Saturday, November 21, 2009

ONGOING COVERAGE: KENDALL YARDS

Pia Hansen: Kendall Yards project appears sound

Pia Hansen
The Spokesman-Review
May 26, 2007

Perhaps I'm a poor judge of character, but I'm the type of person who can't help but feel some sympathy for a developer who almost said a really bad word at his own big groundbreaking. There's just something very human about that.

I'd never heard Marshall Chesrown speak until I headed over for the groundbreaking at Kendall Yards last week. He said all the right words, you know, about being local and wanting to do the right thing. "We all love this place" was what he told the hundreds of people who were there.

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That's not a bad mindset to begin with when you are in charge of creating what's essentially a whole new neighborhood.

At his groundbreaking, Chesrown compared the development to swimming the English Channel. "Today, we're jumping in and now we have to swim the mother," he said.

In any event, I don't think it was Chesrown's reference to "mother" that's causing residual community heartburn over the tax increment financing deal Kendall Yards has arranged with the city.

The TIF is a done deal, but that doesn't mean it's embraced by everyone.

People say it is corporate welfare.

People say the city has bent over backward for Kendall Yards.

People say the city will be left holding the bag.

Over the next 25 years the city estimates about $25 million will be allocated to the Kendall Yards site, coming from the incremental increase in property tax within the TIF district. As much as $2.5 million will go to public improvements like sidewalks and streets also within the TIF district, but outside of Kendall Yards.

Many concerns expressed over the TIF deal stem from the three scariest words in Spokane's vocabulary: public-private partnership.

Rightfully or not, after the commotion over River Park Square those three words strung together will never again have a positive ring in this city.

It's true: The Kendall Yards TIF is a type of public-private partnership, but it is not the same as the funding that was put together for River Park Square.

Here's what lets me sleep at night:

Kendall Yards and Black Rock Development will pay for all public infrastructure improvements up front, spending an estimated $43 million on that. The city is not issuing a corporate MasterCard to Marshall Chesrown and encouraging him to spend the limit any way he wants.

Kendall Yards has to perform according to all the directions given by the city, including putting public projects up for public bid. When they've fulfilled their part of the deal, then they can come to City Hall with their "receipts" and ask for reimbursement.

Kendall Yards cannot be reimbursed more than their share of the TIF dollars that come in.

If the project is hugely successful and property values go up much more than anticipated, we could be looking at a larger amount of TIF dollars. But that's the only way Kendall Yards could get more money than the $25 million initially anticipated.

New projects cannot be added to the TIF, so the developer can't all of a sudden show up and ask for more money to build, say, a large indoor golf arena or an interactive theme park.

As public-private partnerships go, this one seems fairly bulletproof.

A word on gentrification: Some property owners in the West Central neighborhood are concerned that Kendall Yards is going to drive up the property value in the area so much that they can't afford to live there.

That's a valid concern, especially for neighbors who are on limited and very low incomes. No development anywhere should be built on the backs of the weakest among us, just because they don't have a lot of political clout.

But this time around the city and the neighborhood have shown remarkable ability to be proactive about these issues: The neighborhood is doing work on a tax-abatement program, the mayor has created an ad hoc committee to look at low-income housing issues in West Central and a citizens review team is looking at how the city uses its block grant money. It's beginning to look like we can do this.

And here's my parting shot to property owners who continue to whine about how their property is going to increase in value, and they'll have to pay more taxes: What you are saying is that you'd rather forgo neighborhood improvements that will benefit everyone in your neighborhood, for the totally selfish reason that a low tax bill works for you.

Open your drapes, look out your window. In the end, you will get an excellent return on your neighborhood investment as well.