Discussion on Substance: My Brownfield Reforms

Community discussions are important, and that includes people in government engaging, because the rules of Council, Commissions, DDA, etc. preclude any real discussion with the public. Many might not know this, but despite my criticism of tax breaks for developers, I am on excellent terms with several developers, and have had very frank discussions with them that have been mutually illuminating. One reason I am skeptical of the senior apartments for Lot 1 is I have broached the concept with developers who I think sincerely would like that to work as an alternative to building high-priced student rentals, but they insist financiers consider it too risky, even with a proposal of getting letters of interest from MSU alumni and EL seniors, plus we have crunched numbers together.

I have been trying to get development authority reform for years, with reform suggestions rooted in careful analysis of the data. It does not take too much research to learn that the label “brownfield” is used too broadly, even though it was originally intended for former industrial plants, urban ruin, and the like. And, looking at the details of most brownfield plans shows that only a small portion of “eligible activities” costs goes to demolition and environmental clean up, which is what most people expect when they hear the word “brownfield.” There is actually a provision in the Brownfield Redevelopment Act that says developers must provide a financial comparison with the costs of the same site plan on a “greenfield” (sprawl) site, IF they are considering a “greenfield” site as an alternative. IF is a big loophole, and such comparisons are never made, just claims that building on an already developed site is more expensive.

So let me offer these for substantive discussion:

Should cost comparison with a “greenfield site” be mandatory for all brownfield projects?

Should a comparison of expected gross revenue (e.g., charging more per bed near campus than at Chandler Crossings) with a greenfield site be mandatory for all brownfield projects?

I am also going to repeat my other legislative reform ideas, if anyone would like to debate those (including those on Council). I never have heard anyone justify requiring a majority of members of the DDA be owners of property downtown (as opposed to small business owners who rent commercial property, let alone people who live in neighborhoods). I’ll lob that one into Mark’s court.

1) Democratize membership in development authorities so they represent the community not special interests.
2) Require that any bonds issued by development authorities be placed on the ballot, like for debt financing of other public works.
3) Require that any use of tax increment financing for projects justified by “functional obsolescence” or underutilization, not true blight requiring massive clean up costs, be limited to no more than 50% of tax increment.
4) Require a detailed breakdown of objectives for how the project will benefit the local community, including local tax collection, with a plan for how progress toward these objectives will be assessed.
5) Require that all projects detail public service costs required and how these will be paid for.
6) Require that developers provide a detailed financing plan, including a pro-forma, for public review.
7) Require prior screening of all key personnel and companies at local level to rule out developers with histories of fraud, tax liens, foreclosure, etc.
8) Require that at review by MEDC local citizens, businesses, and other tax jurisdictions (e.g., county) be allowed to give testimony for or against approval.
9) Instead of a portion of TIF going to support local and MEDC staff, require developer to pay an up front administrative fee for review and annual fee restricted to actual administrative costs if approved, which would eliminate incentive for local and MEDC staff to approve projects.

Eliot Singer