It was a bittersweet moment today for Graham Richard, our former mayor.

Graham stood at the very back of the crowd of 200 or so people, mostly heavy hitters, politicians and affiliates of one downtown organization or another, to watch current Mayor Tom Henry, Redevelopment Director Greg Leatherman and a few others give and take credit for the new hotel adjacent to the ballpark.

It was all Graham’s vision and his name was mentioned once in passing.

So, a couple of representatives of the hotel spoke about the process and about their surprise at seeing so many people turn out to support the opening. Inside there were another 100 or so folk enjoying the new sports bar, milling in the lobby or waiting for a room or wondering what the crowd was all about.

It is a nice hotel. The sports bar is filled with big screen TVs, there are plenty of booths and bar stools and tables. Big smiles abound. It is new, it is clean, it is open and fresh. You might want to come down just to see the place.

A few years back it was just an idea. Most of that area was blighted, really blighted: there were a few houses among the weeds, there were a few parking lots, Belmont Liquors, a nice suburban-look restaurant and more weeds. The houses, for the most part, had seen their best days many years ago.

Mayor Richard had a vision and pushed his staff, including Mr. Leatherman, to make it happen. Obviously, there were bumps along the way, and questionable transactions, but the vision of a ballpark, a hotel, a large parking garage and a condo complex is now 3/4 of the way to realization.

Greg Leatherman was given the greatest credit and, perhaps, the strongest round of applause, deservedly so. The hoteliers credited him with making sure that the project crossed every hurdle. He took a modest bow. The hoteliers complimented the local banks that got on board, because of button-holing by the mayor, and they spoke of the mass that had been created with the huge project nestled among the Grand Wayne, the Embassy, the Lincoln campus, the Library, the Firefighters Museum, the Botanical Conservator and the Federal Building. One fellow emphasized the density, the mass, that had been created as a reason the hotel could go forward. Much applause.

So, now it is up to Mr. Leatherman to make the last piece of the puzzle come to pass, the condo building. He assured me that Barry is making progress, but they still do not have a lead bank around which other lenders can rally. It is different, he said, finding financing for that sort of a building, compared to a hotel, because lenders expect a full portfolio of leases in hand, signed and notarized. It is different also, he lamented, because the easy money that washed all over the place when the project was envisioned is now a fond memory. Bankers are hoarding their money.

Greg added that he was also left out of the loop when Barry flew in the high-level Savannah delegation in mid-August to see the ballpark. Nobody, except Tim Pape, the mayor and another unnamed council member, were privy to the stealth tour. We are digging for that other name. And, Greg said to me before the dedication today that there was not a media campaign to discredit John Shoaff, the principle critic of the project. Things just worked out that way, he said, and I believe him. In the 30-years I have known Greg I know when he is holding back. You will remember Mr. Leatherman was on two radio talk programs and two editorials appeared, both attacking Mr. Shoaff. Seemed like a campaign, but Greg insisted it was not.

So, Barry Realty is the on the spot. The other three legs of the project are complete leaving just a big hole in the ground to mark their languishing promise to the community. It is good that John Shoaff pushes Barry hard and demands the liquidated damages be paid. If nothing more, it is a reminder that we are all paying close attention. The $400k that would result would help the city budget, no doubt.

Leatherman, for his part, fully believes that Barry will make good on their promise and his points to a few leases that are nearly ready to go. He also reminded me that Barry has already put some $6 million into the ball complex and deserves some credit for the entirety of the project.

Meanwhile, at the back of the crowd, in blue jeans and a light shirt, no tie, no suit, loafers, not oxfords, taking it all in with a tired smile was the guy who had the vision and pushed so hard to make it happen. Today, he said to me, would have been his mother’s 92nd birthday. She would have been very proud.

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Harrison Square Doubts Were Well-Founded

By Ron Reinking, CPA

In the ongoing discussion in the press and the chatter on local talk radio regarding Fort Wayne’s Harrison Square there’s a line of reasoning that goes like this:

“Nobody could have foreseen these economic times . . . city officials did their very best with our money . . . they should not be blamed for having the courage to bring a vision to reality, a plan that could have worked, something good for the entire community.”

That is a defense, however, against accusations never made.

No one believed that those involved in the planning of Harrison Square were careless or insincere. It did become obvious, however, that while promoters initially may have wished good for the community, human nature inevitably took over and self-interest began to drive public policy.

As a result, Fort Wayne now must be counted another victim of well-intentioned visionaries with the power to tax.

The Nobel laureate Milton Freidman in his award-winning book and television series, “Free to Choose,” describes such a situation in the context of one of four different ways people spend money, i.e., “spending other people’s money on other people.”

Thus the well-meaning fellow with a fuzzy civic vision places himself in the position of spending others money for community “good.” Classically, it means serving on a not-for-profit board or assuming the position of “public servant.” In many of these positions, Friedman wants us to know, there is virtually no restraints on spending and, if your intentions are deemed worthy by the media, honor and esteem to boot.

And when, as is the case of Harrison Square, the wheels do fall off, there is no personal punishment or accountability. Indeed, failure itself is often used to justify even more money to “clean up the mess.”

Dr. Friedman continues: “If I want to do good with other people’s money, I first have to take it away from them. That means, at its very bottom, a philosophy of violence and coercion. It’s against freedom, because I have to use force to get the money. In the second place, few people spend other people’s money as carefully as they spend their own.”

Citizens of Fort Wayne, if they hope to prevent future debacles, must hold the boosters of Harrison Square accountable to the Freidman dictum, and for a number of reasons.

First, we must question how much civic courage it takes to pursue a vision of “good” with money taken from other people. Was it ethical, appropriate and even legal to expropriate the taxpayers’ resources for condominiums and baseball stadiums? If the answer is “yes”, then we are little more than indentured servants of a government granted unrestrained power to tax and spend.

Second, we must ask if it is true that nobody could have foreseen this outcome. Eighty percent of the public saw it coming, according to opinion polling. And 100 percent of private investors refused to risk their own capital on the government’s vision. The politicians, with no skin in the game, proceeding anyway, calculating they could make excuses if the bag (which we now hold) ultimately turned up empty.

It is a good guess that the Atlanta “investors” in Harrison Square still retain benefits in the form of tax abatements, forgiven leases of the old stadium and probably cash.* Fort Wayne citizens wish they could say the same.

On this last point it is interesting to note that practically all construction contracts contain performance bond requirements and set dates for completion of a project, thus placing risks on the developers. In the case of Harrison Square, these risks have now apparently become the taxpayers’ problem. (Some will recall that Councilmen Tom Smith and former Councilman Don Schmidt asked unsuccessfully to review our Harrison Square partners’ financial statements in order to evaluate their credit capacities.)

And finally, as hard as it is to say, nobody can ever know for sure that the project is honest. That, unfortunately, is the nature of other people spending your money — you’re never quite certain where it went.

This was the primary concern of Fort Wayne citizens like me with Harrison Square — specifically, that without the tests of a free market we would never really know whether it was a good idea or bad.

That concern, recent events now demonstrate, was spot on.

Ron Reinking, CPA, owns an accounting firm in downtown Fort Wayne. He is an adjunct scholar of the Indiana Policy Review writing frequently on economic development and urban public policy. Contact him at ipr@iquest.net.

* A good part of the investment of the lone “private investor” in Harrison Square, a company of unknown assets and financial accountability, was apparently guaranteed by various agreements and legal devices.

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Good afternoon and welcome. This is the first time a state of the city speech has been delivered here in the regional public safety academy of northeast Indiana.

Which is slated to lose a projected $1.8 million through the end of next year. Henry’s power grab at the facility resulted in most of the board resigning due Henry trying to exert too much control over what was to be an autonomous entity.

Today is the 200th birthday of Abraham Lincoln…many say, our greatest president (pause) so far.

So far my ass. Henry forgot to mention that since Obama was elected, the Dow Jones has lost 2,000 points, the porkulus package is filled with bullshit, including $30 million to protect some stupid tiny mouse in Nancy Pelosi’s district that won’t stimulate anything.

I try to keep Lincoln’s second inaugural address in mind as we face those challenges: “with malice toward none but charity for all,” he said, “…let us strive on to finish the work we are in, to bind up the nation’s wounds…”

How original. Obama’s been running around quoting Lincoln all week, now Tom Henry is parroting the same Lincoln speeches. How about something in the way of original thinking?

Politics did put us on the map in 2008….and we enjoyed our moment in the spotlight. Former president Bill Clinton, presidential Candidate Hillary Clinton, Ted Danson in support of Hillary…

Danson is the dumbass that claimed back in 1988 that all of the oceans would be dead within 10 years and so would all of us. Henry is still star-struck over meeting one of the biggest asshat liberals to walk the planet, amazing.

We accepted matching dollar applications through the middle of December, and set aside 200-thousand dollars in CEDIT money to fund the projects, but the response was so strong and the projects are of such high quality, that I agreed with the staff to double the infusion to 400-thousand dollars..

Then he snatched it away from the city council members so *he* can better decide how to use the funds.

When the program started in 1990, each council district received $450,000 with an additional $450,000 split among the three at-large members. Henry slashed that amount to $250,000, and now it’s going to ZERO.

On to the casino issue.

We know the issue of gaming has broad implications. That is why, as a community, we are studying it in depth. We need to fully understand what those implications are—both the positives and the negatives.

As your mayor, I am committed to creating opportunity for all our citizens and making sure that Fort Wayne and northeast Indiana have every chance to thrive and compete.

So let’s seize this moment to do several things that are essential:

First, let’s continue the community conversation about the benefits and costs of this opportunity; Second, let’s allow the emerging prospect of gaming to move forward in the legislature; and third, let’s have the courage to pursue a full consideration of the gaming issue…. remembering that it must bring us new jobs, high-quality investment, and significant new revenue enabling us to enrich our community in meaningful ways. Nothing less is acceptable.

Sorry mayor, it won’t work. From Fort Wayne Observed:

One of the big items that has gone unnoticed in talks of casino gambling in Fort Wayne is that there will soon be a very large casino opening this summer just a short drive from northern Indiana.

It is the new FireKeepers Casino being constructed on Interstate 94 near Battle Creek, Michigan. It is only 4 miles west of I-69. The casino is being developed by the Nottawaseppi Band of the Potawatomi Indian Tribe.

From Disenfranchised American:

The Sturgis City Council voted last night 9 to 0 to approve a new Casino to be built, right near the Indiana line, just north of Howe, IN.

How many casinos can one region have and still be successful?

Also from Fort Wayne Observed:

Dan Carmody, Fort Wayne’s former head of the Downtown Improvement District, responded to a recent Fort Wayne Observed post on the possibility of casino gaming in Fort Wayne:

From my experience at the origins of heartland gambling casinos are poor levers of economic development and even worse as new forms of revenue generation for units of local government. We are faced with a situation which demands a return to basics, casino gambling is a nice niche for affluent societies but not a cornerstone for local economies in crises.

Why’s he wasting the time and money on this?

Business is also alive at Fort Wayne city utilities, the last of our sewer separation project, in southeast Fort Wayne was finished in 2008… Creating additional holding space for sewer overflows and solving basement back-up problems.

Our city-owned utilities continues to invest in its infrastructure as well. Most recently completing a 32 million dollar clarifier project at our sewage treatment facility. These improvements will significantly increase the plant’s capacity to treat raw sewage..

Ahem. I’m still on a septic, (after being in the city for over 3 years), and several other neighborhoods in Aboite are shit-up-the-creek as well. I also live in an area without a city maintained storm water system. The ground doesn’t perk and a large portion of the affluent (shitty-water) runs into the Hadley ditch.

Another example of collaboration is the city and county working closely together for the joint information technology needs of local government.

Yet the mayor’s office still cannot provide city council with monthly operating statements?

Back in 1974, mayor Ivan Lebamoff had the vision to implement a very creative plan. He agreed that the city would get out of the business of bringing electricity to customers and instead would lease the electric utility to I&M. The agreement stated that I&M would continue to operate the system and the city could, if desired, take back the utility at the end of the lease.

The completion of the lease is approaching, and discussions are underway on an agreement that will best serve local citizens and customers. The city is currently holding thirty five years’ worth of lease payments, held in a community trust. I had hoped today to tell you how I thought we, as a community, could be discussing the use of the trust fund. But two things prevent me from opening that conversation: one— the market has taken investors on a wild ride, and our trust fund, which was at about 35 million dollars a year ago , thanks to our economy, is worth significantly less. That’s troubling.

Even more pertinent, however, is the fact the money was originally set aside to assure citizens they would have a responsive, reliable source of electricity. Because first and foremost, that money is dedicated to assuring continued electrical service for our citizens-that’s our top priority…and we do remain hopeful that an agreement will be reached soon.

The first reason he doesn’t want to discuss is troubling. Who’s he having the discussions with? How about a little transparency. The second reason is bullshit. I&M can continue to service customers with or without the lease. The majority of what they leased from the city they have since replaced with new equipment.

And he barely touched on Harrison Square.

As we look ahead into 2009, we still have many unanswered questions. We certainly don’t know how the economy will continue to impact the entire Harrison Square development, especially the retail and residential portions.

But I do invite each of you to join me April 16th for the first pitch at Parkview Field!

Sans a hotel, condominiums and retail.

Yawn..

AWB

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Yesterday Kevin Leininger reported this:

Although officials with Merrillville-based White Lodging Services say they still hope to begin construction on the 250-room Courtyard by Marriott this year, President and CEO for Investments Deno Yiankes said Friday the company is negotiating with its third would-be lender and that a loan agreement could still be at least months away.

Still hope? Months away? That’s not very definitive, now is it?

No condo’s, no hotel, no retail.

And it appears that White Lodging is giving Austin, TX the shaft as well.

The Austin Statesman reported last month that groundbreaking on a 1,000-room, $275 million hotel [by White Lodging] – originally scheduled for 2008, then this year – is being shelved until further notice.

AWB

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Graham Richards’ legacy:

A failed inner-city housing development, a $2 million tax break to a McDonald’s restaurant, the failed Public Safety Academy of Northeast Indiana, the failure in the development of The Harrison condo project, and screwing the city for $300,000 for his consulting gig.

What am I forgetting?

Happy New Year! – AWB

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