Salem don't need no damn billion dollar Third Bridge boondoggle. That's one way of putting it.
Another way is, The Salem River Crossing project has been marked by poor planning that failed to properly consider much less expensive and more environmentally-friendly alternatives to achieving the purported benefits of an additional bridge across the Willamette.
Regardless, recent land use actions by the City of Salem in support of the Third Bridge by expanding Salem's urban growth boundary are being appealed by opponents of the Third Bridge to the Land Use Board of Appeals, LUBA. Thumbs up!
Here's their press release.
December 30, 2016
Contact Information: Robert Cortright, Co-Petitioner 503-363-7262 [email protected]
City of Salem Land Use Actions on the Third Bridge Appealed to LUBA
FOR IMMEDIATE RELEASE
Salem, Oregon – On December 30th, a group of Salem area residents filed an appeal of the City of Salem's urban growth boundary (UGB) expansion to construct a third Willamette River bridge to the state Land Use Board of Appeals (LUBA). On December 5th the Salem City Council, on a 5 - 2 vote, approved an ordinance to expand the UGB for the path of the so-called Salem River Crossing and to add it to the City's Transportation System Plan and Comprehensive Plan.
The eight co-petitioners are asking LUBA to reverse or remand the Council's decision.
"We're appealing the City's decision to expand the UGB for a third bridge because its a bad idea for Salem and because it violates local plans and state planning rules," said Robert Cortright, the group's spokesperson. "It's a bad idea because it's an expensive, unaffordable project that won't reduce traffic congestion and will destroy homes and businesses."
The appellants are a diverse group of Salem area citizens who are deeply concerned about impacts of the proposed third bridge on our community and its future. All of them have testified against the project. The group includes Sara Deumling, a Polk County business owner, Jim Scheppke, a leader of the "No Third Bridge" group, Linda and Gary Wallmark who have been active in 350 Salem, and Linda and Ken Bierly who have been active in the West Salem Neighborhood Association. Two of the appellants, Robert Cortright and Doug Parrow, served on the Salem River Crossing Task Force that studied different bridge crossing options between 2006 and 2012.
The LUBA appeal will contend that the City's actions violate state planning laws because they failed to consider all alternatives to address peak hour traffic congestion problems. To justify a UGB expansion, local and state planning rules require that the City show a new bridge is the only reasonable way to meet future transportation needs. But the City's own plans and studies show that widening the existing bridges in combination with other actions, like expanding transit service and staggering work hours for state employees, would work as well in reducing congestion — and at a cost that would be hundreds of millions of dollars less than a third bridge.
This is excellent news, because the billion dollar Third Bridge is a terrible idea.
It would do very little to relieve rush hour congestion between downtown and West Salem. Retrofitting the two existing bridges to make them earthquake-ready, along with improving the approaches to the current bridges, would cost hugely less and bring even more benefits.
Hopefully City officials and Chamber of Commerce types who have been mindlessly boosting this boondoggle soon will be confronted with the stark reality of the LUBA appeal. They've been able to ignore valid citizen arguments against a Third Bridge through various bureaucratic and political methods.
LUBA is a whole different animal. I've got some experience with a LUBA appeal, since my wife and I led our neighborhood's fight against a nearby proposed subdivision. LUBA didn't rule in our favor to the degree that we hoped, though we later won in Circuit Court.
However, I came away impressed with the quality of those who serve on the Land Use Board of Appeals. They know their stuff and can't be easily swayed by spurious arguments.
More good news: Robert Cortright is one of the leaders of the appeal, which is being handled by the John Gear law office. I met Cortright at a February 2016 City Council meeting and mentioned him in a blog post, "Why the unbuilt Third Bridge boondoggle is hurting Salem."
In the "possibly illegal" part of my testimony, I referred to a knowledgeable source about federal and state regulations regarding early acquisitions of right of way. He was anonymous, because I'd never met him and didn't have permission to use his name -- just his thoughts, which came to me from a go-between.
I enjoyed the secretive Deep Throat vibe of this. Well, until I got back to my seat after testifying, felt a hand on my shoulder, and turned around to find a guy saying to me, "Hi, I'm Bob Cortright."
Who soon thereafter went to the podium himself and spoke about what I'd said he'd said, in a considerably clearer and more convincing way. Understandably, since Cortright spent 30 years working for Oregon's Department of Land Conservation and Development, where he was the Transportation Planning Coordinator.
He gave me a copy of his testimony. I believe it was instrumental in causing the City Council to give a thumbs-down to buying the 3rd Bridge right of way property.
It's impossible to predict how LUBA will rule on this appeal. But no matter the outcome, the citizens of Salem are winners. This is the first round in what could be a lengthy legal battle aimed at stopping the Third Bridge craziness.
The sane thing for the Salem City Council to do would be to end support for the Third Bridge and shift city resources to implementing cheaper and more effective alternatives.
Mayor-elect Chuck Bennett has been a supporter of the Third Bridge. We can only hope that he will take a fresh look at the facts and vote to pull the plug on this massive waste of taxpayer money.
How do you argue with the "golden man" statue on top of the Capitol building? Through a blog post! I'm sure the Oregon Pioneer reads Salem Political Snark, since he's sitting right on top of a whole lot of fodder for political snarkiness.
Of course, I guess it's possible that the regular Musings of the Oregon Pioneer column in the Salem Business Journal isn't written by the statue.
Last November 8, the voters turned down a new $82 million police station at the site of the former O'Brien/DeLon auto dealership on Division Street between Liberty Street and Commercial NE, abutting Mill Creek on the north. There was no organized opposition to the bond levy.
Hey, Mr. Oregon Pioneer, there sure was organized opposition!
Carole Smith and I organized a Political Action Committee, Salem Can Do Better, that opposed Measure 24-399.
I designed a nicely-organized web page for Salem Can Do Better that's been viewed over 10,000 times.
Pro and con arguments about Measure 24-399 (I wrote the "con") were featured side by side on the Statesman Journal editorial page.
I made a post-election video about what Salem Can Do Better did, because Mayor-elect Chuck Bennett also has expressed doubts that voters were exposed to organized information about the flaws of Measure 24-399.
But aside from the "no organized opposition" comment by the Salem Business Journal columnist, I found their piece interesting. Here's an excerpt.
(Note: don't confuse the dumb-idea Plan B mentioned below with the Salem Can Do Better and Salem Community Vision Plan B -- which is for a $62 million bond measure, $20 million less than Measure 24-399, which includes funds for a perfectly adequate 75,000 square foot police facility AND making City Hall/Library earthquake-safe.)
There are several conversations I wish to report on.
The first is that two Salem City Counselors [sic], while making the political rounds speaking in support of the new police station bond issue levy, said there was "No Plan B" if the bond issue failed. Well that was not quite right, as there is a "Plan B."
It seems the City Council, which is also the governing body for the Downtown Urban Renewal Agency, has been talking to itself. The Downtown Urban Renewal Agency is now considering the purchase of the former auto dealership property for the City of Salem.
Is that legal? I really don't know, but I suspect it is. So "Plan B" is now being considered. The City Council, if "Plan B" continues in its present form, will hold another election in May 2017. The price tag is expected to be $82 million again. One might expect organized opposition for the next round, so stay tuned.
Yes, indeed, there would be organized opposition again to a police facility bond measure if City officials were foolish enough to put the same $82 million proposal that voters just rejected back on the ballot.
Salem Can Do Better would make the same strong arguments to vote NO that we did before. And this time we'd have a powerful additional argument:
Salem citizens just told City officials that they wouldn't pay for an over-priced, over-sized $82 million/148,000 square foot police facility that is way more expensive than this town needs, or can afford. Yet here they are, asking you to say "yes" to something that you just clearly said "no" to. Since these City officials aren't willing to listen to you, speak even louder in this election with a more emphatic NO!
Do Salem's Mayor, Mayor-elect, city councilors, and other officials care about Truth and Transparency? In a few weeks we'll find out.
By January 6 I've asked them to explain -- in a simple, clear fashion -- why a $749,000 urban renewal grant was approved for the Park Front building on December 12. The applicant was T.J. Sullivan, a former city councilor and current vice-president of the Chamber of Commerce.
I asked city councilors to say why they were going to vote "Yay" or "Nay" on the $749,000 when I testified in opposition to this giveaway during the public comment period at the recent Urban Renewal Agency Board meeting (which is the City Council convening as another body).
After failing to get a cogent response from Salem's elected officials about why three-quarters of a million dollars is being handed out for what sure looks to be crony capitalism, and talking with some people knowledgeable about urban renewal who are as outraged about this action as I am, I decided that letting this go wasn't an option.
So today I sent the message below to the Powers That Be at City Hall.
I deeply believe that when officials give $750,000 to a private LLC (limited liability company) to help pay for an office building that was planned to be built without public money, but a bank wouldn't provide a construction loan without that additional equity, citizens deserve to get a full explanation of why taxpayer funds are being used for this purpose.
If you agree, tell the Mayor and City Council you want them to respond to my message: [email protected]
TO: Mayor Anna Peterson; City Manager Steve Powers; Urban Development Director Kristin Retherford; Councilors Chuck Bennett, Steve McCoid, Brad Nanke, Jim Lewis, Tom Andersen, Diana Dickey, Warren Bednarz
CC: Incoming city councilors Cara Kaser, Sally Cook, and Matt Ausec
FROM: Brian Hines
SUBJECT: Reasons needed for granting $749,000 of Urban Renewal funds to Park Front LLC
Along with other concerned citizens, I’m perplexed about why a $749,000 Urban Renewal grant was approved by the City Council, acting as the Salem Urban Renewal Agency Board, on December 12, 2016.
A careful review of the purposes of the downtown urban renewal district and T.J. Sullivan’s request for funds to assist in construction of the Park Front building has caused me to conclude that the $749,000 is an inappropriate use of public funds.
Thus I am requesting that Mayor Peterson, City Manager Powers, Urban Development Director Retherford, and the city councilors who voted for (or against) the grant describe in a simple, clear, truthful, transparent fashion the reasons why this is (or isn’t) an appropriate use of Urban Renewal money,
This should be done before a check is written to the Park Front developers to assure that the public fully understands why their City officials are spending $749,000 of taxpayer money in this fashion.
At the December 12 Urban Renewal Agency Board meeting, Mr. Sullivan testified that he needed this grant in order to be able to obtain a Pioneer Trust Bank loan for the four story building he wants to construct. Sullivan admitted that he could build a smaller, less expensive building without the $749,000, but he wants the “full meal deal,” so to speak.
For this and other reasons, the $749,000 grant is not justified.
Urban Renewal funds are not supposed to be used as a subsidy to private developers for reasons unrelated to the basic purpose of Urban Renewal. As I noted during the public comment period at the December 12 meeting, the City of Salem web site page, Urban Renewal in Salem, says this is:
“To spur redevelopment where it might not otherwise occur without public investment."
However, as noted below, in this case redevelopment was going to occur without the $749,000 grant. So all this grant is doing is providing taxpayer funds to the Park Front developers so they can build a larger, more expensive building than Pioneer Trust Bank would allow under their lending terms absent the additional $749,000 of equity.
Further, the City’s Urban Renewal in Salem web page lists four activities that urban renewal agencies in Oregon may undertake. None of them applies to subsidizing construction of the Park Front building with a $749,000 grant.
“Urban renewal agencies do not provide general government services, but may make or carry out urban renewal plans which may include the following activities in support of projects in the plan:
• Acquisition of real property;
• Assistance in relocation of displaced persons;
• Installation, construction, or reconstruction of streets and utilities; and
• Repair, rehabilitation, or demolition of buildings.”
Here is a link to the staff report which recommends approval of the $749,000 grant request.
It contains seven criteria that the Park Front project supposedly meets. I disagree. Following are the criteria and my briefly-stated reasons for rejecting the assumption that the Park Front application complies with them.
Removal of blight. Developers of the old Boise Cascade property have already received a tax deferral for the South Block apartments and a separate $749,000 urban renewal grant for the Marquis rehabilitation center. This area is no longer blighted. The apartments are a success. The Park Front building is to be built on property bought from Marquis. Public funds have helped to de-blight the area. No further use of urban renewal funds is justified.
Leverage of Public Funds with Private investment. As noted in my testimony provided during the public comment period at the December 12 meeting, construction of the Park Front building was announced in March 2016. At that time there was no mention by Sullivan, or anyone else involved with the project, that construction was contingent on receiving urban renewal funds.
Rather, a Statesman Journal story said:
“Construction for the $8.5 million building will begin on a portion of the North Block parcel of the Boise site in summer 2016 and be finished by May 2017, said TJ Sullivan, a co-owner of Huggins Insurance.”
So there is no leveraging of public funds with private investment. The private investment was committed to many months before Sullivan requested the $749,000 grant to enable him to construct a larger building than Pioneer Trust Bank was willing to give him a loan for.
Increased Property Value and Tax Increment. Again, increased property value was going to happen without taxpayer money. And I have not seen an analysis showing that the $749,000 will generate property taxes in excess of that amount over, say, the next 20 years, especially given that Sullivan has said that a smaller building could be constructed without the urban renewal grant.
Connectivity between Riverfront Park and Downtown. I am not aware that this project will do anything to improve that connectivity. True, tenants of the Park Front building will be able to walk to Riverfront Park. But since no retail space or residential housing is planned for the building, there will be very little reason for anyone to visit Park Front unless they have business to undertake with a tenant of the building.
Job Creation. As noted before, construction of the building was announced months before the urban renewal grant was requested. Several floors of the building already have committed tenants. No evidence has been provided that a $749,000 grant will lead to any additional jobs.
Streetscape Enhancements. Very few people will get a close-up view of the landscaping planned for the Park Front building. It will be built in what amounts to a downtown “island,” since few people will want to, or need to, cross busy Front Street to reach the building. Landscaping is a code requirement, so it is an automatic streetscape enhancement when completed.
Downtown Vibrancy. Park Front is an office building with no retail space or residential housing in an area of downtown that is difficult to get to. Park Front will contribute very little to downtown vibrancy.
I look forward to your replies regarding why granting $749,000 to the Park Front developers is a reasonable use of limited urban renewal funds. All replies will be shared verbatim with the public in the interest of truth and transparency. Please reply by January 6, 2017.
I reiterate my request that City officials not pay out any portion of the pending grant until vetting of the approval process is complete. It’s only right that the grant process be fully and transparently made known to Salem citizens.
Thus, (1) City Councilors need to clearly describe why they voted for or against the $749,000 urban renewal grant application, and (2) other City of Salem officials need to clearly describe why approval of this grant fits with the stated goals of the Urban Renewal Agency.
Just what I wanted for Christmas: an Oregon election law violation! I've already unwrapped it (by opening an envelope that came from the Secretary of State office) and am "wearing" it proudly.
After all, I had no idea that there was a requirement to register as an Independent Expenditure Filer if someone spends $750 or more in a calendar year in support of, or opposition to, candidates or ballot measures independently of those officially involved in a campaign (like, the candidate, a PAC, and so on).
Nowadays political campaigns are making good use of social media. Heck, this is a big reason why Donald Trump got the GOP presidential nomination -- he's a Twitter Master.
So when the May 17 election for Salem Mayor and City Councilors approached, I decided to throw about a thousand bucks into supporting my favored progressive candidates -- Carole Smith, Cara Kaser, Matt Ausec, Sally Cook -- via "boosted" posts on my Strange Up Salem Facebook page.
This was part of what I thought of as my extra year of Mini Cooper payments effort to improve Salem's political landscape. The five year loan on my 2011 Mini was paid off this April, so I figured that contributing the equivalent of 12 more months of $250 car payments, or $3,000, to candidates I liked was a great idea: $1,000 went to Mayor candidate Smith, $1,000 to Progressive Salem to support the three city council candidates, and about $1,000 went to the Facebook boosts.
However, to someone in the know about the Independent Expenditure Filer requirement in the Oregon Campaign Finance Manual, that blog post was akin to a thief putting up a billboard with his name on it that said "I just stole some stuff!"
That someone was Salem City Councilor Warren Bednarz, who filed a complaint with the Election Division on August 12, 2016. In the May election Bednarz was beaten by challenger Sally Cook, who I supported in several boosted Strange Up Salem posts.
When I got the complaint via an Elections Division staffer, I read it carefully, along with what the Campaign Finance Manual said about independent expenditures. I also Googled "Facebook post boost political expenditure," or words to that effect.
After a lot of searching, I couldn't find any example, anywhere in the country, where a Facebook post that had been boosted (by paying money to Facebook) to reach more people had been considered a political expenditure. The examples of independent expenditures in the Campaign Manual also didn't mention anything akin to a Facebook boost.
So I decided to challenge Bednarz' complaint. The letter I sent to the Elections Division made a lot of sense to me. But I have to admit, I'm me, so I've got some biases toward moi. Download Elections Division letter 8-22-16
Mr. Bednarz obviously isn’t challenging the many other similar posts I wrote around the May election. These, like the six posts in question, reflected my personal opinion about the primary election here in Salem. Thus, the question here is whether paying to “boost” a Facebook post so it reaches more people is a “communication expressing clear words of advocacy.”
I am strongly arguing, “No, it isn’t.” To repeat: I did not pay Facebook to publish a communication. I already had published the communication for free when I paid Facebook to “boost” the post so it reached more people than it would otherwise.
Here’s a good analogy: I am standing before a crowd, exercising my First Amendment right to speak to them about a political issue. This is analogous to me writing a post on my Strange Up Salem Facebook page. Mr. Bednarz obviously is not challenging my right to do this. I did this with the six posts in question, just as I did with other posts around the time of the May election that were not “boosted.”
Returning to the analogy, I realize that my unamplified voice isn’t strong enough to reach people on the edges of the crowd. Conveniently, a guy approaches me with a battery-powered megaphone. “Want to use this for $5?” he asks me. “Sure,” I tell him. Now people in the back of the crowd can hear me.
I haven’t altered my freely spoken communication in any way. I haven’t paid the guy to write a speech, print posters, make a radio/TV ad, or anything of that sort. I’ve simply paid him for a means to amplify my freely-composed communication so more people can hear it.
This is what “boosting” a Facebook post does. It isn’t an expenditure to make a communication. It is a payment to reach more people with an existing free, no-charge communication.
The Independent Expenditure Filer rule refers to just that: expenditures to make a communication. It talks about payments for “making” a communication. I paid Facebook nothing to make a communication, such as a political ad. Rather, I paid Facebook to amplify the communication that I freely made on my own.
Well, the Elections Division final determination on Bednarz' complaint that I got yesterday didn't find my arguments as persuasive as I did. Download Final determination Bednarz complaint
Which doesn't mean I agree with the final determination.
It bothers me that a communication made at no cost -- a Facebook post -- becomes an independent political expenditure when that post is "boosted" via a payment to Facebook so it reaches more people.
Yes, I understand the reasoning of the Elections Division. I can see how this makes sense to them:
While the original communications, the Facebook posts, were posted at no cost to you, by paying to boost a post you communicated your support and opposition of the candidates to a broader audience than what the original posts reached.
What bugs me, and I readily admit that this will sound more like an ethical/moral argument than a legal one, is how corporations, such as the Gannett Corporation that owns the Salem Statesman Journal newspaper, is able to spend many millions on reaching a "broader audience" who then can be bombarded with perfectly legal political endorsements.
Meaning, the Statesman Journal endorsed Mayor candidate Chuck Bennett and Measure 24-399, both of which I opposed in boosted Facebook posts.
So the newspaper could urge tens of thousands of people to vote for a candidate and a ballot measure, but this isn't considered an "independent expenditure" because no extra money other than the many millions of dollars Gannett has spent on the Statesman Journal was expended on the political endorsements.
This is the way our political system works: individuals and organizations who have an innate ability to reach voters (like a celebrity with millions of Twitter followers) have free rein to urge people to vote a certain way. Citizens like me, who need to pay Facebook, say, to reach more people, have to jump through regulatory hoops to do this.
Sure, it took me less than an hour to register as an Independent Expenditure Filer, and then file the transactions describing the money I spent on the Facebook boosts. But I still feel like the political voices of ordinary citizens are being unnecessarily constrained by the Elections Division ruling.
I wasn't aware that the City of Salem was leasing the old O'Brien auto dealership site north of downtown until I read about this in a recent Statesman Journal story, "Salem preps old dealership for homeless warming shelter."
The city of Salem dispatched staff Tuesday to ready the old O’Brien Auto Group space for the homeless to use as a warming shelter while coming winter nights are expected to dip below freezing.
...The city leases the O’Brien property, which would have been the site for a new police facility if the measure to fund it hadn’t failed this November.
O'Brien site when it was an auto dealership
I knew that the City had an option to buy the O'Brien property, but the lease was news to me. So I asked Courtney Knox Busch, who works in the City Manager's office, to send me a copy of the lease agreement. Here it is. Download O'Brien Site Lease_Council Report 6_27_16
The City of Salem (tenant) isn't paying any cash to Shires Property, LLC (landlord) for a lease of the 37,320 square feet of space in five buildings on 3.51 acres that runs from June 28, 2016 to June 30, 2017.
Instead, the City is responsible for paying all costs of utilities, insurance, property taxes and maintenance of the O'Brien property.
What the City of Salem is directly paying for is an option to buy the property. The option is to be paid for in two $50,000 chunks.
First option payment: $50,000 on or before December 1, 2016, which doesn't apply to a potential purchase of the property. I'm not sure if this payment has been made. I'll ask Busch if it has. Seemingly it should have been, because there's a Plan B proposal for a new police facility following the defeat of the $82 million bond measure in the November election.
[Update: Yes. Busch told me the first payment was made.]
Second option payment: $50,000 on or before March 1, 2017, which does apply to a potential purchase of the property. The option to buy ends on May 31, 2017.
So, assuming the City of Salem made the first payment after the police facility bond measure failed, another $50,000 payment will have to be made to preserve an option to buy the property. Since the earliest a Plan B could be voted on is after March 1, and the option expires on May 31, there's only a narrow window to submit a revised police facility plan to voters without extending the lease/option agreement.
It's clear that simply submitting the same $82 million proposal that failed in the November election would be an insult to the will of voters and have little chance of passing. Thus City officials don't have much time to reach out to the Salem community and come up with a collaborative revised proposal that, hopefully, includes the key items in the above-mentioned Plan B:
(1) Put a PLAN B $62 million bond measure on the May 2017 ballot.
This will pay for a perfectly adequate 75,000 square foot police facility AND seismic upgrades to City Hall and the Library — which was the City of Salem plan until the size and cost of the police facility doubled, squeezing out lifesaving funds for making the Civic Center earthquake-safe.
(2) Build the 75,000 square foot police facility on the same “O’Brien” site north of downtown, where the facility turned down by voters was planned. Leave out a new 911 Center and structured parking, since neither of these costly options is needed.
(3) Hire new Oregon consultants with a proven track record of building cost-effective police headquarters. Mackenzie and AC + Co Architecture could be good choices.
Last night the Salem Urban Renewal Agency board, which is just the City Council by another name, approved a $749,000 grant to T.J. Sullivan for his Park Front office building.
Nine days ago I called this "crony capitalism" in a blog post written after Sullivan's application came to light. Nothing I saw at yesterday's meeting changed my mind.
Here's a video of my testimony, which includes an interchange between Councilor Jim Lewis and me. I'll share the text of what I said at the end of this post.
My central points were based on two indisputable facts:
(1) The City of Salem web site says that the aim of urban renewal is “to spur redevelopment where it might not otherwise occur without public investment.”
(2) The Park Front building clearly was planned to be constructed without public investment.
So what bothers me the most about the 5-1 vote to approve what amounts to an unnecessary gift of public money to a private development is that none of the city councilors other than Tom Andersen were bothered by the disconnect between what urban renewal funds are supposed to be used for, and what they actually are being used for.
(Andersen voted "no" on the grant request; councilors Bennett, Dickey, Lewis, McCoid, and Nanke voted "yes.")
Here are my main Crony Capitalism Takeaways from the Urban Renewal Agency meeting.
T.J. Sullivan admitted that the only reason he needs the $749,000 is to be able to build two extra floors on his four-story building. In his testimony, Sullivan went into considerable detail about the problems he encountered in getting a construction loan from Pioneer Trust Bank.
Given that Sullivan and his partners would only have a million dollars in equity invested in this $8.9 million building, and that only two floors had committed tenants, he said that it wouldn't be possible to get loan approval for the four story building he wants without a $749,000 grant from City of Salem urban renewal funds.
Sullivan admitted that he could have built a two-story building on his own. But Pioneer Trust wasn't happy with the appraisal, debt to income level, or occupancy percentage of his four-story project.
Well, for most businesspeople that's a problem they'd have to deal with on their own. Find more equity/investors. Work harder at recruiting tenants. Reduce the cost of construction.
But in Salem, urban renewal money isn't being used for the main intended purpose -- spurring private development that wouldn't have occurred without the leverage of public funds. Rather, Sullivan got a gift from the City of Salem that helps him construct a building that he said definitely was going to be builteight months before he applied for the urban renewal grant.
Basically, this is a public bail-out of a poorly-planned private project. Which is a pretty damn good definition of crony capitalism.
Calling the current condition of the old Boise Cascade property blighted is absurd. Urban renewal money is supposed to be used on redevelopment projects in "blighted" areas. Years ago, when nothing was happening with the Boise Cascade site, that word would have fitted the property.
But after Mountain West Investment got a generous 10-year tax break to build the South Park complex, I've heard those apartments are fully occupied and commanding pretty high prices. Further, Marquis Companies got a similar $749,000 urban renewal grant for a rehab center as part of the deal Mountain West made when it sold part of the Boise Cascade property to the City of Salem for an expansion of Riverfront Park.
So that's two major de-blighting investments of public funds already made on the Boise Cascade property. Further, as I said in my testimony T.J. Sullivan's Park Front building is on a site bought from Marquis Companies. So the same piece of property now is going to get two $749,000 urban renewal grants.
This is ridiculous.
Like I said in my response to a question from Councilor Lewis (watch the video), I hate to sound like Donald Trump, but the City of Salem is making some horrible deals. Sullivan was planning to construct his building with private money until he learned about the "slush fund" of Opportunity Grants in the Urban Renewal Agency.
Councilor Andersen asked Kristen Retherford, the City's Urban Development director, why Sullivan couldn't get a typical $300,000 grant, and then apply for a $449,000 loan from urban renewal funds. The answer was that a loan wouldn't help him out with Pioneer Trust Bank, which wants to see more equity in the project.
Thus public funds are being used to subsidize a project that was too risky for a private bank to take on. The Salem city councilors didn't even discuss limiting Sullivan to a $300,000 grant, which would require him either to raise more money on his own, reduce the cost of his building, or work harder at finding committed tenants.
Again, this whole fiasco smells strongly of crony capitalism.
The Opportunity Grant program looks very much like a slush fund. When I was working on my testimony yesterday afternoon, I tried to learn what an Opportunity Grant was -- since the City of Salem staff report said this was the source of funds for Sullivan's $749,000 grant request.
I Googled "Salem Oregon urban renewal opportunity grant." Nothing. I did a search on the City of Salem web site and came up with next to nothing, just a reference to how $25,000 or less is available to renovate second floors in the downtown area.
This morning I emailed Kristin Retherford some questions.
Ms. Retherford, I’ve got some questions about Urban Renewal Opportunity Grants/Purchases.
In preparing my public testimony for last night’s meeting, I tried to find out about them. I Googled “Salem Oregon Urban Renewal opportunity grants” and came up with nothing. I then did a search via the City of Salem web site and came up with next to nothing — just a mention of downtown second floor $50,000 grants for artists and such, as I recall [actually, it is $25,000; I recalled wrong].
So where can I find information about the $6 million or so (now $4.5 million; can’t remember the exact figure) in Opportunity Grants that Urban Renewal offers. Who is eligible? What are the criteria? How does one apply?
Councilor Lewis said I or anyone else could get one if wanted. But this implies that people know about the Opportunity Grants. (Another question: what does “Opportunity” refer to? Meaning, what is the opportunity being taken advantage of?)
I noted that your staff report to the Urban Renewal Agency board mentioned information received from downtown property owners who have been identified in opportunity areas. Who are those people? I’d like a list of them.
Also, your staff report mentions an August 22, 2016 meeting of the Downtown Advisory Board where they gave guidance to the Agency board about how to use Opportunity Purchases funding. I looked for those minutes and didn’t find an August 22 meeting of the DAB. I looked through minutes of adjacent meetings in time and didn’t find much, if any, mention of this guidance as I recall. Please let me know at which meeting of the DAB this guidance was given, since there wasn’t an August 22, 2016 meeting of the DAB.
I’m planning to write a blog post tonight about the Park Front decision. I realize this is short notice to give you about my questions, but if you or a staff member could answer most or all of them today, that would be great. Otherwise, I can update the post when I get this information.
I haven't gotten a response yet. But Carole Smith had asked about this program and forwarded me a message she'd gotten from Urban Development Director Retherford a few days ago. I've read the message several times. I can't make much sense of it. I've boldfaced some confusing parts.
The Opportunity Purchase Fund is one of the projects identified in the 2011 Action Plan. This is for City acquisitions, or opportunity purchases. It is not a grant.
We have had funds budgeted last fiscal year and this fiscal year for an opportunity purchase/acquisition. The DAB [Downtown Advisory Board] identified several properties and the Agency authorized us to conduct outreach to the property owners and pursue and acquisition. We learned that none of the owners of the properties identified for possible acquisition were interested in selling them to us at this time. There were either other private sector parties in the process of purchasing them, or the owners had other plans.
Consequently, we realized that our funds budgeted for an acquisition would be better used as grant exceptions to make private sector downtown redevelopment projects feasible. The first such grant exception was to PDQ investments to construct 40 units of multifamily housing on Front and Court. The second request is the Park Front office building project. We expect to receive a request from the company that purchased the Wells Fargo site for improvements to the former Newberry's building, and we have one other party that has expressed interest in a grant exception.
So, to answer your first question below, the Opportunity Purchase is not itself a grant, but we are using funding that had been budgeted for an Agency opportunity purchase in order to fund exceptions to our regular grant program. I hope that makes sense. I'm happy to talk to you about it if it's not clear. In terms of marketing, as people have approached us with regard to our normal grant program, we have shared with them the process for requesting an exception to the $300,000 grant limit. These exceptions have to go to the Agency for approval.
Well, the $749,000 that Park Front/Sullivan got is called a "grant." But somehow it isn't really a grant, because the Opportunity Purchase fund isn't being used for purchases, but rather for what is basically a slush fund for people who are undertaking downtown redevelopment projects.
It bothers me that exceptions to the usual $300,000 limit can be handed out for no reason. This is why I continue to call what the Urban Renewal Agency is doing crony capitalism.
No information about these Opportunity Grants has been made public. If you're well connected or otherwise "in the know," you can talk to Urban Renewal staff and get a chance at free money. Otherwise, you've got to suck it up and do what private developers usually have to do: figure out how to finance a project on their own, or through the usual Urban Renewal channels.
Salem Community Vision has posted a video of Evan White's testimony at yesterday's Urban Renewal Agency meeting. Evan preceded me, and was considerably blunter about the crap being imposed on the citizenry. Watch it! Way to go, Evan.
Here's the text of my testimony, with added links:
I want to understand why $749,000 of public urban renewal money is being proposed to be given to the private developer of the Park Front building.
During your deliberation on this agenda item those of you who favor this proposal need to explain, in a clear declarative sentence or two, why you believe T.J. Sullivan’s funding request should be approved.
Because the facts show this doesn’t make any sense.
FACT 1.The City of Salem web site says that the aim of urban renewal is “to spur redevelopment where it might not otherwise occur without public investment.”
FACT 2. The Park Front building clearly was planned to be constructed without public investment.
In March 2016, more than eight months before Sullivan requested the $749,000, a Statesman Journal story said Park Front joined “a flurry of projects at the once blighted industrial park. Construction for the $8.5 million building will begin on a portion of the North Block parcel of the Boise site in summer 2016 and be finished by May 2017, said T.J. Sullivan.”
Note: “will begin.” Not “might begin.” And no mention of urban renewal money.
Also, a First Commercial Real Estate post pointed out that it represented Marquis Companies in its purchase of the North Block site for a rehabilitation facility. A portion of the site then was sold by Marquis to Park Front LLC.
FACT 3. Astoundingly, this same piece of Boise Cascade land has already gotten urban renewal funds to supposedly leverage its development.
In March 2015 Salem LTC Properties, a subsidiary of Marquis Companies, got $749,999 from the Urban Renewal Agency.
LTC Properties was going to construct a rehab center on part of the property, and an office building on another part. As noted above, the Park Front office building is on land bought from Marquis.
So this obviously is double-dipping into urban renewal funds for the same piece of property, and for the same amount: $749,000. Public funds already have been used to supposedly spur development of that property. It was ridiculous to do this once, and would be even more ridiculous to do this TWICE.
The staff report on Sullivan’s request says that the project meets urban renewal goals of removing blight and leveraging public funds with public investment.
But this is wrong.
As the Statesman Journal story said, this is “once blighted” property. Mountain West got tax breaks for the successful South Park apartments. Mountain West demanded, and got, $749,000 in urban renewal money for the Marquis rehab center on the southern part of the North Block.
Now Park Front LLC has bought part of that site from Marquis for its own office building. Park Front said it was committed to constructing that building eight months before it applied for another $749,000 in urban renewal money.
Forking out that money sounds like crony capitalism, especially since T.J. Sullivan said in his application letter that the money is needed because construction costs have increased — which is just a fact of doing business in a booming economy.
I just got 2016 Clinton vs. Trump election results for Salem from someone who, as with the 2012 Obama vs. Romney results, shall be known as a "fellow political junkie."
There's some positive news for us local liberals/progressives in this Age of Trump. In Salem we're getting increasingly stronger!
Here's the overall result -- arrived at by aggregating vote tallies by precinct to get ward totals, which, when summed, provides a result for Salem. Clinton crushed Trump by 11%.
By comparison, Obama beat Romney by almost as much, 10%. Note the disparity in the major party percentages: 87% in 2016, 96% in 2012. Third party candidates (Stein & Johnson), write-ins, and undervotes got considerably more votes in 2016. (An undervote means someone didn't cast a vote for president.)
For me, this is the most encouraging chart. Clinton beat Trump in every ward, even in the most conservative parts of town -- south Salem and west Salem. See the ward map below.
Yes, the Clinton margin in Ward 4 was very small, just 20 votes. But still... in Ward 4, as everywhere else in town, the liberal presidential candidate beat the conservative candidate.
Here's the 2012 comparison. Romney beat Obama in wards 4 and 8. Remember: the overall margin of victory for Clinton and Obama in Salem was about the same. The difference in 2016 is that the most conservative parts of town turned more liberal.
My fellow political junkie sent along this observation:
A highlight - Hillary won Ward 8 (West Salem) by 4%! (In 2012 Obama lost Ward 8 by 2%.) West Salem has been moving in a progressive direction in recent years, generally faster than other parts of Salem. This result is more evidence that the trend is continuing. West Salem used to be a conservative Republican bedrock. Now it is more of a swing area.
Lastly, here's a comparison of how Salem voted in the 2016 presidential election compared to Marion County, Polk County, and Oregon as a whole. Salem was right in line with the entire state -- Clinton country! Marion and Polk counties went for Trump by a fairly wide margin.
(Salem comprises about half of the Marion County population, so given Salem's decidedly liberal leaning, the election results above show that the rest of Marion County is really conservative.)
Here's the 2012 comparison.
Pretty similar, though in 2012 the Salem margin of victory for Obama was three points under the Oregon margin. In 2016, as noted above, the Salem and Oregon margins in favor of Clinton were exactly the same. So this also points to Salem becoming more liberal during the past four years.
So Salem is more liberal/progressive than many people give the city credit for.
If Salemians voted for local officials such as the Mayor and City Councilors in the same political fashion as they voted in the last presidential election, this town would have a much more liberal-leaning city government than it does now.
I can only hope... for 2016.
Well, in 2016 Salem elected three new progressive city councilors who will take office in 2017: Cara Kaser, Sally Cook, Matt Ausec. (Conservative city councilor Brad Nanke ran opposed.) Only in the Mayoral election did the more conservative candidate, Chuck Bennett, win out over the more progressive candidate, Carole Smith.
Thus my hope mostly came true. Which leads me to say with even more confidence:
I can only hope... for 2018.
Which will feature another mayoral race, and races for four city council seats -- two of which currently are held by conservatives: Steve McCoid and Jim Lewis. One of the two remaining seats is held by progressive Tom Andersen, and the other will be filled in March 2017 in a special election necessitated by the resignation of Daniel Benjamin.
Yesterday I wrote a blog post about Salem City Council goings-on that had "sad" and "pathetic" in its title. I don't enjoy doing this. I'd much rather be writing about the marvelous things City officials are doing that make almost everybody in town joyful.
But I can't do this, because such isn't happening.
Under Mayor Anna Peterson's less than inspiring reign, she and her Chamber of Commerce-backed city council majority have chosen to focus on what pleases the already rich and powerful in Salem -- not on the needs and wants of ordinary people.
So, to offer up one significant example, we've gotten planning for an unneeded Third Bridge that will destroy dozens of homes and small businesses while doing next to nothing for rush hour congestion, at a cost that would approach a billion dollars if this boondoggle were to ever become a reality, which almost certainly it won't.
Here's some great quotes from Councilor Tom Andersen about the Third Bridge debacle:
Andersen said building the bridge to thin congestion was like "trying to solve obesity by buying bigger pants."
He also noted city money is still being spent on the project.
"For all the good that this money will eventually do us, we may as well just take the money down to the river and throw it in," he said.
This is no way to run a city government.
Just about everything that's come out of City Hall in recent years has been marked by controversy, resistance, protests, outrage. Tons of citizen energy are being used to stop bad ideas which should, and could, be directed at improving Salem.
So my Civic Activism Wish for the New Year is to have JOY be much more of a prevailing mood at City Council meetings. I'd love to see people universally praising proposals to make Salem more livable, vibrant, cutting-edge, cool, equitable, diverse, and prosperous.
There are lots of terrific ideas floating around.
Everybody has their favorites. These are a couple of mine. I like these proposals because they are examples of projects that would make large joyful differences for small amounts of money -- compared to crazily expensive notions like the Billion Dollar Bridge.
Salemtowne to downtown multiuse path. I loved how Mark Wigg, an energetic proponent of this idea, speaks about "creating beauty and spreading joy." That's the sort of practical poetic sensibility we need more of.
Problem is, so far Wigg is getting nowhere with his multiuse path (bicycling, walking, etc.) proposal, because Mayor-elect Chuck Bennett, Public Works Director Peter Fernandez, and other City officials are so enamored of their Third Bridge fantasy, they view a low-cost, people-friendly alternative to using a vehicle to travel between West Salem and downtown as harmful.
Well, via the video below take a look at Wigg's testimony at a February 2016 City Council meeting.
Streetscaping downtown. This is an idea that has been talked about for a long time. What needs to happen now is a just do it mentality. Downtown Salem has a lot of untapped potential. The main obstacle is the auto-dominated feel of the Historic District.
People should be privileged in downtown, as elsewhere in Salem, not vehicles. No car or truck has ever shopped at a business, eaten at a restaurant, or had a drink at a nightspot.
The “Streetscape Project” has high ambitions. It adds parking spaces, trees, benches, inviting sidewalks and other pedestrian amenities to downtown. It cuts back traffic on streets that are under-capacity and creates instead a beautiful, economy-enhancing garden running from Riverfront Park to the Capitol.
Linking parks to employment areas is a goal in the City (of Salem’s) Strategic Action Plan and Streetscape, a project of the Design Committee of the Salem Downtown Partnership chaired by Jonathan Fahey, agrees. Streetscape proposes that it can both reignite downtown businesses and make Salem a destination spot.
...“We want to get people out of their cars,” Kittleson says. “We want to slow traffic downtown so we can get people onto our sidewalks eating and drinking.” Traffic calming, he says, by reducing car lanes in favor of pedestrians and bikes, will make downtown safer, more engaging and hospitable.
...Susan Kay Huston designed a Lord & Schryver-inspired plan running East-West for State, High and Court Streets. In these plans, one auto lane is omitted and an ingenious, usable garden established on the widened sidewalk. The result would link Riverfront Park all the way to Wilson Park at the Capitol, (and the parklike setting of Willamette University’s campus) with green.
...Other cities put on “road diets” have seen a 20% increase in adjacent property value. “This plan makes good economic sense, not just to downtown but to taxing districts, school districts and all government. It reduces the financial burden on local citizens,” Smith says.
In recent months Costic, Bural, Huston and Smith have hosted a series of “incredibly positive” focus groups to gather input from business and property owners. “Every person who adds a suggestion gets their thoughts heard,” Huston says. “That’s what makes it so energetic.”
A Salemtowne to downtown multiuse path. Streetscaping our urban core. Projects like these appeal to just about everybody in Salem. They create JOY. They bring people together rather than driving them apart.
I'm optimistic that with three newly-elected members joining the City Council in 2017, a fresh attitude will blossom in City Hall.
Let's all work together on efforts to make Salem a better place to live for everybody, not just a few. Let's stop the top-down approach to planning and goal-setting, replacing it with a bottom-up trust in the wisdom of ordinary citizens -- who, really, aren't ordinary, but extraordinary.
There's so much energy, talent, and expertise waiting to be unleashed in this town. All that needs to be done by the folks at City Hall is welcome the passionate creativity that exists in abundance among Salem's citizenry, rather than pushing it away.
Tonight five clueless members of the Salem City Council voted to move ahead with the unneeded, unwanted, and unpaid-for Third Bridge, a.k.a. the Salem River Crossing.
Let it be remembered who supported this billion dollar boondoggle: Mayor-elect and current city councilor Chuck Bennett, along with fellow councilors Steve McCoid, Jim Lewis, Brad Nanke, and Warren Bednarz. Councilors Tom Andersen and Diana Dickey voted against the bridge.
Bednarz was roundly defeated in this year's election by Third Bridge skeptic Sally Cook. So his vote tonight can't hurt him.
But Bennett, McCoid, and Lewis will be up for re-election in 2018. Their opponents should, and almost certainly will, remind citizens that these guys have voted to impose a $1.50 each way toll on the Third Bridge and two existing vehicular bridges, along with increases in the local gas tax, vehicle registration fee, and property tax.
I'm not making this up.
These are the official major funding sources for the Billion Dollar Boondoggle, along with a comparatively small amount of state and federal money, should that somehow materialize in these financially challenged times.
Tonight was the second reading of an ordinance that "makes major comprehensive plan amendments for the Salem River Crossing Preferred Alternative."
Now, one would think that this City Council meeting would be a joyous occasion for supporters of the Salem River Crossing. It marked a step forward for the Third Bridge. Yet exactly nobody spoke in favor of it at the public hearing (which wasn't very public, because nobody other than city councilors could speak during it).
I saw downcast eyes and morose expressions from the Billion Dollar Boondoggle Five.
City Manager Steve Powers also didn't look very happy, perhaps because I suspect he agrees with much, if not all, of what Councilor Tom Andersen said in his animated six minute explanation of why he was voting NO on the Urban Growth Boundary expansion needed to accommodate the Salem River Crossing bridgeheads.
Below you'll find a video of Andersen's remarks. I urge you to watch it. This was a great example of the proverbial speaking truth to power.
I especially liked his oh-so-true observation that the City Council was rushing to get a vote on the UGB expansion before the end of the year because three newly elected city councilors who are against the Third Bridge, and said so in their campaigns, will take office in 2017.
So the vote tonight was a last gasp attempt by the Chamber of Commerce-backed councilors -- Bennett, McCoid, Nanke, Lewis, Bednarz -- to kiss up to the Powers That Be in this town. They used special interest money to get elected, and they paid back those special interests with their "yes" votes for the Billion Dollar Boondoggle.
Here's the Tom Andersen video.
Update: a commenter, Ben, challenged my assertion that five city councilors voted to approve a $1.50 each way toll on the Third Bridge and existing bridges, plus other tax/fee increases. Well, that is what they did when they voted to move ahead with the bridge via an urban growth boundary expansion.
This bridge isn't going to build itself. Somebody has to pay for it.
And the official funding plan is exactly as I described it. See image below. It makes no sense to claim, as Ben did, that all the City Council did last night is vote for a location for the bridge. That isn't how the way federal/state planning of this sort works.
Everything is tied together. The Salem River Crossing folks have been busily working simultaneously on a bridge design, location, funding plan, environmental impact statements, and such. These can't be separated out, as some City officials like Chuck Bennett have been claiming.
You can't settle on a plan for a $430 million bridge (known as the Preferred Alternative), submit an Environmental Impact Statement and funding strategy based on that plan, and later tell the Federal Highway Administration, "Hey, now we're going to do something very different; hope that's OK with you guys."
It won't be. Bait and Switch not only is fraudulent, often it is illegal.
Bennett seems to think that a cute cheap little 2-lane bridge could be substituted for the half-billion-dollar Third Bridge if that's what Salem citizens "feel would serve their needs and they'd be willing to pay for."
This isn't my understanding of how the federal approval process works.
First the bridge is designed. A credible funding plan is developed to go with the design. Then all that is sent in to the Federal Highway Administration for approval. Bennett seems to think the approval comes first, and the design plus funding plan can be... whatever.
Hopefully some City official can educate Mayor-elect Bennett about how the process really works.
Moving ahead with the bridge thus means moving ahead with the funding plan. Here it is, in all its billion dollar glory (a likely cost after inflation, cost overruns, and financing costs are included).
Man, the outrages never end when it comes to the Powers That Be in this town financially rewarding... get ready for a non-shocking revelation... other members of the Powers That Be.
The newest example of Salem's crony capitalism is T.J. Sullivan's request to the Downtown Advisory Board for $749,999 to help pay for the $8.9 millionPark Front office building on the old Boise Cascade property adjacent to Riverfront Park. See: Download DAB agenda 12-01-16
Note: Sullivan's request letter asks for $749,000, but I guess the Downtown Advisory Board threw in an extra $999 just to get the total tantalizingly close to a round $750,000.
Here's what I find outrageous about this planned private use of public funds.
The Downtown Advisory Board staff report about the request speaks of leveraging Riverfront/Downtown Urban Renewal funds, and removing blight. But construction of Sullivan's office building was announced in March 2016 -- more than eight months ago.
This announcement didn't say that the Park Front office building only will be constructed if Urban Renewal funds can be obtained. No, it and a Statesman Journal story published at the same time said that construction will begin soon.
Construction for the $8.5 million building will begin on a portion of the North Block parcel of the Boise site in summer 2016 and be finished by May 2017, said TJ Sullivan, a co-owner of Huggins Insurance.
Huggins Insurance, along with several investors, formed Park Front LLC. The insurance company will lease out and relocate from its current office on 1786 State Street to the Park Front building once construction is completed. A stock brokerage has already signed on as a tenant, and Sullivan said several businesses, including gyms and banks and medical offices, have expressed interest in the office space.
So it seems clear that the $749,999 isn't needed to spur redevelopment of a blighted part of Salem. The Statesman Journal story refers correctly to "the once blighted industrial park." Repeat, once-blighted.
Also, Sullivan told the Statesman Journal that several tenants, naturally including his own insurance company, either are committed to locating in the Park Front building or have expressed interest in doing so -- another piece of evidence that urban renewal funds aren't needed to leverage development in a blighted area that otherwise wouldn't occur.
The question then becomes, why is there a good possibility that T.J. Sullivan will get a taxpayer giveaway for a project he and his partners already were committed to building?
The Salem Area Chamber of Commerce is opposing a payroll tax proposal that would restore evening and weekend bus service in Salem-Keizer and provide free bus passes to students. To fight the measure they have produced an attack ad called “Stop the Employer Tax.” It begins with a scary soundtrack that sounds like it was recycled from the old Willie Horton attack ad. Kind of laughable.
But then you hear the first words spoken in the ad, and they’re simply untrue.
The voice of T. J. Sullivan who owns Huggins Insurance, and is a Chamber Board member and former Salem City Council member is heard to say this: “The State gets off without having to pay a dime.”
Wrong. The state of Oregon already pays a de facto payroll tax to the Salem Keizer Transit District that raises about $5 million a year and is about three times the 0.21% of payroll that is being proposed for other employers in Salem to pay.
Thus T.J. Sullivan clearly is part of the Powers That Be who like to believe they can control what happens in Salem for the benefit of the already rich and powerful.
And it sure looks like the Salem City Council, which serves as the Urban Renewal Board, is poised to hand over $749,000 to Sullivan for no reason other than, um, he deserves it?
Hopefully this outrage can be derailed, especially since approval of the money appears planned for the last "lame duck" Council meeting before three new progressive city councilors take office in 2017.
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