Who is Christopher Guerin kidding?
Posted by Mike Sylvester - 8/31/10 @ 11:49 pm - Filed Under City Council, Featured, Local Politics
Christopher Guerin is the President of the Fort Wayne Redevelopment Commission and he wrote a pompous column that was published in the Journal Gazette today. This piece very specifically attacks Fort Wayne City Councilman (Democrat) John Shoaff and attempts to defend the failed Harrison Square Project and Barry Real Estate.
I have copied this column below the fold and my comments are in bold italics.
City Councilman John Shoaff’s recent criticism of Barry Real Estate and the Redevelopment Commission requires a response. I’m going to refer to Mr. Shoaff as John because he’s the first friend I made in Fort Wayne. This won’t be the first occasion that John and I have disagreed on something, only, unfortunately, the most public.
Before I address a number of inaccuracies in his comments, and points that he fails to mention, I want to cite a few obvious facts.
Harrison Square, even if The Harrison as currently envisioned is never built, is an astounding success. A state-of-the-art ball park, with attendance figures today already exceeding total attendance last year, plus a first-rate Marriott Hotel, not to mention an excellent new parking facility, all together represent a huge accomplishment for downtown. City Council, and both the present and immediate past city administrations, deserve all the credit for making this happen.
This paragraph is laughable to say the least. The ball park is nice; however, the taxpayers paid for it and it is in no way economic development; instead it is economic re-arrangement since it is not drawing new people into Fort Wayne; it is instead having people come to a different section of town. The hotel occupancy rate in Fort Wayne is around 50%. Building a new hotel results is more economic re-arrangement. The same number of hotel rooms are rented; they are just rented in a different part of town. The new hotel will lower the profits of existing hotels. Downtown Fort Wayne is full of parking. Anyone who thinks of a new parking garage as economic development is, well, enough said.
The Harrison will be built. It’s just a matter of time. When all the contracts for the Harrison Square project were signed four years ago, no one knew that we were heading into the worst economy and the tightest credit market in memory. But there are signs of progress, and I am convinced that The Harrison, or a similar project, will be built.
The Harrison will NEVER be built as originally promised. Per the original plans high priced Condominiums were going to be built downtown. They were so priced that no one would purchase them.
Some people hated the Harrison Square project when this city’s elected officials voted to approve it, and they hate it now. Some go to Parkview Field quite often and enjoy the games or other events there, but they still hate that it exists.
Of course we do. About 70% of the taxpayers who paid for the Project opposed it; however, our Government shoved it down our throats.
John Shoaff’s recent complaint centers on the fact that there is language in the city’s agreement with Hardball Capital that includes a $5,000-a-day penalty if The Harrison isn’t built by June 1, 2009. He’s right about this, and about the fact that the Redevelopment Commission and the administration have shown restraint in not imposing this sanction. A few more facts:
You call it restraint; I call it a failure of fiducial duty.
Barry Real Estate has continued to show good faith in attempting to get the project under way. If any of us felt that that was not the case, we would have pursued legal options.
This good faith effort has taken the form of some considerable effort and success in speaking with and securing tenants, as evidenced by an office user committing to the entire second floor and by the recent public announcement of the securing of a letter of intent with Scotty’s Brewhouse. Efforts are ongoing to secure additional quality retail tenants.
Commerical tenants were NEVER part of the original plan…
Barry Real Estate has already invested more than $800,000 in The Harrison in design fees, marketing expense, physical infrastructure connected to the ballpark and other fees. If this doesn’t represent “good faith” effort, what does?
Imposing sanctions on a business partner, especially for a governmental entity, always entails risks. What will all of our other partners, potential and actual, in the business community think if we appear to be punishing a partner in tough times? What’s the risk that they will think twice about doing business with the city in the future?
John, quite unaccountably, stated that it doesn’t matter that a countrywide financial downturn is the reason for The Harrison’s not being built as yet. He says the contract doesn’t provide for any such contingency, so why should the city hesitate to demand its $5,000 a day? This is the language not of reason, but of revenge.
John also insists that the Redevelopment Commission could have collected $1 million so far from Barry. He needs to have his lawyer look at the contract. The total collectible is capped at $450,000, since the penalty only applies for 90 days.
I have read the agreement and I do not think it is capped at all. That being said I am not a lawyer and I may well have missed something.
John, I know you oppose Harrison Square. You have a litany of reasons why it was always a bad idea, and you recited it again Tuesday night. Maybe you’re right. Your points are debatable, but hardly self-evident, and, even worse, far from constructive when everyone involved is trying to make progress on The Harrison. But, three great facilities, plus enormous, growing, community-wide delight in the ballpark, are indisputable facts.
Give me a break…
Isn’t it time, John, to join the winning team?
Councilman Shoaff is on the winning team. Councilman Shoaff is the only Democrat I voted for in the last election. He is a very good City Councilman and he is certainly right on this issue.
Mike Sylvester
Comments
19 Responses to “Who is Christopher Guerin kidding?”
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Economic rearrangement.Excellent point.And then the tax payer gets to pay for the rearangment.BRILLIANT!
“…. it is economic re-arrangement since it is not drawing new people into Fort Wayne….”
I would have to disagree with you. The “Wizards” best attendance season was in 1993- with 318,506.
Moving the ballpark downtown has increased this. last year there were 378,529- an increse of 60,023. This year it looks like we will top that.
Sounds like we are drawing more folks downtown!
The performance of the team is what draws people. People who hate the ballpark and the mutant apple logo still go to games because the team is doing well.
Robert, they are not doing as well this year as last- yet attendance increased.
Looking at the announced attendance over the last 22 weekday (M,Tu,W,Th) games, the “Thirsty Thursday” games (6 of them) have averaged 7010 fans and the other 16 have averaged only 3895. Are fans going to watch baseball or drink $1.00 beers?
Kevin,
If the additional people going to the ball games are from outside of the Fort Wayne area then this is a small amount of economic Development Kevin.
If they are from this area then those same people are just spending their entertainment and food budget at a different place than they otherwise would have spent it.
Mike
Barry Real Estate should not be held to the terms of the contract because “they are trying”. Does that excuse work for all the unemployed people with mortgages that the banks are foreclosing on due to nonperformance?
My thoughts on the letter.
http://thehudman.blogspot.com/2010/09/playing-hardball-or-played-by-hardball.html
Some people “from this area” are going to the Ball games at the new stadium downtown that never would have gone to the ball games at the Coliseum. So I am not sure if I follow the spending entertainment dollars shift logic.
From another angle. I’m troubled that non-elected city officials are making policy. The decision not to enforce certain clauses of a contract are a policy-making decision. Listen to the words of those who are attacking Mr Shoaff, they tell the tale.
Jane -You are probably correct - BUT, they were drinking their beer elsewhere - some of it downtown at other venues - it’s the current “meeting place” for the young folks in our town - there is a new one of these every few years - this place will also pass for them - just wait and see.
The city does not have anyone who understands economics or more importantly mathematics. Nearly 100% of us live on a fixed budget. The only ones who tend not to are those on Social Security who generally have gotten inflation indexed increases. The past two years they have not. However, where as 9.5% of the workforce is unemployed, their incomes went down. Those who are working outside the Allen County library (library is giving a 2% increase), wages are not increasing.
With this said, the average Fort Wayne Resident has not seen an increase in income, but a decrease. Budgets are tighter.
Now we come to the theory that money can neither be created or destroyed, only transferred from one place to another. Looking at Fort Wayne, we as a community have a fixed income and basically a fixed expense. We export goods and services and we import goods and services. The only way for our community to grow economically is to export more goods and services. One way to export services is for those outside the taxing area of Fort Wayne to come to Fort Wayne and spend money. If they do not do this, there will be no new revenue for the exporting of our entertainment. If we are the only ones who use the Ballpark, then we are the ones who are paying for it. In our economy the saving rate has increased to just under 6% because people are spending less. If people are cutting spending, where are they doing it? There are fewer discretionary dollars, some entity is getting less if the ball park is getting more.
$40 million invested with a bond of 4% costs over $1.6 Million a year. Does the city of Fort Wayne see a net increase in local taxes of at least $1.6 Million a year from the ball park? If not, then it is an economic failure, pure and simple.
In fact we had a ball park paid for, so it could be costing us at least $1.6 million a year for having the ability to say “WE HAVE A GREAT BALL PARK.” Sounds like Fort Wayne trying to stay up with the Jones’s. Fort Wayne just wants to be FLASHY.
The net difference between the ball park revenue at the coliseum and the new ball park would be an indication of how much economic growth it has generated. The problem is those who used to eat at Applebees, Chillies and other eateries around the area of the Coliseum are seeing lower business sales. All the new ball park has done is shift business from one area to another.
Time will tell. I hope the taxpayers do not get stuck with it, but I am not holding my breath. There is a saying, you should never invest more than you can loose. The problem is the government has no business investing in projects like this.
We also know that the other ballpark was not supposed to be built by using the Food & Beverage Tax. Why do you give a pass to the Coliseum, so how much money is being diverted from the F&B Tax to the Harrison Square project?
William- ” The problem is those who used to eat at Applebees, Chillies and other eateries around the area of the Coliseum are seeing lower business sales. ”
Have you documented this? It would be interesting reading.
I was at the Frankee Park Zoo today and saw many license plates from out of state (Ohio and Michigan). These are the types of visitors we need. They bring outside dollars into our area. A better use of Tax Dollars (I would not support it either) would have been an aquarium. The Baltimor and Chatanooga aquariums are first rate, though they cost a bit of change. They were funded mostly by private donations. These attractions actually bring people in from two states away, every week an during the summer months, it is nearly every day. Do they pay for themsevles, I do not know. However, they certainly bring in far more people to eat and stay in the area than a ball park that is mainly supported in attendance by Fort Wayne Residences.
William great post, great detail.
It comes down to money. It always will for ever and ever. Politicians believe that when you “shuffle” around that stimulates the economy. A perfect example is harrison square. When the stadium was at the Coliseum site people ate at Coliseum area restaurants if they ate. Now that the stadium is downtown those who chose to eat downtown no longer eat at Coliseum restaurants they eat at downtown locations. Democrats believe this is called “stimulus”. What they fail to realize that its just “shuffling” money from one place to another and there is no additional spending. It’s just the same spending somewhere else. All you have to do is take alook at the Stimulus package that was previously shoved down our throats and take a look at the proposed next one. It’s just going to be a shuffling of money. No real long term growth, no long term jobs. The government as a whole is good at that.
As the saying goes, it this was that great of a deal the public sector would have done, not the government.
Cash for clunkers - Took future sales and brought them forward creating a large drop in sales when it ended. What would people have done with their cash if not for cash for clunkers?
$8,000 home credit - Took future sales and brought them forward creating a short term demand now, but creating a cliff effect. Now we are in a dry spell until natural demand and supply can resume. What would people have done with their cash if not for the $8,000 home credit?
Medicare - take money from workers from 1965 to present to pay seniors medical care. Sounded good, took money that went into savings, spent it on current healthcare for seniors, stimulated the economy with new pharmacuticals, biomedical companies, drugs, treatments, procedures and a host of new specialties. The problem is that it is a pyramid scheme that cannot continue. Instead of setting those tax dollars aside for the ones who paid them, they spent them leaving future seniors in the hole.
Social Security - took money from workers, causing the depression to last a bit longer, making it more difficult for workers and companies to survive. It in return created the false impression that those taxes paid by workers were being set aside for their future benefits. In reality 95 cents of every dollar paid into social security was paid out in benefits. There is no special account with your money in it. Your taxes went to pay for someone who was old enough to collect, not based on need. This is why we saw increased economic growth. We took future savings and spent it now. Those savings were the “flywheel” for tomorrows seniors to help keep the economy going when they were retired. Now we have people saving more, depressing the economy.
Investment tax credit - As a person who has worked in manufacturing most of their life, I really see no need to replace good equipment that has not yet been fully depreciated with new equipment so that someone has a job. What this creates is more debt. Our problem is not a lack of equipment, but over capacity.
Our entire economy is built on debt: $13.6 Trillion in US Debt: $23 Trillion in unfunded Social Security OASI debt: $20 Trillion in unfunded Medicare debt; Trillions in state debt; trillions in mortgage debt; trillions in credit card debt. What is the networth of the US? The average individual might be positive, but what happens when you add in government debt?
I have to agree with John Shoaff http://www.journalgazette.net/article/20100909/EDIT05/309099976
[...] A couple of weeks ago Christopher Guerin, the President of the Fort Wayne Redevelopment Commission wrote an article in the newspaper in which he personally and specifically attacked City Councilman John Shoaff for wanting the City of Fort Wayne to collect the $5000 per day the City of Fort Wayne is due since Barry Real Estate/Hardball Capital clearly defaulted on their written contract with the City of Fort Wayne. In this piece Mr. Guerin repeatedly defended the failed Harrison Square Project. I covered that in detail in an earlier blog post. [...]