Councilor Neitzert misses the mark on the Lloyd TIF

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Sioux Falls city councilor Greg Neitzert was doing the 2nd half of his SE Podcast stint this Sunday.

He was asked about TIFs and specifically the Lloyd TIF. He did a fantastic job of explaining how TIF’s work (it is essentially a property tax rebate). He also made great arguments as to why the TIF for UPTOWN II was for good reasons. On the face he is correct. We are using the TIF money to clean up soil, old buildings, asbestos and constructing some minimal public parking. Like I said, on it’s face it sounds like a great use.

But let’s look at reality. First off, we have NOT collected a penny in property taxes on the land for over 11 years. Nothing. Zilch. ZERO.

The TIF (Tax rebate) will last for 13-14 years. We will essentially be getting little to no tax revenue from the property for almost 25 years.

But what makes this TIF controversial is the fact that Lloyd promised to buy this property in 2006 and for some strange reason we let it sit for 11 years, and the only real reason I can come up with is that we were HOLDING it for the developer (with no major retainer of down payment). One developer in a city that has dozens of high profile, successful developers that would have loved to get their hands on that land, some of said that.

I guess I will never know the reason why we held the land for Lloyd Companies (I was looking for it in the Siding Settlement, but couldn’t find it).

I do know this though. Within those 11 years the city did NOTHING to either sell the land, clean up the land (with EPA grants) or even send out any RFPs. Why? Doesn’t it seem strange that while we were getting $27 million in Federal Dollars for a plot of dirty RR land we didn’t set aside a few bucks to clean up this property, put in curb and gutter and parking and sell it?

While Neitzert makes some good points about the usage of TIFs, the deal with Lloyd stinks.

*Also an important note. All of the councilors who voted for the TIF (besides Neitzert) received campaign donations from Craig Lloyd and councilor Selberg earns his living as a broker for the Lloyd Companies (he did not excuse himself). Councilors Starr and Stehly (who have never gotten campaign donations from Lloyd) voted against the TIF.

UPTOWN Timeline

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This was the presentation I gave last night to the city council meeting during public input about UPTOWN II TIF application.

I said I was NOT doing the presentation for council but for the public, since their minds are usually made up before the meeting even starts.

Phillips to the Falls – UPTOWN Timeline

2004-5 Completion of Phillips to the Falls

8/14/2006 – Uptown Presentation to the city council, 3-Phases, $2.582 million dollar purchase price for 3 parcels, promise to be finished by 2014-2015, Over $100 Million valuation, $4-5 million in property taxes a year. When Craig Lloyd from the Lloyd companies was asked when him and his partners anticipated purchasing the property by councilor Kermit Staggers, Lloyd responded, “Soon as you can give me title.” Purchase price at that time was $2,582,000 for all of the parcels. Development agreement was supposed to finalized in September 2006 according to city planner Erica Beck.

4/2/2007 – (Land still NOT purchased) City Council awards TIF #8 for first phase of Uptown. Before approval city councilor Pat Costello asks why a ‘Needs’ analysis was NOT done for TIF and It concerned him going forward on future TIFS. Planning Department said they followed state statutes which did not require the analysis.

7/16/2007 – City Council approves purchase of land, Split into TWO payments. Lloyd promises to break ground in March of 2008 (They did not).

12/6/2010 – Land still not purchased. During a city council informational Council Chair Greg Jamison asks about (purchase/TIF) deadlines for the Uptown project. City Planner Erica Beck (at the time, now is the project manager for Uptown II for Lloyd companies) said they were working with the city attorney’s office to amend the agreements, they want to give the Lloyd companies until the end of 2011 to move forward with project since they have invested so much of their own capital so far (Yet the taxpayers of SF are still holding on to the land and receiving NO tax revenue).

12/11/2012 – Utility Easement finally released for Uptown Phase I – Purchase finalized for Uptown Phase I first parcel shortly after that for $1.1 million (Which should have left a balance of $1.5 million without inflation on remainder of property – (See original valuation chart above from first meeting/presentation in 2006).

It took Lloyd Companies over 6 years to purchase HALF of the parcels AND another 5 years to purchase remainder. Taxpayers held the land for a private developer for 11 years. This is unheard of in the private sector without a significant down payment. Why didn’t we open this land for sale to others instead of holding property for Lloyd? Why didn’t we clean up the land ourselves with the assistance of EPA Federal Grants (Remember we just got $27 million for the railyard).

The TIF passed 6-2 (Starr and Stehly voted NO saying it was NOT a good use of a TIF).

Myself and another citizen also pointed out that several of the councilors voting last night received campaign donations from Craig Lloyd. Erpenbach, Rolfing, Kiley, Selberg and Erickson and should not be voting on the TIF. It was also pointed out that Selberg works as an independent broker for Lloyd and should definitely be excusing himself from the vote, he did not.

If you watch the above meetings and how this played out over the last 11 years, you will see a lot of secrecy, conflicts of interest and insider baseball being played. Even if the TIF was a good idea for this project, how they got to the end game certainly was questionable.

UPTOWN II Tax Increment Financing (TIF) DOES NOT benefit the public

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You can watch the whole Sioux Falls Planning Meeting,

notice how there is almost ZERO discussion before approving the Lloyd TIF. How ironic, our planning commission will horse trade for 45 minutes over the timing of a church’s electronic billboard but spend only a few seconds on giving away a $4.1 million dollar tax rebate to a wealthy developer.

Heck, even after George Hahn came and pointed out their tax valuations were incorrect and the TIF should be deferred until those numbers can be corrected, they still marched forward.

Hey, what’s a few million here and few million there when we are short changing public education? They will just raise taxes on the worker bees to make up for it.

What is going on with the OSHA investigation of the Copper Lounge collapse?

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As you can see, the OSHA investigation case IS STILL OPEN on the Copper Lounge collapse. The fines are being contested and nothing has been paid yet.

But it still leaves a lot of unanswered questions;

• Did or Will the city conduct their own investigation, and is Hultgren Construction paying for the disaster recovery?

• What have the insurance companies determined and will any claims be paid out? To either the victims and their families or to the city.

• Will there be any reimbursements for Downtown businesses that lost business for over a week due to the collapse.

• What repercussions are there for Legacy Development that was tied to Hultgren construction. What happened to the agreement between Lewis and Legacy to build them a new store downtown?

The public has heard very little from the city, the states attorney’s office and the attorney general about what charges may or may not be brought forth. The only government entity giving us any information is OSHA at this point.

I hate to say it, but like the secret siding settlement on the Denty, it looks like the city is looking to sweep this under the rug, or at least keep it off the radar until they can give a contract to Legacy to build a new parking ramp.

Hopefully the parking ramp contract will be voted down and we can start at square one with justice to the victims of the building collapse.