We've already thoroughly discussed the oil contamination problem that arose at the seeming last moment, and caused the last re-calendering, but now there seems to be yet another belatedly discovered glitch, according to Mr. Wright's report:
Although results from those [environmental] studies are not expected before Tuesday, council members had planned to move forward with the public hearings.
But in the meantime, officials discovered that under state law, the Municipal Building Authority cannot make payments on bonds used to finance a building that is not complete. That means GE Commercial would not have been able to collect payments while the recreation center is under construction.
"We had to find a way to protect GE during that time period," Harmer said.
The city has secured a letter of credit as collateral for bonds that would finance construction, Harmer said, but has not had time to clear the letter with GE Commercial.
I'd love to have been that proverbial "fly on the wall" in Ogden Community and Economic Development Director David Harmer's office in the days following Stuart Reid's departure. Although he's a clean-cut guy, and probably doesn't regularly use the kind of language some of our gentle Weber County Forum readers sometimes do, I'll bet he's muttered a at least a few choice words from time to time. He got handed a real can of worms. I'm sure, however, that everything will get ironed out in due time, now that we have an experienced manager like David Harmer in charge of things.
If it doesn't happen pretty soon, however, the upcoming November Ogden City municipal elections could easily morph into that "citizen bond referendum" that that some Ogdenites were pushing late this spring.
There's also another interesting wrinkle in this story. The new city council bond vote date now falls on the same date as a Weber County Commission hearing and comments session for a proposed Weber County 21% property tax increase. Although I'd planned to attend the Ogden City Council session on the bond issue, I think I'll be sitting in the county commision chambers at 6:00 p.m. on August 23. For those who were unaware that our county commission was planning to take another large bite out of our wallets you can read this notice which appeared in the Standard-Examiner this morning. It's a sure bet I'll be posting a seperate article on this latest county commission proposal sometime this weekend.
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*Yogi Berra
16 comments:
That's weird. I thought the Weber County Commission held its regular meetings on Wednesdays so they wouldn't conflict with Ogden City Council meetings. I wonder how both these meetings landed on the same date.
Ya man, that is weird I bet they set it up that way on purpose. Just like the union square unit owner that has the last name Jorgenson must be related to the city council member.
Settle down, anonymous, the same name thing was a hypothetical, researched, found not to be one and the same and acknowledged. No theory of conspiracy, in either case, just interesting coincidence.
I'm wondering when ALL of this costly delay will be attributed to the "legal challenges" brought about by Moyes and his bunch? Harmer already floated that idea, to take some heat off the City's screw-ups, so I'm thinking this legal issue will come up again.
What all of this tends to show me is that the City folk in charge should absolutley NOT be filling the roll of developer, because they are way out of their league. Boiler plate due dilegnece has not even been addressed, let alone the intricate details of a project of this magnitude. It's just another example of how our city affaris are being run and at the trmendous cost thereof.
But I'll give 'em credit for one thing, though: They do know how to handle a ferret. Catch 'em and kill 'em and keep the city neighborhoods safe.
Absolutely, ec!! This is mind boggling, and you are right on when you speak of boiler plate due diligence not being addressed.
I really can't believe this, that this project has gone this far and the proposed method of repayment of the bond has now found to be illegal under state law.
Isn't there someone down there whose job it is to check these plans for possible illegalities? The Mayor and Council cannot be expected to know everything about legal issues, and therefore they should be running these plans by their own attorneys before even putting them on the table, and especially before making deals based on them.
Just got back from Ogden, and I got to see the mall site that has been the topic of so much debate on this blog. Man, I hate to say it, but if my experience today is any indication, then I can see that Ogden really does need help. Today I got off the bus at 23rd and Washington, and I couldn't believe how barren the sidewalk was on the east side of the street with all the storefronts (especially on a Saturday). I even thought to myself "Hmmm, maybe I shouldn't be here, no one else is." Even though I think Ogden's economy could become a bit more vibrant, I got thinking. Do you suppose part of the problem is that there's just too much commercial real estate for the demand of commercial services? In other words, is there just not enough demand for different stores to fill those vacant storefronts? Since I'm not a resident of Ogden, I can't really have an accurate perspective, so any insights would be appreciated.
If all Weber County tax payers knew why their tax bills are going up so drastically there would be a lynching party with the big guy on nine and five of his amigo's on the council as guests of honor.
All of this evil RDA madness that has totally taken over the Godfrey regime is now reverberating through out all the budgets of the whole countiy and in a big way are contributing to this obcene upward spiral in property taxes.
The tax payers always end up paying for government malfeasance and stupitity. In spite of what Jorgenson and Burdett and their masters in the hierachy believe about tax increments - THERE IS NO SUCH THING AS FREE MONEY!!!
A drive down Washington Blvd. is a sad, barren affair. These store fronts, CC, went empty with the inception of the original mall, and with the mall's eventual deterioration, went the same way. Absentee owners, vacant, obsolescent....and now the mall, torn down into an erroding display of malfeasance. Nothing but dirt, a plan for a rec center that is continuously being set back, and contaminants the most recent discovery. But our city officials are "CONFIDENT," as confident as they have been for months, that these problems will go away in a week or two. Each month they grow more confident; each month the mall stagnates.
I don't know who'se really running this show, but I'm afraid the ship either has no Captain, meaning the duties are shared by many inexperienced pilots, or the main man is just not up to what the position demands.
It is a pitifull sight.
CC,
I those store fronts were not always empty. Before they tore down the mall, Cross Western Wear, Habitations, and a few other stores were still doing business on Washington. After the mall was torn down, the resulting Gaza Strip look didn't seem to bring the foot traffic. Those businesses hanging on by a fingernail were given the final "nail in the coffin". They moved or closed their doors.
I think if the existing site were parcelled, you would see businesses going up there overnight. The reason I say this is because of the location of that site. Thousands of cars drive down Washington every day, and a retail business would get great exposure. There just has to be something other than dirt on the other side of the street.
A question:
I don't understand this...
<<"We had to find a way to protect GE during that time period," Harmer said.
The city has secured a letter of credit as collateral for bonds that would finance construction, Harmer said, but has not had time to clear the letter with GE Commercial.">>
First, I don't think that GE Commercial needs as much protection as the citizens of Ogden do...
However, my question is how can a letter of credit be used as collateral? Does anyone know how this works? This is an honest inquiry. Collateral usally means real property... is the site for the mall going to be used as the collateral basis for the bond issuance?
Don't know the answer to your question Toad, but I think I might know why this property tax increase is happening.
There are some informational items on the Ogden City web page regarding the proposed recreation center development. In there, there is this:
"The state legislature determined that cultural and recreational facilities are eligible to receive an additional portion of the property taxes being collected and distributed by the county from development project areas established prior to July 1, 1993. The tax revenue available for eligible projects is referred to as “additional tax increment.” The Redevelopment Agency decided in 2004 to request the “additional tax increment” for eligible projects."
This might answer at least one question many people have been asking-----Why a recreation center? This might be because the city could only get that tax money from Weber County for projects in either the cultural or recreational category.
My thought is that, since Weber county might lose that particular property tax revenue, from developmental project areas established prior to June 1, 1993, (courtesy of the Utah State Legislature,) should the recreation center project occur, it now feels that it has to make up that possible deficit by raising individual and business property taxes.
Another thing to note here is that the Legislature did not say -- You Must take these tax revenues for cultural and recreational projects. It said instead that it would allow these revenues to be taken, but it did not mandate it. It was the Ogden RDA that decided to take advantage of this and vote, in 2004, to take that revenue for a recreational (or cultural) project.
The document goes on to say that construction of the facility must commence before December 31, 2005, and that the additional tax increments must be pledged on or before July 1, 2005. It appears that this July 1, 2005 pledge was made.
This to me is a very good reason for Weber County to propose an individual and business property tax raise, because their tax revenue has been gouged for the recreation center project.
It makes sense. I of course have no way to know if this is indeed the motivation for the proposed recreation center and therefore the proposed tax increase, but it does make sense.
The first quote I cited has one more sentence to conclude the paragraph:
To ensure that the citizens of Ogden do not pay higher property taxes because of using this extra portion of the property tax revenues for the recreation center rather than other traditional uses, Ogden elected to reduce its budget accordingly."
Well, that worked, didn't it.
What do you think? Plausible?
Isn't it nice to see the City's concern in "protecting GE." Gives me that warm & fuzzy, it does. I'm wondering how the City is protecting us, the taxpayers, who are on the cusp of this, this, this thing.
Toad's got it right, is the ground the collateral? And, maybe Dorothy can answer this as I've read some fine posts of hers regarding things of this nature, just what is a "Letter of Credit," other than a bank stating that Ogden City is good for a certain amount of money as it applies to a particular project? I feel much better knowing that David Harmer is protecting GE with that instrument. And that credit, based on Ogden City's money ability, is probably OUR tax monies that are somewhere in the City's system.
Yeah Toad, I agree, some of the stores remained OPEN for awhile after the mall opened, but for all intents and purposes their fate was already decided. A couple, like Cross Western, even made it through until recently, but the original mall basically destroyed downtown Ogden as we knew it. And now, the revitalization depends on a bowling alley/gym, in glorified edity named the "High Adventure Recreation Center." Maybe the general, overall idea isn't so bad, but the ongoing process makes me extremely nervous. So far nothing but delays and a $2 million increase in costs. And now, another delay on the Public Hearings, previously slated for 16 Aug., 05.
A sad commentary, really. And to add to the madness, a Lobbyist hired to acquire citizen's homes for the Riverwalk, Union Square still upside down, a plan to build a 2 stop gondola for $25-40 million, and an uneducated Utah State Legislature, when it comes to eminent domain, sitting in the wings awaiting some instruction from our City Council.
There is a flash of light, though, and that's with the ski industry. Some of those entities are apparently looking at our city as a business cluster hub, but I don't ever hear the Administration talking about that, or anything else remotely related to private enterprise. All I seem to hear about are rising costs and delays in all of these projects that occupy the back burners.
Yep, a very sad commentary indeed.
The National VFW Convention will be held in Salt Lake City on August 22-25, and President Bush and Senator Hatch will be attending, I read in the Deseret News yesterday. They are speaking on the 22nd--no word about the other dates. Hope this does not conflict with these already conflicted meetings.
They are using the land to secure the second series of bonds. I will type a quote from the document I referred to before:
"Financing the project by means of two bonds (or in other words "loans") allows the RDA to utilize the additional tax increment revenue that is available to fund projects of this nature and allows for a second bond to be issued that will be secured by the cash flows of the project as well as the land lease and facility. The Series A bonds (repaid by tax increment) will provide the down payment for the entire project. The remainder of the cost to construct the building would be paid by the Series B bonds (repaid from the lease payment and secured by the land and building.)"
So the land is the collateral for the Series B bonds, if I am reading this correctly, and is what we are talking about here the Series A ones? Would there be different collateral required for these two series, or could they use the same one?
Well the two bonds can't have the same collateral unless the collateral is of greater value than both bonds together. ie - $20 million plus.
When this BS Rec center deal goes bust the Wells Fargo Bank and associated bond dealers will own the land and what ever is built on it for about a quarter of it's cost to the tax payers. The bank will own it all for about $10 million while the total cost to the citizens will be around $40 million. Check it out if you don't believe these numbers.
The other series of bonds will be repaid by every stinking cent that the other 10 city RDA's are able to throw off. Money that would have gone toward benifitting the public if it had not been squandered as collateral for this dumb ass idea to build a $20 million dollar monument to the lord mayor's giant ego.
You might say I disapprove of the plan.
Ten to twenty years down the road when our town starts its true influx of population Wells Fargo will sell off the heart of down town Emerald City for enormous profits. Profits that were bled from us today by this evil combine of City, Bank, Lawyers and bureaucrats.
The thing that I can't understand about the county increase is that the home appraisals are coming in much higher than last year. This makes sense as the market has appreciated most homes because of the continued demand for homes. This means additional revenue to the county without a corresponding increase in service levels (like new homes would add).
One has to wonder why the county has such a tremendous need for more money, since their coffers have increased in most cases by 10%. For those of us living in Ogden, we have the highest property taxes in Utah already. Weber County is also tops in this category... see the Utah Taxpayer Association website for more. Here is their web site
Seems like there might be some explaining to do.
A gem of a reason for those high property taxes. A direct quote from the Utah Taxpayers Association web site about the Rec Center...
***Will the bond create new taxes?
When RDAs divert local property tax dollars from local governments to subsidize economic activity that is already occurring in Utah like retail and recreation, then local governments are forced to either reduce services or raise tax rates on all property owners. Last year, Weber County Commissioners attributed their tax increase to RDAs diverting property taxes from the county to subsidize businesses.
Seems that this is why our taxes are going up again.
Oz & EC, I appreciate both of your comments on this board, and not just because I agree with you both. To see numbers bandied about by the Mayor and the Council, one has to wonder how Ogden will ever pay for it. We seem to have already spent discretionary funds at least 10 years into the future. If the Riverfront is developed the way that the city is talking, our spending could well hit the "into perpetuity" mark.
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