The Easthom Page

What does the vote on Lot 5 mean on Monday night?  The vote was to authorize the town manager to work with RAM to come up with a development agreement incoorporating the various aspects of the existing memorandum of understanding and, as I put in the resolution last night, incooperating council comments.  The latter was very important for me to do!  I had many items of concern to be a part of the D.A. in some form, or I will not approve it personally.  The N&O reported today that RAM “shot down” my affordable housing issue; at risk of being accused of bait and switch, they were not going to promise anything like that.   I voted for the manager to proceed with the hopes that this future development agreement will have my questions answered and suggestions within it.  If it doesn’t, I won’t vote for it.  The manager will have to work with RAM to come up with an agreement that the council can be happy with.  Is it over?  In my opinion, no.  Absolutely not.  In essence, what I did was say : ” Please go and craft a development agreement with x,y,z, and present it back to the council for approval, or NOT.”   That was the resolution.  I hear that once such things get approved for the manager to proceed with drawing up agreements, that basically all is said and done.  I don’t agree.  Maybe I have to see things in black and white or something but the council has to APPROVE the development agreement, and will either do that, or not in February.    What did I ask for, and what would I like to be included?

1.  affordable housing units at 21– no more negotiations on this number. No other negotiations regarding open space, etc.  No more surprises!

2.  affordable parking ON SITE, not 2 blocks away at the Wallace Deck.  Maybe across the street, but that’s as far as I go. We don’t have to have a parking space for every unit, but include any affordable housing on site.

3.  Permanent reduction of condominium association fees for affordable units.  It’s simple.  Are we getting affordable units or not?  High condo association fees make some units completely unaffordable.  This is an issue now for the council with upcoming projects.

4.  Details! Details! Details! on the performance bond–how much and it should cover the project “as designed.”

5.  Start and end date for the project.  We will be tying up our revenue stream from parking on lot 5 for years and should not have to suffer more losses if the project goes on and on….the developer should be fined for going over the agreed to date of completion equivalent to the revenue loss for the year.  The developer should lose all property rights if they do not complete the project within a reasonable agreed to time frame, as well. 

6.  Where are the details of the increased town services that will have to be provided for this project?  I did not see that in any of the financial analyses.  I want to see that projected to get a real picture of our financial situation.

7.  Make sure that the project is in fact LEED certified at best and go farther with using renewable energy.  This was a point that Jim Ward argued, and I will support this in seeing that this building, as others that come before the town, are held to the highest accountable standard for energy efficiency.

8.  Make sure that this development agreement is made available to the public at least 2 weeks in advance of a council meeting in which it is to be approved/not approved.  The public needs more notice of this!  (short notice with 500K to 7.25 million).   I didn’t know much more in advance than the public did.

If these minimums are not met in some form or fashion with the development agreement, I feel that this project is not in the Town’s best interests, and I won’t support it.  Consider this list to be not inclusive!  I will wait to see what agreement comes before us.

There undoubtedly has been much written and discussed about the redevelopment of Parking Lot Number 5.  Here are my feelings.  I think that redevelopment of this site for residential and commercial use is important for being an impetus for more good redevelopment downtown in the future.  However, my history with this project is very limited.  I have heard comments such as (and not all are included here!) : “this is a TIF in disguise”;  “why should we shell out 7.5 million for a parking lot we already own?”; “this is just an incentive for developers.  Just wait until the developers come to the council for other incentives to redevelop and make their own downtown project great. Maybe we can ask the council for something in return for us creating a great downtown project;”  “cannot trust RAM, look how the numbers have changed and it’s too risky now.  No telling what they’ll do next”;  “what happened to revenue neutral as the goal of the town in this project?” .  Thus, I had many questions to pose before our council committee and town manager.  I asked basic questions and continue to ask questions(not all included below), such as:  isn’t it important to have start and end dates to the project given that our general revenue for current lot 5 use will be reduced by 275K per year….once the “hole is dug” and steel beams are put up, our lot 5 will no longer generate the revenue that we once had for parking.  Thus, less money in our “pot” to pay off the 7+ million dollar parking lot debt–each year.  If we put an end date on the project, we could fine the developer a certain amount per month if they don’t meet that “date”, until the project is complete.  And if the project is not completed within a reasonable time frame (say six years), then the developer loses rights to lease the property (and air rights) and other possible fines(?).   From what I have seen to date it looks like the project could be completed within 3 years to five years.  Whatever the time frame, the public needs to know, and hold this developer accountable.

Also, what about affordable parking and housing?  I am thankful the developer has agreed to 15% of affordable units here– but what about the parking?  Why should we send the affordable unit owners two blocks away to park?  I say put the parking on site (or close!), or not at all.  And it would be nice if we could cater to families in affordable housing, not just singles.  The Town needs more 2 bedroom units that are affordable.  What about condominium assocation fees?  These fees often eat away at the affordable owner’s budget and eventually make the units unaffordable.  We need a way to offest these fees in some manner for this development and other developments that come down the pike for affordable owners.

What about the performance bond?  How much will it be?  This is important.  We don’t want this developer to say to the Town in another 2 years, “cannot complete the project as designed due to increased construction costs beyond our control”, etc.  and leave us with a hole in the ground and an unfinished building.  Yes, they are contributing 12+ million in equity.  They could still walk away.  The bond should be sufficient enough to complete the project by another developer, if need be.  The town’s risk is minimal in that we don’t pay the 7+ million for the parking deck till the deck is ready for operation.  But, if the developer “goes to town” and begins construction, which involves destruction of our current lot 5 that generates 275K per year in revenue, and leaves it without our ability to make ready use of it again as a parking lot, we lose out financially.  If we proceed with this development agreement, we want to make sure that it goes on and gets DONE.  Let’s agree to a very sufficient performance bond and a reasonable time frame of project completion and consequences if the time frame is not met.

This development could be a true beginning to a revitalization of downtown, and contribute to the commercial and residential tax base in a positive manner.  There could be many positive “intangibles” in this downtown redevelopment that one local developer noted (future increase in commercial tax base, residential tax base, etc).    But I want to make one thing clear (at least for me):   don’t expect the Town to contribute financially in any way to any redevelopment efforts similar to this one, in the future.  I can tell you that in downtown Durham, the city  often “contributes” financially to large redevelopment projects when the developer requests certain things such as infrastructure improvements, etc.  in order for their project to be successful.    The argument is that the Town owns the parking lot #5 land, wants control in its development, and thus wants to invest in itself. 

And yet:  what happened to “revenue neutral.”  What happened when the Town went from 500K for affordable housing to 7.5 million for an underground parking facility attached to a massive tens of millions of dollars residential/commercial project?  Unfortunately for me, I came onto council without the institutional knowledge.  Fortunately, I have had the questions to ask as everyone else has had.  I have not been in involved in the negotiations.  I greatly respect the time spent by our council committee on these negotiations (Bill, Sally, Cam).  I have not been there during the deliberations of the past.  It is almost not fair for me to come in and pose such questions (now and in the future) as if I don’t trust the opinions of my fellow council members.  My fellow council members are acting in good faith.   But I am the newest member of this council and again, I’m not in this to sit back and assume all is OK and not offer up my own personal opinions.  I am deeply troubled about the thought of  spending 7 million on an underground parking deck.  At first blush, I don’t like it one bit.  I recognize the value of this project inherently in what it can do to revitalize downtown, however.  Do we need to spend 7 million on a parking deck?  Would this project have happened, or something similar to it, without the Town investing that money?  What if we sold the land outright and let the SUP process allow the Town to control to the extent that it could without the capital outlay?  What are the benefits to a public/private partnership here and in future developments?  What is the precedent that we set with this development? Did the Town allow sufficient time for the public to absorb the 7.5 million price tag?  Is it all a “rosy picture” that in reality is not the accurate picture?  I have listened to each and every person that has spoken on this project (to me), have read all of the letters to the editor, etc. and I’m still struggling.  I’m excited about this project, but still struggle with the financial ramifications.  I want to make sure that this Town is very much protected and invested wisely. 

So when this comes before the council on Monday, my questions will be there.  The decision will not be made on Monday as to the final outcome of the project— it will merely authorize the manager to proceed to finalize a development agreement, which still has to come back before the council for approval.  I still have time to think about it and ask questions.  And I’ll continue to do so, and I encourage all others that are concerned to do the same.