Tuesday, September 10, 2013

More Corporate "Freebees" from the Ogden City Council? - Updated

Fattening the purse of the latest corporate welfare recipient developer, to the tune of $1,000,000

Interesting agenda items popping up on tonight's Ogden City Council and Ogden City Redevelopment Agency Board calenders:
Click to enlarge image
3. Reports from Administration:
a. Mixed Use Master Development Agreement – Ogden 20th Street Investors. Proposed Resolution 2013-16 approving the Mixed Use Zone Master Development Agreement for the Ogden Bend Master Planned Community for the Development of land generally located between 20th Street and the Ogden River and between Grant Avenue and Lincoln Avenue together with land between the Ogden River and 18th Street and between Kiesel Avenue and Grant Avenue.
Here's the nitty-gritty:
Developer Responsibilities:
  • Complete the development in accordance with all laws,including the Riverbend Master Plan
  • Phase the project and submit documents for approval in accordance with the MUMDA
  • Meet all Open Space and Trails Requirements outlined in the Master Plan
  • Construct all on-site public infrastructure and convey to the City
  • Meet and confer regarding Development Application Denials
  • Meet and confer regarding Development progress
Ogden City Responsibilities
  • Bend over backwards to "facilitate" this project
  • Cough up an additional $1 million in tax increment to fat-cat develper
The bottom line?

Ogden City, along with an administration-compliant Ogden City Council will apparently be fattening the purse of the latest corporate welfare recipient developer, to the tune of $1,000,000.

Projected "net value" to we Ogden City Taxpayers  after this project is completed? Well who knows?

Sodden question: If Ogden City is such a great place to invest, why do the one-trick-ponies of the Ogden City  Economic Development Department (holdovers from the Godfrey administration) find it "necessary" to continue to "bribe" these "developers" (and current property owners) into "investing" in Ogden?

Just "axin.'"

Update 9/11/13 6:30 a.m.: Looks like the Council and RDA jumped in with both feet:
Mixed Use Master Development Agreement – Ogden 20th Street Investors. Proposed Resolution 2013-16 approving the Mixed Use Zone Master Development Agreement for the Ogden Bend Master Planned Community for the Development of land generally located between 20th Street and the Ogden River and between Grant Avenue and Lincoln Avenue together with land between the Ogden River and 18th Street and between Kiesel Avenue and Grant Avenue. Resolution adopted, vote: 7-0
A full twenty months into the Caldwell administration, the taxpayers of Ogden are still paying through the nose to "clean up" Boss Godfrey's "messes;" and BRIBERY even now remains as Ogden City's #1 economic development tool.

Update 9/16/13 6:30 a.m.:  Via the Ogden City website, here's the video of the 9/10/13 RDA meeting:


55 comments:

Dan S. said...

Rudi, can you elaborate on the $1 million? Where's it coming from, and exactly how is it being spent?

rudizink said...

It will supposedly come from Subject Property tax income, which will be re-redirected to the new developers, of course.

I swear, this scam will never end.

Dan S. said...

OK, so the money comes from tax increment. No surprise there. And how exactly will it be spent? Is the city writing a check to the developer, or is the city having some of the work done through its own contractors...?

James Humphreys said...

As I understand it Dan, the 1 million is being held until all of the site infrastructure is completed to the city's standard and pass all inspections. This includes, water, swear, streets, curb and gutter etc. Once this is done, then the city will in essence purchase that infrastructure for the 1 million dollars and the developer will deed it over to the city.

The tax increment has been accumulating for nigh on 10 years already.

James Humphreys said...

This is a project, I am actually pleased with. The city has a great Master Plan for those 6 blocks and only owns about half of the land. Goddie Lesham owes the rest. The deal with the developer has the developer acquiring all of the land from the city and from Goodie Lesham in the project zone, but Mr. Lesham doesn't get any payment for the property until the project is completed and the units are sold etc. This worked out well for the city and may work out for Mr. Lesham, who has held this project up for nearly 10 years. Those blocks have been obliterated for the most part and we really need the project completed.



It will increase housing downtown, which is sorely needed and it will add far less retail and commercial than originally planned under mayor Godfrey. This gives other retail spaces in the area more of a chance to survive, since we have too much retail space and not enough population to support it. It is also adding a significant amount of open space and park space along the river, that will act as a buffer for the single family homes north of the river in that area. Property values will certainly rise on the parcels themselves and the RDA for that land only has 8 years left. The surrounding property should see an increase in value and therefor more taxes for the school district and with more people, more sales taxes for Ogden City.


This was a bad project from the beginning and a lot of city money has already been spent. In this case, I think the city is doing a good job of making lemonade out of the lemon we had to work with.

blackrulon said...

Wonderful. Just another delay in attempting to complete the horribly flawed Reverfront project. At the end of this project, if everything goes according to your rosy outlook Gadi Lesham comes out ahead. At least will the city deduct all of the money Lesham owes the city? It's just another million dollar pork chop around the neck of Ogden taxpayers to help make developers rich.

James Humphreys said...

you are correct. The city added liens for the demolition of the properties and the back taxes etc. Mr. Lesham paid some of the back taxes to avoid foreclosure by the city, but more back taxes are owed and the city is holding liens on those. Mr. Lesham will have to clear all of those liens to be able get paid at the end so yes the city should recoup a significant portion of the funds we have had to invest. This deal is way less "corporate welfare" than we have seen in projects past. This is way more affordable and with a much greater benefit than the Junction has been.

blackrulon said...

I, and Ogden taxpayers, have for nearly 15 years heard wonderous tales of the potentional economic growth and increased tax revenue sure to come with the latest project. Yet as I drive through Ogden I see empty building after empty building.The only group that seems to benefit from these projects are the developers. i am still waiting for the increased tax revenue sure to arrive with the last RDA giveaway. Count me skeptical as to the fulfilment of the promised growth and tax revenue. The project has not dazzled me with its brillance but it is on course to baffle me with BS.

Not so fast said...

What tax increment has been accumulating, James? Did Gadi (not Goodie or Goddie as you've mentioned below) Leshem start paying his property taxes? There's not a pot of money being generated or held. The tax increment comes from FUTURE taxes paid.

James Humphreys said...

The city moved to foreclose some of Gadi's property (thanks for the correction) for back taxes. He caught those up to avoid the foreclosure. Not all of the taxes have been paid but some have. Remember the RDA was for 10 years and 2 years ago, the Council extended it 10 more years since nothing had been developed.

James Humphreys said...

You are right to be wary given that under the last Administration we went nearly 80 million more in debt and most of it was for TIF and bonded projects. This one is one million more and we are recouping a lot of the money already spent. So while there is some benifit to the developer, the increase in people and the developed property will generate more taxes in many ways. The question with TIF is will it create more than it cost. Certainly in some cases Ogden is on the losing end of that bargain. On this one I think we actually come out ahead, finally.

blackrulon said...

Thanks for correcting me. I am certain this plan will work. Not like all of the previous financial boondoggles. What could go wrong? After all it is being developed by basically the same brillant minds in the Ogden city Redevolpment and Business department.

rudizink said...

No, James. "The tax increment has NOT been accumulating for nigh on 10 years already." This project has been languishing for that period of time. The only upside I see to this latest development: The Caldwell administration is now finally "cleaning up" another Godfrey administration mess, at an additional cost to Ogden city tasxpayers, of course, of another cool one million bucks.

rudizink said...

"...making lemonade out of the lemon" Yep. That's how an extreme optimist would phrase it.

DevilsIntheDetails said...

Partly right, James.

In the end, the plan is for the developer to convey only the "on-site public infrastructure" to the City.

rudizink said...

:-)

blackrulon said...

How did we (Ogden City) end up with lemons? We were assured the plans and money involved was seed money for a permanent and always blooming money tree.

smaatguy said...

shortage of downtown housing??...those profusely ugly "townhomes" being built don't seem to be flying off the shelf do they...with their great views of....wait for it...the building next door?

smaatguy said...

Less corporate welfare than we have seen in past projects is STILL corporate welfare!...gee, one poke in the eye is better than two eh?

rudizink said...

LOL. You'll hopefully appreciate the fact that I've labeled the grapic insert "Иосиф Сталин Architechs," which translates to "Joseph Stalin Archictects," I hope. :-)

smaatguy said...

Well hell Rudi maybe they can get the million from the water and sewer fund...oh wait...

smaatguy said...

old James sure has the skinny on all this doesn't he...what your angle James?

rudizink said...

LOL. You'll hopefully appreciate the fact that I've labeled the grapic insert "Иосиф Сталин Architechs," which translates to "Joseph Stalin Archictects," I hope. :-)

smaatguy said...

LOL...yup ..and it's got that groovy Chippendale parapet treatment....so you know its a good development with that little ditty...

smaatguy said...

why had nothing developed...because there was no corporate welfare?....now magically people will be moving to this area?...gambling on the taxpayer teat is what this is no matter how much "less" welfare is being provide than in the past.

rudizink said...

James is an "insider" within Council Candidate Marcia White's campaign; and lately, he's been watching Weber County Forum like a hawk. Not that that's a bad thing, mind you. After all, the whole purpose of publishing a blog is to attract reader attention.

smaatguy said...

Ahhh...welcome aboard James! too bad more politico's don't pay attention and actually interact....that's refreshing

rudizink said...

Yeah! James is a good guy, and is extremely politically savvy. Great to have him aboard to flesh out the discussion.

good_reader1 said...

How soon new forget about the $ million spent to clean up the corner of Wall and 12th for a developer.
Yes come to Ogden get sweetheart deals for the lease of the Junction, Hilton Garden Hotel seed money (tax break), raise water rates for more development.
If Ogden is so desirable why do we pay (bribe) business to come here.

Not so fast said...

Your accuracy and ability to
present factual information is on par with some of the reporters at the Standard Examiner these days. The city does not initiate the foreclosure process on a property for unpaid taxes, the county does that. From what has been reported over the years, Ogden City does not have liens for the back taxes, they had liens for the demolition costs to remove the buildings in the public hazard that was created by Mr. Leshem. According to the Weber County Assessor, all of the properties
Click for a handy map in the project area previously held by Mr. Leshem are now owned by Ogden 20th Street Investors LLC as of May 10, 2013. If you look at the "Tax History" for the properties previously held by Mr. Leshem, you will see a "Direct Charge" in 2010 for the demolition costs. That lien has obviously been cleared as the property has changed ownership. Ogden City is footing the bill for demolition and you are delusional if you think any of the taxpayer funds invested in the property previously owned by Mr. Leshem are ever being paid back. There is a great deal of "corporate welfare" going into this project to fix the mess created by Godfrey.

Marco said...

I only wish I could give you 20 "likes" for that comment!

James Humphreys said...

So I checked with the city itself today and was informed that the Standard is wrong on the amount. It is actually 1.5 million and the council approved those funds in the spring of this year already. The funds discussed last night are those funds and no new funds were discussed. Also to be able to take advantage of the TIF, the developer has agreed to wait until the end of the project's RDA period and after the project is completed and sold. The end of the RDA period is 2027

LibertyinUtah said...

Sometimes I think that if Ogden was a human, it would be doing unspeakable favors to gain the affection of others.

I don't know about the rest of you, but I'm getting a little tired of the flailing about Ogden city does every few years to try (and fail) to reinvent itself.

Ogden Lover said...

Two questions:
Who exactly is Ogden 20th Street Investors LLC? I found a reference to Bluffdale using Google, but that's all.

Just how is that Junction doing? Re the lumpencitizens being made rich from all the income it's generated?

James Humphreys said...

So not so fast....I wish you were right and thanks for your totally incorrect assessment of my information. Had you done all the digging you were using you would have found a number of things.


1. You are right the County formally starts foreclosure for auction when a government entity is involved. Typically, they wait 3 or 4 years as required by law first. However, once the law's time frame has been met, the taxing entity may request, and in this case did, to have the county foreclose.


2. Property cannot change title without the taxes being brought current. Like you, I checked the records at the county online and they showed all of the the taxes owing on Gadi's properties since 2008. I also called the City and the County Assessor to understand the structure of the deal that was happening. The city indicated they had been paid back taxes as the property was transferred between Mar. and May of this year on all of Gadi's property. The county, on the phone indicated that the taxes on the parcels I checked were paid trough 2012. They are unsure why the website information is not up to date after so long. Only this years taxes are owing.


3. The liens for demolition have been cleared as is required also by law so the demolition costs have already been recouped as have the back taxes.


4. The city actually offered 1.5 million up front for this project with no bonding required and the developer agreed to all of the city's requests to meet the city's vision and master plan. The developer is a minority holder in Ogden 20th street investment, LLC. No additional up front funds are in the contract to be paid.


5. The developer has agreed to pay Mr. Lesham after the project is completed, sold and expenses paid out first. His daughter is actually handling the transaction now and not him and that has made this more possible. The city owned a significant number of those plots themselves but this deal had to weave a lot of stakeholders together to make this new neighborhood a reality.


6. The developer will also not be able to recoup with TIF until the RDA period is complete, which is 2027.


I took the time to talk to a number of the principles in the deal and get my information correct before I wrote. Your personal attack on me was unnecessary, out of line and so far, incorrect.

James Humphreys said...

This was a poorly timed project from when it started in 2002. Three master plans later it might actually be successful. I am hopeful given how much time, energy and resources Ogden has already poured into this project that it will succeed. As a taxpayer, I have to be, otherwise we will have wasted a lot of resources that we all have been forced to invest.

James Humphreys said...

According to the realtor and the city the sales rate is about 1.5 a month, which is what was projected until the other parts of this project move forward. So far they are averaging sales that in the 110- 115 per square foot pricing right now, which is higher than I expected.

James Humphreys said...

I am political insider with a lot of people, but I actually love the way a city lives and breathes and grows. I am very excited and discouraged by a number of projects personally. I like to support candidates that I think have the city's best interest at heart, know their limitations and are willing to fight for the rights of all taxpayers. I am a bit of an ideology in that sense. I have followed this project in particular since its' inception in 2002 and was very much against it. However once the demolition was done, we can't leave 6 city blocks along the river and next to downtown vacant, so I got in to help ensure it would be a success. There is a lot more information on this project than can be shared on this forum. I will meet with anyone or talk on the phone and work through what little I know anytime. I have been a long time follower here, but recently decided lurking was no longer the only thing I should do, if I wanted to be involved more.

James Humphreys said...

Thanks sir. I appreciate that. This group is very active in our community and I hope to being something to add to the discussions.

James Humphreys said...

Ogden 20th Street Investors, LLC is the group that owns the property in the RDA zone called Riverfront or the Bend Master Plan zone. I am not sure how the city itself is fitted in, since the city is a land owner in the zone, but all of the landowners and the developer make up the group. The principle point of contact, according the the state's Dept. of Commerce, is one of the principle's with the developer in Provo. The developer is a minority partner according to the City. It was formed at the beginning of the year.


I need to look more into the Junction. I was very unhappy with the costs and bonding we used to pay for all of that construction.

blackrulon said...

I am hopeful the city will stop wasting money on these projects. Otherwise the Ogden taxpayers will continue to fund these corporate handouts. Stop funding new projects. Focus on what has already been funded and make them work. The resources have been wasted and taxpayers have again and again been promised that the current dream is the one that will succeed. If Ms. White gets elected perhaps she could focus on stopping these ongoing and never ending series of wasted investments. What's next? Reviving the gondola to save ogden? Enough. When Stop-Shop closed, in large part due to Ogden City handouts to Winco, the buyer of the property did not ask for city funds. instead he used other devices to lure new tenants and make a success. Perhaps Ms. White could ask Councilman Blair about how he mananged to expand his business. Ofen residents are not afraid to spend money on whortwhile projects. Look at the library bond and the school swimming pool bond. But not to continually fund soe pipe dream that drains city and taxpayer resources.

James Humphreys said...

I couldn't agree more. The city should be focused on what is good for all residents and not just a few. And the costs have been astronomical and I predict some will fail before the bonds are paid off. We have to be much more careful.

Dan S. said...

I'm virtually certain that the Junction bond payments are still being subsidized with BDO lease revenue. The overall situation has improved only marginally since I wrote about it four years ago: http://wcforum.blogspot.com/2009/07/junction-good-investment.html

James Humphreys said...

You are correct Dan. I checked today and indeed the junction bond payments still require some BDO revenue to be transferred each year to cover the costs. And it looks like that will be the case for the foreseeable future.

Bob Becker said...

Sorry, BR, but I think Mr. H has made a good case for the city's latest action. The reality is, none of us benefit, as Ogdenites, from downtown continuing to be the vacant lot capitol of N. Utah. The original river project was a bad idea for many reasons, not least among them the ethical problems involved in coercing home and business owners who did not want to sell to sell to, in the end, benefit other private owners. But Godfrey weht ahead anyway and now we have to deal with the lingering fallout of his administration's poor judgment. This seems a well-designed investment on the city's part to at long last get back what Mr. Lesham owes us and to finally get us out of bed with him and to see the prooerty developed. Not doing this for the sole reason that Mr. Lesham might benefit as well seems like cutting off our nose to spite our face (municipally speaking).

Marco said...

Wrong as usual, Bob, This project is the very definition of government-driven malinvestment

Ogden Bend Master Planned Community = Instant ghetto.

blackrulon said...

What it really seems to be is just the 21st century version of alchemy. Usinjg taxpayer dollars on yet another ill conceived scheme to make economic growth magically appear. i'll believe in the wisdom of this latest folly when all . or even one,of the other grand sure fire plans yield the promised results.

aospare said...

That is giving alchemy a bad name.

Smaatguy said...

Please tell me that the "Scott Brown" mentioned in Fridays paper about the vacation of Childs Street is not the same Scott Brown that "worked" for the city years ago and was one of the "brains" behind the Junction. Please say it aint so!

rudizink said...

LOL, Smaatguy. Kinda like the proverbial "bad penny," no? :-) Weirdly, though, he now seems to have mended his ways, and is now "working" the other side of the street. Too funny.

smaatguy said...

So it is the one and the same????...
Looking to get another sweetheart deal in the Parkway...like he gave his buds at Bingham Cyclery????....and while at the same time being a silent partner in the building....are you sure it's mending or bending...as in over???

rudizink said...

I'd be surprised if it's NOT the Same Scott Brown. He's the guy with the "expertisse," after all.

smaatguy said...

the funniest knee slapper is that he owned the largest construction company in the west....LOL...maybe it was West Tooele....

rudizink said...

I actually enjoyed working with Brown when he was still working for the Godfrey administration. He'd always take or return my calls, and was absolutely forthright about whatever scheme he was working on at any given time. Our journalist/source relationship was actually great... until Godfrey finally told him to "shut STF up," and quit spillin' the beans," LOL!

smaatguy said...

LOL...yeah...but those on the other end of those schemes....well that's another story ...

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