the Park as if this was a recent phenomenon. But the plan/vision was established years ago. Why doesn’t the city simply condemn the property and pay an “eminent domain” price?
Yes, plans to build apartments on what many assumed would be parkland created an “uproar” but what killed the deal was the failure of both the City and Mountain West to research the legal ramifications of building a public road on public parkland through the Carousel parking lot to the proposed apartments.
Mayor Peterson refers to the “one-time” opportunity to pay 3 times the price for the parcel and justifies it by claiming the park expansion will be like an engine on the economic development train. But the Mayor and other Councilors were silent when that same train almost left the station when Council threatened to approve apartment construction covering 3.8 acres of parkland.
Mountain West’s continued bungling is a reminder that the City, any City, needs to be vigilant when considering entanglements with real estate developers. City of Keizer taxpayers had to pay a tidy sum last year because someone in that city and others on its council ignored facts in the public record.
Mountain West knew or should have known the difficulties associated with railroad crossing and right of way. And everyone knows the land in and around the Boise property is very poisonous.
The paper says Mountain West is dusting off a “delayed” plan. To be clear Mountain West delayed their plans once they discovered what other 30-year old plans for the property reveal; the costs of removing that warehouse make profitable planning a challenge for anyone.
To close the deal, or fuel Mayor Peterson’s economic engine, Mountain West is dusting off its application for both a tax abatement and other “help” with financing. Tomorrow night City Council, the same folks who want a third bridge, have the power to commit Salem taxpayers to a $10 million giveaway and an undetermined “project bond” to be secured by Mountain West, the same folks who seemed to be confused about rail right of way and unaware of poisons on their property.
The article asks if the developer will make a profit and of course the developer claims the project may just break-even after burning “X-million” on chasing an ill-conceived project.
It’s outrageous that the reporter never refers to the “X-million” the City would have lost if the apartments had been built on the economic engine parkland, or the money always required to hook up private development to public services. The article fails to ask whether or not the taxpayers will profit from this or any other real estate development.
How will this deal pencil out? Who will ask staff to estimate the tax revenues the project is supposed to create? Will staff calculate when the estimated tax revenues will repay the public investment in this development?
Is it worth risking tax abatements and other considerable taxpayer investment on a “break-even” project?
Richard Reid
The $2mil vs. $700-$800k bothered me too when I read the article. The take-away for me was that the $2mil would come back from the developer in the guise of fees/taxes/etc. If I understood this correctly, then I would suggest offering Mount West $800k for the property, then be glad that the city will gain $1.2mil in revenue in the future.
I had forgotten about imminent domain. Chances are that action would go to arbitration. Even if arbitration ended up below $2mil (which I think it would), it would be better than paying out $2mil outright.
One thing that might be a consideration would be the immediate use of the new park parcel for the Minto bridge project. If arbitrated, the parcel could be tied up for years, then setting back 2 very public-desired projects till who knows when.
I would love to just trust our city leaders, but it does seem to be happening very, very fast.
Posted by: Lew Hundley | January 27, 2014 at 02:21 PM
Re: the $2M. Councilor Bennett asked for some clarification on this point, and the answer was that because the issue of traffic access to the parcel had not 100% definitively been settled (even if it was a remote-ish possibility), the $800K park-only valuation was too low. On the other hand, because traffic access remained problematic, the developer-ready valuation of $4M +/- was high. $2M was mutually agreeable as a middle, compromise figure.
The City and Developer need to be in a marriage of convenience and Eminent Domain proceedings would poison that marriage and likely sabotage the whole project.
So there are multiple reasons - including public interest - for the parties to settle and find a mutually agreeable compromise.
Next up is the project bond discussion for the north parcel, including the nursing home, on March 24th.
It seems to me that raising questions about the nursing home is more constructive at this point than fretting over the overpay on the park block and subsidy for the south block apartments.
The nursing home is the real clunker in the deal!
Posted by: Breakfast on Bikes | January 28, 2014 at 11:24 AM
Breakfast on Bikes... a non-religious AMEN, BROTHER! to what you said about the nursing home.
For one thing, is this the highest and best use for that prime close-to-riverfront property?
If I had to think, "What sort of use would do the least to make the Boise Cascade property a vibrant downtown location?", a nursing home would be a top candidate.
Come on... can't Mountain West Investment and the City do better than this?
Posted by: Brian Hines | January 28, 2014 at 11:50 AM