Public Watchdog.org

The Uptown TIF: Crapitalism Without Accountability

07.25.13

This week, both the TribLocal and the Park Ridge Journal published articles about the City Council’s discussion of Park Ridge’s Uptown TIF at this past Monday night’s Committee of the Whole meeting: “City Staff Reworking TIF To End Deficits,” (Journal, 07.24.13) and “Park Ridge hopes to reduce TIF drain” (Trib, 07.25.13).

At that meeting, City Finance Director Kent Oliven reiterated that the Uptown TIF fund – the special enterprise fund created to operate the TIF district – has already “borrowed” more than $5 million from the City.  Oliven also reiterated the findings of TIF consultant Kane McKenna and Associates, Inc. that, by the expiration of the TIF in 2027, the TIF fund is projected to owe the City over $20 million.

That’s not the kind of return one would hope for on the City’s approximately $40 million TIF “investment.”

It’s also one big reason why Moody’s downgraded the City’s bond rating in January 2012, while also assigning a negative outlook to the City’s finances.  And it’s got the City scrambling to salvage whatever it can from this long-term mess, using some of the ideas and advice given the Council several months ago by Kane McKenna.

For example, one way to put more TIF district tax revenue in the TIF fund is to segregate TIF district property that has gained in value from the property which hasn’t.  But that reportedly will take TIF revenue away from other taxing bodies, like School Districts 64 and 207, and the Park Ridge Recreation and Park District.  We suspect those taxing bodies might have something to say about that effort, even though they – and especially D-64 – were complicit in the creation of the TIF back in September 2003.

Back then, because D-64 had the most to lose from the TIF’s diversion of property tax revenues, the D-64 Board went through the effort and expense of hiring a top-notch Loop TIF attorney, John Murphey., He repeatedly advised then-D-64 Board members Joe Baldi, Rich Brendza, Ares Dalianis, Christine Heyde, Dean Krone, Steve Latreille and Sue Runyon that the land in question did not legally qualify for “TIF” status because it could be developed without a TIF; and that D-64 would likely be successful if it sued the City to stop the TIF.

For reasons that were vague even back then and virtually impenetrable today, however, the D-64 Board wimped out and cut a less-than-optimal financial deal with the City that the City reportedly will be looking to renegotiate now that the TIF has become an economic black hole.

Which illustrates, painfully, one of the biggest problems with government generally, but especially local government here in Park Ridge.

Lack of accountability of public officials for the decisions they make.

Less than 10 years after the foolish TIF-related decisions were made, not one of the elected City officials who made those decisions, or either of the two key City staffers who facilitated them – mayors Ron Wietecha and Mike Marous; alds. Mike Tinaglia, Don Crampton, Rich DiPietro, John Benka, Sue Bell, Andrea Bateman, Sue Beaumont, Howard Frimark, Dawn Disher, Mark Anderson, Rex Parker, Larry Friel and Jeff Cox; and city mgr. Tim Schuenke and finance director Diane Lembesis – remain in elective City office or City employment.

That leaves current Mayor Dave Schmidt and Alds. Joe Sweeney, Nick Milissis, Jim Smith, Roger Shubert, Dan Knight, Marc Mazzuca and Marty Maloney – along with City Mgr. Shawn Hamilton and City Finance Director Kent Oliven – to come up with desperate after-the-fact solutions to borderline-impossible problems created by the departed perpetrators of this TIF debacle.

Not only don’t those perps have to clean up their own mess, but we suspect they are delighted whenever they read superficial alibis for the TIF’s failure, like the TribLocal’s “a weakened economy and soft real estate market,” which gloss over how the $20 million-plus, bond-financed subsidy the City gave TIF developer PRC Partners, LLC was the product of fundamentally boneheaded public policy.  Or that, as we understand it, the servicing of that $20 million of bonded debt contributes mightily to the annual deficiency in the TIF fund.

That’s a “gift” from the perps that will keep on giving for years to come.

Giveaways of public money for private benefit are what properly have been dubbed “crapitalism.”  Unfortunately, it appears to be on the rise nationwide.  And irrespective of whether that crapitalism occurs at the federal, state, or local level, the politicians who make it possible and the recipients who crapitalize on it always seem to make out like the bandits they are.

While the rest of us taxpayers get stuck with the bill.

To read or post comments, click on title.

11 comments so far

Nice post. Just curious, do you have any thoughts on how things could have been done differently? Do you think we’d have been better off leaving that part of Uptown undeveloped?

EDITOR’S NOTE: Thanks.

First of all, the City shouldn’t have TIF-ed that property because it most likely didn’t require a TIF to be developed/re-developed. The City had 61 developers who wanted a crack at what was then the “Reservoir Block” and/or the former Bredemann property (including the folks who actually did the project, and others who bid on it), yet to our knowledge the City never solicited offers before announcing it was going to TIF it.

Second, Schuenke shouldn’t have been allowed to negotiate with a five year old, much less PRC. And the City’s consultant, S.B. Friedman, was no better. As a result, the City went into that gunfight armed with a BIC pen and a roll of duct tape.

Third, the City never should have committed all that bonded debt to the deal. As in most instances when this City (or most other municipalities, for that matter) tries to “do business” with private industry, the City gets hustled – as happened here, when the developer saw that the City was like a starving dog chasing a t-bone. And selling the Reservoir Block without even getting an appraisal was brain dead.

Contrast that with how the current mayor and the Council handled the Whole Foods deal, where the Council’s refusal to roll over on the developer’s demand for sales tax revenue sharing – despite being royally ripped by the Economic Development Task Force for not rolling over – saved the taxpayers around $2.5 million when the developer blinked.

elected officials who overwhelmingly assert that governance should be left to “the professionals” — i.e., paid staff and their paid consultants — are behind all of this. If a majority of elected officials feels this way, that’s how the vote goes. Sad part is that, contrary to the “wet-our-beaks” spirit of crapitalism, only one Park Ridge city elected official who shall remain nameless ever seemed to grasp that there was perhaps gelt to be had. The rest went along with the Bic vs. Beretta deal because “the professionals” said so. No personal gain, just — Lord knows what.

EDITOR’S NOTE: Given Park Ridge’s “City Manager” form of government, those “government professionals” are SUPPOSED to be doing the managing, with the city manager acting like a corporate CEO and the Council acting like the board of directors. But with the Uptown TIF, it was the halt and the lame being overseen by the dumb and the blind.

But we’re not ready to agree that there was “no personal gain” – especially when “personal gain” can take a variety of forms other than cash on the barrelhead.

I do not see any suggestions in your post on how we fix the “the biggest problems with government generally, but especially local government here in Park Ridge”.

That is because it cannot be fixed. It is a simple fact of a democracy. People do not run for office for life and often consequences of the decisions and policies they implement take place after they are out of office.

Unless you are asserting there was criminal activity, there is not a damn thing that can be done.

Ironically it is often the same way in reverse. Many times an elected official(s) gets credit when it was actually the hard choices made by their predecessor that deserved the Kudos!

EDITOR’S NOTE: “Suggestions”? Let’s start with:

1. Voters must pry their heads out of their derrieres so that their sphincters stop depriving their brains of oxygenated blood.

2. Voters must inform themselves about the issues and the facts relevant to those issues. If you don’t know that City government is not responsible for mowing Northwest Park, or who your alderman is, you’re a moron who deserves a wake-up call administered by the business end of a Louisville Slugger.

3. Elected officials, especially FORMER elected officials, OWN everything done on their watch – from the moment it occurs until the second they croak. And for 15 minutes thereafter, or until their bodies assume room temperature, whichever is later.

4. If you don’t understand that “government” has no money of its own and spends only what it confiscates from all of us taxpayers, you deserve to have all your assets confiscated and be sentenced to spend your natural life living off a Link card.

5. Schools should teach CIVICS, beginning in Grade 4 and continuing through Grade 12, instead of sociology and psychology.

Next!

I couldn’t agree with you MORE! Elected officials do stupid things that cost the rest of us a bundle, then walk away and act like all the consequences were Acts of God.

And thanks for calling out these individuals by name, unlike the Tribune which called for the replacement of the entire METRA board but didn’t have the balls to even identify each of those political hacks/crooks by name.

I am pissed that all this money is being poured down the TIF sewer, PRC walks off with a bundle, the idiots who were supposed to protect us from PRC drop the ball, and then they walk off into the sunset and act like they did nothing wrong.

Jerks.

Lovely list PD and I agree with all 5 points but it still does not address the problem. Your title talks about Accountability. Not a single thing on your list changes a lack of accountability.

EDITOR’S NOTE: Perhaps we were too subtle, so let us be more direct: more informed, engaged voters are likely to elect better, more accountable officials – like Mayor Schmidt instead of Howard Frimark or Ron Wietecha.

What would unwinding the TIF transaction entail?

EDITOR’S NOTE: Don’t know, but don’t think it’s doable or desirable. To use Colin Powell’s “Pottery Barn” analogy: We broke it, so we bought it.

Are the names of the partners or shareholders of PRC known or available to the public so we know who-besides former PR employees and elected officials-ripped us off?

EDITOR’S NOTE: You’re still unclear on this concept of accountable governance, aren’t you?

We’re no fans of PRC, but nobody elected PRC or its principals to look out for the taxpayers’ interest. PRC cut the best deal for itself, which is what it’s supposed to do.

It’s the ELECTED OFFICIALS who were supposed to do that, and whose negligence, stupidity or cluelessness has “ripped us off.”

PD:

I am all for more informed voters (and voters who show up!!!!!). Perhaps I was too subtle. More informed voters does not necessarily mean they would pick PD’s choice (horrors) and, more to the point, the problem you point out (accountability) still exists.

If good ole’ Mayor Dave goes off the reservation and does something that you deem to be “foolish”, wrong, stupid, you pick your word, he will still not be accountable for it when he leaves office.

EDITOR’S NOTE: Okay, let’s try this one more time, because we get the sense you are confusing the “accountability” of public officeholders with their “financial liability.”

Elected officials generally can’t be sued for money damages as compensation for their negligence/stupidity while in office. So their “accountability” has to be, instead, a function of the “court” of public opinion – the first duty of which is to understand and maintain an accurate history of what occurred, when it occurred, and who made it happen or neglected to prevent it.

If we’re still publishing this blog when Mayor Dave leaves office and something that occurred on his watch is shown to have been wrong/foolish/stupid, you better believe we will hold him “accountable.” But given his record of admitting mistakes and apologizing to the taxpayers for them – something NO other mayor in Park Ridge has ever done, to our knowledge – we suspect Mayor Dave will not shirk accountability the way his recent predecessors have done.

Quick real world example…..Paterno. I would guess you consider yourself to well “informed” and engaged”, right?? Well not only did you vote for him but you told all of us to vote for him.

Now it is VERRRRRRY early and Paterno may very well turn out to be what you had hoped but I think it is fair to say thus far he is not hitting it out of the park.

If the good Doctor continues down this path and there are more “Chromebookish” decisions or other spending that you deem wrong or stupid there will not be accountability for those decisions once he leaves office.

EDITOR’S NOTE: Quick real world answer: Even knowing what we know now, we would still endorse Dr. P over his competition – if for no other reason than, if Dr. P isn’t yet “hitting it out of the park,” he’s at least been up to bat. Cameron and Lee, on the other hand, haven’t even reached the on-deck circle.

You also seem to be unclear about this “accountability” thing. While the preferred method is for the individual official to hold himself/herself accountable for what he/she did in office, and what occurred, it’s also up to his/her successor officeholders – and to the media and The Public – to do that job.

So until Dr. P leaves office, we won’t know whether, and how, he will be held accountable for what he did and failed to do. Hopefully there won’t be any more Chromebook and arbitrary salary increase bobbles.

Psychology and sociology ARE the beating heart or at least the prime movers of civics; they should all be taught. No either-or choice needed. And you can’t have it both ways; either the elected officials do their own due diligence and effectively go behind the so-called CEO and his staff at the same depth of detail and arcane technological issues as they should be delving; in a word, doing the jobs they and the rest of us are paying the professionals to do — OR the elected officials have to vet and hire with an eye to our needs and then trust the professionals to do the jobs for which they are being paid. If the staff pushed the elected officials into bed with shysters, how would the elected officials know unless they did the damn job for themselves?

EDITOR’S NOTE: We’re having a hard time deciding whether “[p]sychology and sociology ARE the beating heart…of civics” or “[i]f the staff pushed the elected officials into bed with shysters” is one of the five lamest clauses ever appearing in a comment on this blog. And the latter also sounds like one of the lamest alibi’s ever offered by or on behalf of our elected City officials.

Any elected official who would let himself/herself get pushed into ANYTHING involving “shysters,” especially by such an obvious bonehead as former city manager Tim Schuenke, deserves to be tarred and feathered for his/her dereliction of duty. Just for starters.

So you’ll go back and fix the Senior Center mess, since you trusted the professionals who fed you to the shysters, right?

You are deliberately missing my point and trying to obscure it with the usual name-calling. A multi-million-dollar project with a lot of moving parts is either something an elected body delegates to its wellpaid staff and even better paid consultants — professionals all — or it

EDITOR’S NOTE: If you’re referring to this editor’s 8 years on the Park District Board, you’ll need to provide more facts – because he does not believe he ever voted for one of those Seniors Inc. exclusive use contracts, nor does he recall six-figure operating deficits for the Senior Center being posted from May 1997 through April 2005. Nevertheless, he is accountable to the taxpayers for whatever went on during his watch and will remain so until 15 minutes after his body assumes room temperature.

Any public official who delegates multi-million dollar projects to “staff” or to “consultants” but doesn’t oversee and question everything about those projects with heightened due diligence is simply derelict in his/her duty.



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