Junction 101

A crash course in geography and economics for Ogden taxpayers

By Dan Schroeder

As every reader of Weber County Forum knows, there are few projects in Ogden that are as important or as controversial as The Junction. But this reader, at least, has gotten through the last four years without ever actually understanding the complexities of this project. Motivated by the administration’s recent request for a 12-year extension on its entitlement to Junction tax revenues (and by a lull in the summer when I had few other responsibilities), I set out last week to remedy this situation. This article summarizes what I’ve learned.

The Lay of the Land

The Junction occupies the former Ogden City Mall site, taking up two square blocks (about 20 acres) of downtown. Here’s a graphic from the Ogden City web site, showing a simulated aerial view facing west, which I’ve labeled with the names of the major Junction components:

When the Ogden City Redevelopment Agency (RDA) bought the old mall site, it acquired the entire two blocks with the exception of the Episcopal Church. The RDA still owns most of the site, but not all. At the south end, the RDA traded some additional land to the church in exchange for a parcel across 24th Street. At the north end, the RDA granted one parcel to the Treehouse Museum and sold three parcels for commercial development. Those three parcels are now occupied by the Ensign Plaza building, the Earnshaw building, and the vacant land that was intended for the Ashton Square condominiums. (The privately owned parcels are tinted yellow in the graphic.)

The RDA continues to own the parking garage, the Salomon Center, and the vacant land that was intended for the Midtown Hotel (these properties are tinted green in the graphic). However, the Salomon Center is leased to Health & Fitness L.C., an entity set up by Gold’s Gym and Fat Cats.

The rest of the land at the Junction is also still owned by the RDA, but is under long-term lease to the Boyer Company, which built the Megaplex Theater, the Wells Fargo office building, and the various restaurants, retail space, and apartments. (These properties are tinted blue in the graphic.)

The Debt

To finance its Junction-related expenses, the RDA has issued three different sets of bonds, referred to as Series A, B, and C. (For details, see pages 63-64 of the city's 2008 Comprehensive Annual Financial Report.)

The Series A bonds, totaling $7.3 million, were used to help finance the construction of the Salomon Center. The payments on these bonds are about $550,000 per year, and are coming from tax increment revenue from 10 other redevelopment districts throughout the city.

The Series B bonds, totaling $8.9 million, were also used to finance the construction of the Salomon Center. The payments on these bonds are about $590,000 per year, and are coming from the lease payments that Health & Fitness L.C. pays to the RDA.

The Series C bonds, totaling $22.4 million, were issued to consolidate the rest of the city’s Junction-related debt: $6 million to purchase the mall site, $4 million for demolition, $5 million to settle with Woodbury Corp. for its interest in the mall’s tax-increment revenue, and the rest for streets, sidewalks, utilities, and miscellaneous expenses including legal fees. The payments on these bonds are about $1.9 million per year, and are coming from a combination of tax increment revenue (from the mall redevelopment district itself and from the American Can RDA district) and lease revenues from Business Depot Ogden (BDO). If/when Boyer’s Junction developments ever make a profit, the city’s share of that profit will also be applied to paying off these bonds.

All three sets of bonds were issued in 2005 and will mature in 2025-31. Of the total original debt of $38.6 million, the remaining unpaid principal is approximately $36 million.

Incidentally, this bonded debt doesn’t account for all of the city’s investment in the Junction. The city also used various one-time allocations to pay for miscellaneous expenses, cost overruns, and repairs.

The Revenue

As mentioned above, the city (RDA) has two types of revenue to pay off this debt: tax increment and lease revenue. Each of these requires some explanation.

Tax increment financing is the whole premise of the RDA. When a redevelopment district is created, any additional property taxes from new development in the district go to the RDA for a certain period of time. Normally this revenue is used to pay off a portion of the debt from that development. Under some circumstances, however, tax increment revenue can be moved from one redevelopment district to another. In Ogden, tax increment revenue is now flowing from 10 other redevelopment districts to the Junction. Tax increment financing is controversial because it deprives all the taxing entities (school district, city, county, etc.) of the property tax they would normally collect from the new development. Proponents argue, however, that without tax increment financing, much of the new development would never take place at all.

When the city owns a piece of property, it can receive additional income from leasing that property. The city (RDA) leases the Salomon Center directly to its tenant, and began receiving lease payments in July 2007. The RDA also leases 6.3 acres of Junction property to Boyer, under an agreement whereby Boyer pays the RDA 50% of its net profit (if any) on this property. The city has a similar arrangement with Boyer for BDO, which is now returning about $3 million annually to the city.

The Junction’s retail properties, including restaurants and entertainment, also generate some sales tax revenue. The city’s share of this tax is 1% of sales, and this revenue goes into the city’s general fund (not to the RDA).

The Problem

The revenue streams to pay off the Series A and B bonds seem to be coming through, at least for now. In particular, there is no sign that the Salomon Center tenant might walk away and default on the lease, leaving the city responsible for the Series B bond payments.

The problem is with the Series C bonds. The tax increment revenue from the Junction (including the block west of Grant between 22nd and 23rd Streets, which is part of the old mall redevelopment district) seems to be covering only about half of the $1.9 million annual payment. Most of the difference is being made up by BDO lease revenue, which the city would prefer to spend on other projects.

But in just five years, the situation may become much worse. That’s when the time limit on collecting tax increment from the mall redevelopment district runs out. For the next 12 years after that, the entire $1.9 million annual payment on the Series C bonds would have to come from BDO and/or other sources.

One of those other sources was supposed to be lease revenue on Boyer’s Junction developments. But with so much of its office, retail, and residential space still unleased, Boyer has yet to make a profit. Ogden Community and Economic Development Director Scott Waterfall has stated that he doesn’t anticipate receiving any income from Boyer in the near future.

In an upcoming article I will show in more detail how the Junction’s tax increment and lease revenues have fallen short of what we were promised. I’ll also describe the administration’s proposal to obtain additional revenue by extending the collection of tax increment on the mall district for an additional 12 years.

Meanwhile, the floor is open for comments.

The Junction: What Next?

Tough decisions confront our community -- UPDATED

By Dan Schroeder

In two recent articles I’ve tried to provide an overview of Ogden’s Junction development and a detailed look at its revenue shortfalls. The most pressing problem is how to make the $1.9 million annual payments on the Junction’s “Series C” bonds over the next 17 years.

Revenue Sources

For the short term, most of this money can come from the tax increment revenue that the Ogden RDA receives from the mall redevelopment district (which includes the Junction plus the block west of Grant between 22nd and 23rd). This year the tax increment should be about $1.1 million, and over the next two or three years it should creep up a little higher, as more of the new buildings are completed and taxed at their full value.

A second source of revenue is tax increment from the American Can redevelopment district, north and west of the Junction. About 10% of the funds raised by the Series C bonds actually went toward the American Can parking garage, not to the Junction (as I should have mentioned in my earlier articles). In return, the American Can district is contributing $200,000 per year to the debt service.

A third revenue source is lease payments from Junction tenants to the Ogden City RDA. Most of the Salomon Center lease revenue is being used to pay off the Series B bonds, but there is about $100,000 per year left over that can be applied to the Series C bonds.

In addition, it was hoped that the Boyer Junction developments (Megaplex Theater, Wells Fargo building, restaurants, and smaller residential and commercial buildings) would be generating lease revenue by this time. But much of Boyer’s space is still vacant, so it isn’t yet making a profit or passing any income on to the RDA. City officials are now refusing to predict when this situation might change. Two years ago, however, they apparently projected that the city would receive over $300,000 annually from Boyer. It seems possible that this could still happen eventually, but not in the next few years.

The final source of funds is lease revenue from Business Depot Ogden. BDO currently provides the city with about $3 million per year, and a substantial portion of this money has gone toward the Junction bond payments during the construction phase.

The Short Term

For the next few years, however, it appears that the subsidy from BDO can decline dramatically: $1.1 million from mall district tax increment, plus $100,000 from the Salomon Center, plus $200,000 from the American Can district gives a total of $1.4 million, leaving only $500,000 needed from BDO to make the $1.9 million bond payment. And the mall district tax increment should soon climb to $1.2-1.3 million, allowing the BDO subsidy to decline further.

That’s the situation until 2015, when the mall district tax increment is scheduled to revert back to the taxing entities. Even in a best-case scenario (with $300,000 in Junction lease revenue from Boyer), the BDO subsidy would then have to climb back up to about $1.3 million. Whether the city can afford this would depend on what other uses it has in mind for the BDO lease revenue.

Long-Term Tax Revenue

Presumably there are other uses for the BDO funds, because the RDA is now asking the Taxing Entity Committee to extend the tax increment on the mall district through 2026, when the Series C bonds will be fully paid off. To understand the magnitude of this request, let’s make a few more projections.

By 2015, all of the existing Junction buildings should be completed and fully on the tax rolls. Even if we allow for a slight decline in the tax rate, the tax increment on the mall redevelopment district should be at least $1.25 million per year from 2015 through 2026. Barring some unexpected catastrophe, this is reasonable low-end estimate.

In a more optimistic scenario, the two vacant Junction parcels will be developed by 2015 and contributing additional tax. If the value per acre of these parcels is then comparable to the rest of the Junction, they could provide about a half million dollars of additional tax revenue, bringing the total annual tax increment to about $1.75 million. (Two years ago, city officials dreamed that these parcels would be developed to much higher values, resulting in a fantastic projection of over $3 million in tax revenue. I’ll ignore that projection in this reality-based article.)

So when the RDA asks the taxing entities to extend the collection of tax increment, it’s asking for about $1.25-1.75 million per year, over a period of 12 years.

The Taxing Entities

Now let’s look at where this money will go if the RDA’s request is declined. The answer is about the same for the Junction as for any other property in Ogden. Here’s the breakdown from my own recent property tax statement:

I’ve simplified this chart by combining taxing entities with similar purposes; for instance, “Schools” includes both the Ogden City School District and the Statewide School Basic Levy, while “Health & Safety” includes the Weber-Morgan Health Department, Paramedic Fund, 911 Service, and Mosquito Abatement.

Multiplying these percentages by the total projected tax increment of $1.25-1.75 million gives the following annual revenue to the taxing entities:

(Click the highlighted link for a more detailed version of the above table.)

If the tax increment is extended for 12 years, each of these entities will either have to do without this revenue (and thus provide a lower level of service) or make up the revenue by raising taxes on the rest of us.

Because the schools would take the biggest hit, the RDA is offering to pay them back $300,000 per year through so-called “mitigation payments”. As you can see, these payments would make up no more than half of the lost revenue to the schools. The RDA is also offering to sweeten the deal by handing some real estate over to the school district. There have been no reports of similar offers to the other taxing entities.

In order to extend its collection of tax increment, the RDA must convince six of the eight members of the Taxing Entity Committee (TEC) to vote for this proposal. The eight members include two from Ogden City (currently Council Chair Amy Wicks and CED Director Scott Waterfall), two from Weber County, two from the Ogden School District, one from the State Board of Education, and one from the Central Weber Sewer District (nominally representing most of the smaller taxing entities). The Ogden City representatives are being asked to relinquish general fund revenue in exchange for five times as much revenue going to the RDA. Everyone else is simply being asked to hand over their money to the RDA--although the school representatives are being offered part of their money back.

Why any of the TEC members (except those from Ogden City) would vote for such a deal--against their own best interest--is beyond me. The RDA could perhaps argue that it is morally entitled to the tax increment because without the new Junction developments, the revenue wouldn’t be there in the first place. But this argument should have been made before the buildings were financed, not after. Instead the city was promising, until just two years ago, that the Junction taxes would revert to the taxing entities in 2015.

So at this point, the RDA is effectively begging the taxing entities for a bailout. But assuming that the entities would even consider such a gift to charity, they should be asking how much the RDA truly needs.

Just how needy is the RDA?

Unfortunately, that question doesn’t have a simple answer.

One complication comes from differing attitudes toward the BDO lease revenue. On one hand, this is the revenue that formally underwrites the bonds, so perhaps it should be used to pay them off. On the other hand, anyone can think of other uses for that revenue.

Another complication comes from our uncertainty over the Junction’s future taxable value. Take the low and high estimates from the table above, subtract the $300,000 mitigation payment, then add back $300,000 from the American Can district and the left-over Salomon Center lease revenue. If you’re optimistic, add another $300,000 from Boyer lease revenue, and you end up with anywhere from $1.25 million to $2.05 million in revenue that the RDA can apply toward the $1.9 million annual payment on the Series C bonds. So there could be a shortfall of $650,000 that would have to come from BDO or somewhere else (still much less than what BDO paid in 2008), but there could also be a surplus of over $100,000, with no subsidy from BDO at all.

Given this wide range of uncertainty, a reasonable approach might be to wait and see how the Junction is doing in 2014 before promising any bailout. Indeed, the minutes of the June 25 TEC meeting show that one of the members asked why the RDA is in such a hurry to get the extension approved. And the RDA’s response was telling:

He [Richard McConkie] clarified for planning purposes, and for staff to have the ability to be able to negotiate on a future hotel or other major retail component, the tax increment plays an important part in sitting down with developers.

Moreover, at an earlier point in the meeting, McConkie specifically stated that in order to lure a hotel developer to the RDA’s vacant Junction parcel, the city would probably have to build a $4-5 million parking garage.

So the reason this is coming up now is simple: The city wants to borrow another several million dollars, and it needs another guaranteed revenue source to underwrite that debt. Then the city can gamble the money on yet another speculative venture such as the much-rumored new hotel. Whether Ogden’s market is ready for a new hotel, which would compete with the Marriott, the Hampton, and the Ben Lomond, seems not to concern the city administration.

Instead of asking the TEC to further enable its gambling addiction, here’s a novel idea for the Ogden City RDA: Sell the vacant “hotel” parcel on the open market (it’s assessed at nearly $1 million), get it on the tax rolls, apply the proceeds to pay down a little of the existing debt, and let the market decide what should be built on that parcel of land--and when. With the Salomon Center and Deseret Books right across the street, any number of businesses should be able to thrive at that location if given the chance. And when the streetcar comes through in a few years, a parking garage will be superfluous.

Selling the vacant parcel may or may not be the RDA’s best option at this point. Perhaps there are other options that don’t require incurring even more public debt at the expense of our schools and other public services. At the very least, I hope more citizens will become aware of the uncertainties, the trade-offs, and the risks that accompany the decision our community is now facing.

Citizens, please weigh in with your opinions!

Update 8/7/09 12:55 p.m. MT: "I've just received word that the Taxing Entity Committee will meet again, to consider the RDA's proposal, on Wednesday, August 19th, at high noon." -Dan S.

The Junction -- A Good Investment?

A detailed look at the revenue shortfall

By Dan Schroeder

In an earlier article I gave an overview of The Junction and its current financial situation. In brief: Tax increment revenues from 10 other redevelopment districts are paying off the Series A bonds ($7.3 million), while lease revenues from the Salomon Center are paying off the Series B bonds ($8.9 million). But the future revenue to pay off the Series C bonds ($22.4 million) is uncertain. Tax increment from the Junction district itself is covering only about half of the $1.9 million annual payments on the C bonds, and even that revenue is scheduled to disappear when the redevelopment district expires after 2014. The Boyer portion of the Junction is not yet making a profit, so it isn’t providing any lease revenue to the city. Consequently, the Junction continues to be subsidized by lease revenues from BDO.

In this article I’ll take a closer look at why the revenues from the Junction are falling so far short of what was predicted. Looking into these details can give us a better understanding of the Junction’s financial prospects, and perhaps teach us to be more skeptical the next time we hear rosy predictions about the future.

Flashback

To focus this analysis, let’s resurrect some official Ogden City predictions from just two years ago. Here’s the lead article from the city’s July 2007 utility bill insert, titled “The Junction -- A Good Investment” (Click on the image to see the article at a legible size):

The most obvious inaccuracy in this article is the implication that the city’s investment in the Junction was only $6 million, when in fact it was over $40 million plus interest. But putting that blunder aside, let’s focus on the table of revenue projections:

The most notable numbers are the four in the upper-right corner, which predict the Junction’s property values and the tax on those values for 2007 and 2010. How do these predictions match up to reality?

Reality Check

According to the Weber County Assessor’s office, the actual market value of the Junction in 2007 was slightly under $30 million--and the taxable value was less than $9 million. These numbers were based on assessments as of January 1, 2007, and they determined the taxes paid near the end of that year: about $150,000. Because these numbers would have been publicly available by the time the city’s article was written, it would seem that the article’s author had something else in mind.

Perhaps “2007” really meant the end of 2007, that is, tax year 2008. By the middle of 2007 it should have been possible to predict the status of the various construction projects as of the following January 1. But even then the actual assessments fell far short, giving a market value of $70 million, a taxable value of $54 million, and a total property tax of $845,000.

The 2009 numbers are a little higher: market value $80 million, taxable value $61 million, and an expected property tax of $980,000. The numbers for 2010 will be higher still, but not by a lot.

Here’s a graph showing the Junction’s property tax for the last three years, broken down by the various buildings and parcels:

Whereas the only building being taxed in 2007 was the Salomon Center (and at less than half its final value), every taxable Junction building is at least partially on the tax rolls for 2009. Next year we should see some further increases in the taxable values of the Wells Fargo building, the Earnshaw building, and some of the smaller buildings.

Minor details: (1) The Junction’s RDA district also includes the square block west of Grant between 22nd and 23rd Streets, but none of the preceding numbers include the properties on that block. If you want to know the RDA’s tax increment revenue from the whole district, you need to add that contribution (about $160,000 for 2008) and then subtract the tax on the district’s baseline value before it became an RDA district (about $50,000). (2) The numbers in the paragraphs above include not only real property but also equipment in the buildings, which contributed nearly $5 million to the value and $75,000 to the tax in 2008. The graph, however, does not include the tax on equipment. (3) For those properties that are leased by the RDA (that is, the Salomon Center and all the Boyer properties), the property tax is being paid not by the owner but by the tenants. Unfortunately, the bookkeeping for these properties is too complicated for the county’s web site to handle, so you can’t look up the property values and taxes there. I got the numbers from Shelly Campbell-Bustos in the Assessor’s office, to whom I am extremely grateful. To see a complete table of the numbers, click here.

Why the Discrepancies?

So why were the city’s published projections so far off? Let me count the reasons.

First, the projections neglected the fact that not all of the Junction property is taxable. The most valuable untaxed property is the parking garage, assessed at $12 million. (If the garage is ever used commercially it will become taxable--but for the foreseeable future, it would be economic suicide to charge Junction patrons for parking.) The nonprofit Treehouse Museum, assessed at $3 million, is also untaxed.

Second, the projections neglected the fact that residential properties are normally taxed at only 55% of their full value. The difference takes a significant bite out of the taxes from the Boyer apartments and the Earnshaw building.

Third, some of the assessed property values undoubtedly came in lower than what the projections assumed. This was especially true of the Salomon Center, which cost approximately $18 million to build but is now assessed at only $9.8 million (not counting the equipment). The county actually tried to assess the building at the higher value, but the tenants successfully appealed on the grounds that their lease rate reflects a much lower market value for the building.

Fourth, the projections assumed that the 2006 tax rate would be in effect through 2010. In fact, Weber County’s tax rates tend to decrease over the long term; the 2008 rate was 12% lower than in 2006.

Fifth, the projections for “2007” included the $30 million Ashton Square condominiums--a project that hadn’t even broken ground when the projections were made and that was ultimately canceled. Similarly, the projections for 2010 apparently included a hypothetical $65 million hotel/condo complex on the still-vacant parcel between the Salomon Center and Washington Blvd. Both of these projects were promised to have significantly more value per acre than anything else at the Junction. (More explanation of what’s included in the projections can be found in this earlier version of the article.)

And sixth, the projections were overly optimistic about the timetable for completion of many of the buildings.

The standard excuse for the Junction’s current financial trouble is “the economy”. But the economy has nothing to do with the first four reasons just given, and was only partly a factor in the last two reasons. Perhaps, in a booming economy, the Ashton Square condos would have been started in 2008 and on the tax rolls by 2010--but not sooner. Even during the best economic times, it’s hard to imagine that by 2010 Ogden’s market could have absorbed a new $65 million hotel/condo complex in addition to the Earnshaw building, Ashton Square, Boyer apartments, and other competing residential developments downtown. The timetable for completing several of the buildings had already slowed down by the time the utility bill insert was published, when the economy was still strong.

Sales Tax and Lease Revenue

As the table indicates, property tax isn’t our only revenue from the Junction. It also produces sales tax and lease revenue.

The projected sales tax figures are not particularly large, and we can probably assume that the construction delays and cancelations have resulted in still lower receipts. I’ve inquired with the city regarding the actual sales tax received so far, and will post the numbers when I get them. (Because local sales tax goes into the city’s general fund, it cannot be applied directly to the RDA bond payments. In the end, however, that’s a technicality; what matters is the city’s total revenue.)

The projected lease revenue for 2007 is very close to the annual lease payments made by the Salomon Center tenant, Health & Fitness L.C. That money has been coming in since July 2007, and most of it is being used to pay off the Series B bonds.

The additional $300,000 of projected lease revenue for 2010 must be what was expected from the properties leased to Boyer. The actual lease revenue from Boyer to date has been zero, because Boyer isn’t yet making any profit.

Boyer’s properties (under long-term lease from the RDA) include the Megaplex theater, the Wells Fargo office building, the restaurants, and the adjacent mixed-use buildings with retail on the ground level and apartments above. These buildings are now all finished, at least on the outside. But the office building is less than half occupied, with only two tenants who both moved from across the street. (This is the building for which the Ogden City Council declined to approve two additional floors, which the city itself would have had to “lease” at a cost of $400,000 per year until actual tenants were found.) Boyer’s mixed-use buildings are also mostly unoccupied. Until these occupancy rates increase, Boyer will be losing money on its Junction developments overall. Whenever it does start making a net profit, the city’s revenue will be half of that profit. Ogden Community and Economic Development Director Scott Waterfall has stated that he doesn’t anticipate receiving any income from Boyer in the near future.

The Bottom Line

The Junction projections in the 2007 utility bill article weren’t merely optimistic: they were unfounded and deceptive. Still, perhaps we shouldn’t focus too much on that article. After all, it was published at the start of the 2007 mayoral campaign.

A more reasonable “optimistic” prediction for the Junction would have been a built-out taxable value of about $100 million, which would generate about $1.6 million in property tax annually. Combined with the Boyer lease revenue, this would have been just enough to make the payments on the Series C bonds through 2014. After that, either an extension on the tax increment or subsidies from BDO (or some other source) would still have been required to continue the bond payments through 2026.

A reasonable “pessimistic” scenario is more or less what we have: two Junction parcels still vacant, significant construction delays on some of the others, and no lease revenue from Boyer expected for several years. Payments on the Series C bonds are requiring a subsidy from BDO of almost $1 million per year, in addition to all of the Junction tax increment. If the tax increment expiration is not extended, the subsidies could increase to the full $1.9 million bond payment.

(Let’s try not to imagine even worse scenarios, such as the Salomon Center tenant walking away and defaulting on the lease. Then the city would be liable for another $590,000 a year in bond payments.)

So is the Junction a good investment? From a strict financial standpoint the answer is an unequivocal “no”. It is being subsidized by other RDA districts, by BDO, and by occasional one-time expenditures. Over the 20-year duration of the bonds, the subsidies will add up to at least $20 million, and possibly $30-40 million.

The question, then, is whether the Junction’s benefits to the greater community are worth a subsidy of one or two million dollars a year. Even as someone who doesn’t especially care for the particular entertainment venues at the Junction, I can see real value in creating this new gathering place in the heart of our city. But I can’t put a dollar amount on this value, so I’ll leave the final judgment up to the reader.

Of course, now that the Junction is (mostly) built, our opinions on whether it was a good investment are purely academic. The more pressing question is what we should do next. In particular, should our public officials extend the Junction’s tax increment for another 12 years beyond 2014? Also, what should Ogden do to promote development of the two Junction parcels that remain vacant? I hope to address these questions in a future article. Meanwhile, please share your views on any of these questions.

Std-Ex: Ogden Juggles Junction Tax Increment Districting

Compare the numbers yourselves, then ask yourselves what some Taxing Entity Committee members have been smokin'

Eugene Hart, business administrator for the Ogden School District and also a member of the city taxing entity committee, said the mitigation payment proposal is fair.
“Anything is better than nothing,” he said. “It’s a good option.”

Standard-Examiner
Ogden juggles tax increment districting
8/16/09

Royce Van Tassell, vice president of the Utah Taxpayers Association, said the Ogden School District should strongly oppose extending The Junction’s tax increment district.[...]
The school district isn’t getting anything in return. They are giving money away (by not being able to collect property taxes from The Junction while the RDA is effect).

Standard-Examiner
Ogden juggles tax increment districting
8/16/09

The Standard-Examiner follows up on our earlier WCF discussions, with this morning's Scott Schwebke story, reporting that the fix may be in for Boss Godfrey's proposed Junction tax increment bailout. The Ogden School board, which has been offered a $300 thousand annual "mitigation payment," in exchange for supporting the Godfrey administration's bailout plan, appears to be colluding with the Godfrey administration, splitting up its already pennies-on-the -dollar payoff, and throwing a few bones to the smaller special service districts, just to bring them along. Read all about it here:

• Ogden juggles tax increment districting

Royce Van Tassell, vice president of the Utah Taxpayers Association, is absolutely right in arguing that the Ogden School District should strongly oppose extending The Junction’s tax increment district; and Mr. Eugene Hart, business administrator for the Ogden School District, and sitting member of the city taxing entity committee, is absolutely wrong.

We'll present a couple of graphic representations to show why Mr. Hart possibly needs to go back to school for some remedial math. Here's the graphic from this morning's Std-Ex story, which represents the proposed payoffs to the various entities whom Mr. Hughes, for unknown reasons, is apparently trying to rope into going along with the Mayor's bailout plan:


And here's a helpful table, embedded within an earlier WCF article, showing what all the taxing entities represented by the Ogden RDA TEC Committee can reasonably expect to receive once tax increment moneys begin to flow under terms of the existing junction financing, provided they don't bend over for Godfrey's bailout plan (Click to enlarge image):


Examining these numbers, we're still scratching our heads wondering how any conscientious member of the Ogden RDA Taxing Entity Committee could possibly consider the Mayor's plan to be in any way "fair," or "a good option." As a matter of fact, if any voting member of the TEC is to go along with Boss Godfrey, and accept pennies on the dollar under this knuckleheaded plan, we believe such an act would constitute a clear breach of fiduciary duty, as it would be an act blatantly contrary to the economic interests of the taxing entity he or she is appointed to represent, (along with taxpayers such committee member is supposed to competently serve.)

Compare the numbers yourselves, gentle readers; then ask yourselves what Mr. Hart (and maybe a few others) have been smokin'. Hopefully they'll all have their heads screwed on straight in time for Wednesday's noon TEC Committee meeting.

And don't let the cat get your tongues.

Big Meetings Tuesday Evening As the Council /RDA Lurches Toward Approval of the Junction Hotel Project

We're posting this info early, in order to afford WCF readers a full opportunity to digest and discuss all elements of the this proposed project, well in advance of Tuesday's Council/RDA sessions

An examination of Tuesday's upcoming Council/RDA agendas reveals that the Administration us still tweaking the details of the Junction "Hot Tub" Hotel project financing. Here's where the proposed financing stands at this latest juncture:

Proposed Project Financing
The $13 Million Hotel project will be funded using several different
financing mechanisms:
• $8.7 Million – Facilities Bonds: The City will act as a conduit
for the tax-exempt bonds. The Developer will be responsible
for the debt service.
• $1.5 Million – Tax Increment Bonds: The RDA will issue tax
increment bonds. The City will pledge the City’s Franchise
Tax as additional collateral for the bonds. Debt Service will be
derived from the tax increment generated by the development.
• $2.2 Million – New Market Tax Credits (Federal Allocation):
The Developer is still hopeful that there will be New Market
Tax Credits available for the project.

For a little background on the above-mentioned New Markets Tax Credit (NMTC) Program, by the way, check out this link:

• New Markets Tax Credit Program

There are four main items on Tuesday's Council agenda (5:30 p.m.):

• Public Parking Assessment Area No. 2010-1
- Designation Resolution #2010-23
- Assessment Ordinance #2010-41
Determination:
1. Pull Designation Resolution from Agenda
2. Pull Assessment Ordinance from Agenda
(A Parking Structure Is No Longer Part of the Junction Hotel
Project. These Actions are Unnecessary)
• Contribution Agreement Resolution. Pledging Franchise Tax as Security for RDA Junction Hotel Tax Increment Bonds.
Determination: Table to January 11, 2011 for Final Consideration.
• Addenda to Development Agreement - The Junction Hotel
Determination: Adopt/Not Adopt Resolution
• Industrial Revenue Bonds Qualified Recovery Zone Facilities Bonds - Authorizing Resolution
Determination: Adopt or Not Adopt Resolution

View the full Council packet here:

• 12/21 City Council/RDA Joint Session

The RDA Board will also consider "approvals" relating to the operative project documents (as amended) in a Special RDA Session (6:00 p.m.):

• Reports from the Administration. Junction Hotel Development Agreement Addenda, Amended Promissory Note, and Substitute Trust Deed. Proposed Resolution 2010-15 approving and authorizing two addendums to the Development Agreement between the Ogden City Redevelopment Agency, Kevin Garn, and Western States Lodging, L.L.C., pertaining to the development of a hotel structure on parcel 01-099-0004 at The Junction in Ogden City, Utah, including approving an Amended Promissory Note and Substitute Trust Deed. (Adopt/not adopt resolution – roll call vote)

View Tuesday's RDA packet here:

• 12/21 City Council-RDA Special Session

Lots of interesting nuances here, not the least being the apparent abandonment of a plan for an underground parking garage, and the Special Assessment District which was originally "envisioned" to help finance its construction.

Another interesting element? The administration and other principals seem to believe they'll be able to "close" this highly-complicated (some would call it "Rube Goldbergesque") transaction no later than December 28, even though "final" Council consideration of the Franchise Tax pledge ($1.5 million) as additional security for RDA Junction Hotel Tax Increment Bonds has been "tabled" to January 11, 2011.

We're posting this info early, in order to afford WCF readers a full opportunity to digest and discuss all elements of the this proposed project, well in advance of Tuesday's Council/RDA sessions.

All WCF readers are therefore invited to post their savvy comments before, during or after Tuesday night's Council/RDA events.

Update 12/22/10 3:40 a.m.: Both the Standard-Examiner and the Salt Lake Tribune carry stories this morning reporting on the results of last night's Council/RDA meetings:

• Ogden City Council votes to make legal advice off-limits to public
• Ogden OKs changes scrapping underground parking at hotel

Update 12/28/10 8:00 p.m.: View the full Council and RDA videos, via the Ogden City website:

• 12/21 City Council-RDA Special Session
• 12/21 City Council Regular Session

Standard-Examiner: Tax Increment District Extended

Fine tuning the facts on an otherwise good report on last night's RDA Session

By Dan Schroeder

Some responses to the details of Scott Schwebke's morning story, concerning last night's RDA session:

• Tax increment District extended

1. He never says how much money the taxing entities are losing through this deal (and the RDA is gaining). Based on McConkie's estimates, the net amount is over $12 million. Nor does he name any of the taxing entities (Ogden City general fund, Weber County, library, 911 service, paramedic fund, etc.) that will receive no mitigation payments. So I don't think most readers will realize the magnitude of this decision, or understand that their taxes will probably go up as a result.

2. Godfrey's apparent denial that he intends to use this revenue as collateral on additional debt is extremely misleading. I wasn't there to hear everything he said, but the direct quote isn't a denial at all--he's merely pointing out that this particular action doesn't create any new debt. Godfrey wasn't even there when McConkie admitted, repeatedly, that his office intends to pursue a "partnership" with a major hotel, backed by this tax increment. That's just a polite way of saying the city would take on new debt.

3. The article says that "tax increment from The Junction nearly matches projections made when the city bought the mall property", according to McConkie. I don't know what projections he's thinking of, but the actual tax increment is only about 1/3 what the city promised it would be in a newspaper ad and utility bill insert in 2007.

4. The Junction's total bond debt in 2005 was over $36 million, not $22.4 million as Schwebke claims. He's forgetting the two additional bond series for the Salomon Center. As of this year, very little of the principal has been paid off on these bonds, and there have been additional refinancing charges, so the debt currently stands at about $34 million. (These total figures omit the $2 million portion of the $22.4 million that was for the American Can district, not the Junction.)

5. Similarly, the figures that Schwebke gives for the annual bond payments are only for the largest bond series. The payments on the two other bond series totaled an additional $1.1 million (about half from Salomon Center lease payments and half from tax increment from other RDA districts).

Be Honest, Fair, and Conservative

An open letter to the Ogden RDA Board (aka City Council)

by Dan Schroeder

Dear RDA Board members:

I write concerning your agenda items for Tuesday, October 13, which call for extension of tax increment collection for the CBD Mall District and for associated mitigation payments to certain taxing entities. My concerns fall into three categories.

1. The RDA is breaking a promise.

Please refer to the attached “Ogden City Update” newspaper ad that appeared in the Standard-Examiner on May 31, 2007. In this taxpayer-funded advertisement, the city repeatedly promised that starting in 2015, the various taxing entities (including the library, school district, county, city, and smaller entities) would “begin receiving the full benefit of the tax income from The Junction.” If you pass Resolution 2009-6, you will be breaking this promise to your constituents (Click to enlarge image).

You might object that the promise was made not by you but by the mayor’s office. However, in RDA matters the mayor is actually acting as the RDA Executive Director, and answers to the RDA Board. The Board could have ordered the Executive Director not to make promises that could not be kept, or to publish a correction the following month, rescinding his unrealistic promise. Because the Board took no such action, the Board bears a portion of the responsibility for the mayor’s promise to the citizens.

2. The mitigation payments are grossly unfair.

The proposed “mitigation payments” are plainly being used to buy a bare minimum of the needed votes on the Taxing Entity Committee. In effect, these payments allow some entities to receive tax revenue from the Junction while others receive none. This redistribution of legally prescribed tax rates violates the fundamental principles of property tax collection, and sets a disturbing precedent whereby a coalition of taxing entities can “gang up” to increase their own tax receipts while decreasing that of the other entities.

In the present instance, the mitigation payments would go to the Ogden School District and three of the smaller taxing entities. No mitigation payments would go to the Ogden City general fund, Weber County, the library, the Paramedic Fund, 911 service, or the Weber/Morgan Health Department. As a result, all of these entities will either have to cut services or raise everyone’s taxes.

3. This revenue will merely encourage more debt.

If the purpose of this action were to help pay down the existing debt associated with the Junction, there would be no rush. The RDA district is not set to expire for another five years, so there is plenty of time to negotiate the terms of the extension after we have a clearer picture of the Junction’s financial situation and how much tax revenue is at stake.

However, according to the minutes of the June 25 Taxing Entity Committee meeting, this issue is coming up now because the administration wishes to use the additional revenue as collateral for additional debt. Apparently the administration is still trying to facilitate construction of a major new hotel on the vacant Junction parcel east of the Salomon Center, despite the fact that market conditions are inadequate to make such a hotel financially viable. Rather than respecting these market conditions, the administration apparently wishes to subsidize the hotel with a new taxpayer-financed parking garage and perhaps other incentives. The proposed tax increment extension would allow the RDA to borrow several million more dollars, on top of the $34 million of existing debt associated with the Junction.

Conclusion

While it might seem irresponsible for the RDA Board to turn down free money, the Board must also remember its ethical obligations as public stewards. For too long, the Board has passively allowed the administration to dictate the terms of its dealings. Now is the time for the Board to take control and direct the administration to keep its word, treat everyone fairly, and plan conservatively for the future.

Dunning Reminder: Ogden to Consider Reissuing Up to $32 Million in Bonds Tonite

The Std-Ex reports on another Boss Godfrey plan to put Ogden in hock up to its eyeballs

For those who may have neglected to put the matter on their calenders, we'll issue another dunning reminder of tonight's RDA and City Council sessions, wherein the Council will consider the re-issance of up to $32 million in Junction Project bonds. Although we posted an earlier article on this subject, we were at the time at a complete loss to explain the meaning of this cryptic item, which was included (in varying form) in both the RDA and Council agendas:

9. Reports from the Administration:
a. Tax Increment Revenue Refunding Bond. Proposed Resolution 2009-4 authorizing the issuance and sale of not more than $32,000,000 aggregate principal amount of its taxable revenue refunding bonds; and related matters. (Adopt/not adopt resolution – roll call vote)

Fortunately, Ace Reporter Schwebke is johnny-on-the spot this morning with a pretty decent full report:

• Ogden to consider reissuing up to $32 million in bonds

And yes indeed, our speculation in our earlier article was correct, assuming Mr. Schwebke got the facts straight. Indeed, tonight's agenda item is all about the Bank of New York's revocation of the Junction bonding letter of credit, AND Boss Godfrey's proposed tax increment bailout as well.

And here's the kicker. The substitution of Wells Fargo Bank (WFB) as the new Junction letter of credit bond guarantor will cost the taxpayers at least an additional cool $1 million:

Wells Fargo plans to provide a new letter of credit to the RDA on the reissued bonds that will not exceed $32 million.
That includes about $1 million in bond issuance costs resulting in an additional $80,000 in debt service annually for The Junction through 2030, said Mike Goodwin, the city’s treasurer.

And here's another interesting factor. WFB apparently wants to substitute as collateral utility franchise tax proceeds in place of BDO lease revenue income:

The bonds would be secured by lease revenue from the Salomon Center, tax increment funds and utility franchise tax proceeds. Lease revenue from Business Depot Ogden would no longer be used as collateral for the bonds.

Sounds like a situation made to order for our big spending mayor, as he courts that new hotel franchise which he's been pining for, over so many years. With that BDO revenue freed up, there'll be plenty of dough to generously "incentivize" a prospective new hotelier, or any Godfrey crony who might come up with another ambitious development scheme.

And one reliable source informs us that if this new bonding scheme is adopted by the RDA and Council, the principal balance of the Junction loans will jump to an amount in excess of the price of the original bonding. So if our source is correct, after four years of paying the existing bonds down, Emerald City will be in even deeper hock than we were in 2005.

Hopefully the RDA/Council will table this matter tonight, and seek outside legal and accounting advice. If there was ever a time when the council shouldn't take Godfrey's word for something... it's now.

And we're also scratching our heads wondering how the Bank of New York can lawfully pull the plug on the existing letter of credit. Letters of credit are usually irrevocable. Irrevocability is the whole point of having letters of credit, in fact. What good is a letter of credit if it can be voluntarily revoked at any given moment? In this connection, that's one more reason the council should not jump into this. Time to for the council to confer with independent legal council, we believe. The whole story smells mighty fishy to us.

The question also arises: What's the downside (if any) if our RDA/Council simply refuses to go along with this sudden "emergency" re-fi?

That's it for now. Hopefully one of our readers will show up for tonight's neetings and come back with a report.

Lots to talk about here in advance of tonight's meetings. So what say our gentle readers about all this?

Update 8/18/09 8:18 p.m. MT: For what its worth, here's a link to Scott Schewbke's Twitter tweets. Significantly, according to Mr. Schwebke, it appears that the council has decided to table the matter, and reset it for public hearing three weeks hence:

Council formally sets public hearing for Junction bond reissuance to Sept 8.

Great interim result, we think. This will give the council ample time to carefully examine the issue, and to determine independently who's telling the truth... and who's not.

Big Meeting Today At Noon: Will the Ogden RDA Taxing Entity Committee Roll Over, and Become Willing Investors In The Floundering Junction Project?

Time to test the Taxing Entity Committee's ethical mettle

Here's another quick reminder of today's upcoming event. The Ogden RDA Taxing Entity Committee (TEC) meets today at noon, on the third floor of the Ogden City Municipal Building, to consider whether they'll go along with the Godfrey administration's proposal to extend The Junction’s tax increment district, and allow Ogden City to to continue exploiting 100% of the project's tax increment until the year 2026.

During the last TEC meeting, the mayor's proposal was met with a cool reception, and the committee voted 7-1 to table the proposal and look for other alternatives. In the interim since the last meeting however, the Godfrey administration has been fiercely lobbying, and spreading a little money around, so it's anybody's guess how this matter will turn out if it's put to a vote this afternoon.

We've already gone on record in strong opposition to this knuckleheaded plan of course, which if approved by the TEC, would place all these taxing entities in the posture of voluntary investors in the Junction project, a position which would be in direct conflict with their proper role of service providers for the taxpayers, whom these government entities are designed to serve. As we've already pointed out, a vote in favor of this proposal by any TEC member would be adverse to the economic interests of the taxing entities whom such committee members represent. Time to test the TEC's ethical mettle, we suppose.

For those who'd like to bone up on the subject pre-meeting, we invite you to check out Dan's most excellent Special Reports.

We'll now open this article for immediate reader comments; and we'd likewise welcome any post-meeting reports from those WCF readers who may attend today's event.

Don't let the cat get your tongues.

Oh, My! apparently, and according to the most recent report, the "Brothers in Ogden" have bent down and decided to serve "Blessed Boss Godfrey."

Update 8/19/09 3:00 p.m. MT: We just received this update from one of our most reliable sources within city hall. The TEC committee did indeed roll over in spades this afternoon, and adopted Boss Godfrey's flawed bailout plan whole hog:

The Taxing Entity Committee approved the extension of the mall RDA with a 6-2 vote – Weber County did not support the extension but also did not raise concerns. The Board will be seeing an action item on this in the near future.

Chalk this up as another big win for the "good ole boyz network" in Ogden. We all know who they are.

Shame on the Ogden School District representatives, by the way. They should be looking after their already underfunded school district... but apparently real revenue isn't their top priority these days.

We obviously still have a lot of work to do in Emerald City, fellow lumpencitizens, in our ongoing effort to root out the Godfreyite trash.

Sad, very sad.

8/20/09 9:46 a..m. MT: Scott Schwebke his writeup in today's Standard-Examiner:

• Ogden RDA extends Junction tax increment district by 12 years

It's a sad commentary indeed, about the poor quality of the taxpayers' representatives on the Taxing Entity Committee.

Troubles At The Ogden Junction Money Pit

A harsh reminder of broken Boss Godfrey promises

It was early last week that we broke the news that the Godfrey Administration explicitly admits that the Junction Money Pit is driving Ogden City into the municipal government poorhouse. And lo and behold, six days later, the Standard-Examiner finally gets around to reporting this blockbuster story this morning. Check out Scott Schwebke's full morning writeup here:

• Ogden's Junction's money pinch?

What's immediately obvious is that there are a couple of typos in the Std-Ex headline, by the way, and the the original headline should have read more like our own WCF headline above.

Try as the Administration might, it's impossible to put lipstick on this pig. In simple point of fact, the big spenders of the Godfrey administration wildly overestimated the revenues which would be derived from this boondoggle project from the outset; and Ogden taxpayers have been paying the price for Godfrey's blunder, to the tune of $800 thousand or so per year since 2005.

In its current posture, the administration is desperately trying to buy time, hoping that with a refinancing of the tax increment structure to the year 2026, the project can recover when the economy some day returns to "normal." With respect to that, we'll predict that U.S. credit markets will never return to the go-go times of the early and mid-2000's, a period of economic recklessness unprecedented since the 1920's.

But even assuming that the economy will improve to a point where the Godfrey administration might realistically be able to put this project back on its feet, at least relatively speaking, CED Deputy Director Richard McConkie spells out this less than encouraging "best case scenario":

Extending the project area until 2026 could generate through tax increment, assuming the economy rebounds in a reasonable time, about 60 percent of the revenue required for The Junction's bond debt, McConkie said. The balance of the revenue needed for the debt would come from lease revenues at The Junction and BDO, he added.

That's right, gentle readers. Even assuming under an "optimistic scenario" that Godfrey can con the Taxing Entity Committee into giving Ogden City an additional 12-year cushion, and that the economy recovers to the point where significant tax and/or lease revenues start flowing from The Junction, the taxpayers of Ogden will still be covering the tab for up to 40% of of the Junction bond debt into the year 2026 with BDO revenue, in addition to the millions we've picked up already.

And remember, gentle readers... Godfrey promised (scout's honor) that the Ogden taxpayers would "NEVER be on the hook."

So much for Godfrey promises.

Have at it, O Gentle Ones.

Is The Junction Project Driving Emerald City Into Bankruptcy?

The Godfrey Administration goes to the RDA Taxing Entity Committee seeking major "concessions," i.e., a bailout

We'll shine the spotlight this morning on a fascinating document which we received this morning from one of our alert Weber County Forum readers. Over the past few years we've complained about the the millions of taxpayer dollars which have been expended since 2005 to service the Ogden Junction's back-breaking bond debt, notwithstanding Godfrey's earlier promises that the taxpayers would "never be on the hook." We've regularly expressed our strong concerns that this bond debt was driving our city into insolvency. From our own reading of this document, it appears that those oft-stated concerns have indeed been squarely on the mark. Check out this document, which amounts to an explicit admission on the part of Godfrey administration officials that we've been right all along:

• OGDEN CITY REDEVELOPMENT AGENCY TAXING ENTITY COMMITTEE MEETING MINUTES - June 25, 2009 – 4:08 p.m.

The Taxing Entity Committee (TEC) is the representative body, by the way, of the various taxing entities, from the State School Board to our Weber County Government, who share in the property taxes which flow from projects such as The Junction. This is also the entity which ultimately decides how tax increment dollars are divvied up.

What appears to be happening here folks, is that the Godfrey administration is admitting (behind the scenes, so far) that The Junction has become the unsustainable financial albatross which many of us predicted it would be. This document now reveals that the administration is going back to the TEC, seeking concessions (an extension) which would enable Ogden City to continue exploiting 100% of the project's tax increment until the year 2026.

Among other things revealed by the above-linked meeting minutes is that the Godfrey administration is also proposing "mitigation payments," (i.e., "payoffs") to the other taxing entities, in order to persuade these agencies (who depend on Junction tax revenue) to go along. This, of course, is the "debt upon debt" to which Assistant CE&D Director Mr. McConkie refers in the meeting minutes... which could come at a high price, possibly in the millions of dollars.

What's also obvious from a reading of these minutes is that this concept went off "like a lead balloon" in the June 25, 2009 TEC meeting, as the committee voted 7-1 to table the proposal and look for other alternatives. Nevertheless, with the 2009 municipal election fast approaching, in which Boss Godfrey's questionable financial acumen already presents a major hurdle for candidates on the "Godfrey Ticket," this latest development will be quite interesting to watch.

And one more thing. Old cowboy wisdom axiom: "If you find yourself in a hole, the first thing to do is stop diggin'."

Who will be the first to comment?

Gleanings from Today’s City Council Agenda Packet

Hot Tub Hotel on Hold?

By Dan Schroeder

Once again I’d like to thank the Ogden City Council for its relatively new practice of putting its full agenda packets online for all to see. Here are a couple of items that I found noteworthy in the packet for tonight’s meeting.

1. Contribution Agreement – RDA Tax Increment Bonds. Continuation for consideration of a Contribution Agreement with the Redevelopment Agency for the purpose of issuing Tax Increment Bonds, Series 2010 to facilitate the financing of the acquisition and construction of a hotel at The Junction. (Remove from agenda)

This item, if I’m not mistaken, is the final step in approving the Kevin Garn Hot Tub Hotel. Although it seems clear that a majority of the council supports this project, it hit a snag when the bank refused to accept the financing terms for the proposed parking structure. Now, it would appear, there has been another snag that has forced the council to remove this item from tonight’s agenda. Will this be just a minor delay, or is the whole project in danger of falling through? Perhaps we’ll learn more tonight.

2. RDA Annual Report.

Tonight the council (acting as RDA Board) will formally receive the Redevelopment Agency’s Annual Report for fiscal year 2010. Although the event will be completely routine, this may be the first time that a copy of the Report has been posted on the city’s web site for all to see. For convenience, I’ve extracted the Report from the agenda packet and Rudi has posted it here (pdf, 3.7 MB). The Report is a fascinating document that gives a great overview of what the RDA does. From the map on Page 4 you can see that redevelopment districts cover nearly all of downtown Ogden—and this map doesn’t even show the new district along the east side of Washington Blvd., which was designated after FY 2010 ended last summer. Be sure to bookmark this Report and refer back to it, next time the RDA and tax-increment financing are in the news!

Ed. Note: We'll leave the lower comments section open for anyone who'd like to comment on this topic before, during or after tonight's council meeting.

Tuesday Morning News Roundup

Boss Godfrey is keen on luring a new hotel chain.... Biker brawl story redux

The Standard-Examiner carries this morning a couple of items worthy of note:

First, Scott Schwebke announces, seemingly out of the blue, that the Godfrey administration is hot on the trail of a new project for The Junction... What else? A national flagship hotel:

• Ogden considers Junction hotel

In the comments section under the above story, gentle reader Dan S. speculates about the timing of this announcement:

The picture is becoming more clear. Next week the city will again ask the Taxing Entity Committee to extend the city's collection of tax increment from the Junction for another 12 years, until 2026. The reason they're asking now (rather than in 5 years when the tax increment is due to expire) is so the city can borrow against this anticipated income. And the reason the city wants to borrow more money is so it can "participate" in the hotel project, perhaps by building another parking garage.

Bingo, Dan! We do believe you may have connected the dots. Check the comments section under the above linked article for Dan's full analysis.

Secondly, Std-Ex reporter Di Lewis proves herself true to her word, and provides a followup story to the "biker brawl" story which we wrote about on Sunday. Ms. Lewis has done some interviews with witnesses and participants in the Friday night Ogden melee, and offers more balance than Trent Toone's previous Std-Ex story, which had the tone of a regurgitated police report:

• Incident frustrates cyclists / Critical Mass riders, Ogden officials, police meet

As an added bonus, Ms. Lewis provides this fascinating tidbit:

A group consisting of law enforcement, city officials and Critical Mass riders met Monday morning to discuss the incident and talk about cycling in Ogden.
John Patterson, Ogden’s chief administrative officer, said the city regrets what happened, as it is trying to build a friendly cycling environment.
Patterson said the city is going to start a campaign to bring about civility between motorists and cyclists. He and the mayor will ride with Critical Mass next month, and they are considering starting regular rides with the mayor.

So the Mayor wants to ride with Critical Mass...

Query: Does Critical Mass want to ride with the mayor?


That's it for now, Gentle Readers.

Don't let the cat get your tongues.

A Productive Night for Boss Godfrey Cronies

Last night's council/RDA action, as reported by the Standard-Examiner

The Standard Examiner reports this morning that Boss Godfrey scored a clean sweep at last night's RDA session, wherein the RDA board unanimously approved all three agenda items announced in yesterday's Scott Schwebke article:

1) Waiver of an RDA right of first refusal for a one-acre Junction project parcel at 22nd and Grant, clearing the way for acquisition and development of the property by BDO manager Stuart Reid;
2) Commitment of another $1.1 million in tax increment to Mel Kemp's MTK Holdings, to be applied toward improvements the the 91,000 square foot building housing Adam Aircraft;
3) Authorization for issuance of up to $3.5 million in revenue bonds, to allow U.S. Foodservice to purchase about 37 acres from Councilman Safsten's employer, Autoliv Inc.

Maybe it's just us, but we wonder whether it isn't just a bit inelegant for Emerald City's BDO manager, Mr. Reid, to be involving himself personally in property development at The Junction. Whether this proposed property acquisition represents at least a potential conflict with his contractual obligations at BDO we can only speculate. However, this situation has a bad smell to it, we think.

As for the RDA Board's approval of the commitment of additional credit to Mr. Kemp, we note that this is at least the second time Emerald City has come to his rescue. Emerald City generously awarded Mel Kemp's consortium over $2 million tax increment just two and a half years ago to bail him out financially. We wonder why Mr. Kemp can't obtain his own private financing.

Regarding the $3.5 million bonding for the Autoliv property sale, we are gratified to learn that Mr. Safsten recused himself from the Autoliv/Foodservice transaction funding vote. A more direct potential conflict of interest scenario we cannot imagine, than the employee of the seller in a land transaction voting as a public official on the bonding intended to provide the actual funding . Our compliments to Mr. Safsten, for conducting himself in a manner demonstrating the highest possible ethical standards, and placing himself beyond reproach.

In another Std-Ex story, we learn that the Emerald City Council has cobbled together a $43.2 million "wish list," identifying capital improvement projects to be prioritized over the next five years. Among the projects approved in concept only during last night's council session (no actual funds were committed,) were various street, sidewalk and building repairs, together with improvements at the FrontRunner station. Noticeably absent from from the council list are improvements to the city's woefully dilapidated water and sewer systems, which bodes well for sellers of bottled water in the city's East Bench area, we suppose.

Have at it, gentle readers.

The floor is open.

Standard-Examiner: Time to Force Boss Godfrey to Finish What He's Started

If Ogden City receives a taxpayer bailout, its terms should be strictly conditional

There's a top notch editorial in this morning's Standard-Examiner which we'll present for today's discussion, addressing the Junction Money Pit Dilemma, and the Godfrey administration's recent self-confessed request to the RDA Taxing Entity Committee, to provide Ogden City a taxpayer-borne bailout from the administration's back breaking Junction bond debt. The opening paragraphs provide the gist:

Although hampered by the same recession difficulties that have stalled economic development in many other communities, The Junction is still a big plus for Ogden city. It provides a safe place for Top of Utahns to shop, dine, play or be entertained. It has a great ambiance and environment. We can be proud that it has replaced a deserted mall in the heart of Ogden.
There is a money pinch, however, that has prompted Richard McConkie, deputy director of community and economic development in Ogden, to request a 12-year extension, from 2014 to 2026, on The Junction tax increment district. This would provide some relief to the project's bond debt, which is $22.4 million.
If this is granted, it should come with the condition that the city focus on specific measures that have already moved ahead. We're talking about The Junction and, for example, the Ogden River Parkway project. It's time to put an end to efforts to build a hotel/golf facility, or an ice wall, or a velodrome, etc. The current economic situation requires continued focus and discipline from city administrators. [Emphasis added.]

In publishing this morning's editorial, the Std-Ex public joins the throngs of other Godfrey watchers who've painfully observed the now predictable process over the past 8-1/2 years, whereby Godfrey leaps from one ill-conceived multi-million dollar project to the next, without ever finishing any of those which were already underway.

Kudos to the Std-Ex for coming out publicly on this. If the RDA Taxing Entity Committee is persuaded to go along with Godfrey on this bailout proposal, it should explicitly make its cooperation contingent upon Godfrey's abandonment of any further crackpot schemes.

While Godfrey has amply demonstrated his capacity to cook up new projects, and to bully fiduciary decision makers into setting them in motion, he's also demonstrated near absolute managerial incompetence in shepherding such projects to completion.

Remember, folks, the still incomplete (and technically bankrupt) Junction project has been "in progress" for almost eight years; and for a full 44 months it looked like this. As for the River Project... here's its current status after a similar 8 years' dawdling. At the current juncture, the River Project situation actually appears to be deteriorating... Boss Godfrey now apparently doesn't even know the identities of the private investors who should be moving this project forward.

In truth, there's more that needs to be done with respect to both of these projects than even a competent manager could be expected to achieve in the 2-1/2 years which remain of Godfrey's quickly waning third mayoral term.

Godfrey is a like a narcissistic little kid who receives a new toy, plays with it for a few hours, then tires of it and asks mommy for a new one. It's time for the grownups in local government to administer a little "tough love," we think. Time for Taxing Entity Committee, if they're inclined to go along with this bailout, to set some firm conditional ground rules.

Added Bonus: Don't miss Cal Grondahl's spot-on editorial cartoon, by the way.

Comments, anyone?