TIF is intended to be used as incentive to encourage development of projects that benefit the community but for which the return carries sufficient risk to discourage investment. Construction of luxury housing, a hotel and entertainment venues between an affluent neighborhood and a thriving downtown with a steady stream of visitors is not a risky proposition.Since the beginning of this blog ten years ago, TIFs (tax breaks and gifts of taxpayers' money from the Iowa City City Council to wealthy developers) have been the subject of over 40 blog essays. "TIFs: Links to Blog Essays." They have itemized and illustrated over a dozen categories of reasons why TIFs are a bad idea -- any one of which should be reason enough to stop using them. No pro-TIF public official has ever taken up my challenge to demonstrate why none of those categories is a reasonable basis for concern. Accordingly, there is no reason why this blog essay should repeat those arguments once again.
-- Lauren Lyon (from op ed column below)
A current (2015) case of this abuse, which appears to be sliding down the Council's greased skids as I write, involves a project called "The Chauncey." Although I am not going to describe and analyze it here, it does seem to me important enough to warrant reproducing, "For the Record," some of the current local writing on the subject.
N.J., May 25, 2015
Lauren Lyon, "Church rezoning objects to Chauncey rezoning," April 27, 2015
Henry Madden, "Council Should Issue New RFP for College/Gilbert Site," April 30, 2015
Jon Fogarty, "Financial errors in Chauncey plan, options being ignored," May 20, 2015
Mary Gravitt, "Residents should turn out for Chauncey hearing," May 19, 2015
Marc Moen, Steve Rohrbach and Mike Hahn, "Setting facts straight on Chauncey development," May 9, 2015 [a response to Henry Madden, above]
Wallace and Karen Chappell, "Council should approve Chauncey," May 19, 2015
Iowa City Press-Citizen, April 28, 2015 [online 12:28 p.m. CDT April 27, 2015]
On Thursday, Trinity Episcopal Church filed a formal objection to the city of Iowa City’s application for unlimited density zoning for the proposed location of the controversial Chauncey tower project.
The controversy over rezoning the land at the corner of College and Gilbert streets could be cast as a David and Goliath story, or a confrontation between naïve idealism and worldly sophistication. Neither of those characterizations is correct.
For the past 18 months, Trinity Episcopal Church has pointed toward the shortage of parking likely to result from the construction of the Chauncey on that corner, the project for which the proposed zoning change will make way. Parking restrictions will have a direct impact on parishioners’ and guests’ ability to participate in church activities seven days a week. Trinity has also noted the obstruction of light to the church building that the 15-story Chauncey will cause. Comments by commissioners at the Zoning and Planning Commission meeting April 16 suggested that they might finally be taking seriously the issue of parking related to the unlimited density that the change to CB-10 will allow.
Apart from parking and the aesthetic impact on the church building, Trinity parishioners have consistently raised important issues related to the use of public funds and city owned land. The $14.2 million in incentives to be provided to the Moen Group for construction of the Chauncey includes $12.1 million in tax increment financing. TIF is intended to be used as incentive to encourage development of projects that benefit the community but for which the return carries sufficient risk to discourage investment. Construction of luxury housing, a hotel and entertainment venues between an affluent neighborhood and a thriving downtown with a steady stream of visitors is not a risky proposition.
Inclusion of affordable housing in a project is an element of qualification for TIF. The city of Iowa City proposes to spend $1 million in HUD funds to purchase five units in the Chauncey to be designated for low-income residents. This proposal distorts the meaning of affordable housing in a cynical manner to justify what is already a questionable use of public funds. The project also incorporates a purchase of land by the developer from the City for $2.1 million, the proceeds of which will be contributed by the city to the project’s financing.
It was noted at the April 16 meeting that the city elected not use the Good Neighbor Program protocol, which is “strongly encouraged in most instances” by its own department of Planning and Community Development. The program brochure, which is posted on the city’s website encourages “proactive dialogue between property owners, developers and neighbors that may help identify and resolve issues.” It goes on to say “answering neighbors’ questions and hearing their concerns or suggestions may provide the opportunity to developers/applicants to address concerns or objections before the project is reviewed in a public forum.”
To have the skill, resources and political influence to make one’s mark on the built environment of a city is an extraordinary form of power. It can change the character of entire neighborhoods and shape their future for decades, if not centuries. Zoning regulations provide an essential counterweight to that power by allowing the citizens and organizations within affected communities to ask questions, pose challenges and offer alternatives.
Trinity Episcopal Church has never objected to the commercial development of the property in question. The congregation welcomes it and remains open and willing to take part in the process of discussion and decision-making about the specific nature of that development. The city and its agencies have not entered fully into that process.
The Rev. Lauren Lyon is rector at Trinity Episcopal Church, 320 E. College St. in Iowa City. She can be reached at firstname.lastname@example.org.
Iowa City Press-Citizen, April 30, 2015
In contrast to the Press-Citizen's editorial, "Council should approve Chauncey" (April 25), I would like to state many reasons why the council should not approve the Chauncey and should restart the process for designing a building for that College and Gilbert site and this time do it above board.
1. The council misled the public from the beginning. The city's Comprehensive Plan restricted the building height to 75 feet. Some on the council indicated to developer Marc Moen that they wanted a very tall building and calculated that they could easily change the zoning restrictions. If they had been fair to all developers, they would have stated in their request for proposal that they preferred 15 to 20 stories.
2. The city stated in the RFP that it favored workforce housing. This led many developers to incorporate as many affordable units as possible to receive the contract. One proposal designed 153 workforce units while Moen's design listed 13. Was there prior information passed to Moen that this was not important?
3. The council indicated its pre-established selection of Moen's Chauncey when councilor Susan Mims stated at the January 2013 council meeting, "I see no reason for further discussion. I was for the Chauncey from the beginning."
4. Upon reviewing the comparative matrix developed by the city's consultant, it becomes clear that the Chauncey was not the most financially advantageous choice for the city. By "financially advantageous," I mean the net present value of the TIF money invested by the city and the tax payback the city would receive. These numbers should have been exposed to the citizens but were not mentioned because (former) councilor Connie Champion spoke up after Mims with, "Yes, I agree. Let's not get into a numbers game."
5. The City Council appealed to the Planning and Zoning Commission for a change to the Riverfront Crossings Master Plan to allow the addition of three blocks, including the block where the Chauncey would be located, to allow the Chauncey but was denied. It voted to override the P&Z denial but, by law, the vote required a super-majority and two councilors voted no. It then appealed to P&Z for a spot zoning change to the College/Gilbert site, which would negate the very reason for the transitional area, which the city's Comprehensive Plan incorporated. The P&Z again refused to allow the change.
6. Immediately after the zoning rejection, two members of the P&Z commission, volunteer citizens, were denied reappointment. These were competent long-term members.
7. In obvious ignorance of Federal Aviation Administration rules, the council learned that 20 stories would violate the agency's rules. Why didn't the city investigate, as part of their matrix, the present regulations before voting — an indication of poor planning.
8. In an age of environmental concern, one would think that our council should be concerned with energy efficiency. One developer submitted a design with platinum LEED certification and a "net zero" energy use. We could have had one of the first "net zero" buildings in America and have had national publicity.
9. Many citizens — including Trinity Church, North Side and College Green neighborhood residents, and New Pioneer Co-op members — objected to the high-rise building and the change of the zoning, but were ignored.
10. Just several months ago, the City Council, for some reason, realized that Chauncey did not have any workforce housing so it agreed to buy five units for $1 million — $200,000 per unit. Is that affordable workforce housing?
I believe the only way to correct this elite, unfair, confused and ill-conceived project is to start all over and tell prospective developers specifically what the people of Iowa City want.
Henry Madden is an Iowa City resident.
Iowa City Press-Citizen, May 20, 2015, p. A13 [online 2:56 p.m. CDT May 19, 2015]
Recently, The Chauncey developers wrote an opinion piece outlining the financial benefits for the project. However, don’t listen to what they say, look at what their numbers show. The city is about to take a giant bet on a financially risky project that will supplant growth, has polarized the community, placed a community of faith under stress, and most troubling, left those needing workforce housing out in the cold. Our city deserves and can do better.
This project is a bad deal for taxpayers. The approved TIF totals $14.1 million on a total budget of $49 million. That amount includes a $2.1 million refund of the purchase price of the land. For that amount of public assistance, the city could forgo the loan, take 30 percent equity in the building and get 70 units that can be sold as means-tested workforce housing for middle class families.
Instead, the city will borrow that money, loan it to the Moen Group and let them pay it back in 20 to 25 years out of their property taxes. This process robs the city, county and the school district of revenue from this property and turns what would otherwise be property taxes it into equity for the Moen Group. If this project cannot fully obtain private sector financing, then it is fiscally bankrupt by design.
Furthermore, this project makes a mockery of the request for proposals requirement for workforce housing. At present, the current plan seems to be using $1 million in HUD funds to buy five units in the building for such housing. To me and most people I talk to, this fails the spirit and letter of the original RFP and goes into the territory of moral bankruptcy. Multiple proposals represented a real opportunity to enhance work force housing options for working families in our downtown.
For example, George Sherman Associates, proposed a 13-story building that specified 132 workforce housing units. However, Councilor Connie Champion dismissed those units as “just student housing” and Councilor Susan Mims echoed that remark. Ryan, a 75-year-old firm having constructed hundreds of buildings across the U.S., presented a five-story building containing 60 workforce housing units. This building would have satisfied the community’s desire for a legitimate transition zone between downtown and the surrounding neighborhoods as well as Trinity Episcopal Church.
In short, this project was not chosen based on merit, the fiscal numbers or its alignment with the RFP. Watching the deliberations, Jim Throgmorton seems to be the only councilor who read the nine pages of data supplied by city planning staff since he asked the only question referencing the data. If anything, it appears to have been chosen based on personal relationships, the lowest level of RFP satisfaction and the greatest amount of public assistance.
These are just two flaws of The Chauncey. We could describe many more, but those problems alone are enough to reject this project. There are many other options for the corner of College and Gilbert that are being ignored.
It’s time to admit that many mistakes are being made and that we need to start over. This is a highly desirable site, located between our downtown and our historic neighborhoods. There is no need to subsidize development with public money and with city ownership of all but the MidAmerican electrical substation, the city can dictate every aspect of development. By listening to concerns, opening up the process and setting forth clear guidelines that will be followed, our community can get a project that our entire city can support.
Jon Fogarty is co-chair of Iowa Coalition Against the Shadow. He lives in Iowa City.
Iowa City Press-Citizen, May 19, 2015, p. A7 [online 2:04 p.m. CDT May 18, 2015]
Iowa City Council scheduled May 19 for the Chauncey rezoning. I urge the community to turn out in force with their voter registration card in hand, and expect the following:
•The agenda will be purposely overloaded.
•Members of council will appear to be listening, but only three actually are.
•Do not plead on moral ground — politicians have no morals.
•Corruption is the norm in Third World contexts and content such as skyscrapers, so beware of done deals, like pipe being already shipped.
•If the meeting starts at 7 p.m. and will end at 11 p.m. so as to wear out those wanting to testify.
•Your charter right to five minutes to speak will be cut down to three, so practice you delivery.
Finally: At the last U.S. Census, Iowa City residents numbered 68,000; the city council numbers seven; three are up for re-election. The odds are in the peoples’ favor. And this is what democracy looks like Iowa City.
My delivery is this: The Chauncey because of its height will cast a shadow over Gilbert Street, which a main thoroughfare, and cause the street to ice over in winter. I have observed this phenomenon by walking down Linn Street where a single-story building housing a law firm casts its shadow like a groundhog, icing up the adjoined sidewalk. If the shadow of a one-story building can do this to an entire sidewalk, what will 15 stories do to a highway?
Marc Moen, Steve Rohrbach and Mike Hahn
Iowa City Press-Citizen, May 9, 2015, p. A9 [online 12:44 p.m. CDT May 8, 2015]
The Chauncey Development Team welcomes honest, fact-based discussion of the proposed development at the corner of College and Gilbert streets. Facts do matter, however, and we feel compelled to respond to the April 30 opinion by Henry Madden, which is largely innuendo, erroneous information and unfounded claims of inside information from which he concludes the city’s process was not “above board.”
In response, we provide the following factual information:
•Madden erroneously claims the City Council misled the public on the scale of the development it was requesting in the Request For Proposals. In fact, the city’s Aug. 31, 2012, RFP specifically sought developers for “an urban, downtown-density building” and states “it is anticipated CB-10 (Central Business District) zoning will be requested.” (City RFP, pp. 3,11)
•Madden’s suggestion that “prior information” was provided to developer Marc Moen regarding workforce housing has no basis in fact. In fact, the information on workforce housing was provided through the city’s RFP (City RPF, p. 10).
•Madden claims there was a “pre-established” council selection of the Chauncey. In fact, the Chauncey proposal was made known to council only through the submission process established in the city’s RFP. There was no communication with council members before submitting our proposal, and we had no idea which proposal any member of the council might prefer.
•Madden asserts that TIF numbers “should have been exposed to the citizens.” In fact, not only were the numbers made public, they showed that the biggest benefit to the city was from the Chauncey project. The numbers were included in the City Council packet before selection of the preferred developer.
•Madden mistakenly claims the city has engaged in spot zoning. In fact, the Gilbert/College site already is identified as general commercial in the current comprehensive plan (IC2030 Comprehensive Plan). The CB-10 zoning request is consistent with that plan.
•Madden claims that immediately after P&Z voted on the zoning application, two members of the P&Z commission were denied reappointment. In fact, council appointments to P&Z were made before P&Z’s vote on the city’s rezoning request at which time only oneof the commissioners had applied for reappointment.
•Madden incorrectly claims the City Council was ignorant of the Federal Aviation Administration Rules. In fact, the city’s RFP specifically calls out the airport regulations and it was well known to everyone involved that an FAA variance was required, whether 15 or 20 stories. (City RFP, p. 11)
•Madden suggests that council is not concerned with energy efficiency. In fact, the Chauncey’s sustainability was discussed during the selection process and has been the subject of negotiations since Chauncey was selected.
•Contrary to Madden’s claim, concerns voiced by Trinity Church and others about height were not ignored. Chauncey’s reduction to 15 stories was in direct response to these concerns.
•Madden’s suggestion that New Pioneer Co-op was opposed to the height is belied by the fact that New Pioneer Co-op signed letters of intent to occupy the main floor on multiple projects requiring CB-10 zoning, including a 13-story building and an 18-story glass building. Moreover, the Chauncey design team has been respectful of the corner and surrounding properties. Chauncey is only four stories at the College/Gilbert corner (14 feet shorter than would be allowed under CB-5 zoning) with major step backs to the taller section of the building beginning (at level 5 the building steps back 70 feet from Gilbert Street and 102 feet from College Street). This assures that the shadow effect on Trinity Church is no greater than a CB-5 building.
•Workforce housing has been included since the beginning of the Chauncey project and has received careful attention throughout negotiations on the development agreement. Madden’s suggestion to the contrary is simply not true.
•Madden proposes the city discard all the work done in the last 2½ years and start over. This is after the development team has invested hundreds of thousands of dollars, and after city staff, third-party consultants, and City Council have devoted an enormous amount of time to the development of the College/Gilbert site.
Madden’s proposal would have a devastating impact on any developer ever trusting the city on a development project in the future. It would be irresponsible for the city to follow Madden’s advice.
Marc Moen is a member of The Chauncey, L.L.C., the developer on the project; Steve Rohrbach is president of Rohrbach Associates, P.C., the architect of the proposed Chauncey; and Mike Hahn is president of McComas-Lacina Construction, L.C., the general contractor on the proposed Chauncey.
Wallace and Karen Chappell
Iowa City Press-Citizen, May 19, 2015, p. A7 [online 2:03 p.m. CDT May 18, 2015]
We urge the City Council of Iowa City to continue its support of the Chauncey, as proposed by the Moen Group, architect Steve Rohrbach and builder Mike Hahn. This team is well known locally for its integrity and for its ability to produce quality results.
Plans for the new building include two intimate movie theaters, the next step in the swift success of Film Scene.
We urge the Council to vote in favor of this ambitious project, one that will enhance and enliven our downtown, which continues to grow as an attractive destination. Under the guidance of Nancy Bird, Nancy Quellhorst and many others, the area is becoming a sought after place to live, work and have fun. The Music Building of the University of Iowa, as well as the incoming UI Museum of Art, are part of an increasingly vibrant downtown. The Chauncey will complement the theaters, galleries, restaurants, shops and residences that are currently flourishing.
We are, indeed, burbling along with entrepreneurial activity. The recent designation of Iowa City as the most successful college town in the country, for populations under 250,000, as well as regular recognition as a major retirement center, are a testament to sustained creative activity: the results can only attract more students to the university and to Kirkwood Community College, as well as new residents, retirees and visitors.
We urge the council to affirm what is happening in our city by approving The Chauncey.
Wallace and Karen Chappell