Hardball Capital in MOU warns City of Fort Wayne

The first phase of financing the Harrison Square Park project was passed at last City Council meeting. The City Council without batting an eye expanded the Jefferson Pointe TIF District. This will allow for the City to capture the reserve funds from the Jefferson Pointe TIF District for the downtown area. Mainly to finance the $10 million Parking Garage and infrastructure surrounding the Harrison Square Park Development. It took me a minute to figure out, a council member statement that it did not cost us anything. I think that means the tax dollars remains in the city in the finance game of funding the Harrison Square Park project.

Whether or not Hardball Capital remains in the game as a partner in the public-private park will depend on the details expressed in the Memorandum of Understanding between the City of Fort Wayne, Hardball Capital and Barry Real Estate. The MOU lays out specifically what the City of Fort Wayne must provide for Hardball Capital to continue to play ball in the downtown project in the current budgeted $113 million project.

Fort Wayne residents will be allowed for the first time to stand before City Council to question and address their concerns about the project. However, there may have been a good reason for City Council members not seeking residents input before making their decision on supporting or not supporting this project.

I suggest that the council members themselves were clueless in understanding the project details. Council members had to rely on different select focus groups, consultants and experts to gather information and provide feedback back to Council members. It was too much information overload for the majority of City council members with limited exposure to such a big ticket item when competing with the Hardball Capital team professional expertise.

It was much easy for city Council to frame the project to the public as a who is for or who is against rather than the outrageous amount of public financing being spent on the downtown project. Absence their own understanding of the budget that council has allowed to balloon year after year without responsible oversight. Which became more apparent in their rush to use public dollars for outsiders investments. Public dollars that could have been used to booster local small businesses throughout the city in the name of economic development. But tonight, the real test will be, the City of Fort Wayne and City Council willingness to raid the City's coffers. Especially those who will vote to approve the MOU's details for Hardball Capital's participation in the Harrison Square Park project.

If the MOU is not approved as is, the more the likelihood that the project would die on City Council's table. This makes the deadline date of April 24, 2007 very important. The MOU gives a warning to the City of Fort Wayne, that the Hardball Capital will withdraw from the project if certain specifics are not in place by the City of Fort Wayne by a certain time line.

But, even if City Council members approve the MOU as written, Hardball Capital still has option to withdraw. The MOU states that the funding is off if the $47 million hotel is not built. The hotel will stay around if Hardball Capital slams the deal. But the hotel option is to make it a much smaller hotel.

If the city can produce the larger hotel. The third phase for the City of Fort Wayne will begin with the producing of the necessary funds for the Harrison Square Park. The MOU states that Hardball Capital is donating only $5 million toward a $30 million public-private baseball park. If the baseball park construction cost exceed the $30 million the City of Fort Wayne will eat those extra expenditures. Whatever, those expenditure are when discovered in the preparing of the areas beyond the $30 million woe to the City of Fort Wayne.

Furthermore in this wooing of Atlanta based Hardball Capital, is the exclusive right to build on land provided by the City of Fort Wayne. Hardball Capital has the exclusive right to build the first sixty condominiums and retail on this land. For this right to build the first 60 housing units and retail, Hardball Capital will invest $15 millions. More than likely Hardball Capital will select the builder. The units will sell between $180,000-$300,000. Hardball Capital will have two other bites at this option to build similar numbers of units,if the first bite takes hold.

For the life of me, the cost of the condominium does not sound like it is to attract young folks. The other individuals I can figure out that would be able to afford these properties would be investors. Nevertheless the votes for approval of the details expressed in the MOU will go forward, that is a given. The unknown is, at the end of the day, where will the Wizard play baseball their next season?

Harrison Square Park and the Wizard's Magic

Downtown Fort Wayne Baseball gets a hat tip on this one...Harrison Square Park

I decided to play with the editorial.


What is the Jefferson-Illinois Economic Development Area?

It is a piece of property that is exempt from seeking its property dollars to the state. It is called a tax incremental finance district, TIF, for short.


Where will the money go?

Local entity has stated the exempted funds will be used to pay for improvement in that specific area.

What does this have to do with Harrison Square?

Because TIF dollars are only to be used in the specific geographic area, and Harrison Square is not in that area. The TIF is being expanded to include Harrison SQuare by the redevelopment department.

Just as the redevelopment failed to first appraise property as required by state law before purchasing the property. This team is attempting to circumvent the limited use of TIF in the geographic area.

Why is this important for the Harrison Square project?

To pay for infrastructure and the building of a new parking garage downtown. The new parking garage is a business deal for the city to capture some revenue from the Baseball Stadium and the new hotel development.

Why should we care if TIF is being expanded for the Harrison Square Project?

Because if TIF can be gerrymandered to serve the interest of big business, why not use TIF dollars for the existing small businesses that are all ready downtown.

Does TIF keep my property taxes low?

No property taxes is determined by the budget of your various departments, the salary and expenses for running the departments. Unless some of the staff department, or buildings are being reduced property taxes will continue to be increased.

What TIF does is every time property taxes are increased for the folks who live within that specific taxing district the increase will be set aside and used for improvement in that specific area. And it insures that the bond will be paid off.

Is this fair?

No because TIF is a financial enhancement that does not include all businesses, individuals or other tax jurisdiction. The $12 millions dollar that is collected in TIF dollars could be better used to improve our combined sewer problems. The burden of the TIF special district capture these dollars and remove them for such uses and places the burden of another city experimental project doctored up to be for the good of the residents while lining the pockets of a few. It is not an equitable, effective nor efficient tool used for economic development.

So what's next?

According to the Journal Gazette:

The redevelopment commission’s approval was the first in a four-part process to amend the economic development area’s boundaries. The Fort Wayne Plan Commission will review the expansion proposal on Monday to make sure it fits with the city’s comprehensive plan. Then the Fort Wayne City Council will vote to approve or reject the plan.

The final step is for it to return to the city redevelopment commission for a public hearing and confirming resolution.

The expansion of the area is an important step in securing a large portion of the money needed to pay for Harrison Square. But it does not obligate the city to spend a single cent, and it does not mean the project has to go ahead. It will allow the city to follow through on its promises if the project is approved or ensure the city will have money to pay for another downtown economic development project if Harrison Square is nixed.

Appeal your reassessment, by using the proper evidence.

And go to the city council meeting and let your voice be heard.

Or sell your house and get the hell out of the city of Fort Wayne.