Good morning! It's another Saturday morning, which means that we're out at the Police Academy for the second meeting of the #NavyHillRVA commission. We're out in force but this morning I'm posting a different kind of picture: a screenshot of November 12th's City Council agenda. 
Yup! You read that right. The coliseum is currently scheduled for a vote for November 12th. This is likely a continuance, and will be continued again. Currently @ParkerCAgelasto has proposed the Commission present its findings to council early January.
A November vote would both disregard the work of the commission and violate public trust in democratic process. But I digress. The committee is introducing its members. Everyone is present today.
I am live-tweeting today, not live streaming. I left my phone at home. Please everyone send love to @jasmarlee who is bringing both my phone and coffee. Also SHOUTOUT TO VUU and homecoming, which is happening about a block away.
We are doing voluntary disclosures. Grindly Johnson discloses political contributions to Levar Stoney.
Because this is the greatest committee ever, they also announce FOIA requests. The committee has had one FOIA, documents have been sent to the request-or and will be distributed through the listserv. Website is: navyhillcommission.org
Have you asked questions of the commission? If so answers to your questions and everyone else's questions are online here: richmondgov.com/Mayor/downtown…
Today's topic is, in summary, an audit of the financials as presented to the commission. Topic 1: Bonds. Ordinance 2019-211. The legal agreement has no specifics for the bonds, meaning any bond plan can change. richmondgov.com/Mayor/downtown…
@JohnGerner is presenting using the Municap report, which is online here: richmondgov.com/Mayor/document…
Gerner is enumerating the overall assumptions for the bonds. The first assumptions, too often overlooked, are: that we need an area, that the coliseum cannot be reopened as is, that it is not currently renovated, that the new arena not be privately owned and financed...
... that the cost is not shared with the surrounding counties, that the cost of the construction not be shared with the company, that the cost of the arena is not shared with the state, and that the arena must be built as soon as possible.
These assumptions, key to the bond, are massive. So are the costs. The slide has advanced, but it looks like the capitalized interest on the bond is apx $45 million. How much is one school?
The bonds would be issued directly by the city's Economic Development Authority. The legal agreement will be in place before it issues the bonds. The development agreement will be set by council and council will have no recourse to reject any bond profile set by the CAO & EDA.
The commission is debating whether or not the city can cancel this deal if bonds are issued that do not benefit public interest. This is unclear, but looks like a no. @URProfWalker is recommending extreme caution at this stage of the process due to the lack of recourse later.
JASMINE IS HERE! SHE BROUGHT US ALL COFFEE!!!!!!! @jasmarlee
Mr. Gerner confirms an "increment financing area" is a TIF district. #Spin #YouCantRebrandThisShit
Holy shit: Pierce Homer just asked a great question. How does a TIF generate revenue in the first year if the revenue is frozen that year, thereby not generating an increase? Answer: an amazing and important technicality.
The frozen baseline property values that set our income for the next 30 years are not set at actual value but at a proposed value by council. Data on Dominion towers shows they will produce enough tax revenue in year 1 to exceed the TIF baseline.
To be clear: we lose revenue immediately. Even in the first year, our property would have given us more money than the frozen baseline will actually direct to the general fund.
Bond payment sources: Is it just incremental taxes? NO. It is not. As you can see here the TIF captures our sales taxes, meals taxes, lodging taxes, arena revenues, etc. This deal is GREAT for bond holders. It creates a massive slush fund of public money to pay them interest.
This is a massive pile of public wealth, some of which already exists. The developers would receive a rebate of up to $2million a year from parking meters in the area. The property tax values on site are already increasing at a rate of 2-2.5% annually as is.
Just as a side note, I really wish I was livestreaming. I'm so sorry y'all. There's no experience quite like being in a roomful of NH Corp reps who all murmur amongst themselves every time something is said that they don't like.
The bonds include "turbo" payments. Our team LOVES this terminology. They make our finance meetings very fun. Essentially, for the first few years virtually all revenue goes into a bond stabilization fund, despite having already bond debt service.
What does this mean? In the first 5 years, these bonds are set to super-insure the profit margins of the debt holders. We've triple insured their profit, at a time when our own income is frozen despite increasing needs.
Note that net tax-exempt interest? That's pure private profit, with no public benefit. Paid for out of taxes.
Unlike some other TIF applications, there is no special assessment fee in this TIF district. It does not cause any new tax revenues. It simply recategorizes future tax revenues. It creates the impression of new money coming in, but in fact it simply redirects existing funds.
Summary slide on categorization. I know it's barely readable, but note the overlap between the general fund and the NH Fund.
@URProfWalker is breaking down exactly what TIFs do: they create an account from public revenues streams to insure private bond holders make a profit. They do so with the assessment that interest on bonds gets paid first, before all other needs.
In other words: RPS Kids CAN wait. Until investors make a profit. Then they can have the leftovers. If any exist.
Anyway, while Gerner breaks this down, these guys are big mad.
"All of our tax revenues are going into this fund. That includes tax revenues from existing development that would have existed anyway, without this plan."
"So far, all of the work that has been done is from the perspective of the bond holders--what do we have to do to protect the bonds. Now it's time to raise the question of what we have to do to protect the public." - Pierce Homer
How do turbo payments work? They get their payments on an accelerated timeline, ensuring they get paid. That way, if a recession hits, they've already been paid.
This is how it works folks. It doesn't matter what the 1% does to the economy. They always get paid. #NavyHillRVA
This is how it works folks. It doesn't matter what the 1% does to the economy. They always get paid. #NavyHillRVA
"This is why we have this expanded TIF district. It ensures the bonds are secured."
Get ready for a fire series of words from @URProfWalker :
Get ready for a fire series of words from @URProfWalker :
"This model is a clear example of the financialization of municipal areas. I am concerned about the creation of a #NavyHillRVA fund with an accelerated bond repayment mechanism and a lag in which funds are transferred to the general fund for things like schools like housing…"
"Even the schedule for affordable housing shows the first building has no affordable housing in it. This creates a payment mechanism that does not entail full payment for the outlying issues we're discussing—schools & housing—until after bondholders are paid, in 2040 and beyond.”
This is a shot of Dr. Walker just before he spoke the words we were all thinking, sitting in front of a Venn diagram that shows the cut the NH fund would take out of the general fund.
We are deep in the weeds on these bonds right now. I just want to send a shoutout to the @RichmondForAll family, many of whom are here today, and nearly all of whom are live-tweeting, recording, AND TEXTING EACH OTHER.
This is @ChelseaWiseRVA who is holding it down on her own account and on @RaceCapitol and raising questions in the text thread. GREAT QUESTION.
Anyway, if the second Dominion tower is built, there is $26 million in tax revenue that would have gone to the general fund that won't if this TIF district is implemented. Again I ask, how much does a school cost?
Again, @ChelseaWiseRVA with a little wisdom.
Okay, we took a little break, now we're back talking about the development parcels. richmondgov.com/Mayor/document…
B/c the parcels owned by the city have not been actively marketed before, we do not know if there is other potential for their use and development. Much of the planned development is residential and office space, not typically associated with an area. Again: do we need an arena?
If an arena is not a prerequisite for residential and office development, then the arena and relevant TIF are not necessary for the other development in this proposal.
Current biotech park on Leigh Street illustrates market potential for this development without an arena.
Meals and lodging taxes are a large part of the bond payment source. This means the deal presents a risk of potential cannibalization of revenue currently generated in other parts of the city.
For example: new restaurants in the development zone could cannibalize revenue currently generated in other parts of the city. Heads up #RVA restaurant owners.
The planned meals tax revenue from the development parcels as identified in the proposal is 8% of all 2018 tax revenue in the city. This deal *must* include a cut of some existing revenue. That means during the period of the TIF, we lose that revenue from the general fund.
Schewel posits the opposite could be true. This could all be *new* revenue. Longitudinal data, however, supports Gerner's concerns, not Schewel's proposal. Check with @MrLegacyJones on this.
Do TIFs cannibalize existing revenue? Ask St. Louis. stltoday.com/opinion/editor…
Gerner presents 2018 research that shows a major lag between sports-led development and actual increased revenue to municipalities that use TIF districts to finance that development. Read that research here: deepblue.lib.umich.edu/handle/2027.42…
Gerner is wrapping up: Ultimately, how much revenue to the general fund do we lose if the arena bond is issued? For years 1 to 5, $17 million. Over the entire bond period, $316 million.
That is just from the existing development, based on the 2% growth assumption.
Schewel objects. Gerner explains the calculation. Schewel withdraws objection.
As Gerner wraps up, NH Corp representatives are all talking amongst themselves. Still sound big mad.
Gerner's last stand: Even if we presume a mass influx of people to this area generates enough revenue to cover the fiscal impact, we have to remember that those new people come with associated costs: additional teachers, police, road repairs, etc.
As Gerner ends, the commission thanks him for what is no doubt hours of research. The whole room bursts into applause, with the exception of the three rows of NH representatives. They don't applaud. I'm not joking.
Hakim Lucas asks the committee to enumerate the social benefits, the private wealth-building for minority entrepreneurs, and to hear a review of other RFPs for this area that weren't selected.
Of course, no other RFPs were submitted. This is no doubt for two reasons: first the window was only 3 months, and second Tom Farrell publicly announced his intent to lead redevelopment BEFORE the request for proposals was even made by the city. This was rigged.
Dr. Lucas has raised the question: What is the impact on Gilpin Court? During citizen comment two weeks ago I asked if, as the mayor claims, Gilpin court residents will be assured housing in "Navy Hill."
It is our assessment that NH development will lead to displacement of current Gilpin Court residents due to accelerated redevelopment citywide. Thread for context:
Our Chief Administrative Officer Leonard Sledge takes the mic, and rather than responding, asks the developers be permitted to present. I find it unbelievable, frankly, that the city has no response to this presentation, but instead asks for the developer be heard.
Community comment happened! We filmed it, excepts are ow ding! Thank you Art Burton, @ChelseaWiseRVA, @jasmarlee, Jessica Shim, and @MrLegacyJones for speaking.
