I read the postings related to MCDA's 10 year budget projection and thought
a quick response might be of interest to Mpls Issues list participants.
Internet age debate is free flowing and immediate, but not always fact
based. Three factual corrections seemed worth making. While it won't mollify
project critics, the public investment in the 900 Nicollet block (Target
Store) is $59.6 million, not $128 million. 1/3 of the investment is in
publicly owned assets, most notably a 600 space parking facility. Similarly,
no public funds were invested in the Block E hotel. The hotel developer and
owner is seperate from McCaffery Interests and paid fair value for the hotel
footprint. Finally, the second phase of the NRP program most definitely
won't receive "somewhere around half a BILLION dollars". As planned NRP
neighborhood action plans will allocate $130 million between 2001 and 2009,
with an additional $20 million to be allocated by the NRP Policy Board from
the affordable housing and commercial corridor reserve funds between 2001
and 2004.
Several postings commented on the need for reform and staff consolidation;
always a fair topic for debate, especially during an election cycle. This
ground has been plowed before, however. The last major external review of
MCDA was prompted by me, and resulted in the so-called "Blue Ribbon
Committee report" in the early 90's. Its interesting that those
recommendations focused mainly on governance issues, and had little to say
about consolidation. Its also important to note that MCDA is a much smaller
organization today than it was then. Our staff has been reduced by 15 %
since 1990. The workload and work output has not decreased, however.
Reform should be debated as a policy and organizational structure issue, not
a financial strategy. For my own part I thought for a time MCDA and Planning
consolidation might make sense, but concluded before I left City Hall in
1993 that it would actually result in a less prominent role for planning.
Then, as now, this kind of organizational change will not yield major budget
savings without major service cuts. There is less "fat" than folks may think
after a decade of staff reductions. And I can say with absolute certainty
consolidation will not be a solution to the financial issues created by: a)
the decision to initiate NRP in 1990 by extending collection of tax
increment dollars in older districts through 2009 and reschedule debt to the
early 2000's; b) the decision to commit to a second phase of NRP lasting
from 2001 to 2009; and c) increasing legislative restrictions on the use of
TIF over the decade of the 90's after the NRP finance plan was set in place.
The financial issues created by these factors, which are now greatly
affected in a negative way by property tax reform at the state level, are
the issues MCDA's projection deals with. Suggesting reform as a response to
this financial challenge is nibbling around the edges.
Other postings deal with Agency performance. If one characteristic of
internet discourse is immedicacy, another is that its easy to make very
impersonal comments about public employees. Some of that showed up in the
budget postings. Much more has shown up in other Mpls list postings on other
issues. Without being too defensive, the folks I work with are dedicated to
what they do, as are the folks who come to community meetings and work on
programs and projects from a neighborhood point of view. Its always been
puzzling to me why there isn't more common ground given common objectives.
This is a priority for me, and I take some comfort from at least one
grudging suggestion that things are getting better in this regard. But no
matter how this dynamic improves in the future, this much is true about the
financial issues MCDA faces. It is neighborhood level investments which hang
in the balance.
Much criticism leveled at MCDA and some elected officials centers on a
handful of large downtown projects, most prominently Target Store and Block
E today. In the future projects of this type will continue to be
controversial, with debate centering on whether public investment is
warranted. When the answer is yes, however, projects of this scope and scale
will still be possible because the public investment is self-financing. In
contrast, for future neighborhood scale projects - recent examples would
include the Grain Belt renovation or the housing in Phillips along Portland
and Park Avenues - which require assistance beyond federal, state and
regional sources and the assistance the project itself can generate, the
question will be how can we afford these initiatives because discretionary
local development funds won't be available. This will be the same dilemma
for programs like affordable housing, commercial corridor revitalization,
small business assistance, home renovation, historic preservation,
industrial land assembly and preparation, and on and on. Except for the
federal, state and regional funds which flow through MCDA for these efforts,
additional local development funds will dry up because of the higher debt
payments on old debt (see point a above), the Phase 2 NRP commitment and the
dramatic reduction in overall TIF revenue that appears to be in the offing
as a consequence of tax reform. The only opportunity to maintain some
capacity to respond to these neighborhood level development priorities is
the HRA levy authorized for years by state statute and used by cities
throughout Minnesota. Certainly current and future elected officials aren't
compelled to maintain this investment capacity - and citizens aren't
compelled to support this proposition either - but I do believe the capacity
will be quickly missed and our neighborhoods will be worse off without it.
Finally, on the observation that an election year is a bad time to talk
about MCDA finances and an HRA levy - yes and no. In my transmittal letter
sending the 10 year projection to the Council I observed "there is plenty of
fodder for political debate in this document", and "the fact that this
discussion begins at an intensely political time will make it all the more
interesting". Clearly this issue can be oversimplified, blame can be
leveled, and the debate can be less about problem solving and more about
seeking political advantage. On the other hand, within 3 weeks of being at
MCDA I made a presentation to the Council and Mayor showing the effects of
the issues our current projection covers. In fact a key slide from that July
14, 1999 presentation is titled "New Era" and reads "The MCDA's community
development resource system and funding capacity is fundamentally changing".
The Mayors 1999 budget address delivered to the Council and citizens of
Minneapolis in fall 1998 also identified and talked candidly these
challenges. So this isn't a new topic, although pending legislative action
will deepen and accelerate the concern. There really is no other responsible
course of action at this point than to lay out the facts, have the debate
over options and see where the concensus lies in the end. In part, isn't
that what elections are for?
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