Porters, Again we ask what is truly going on?

 

Well last night I saw this on the J-T On Line http://journaltimes.com/news/local/porters-project-awaiting-final-development-pact/article_ca0d9cca-638c-11e3-b1c9-0019bb2963f4.html?mode=comments

Porters project awaiting final development pact

Thinking that after all this time we would now get answers about the deal with Porters I was well not shocked but bit dazed to read the story and this: “…

Both Porters developer/building owner Micah Waters and Racine City Development Director Brian O’Connell said Thursday the two sides are nearing finalization of the joint development agreement. It’s been going back and forth between attorneys in draft form.

“There is no major dispute; it’s all wordsmithing,” O’Connell said. “… The details matter, and the attorneys are paying attention to details.”…

What???!!!! Its been moths and that “wordsmithing” has not been done yet? Then this “When all agreements have been finalized, Waters said, the next steps will be getting state approval of the plans, going back to the City for building permits and bidding out the project.”

Now I understand not getting the permits but no starting getting State Approval is another story (Unless Waters was told to wait until the new tax laws about rehabbing “Historic” buildings came into effect do I ever smell a scam!)

Mind you this go the Go ahead from the City Council in Spring of 2012 and the Lawyers still do not have an agreement? What? In God’s name could be holding up an agreement, that The City and Water’s both want?

Could it be issues with financing? Property values in Downtown Racine are falling maybe Water’s Bank wants nothing to do with this anymore? If so can you blame them?  just last week a building Downtown Racine less then 200 yards from City Hall sold for pennies on the Dollar of assessed  value would that not be a sign that all is not well in Downtown Racine?

Maybe the Bank just took a walk in Downtown Racine as part of Due Diligence and saw all the For Sale/For Rent signs  now is thinking twice? I know I would.

Myself I am wondering why this story in the J-T now? Will this be the start of stories leading to one that talks about Porters needing more money?

I did take the time to talk to a contractor in Milwaukee who works on midsized projects (Over 1 Mill under 5 Mil), he told me that IHHO:

Waters with his ideas/Drawings could be getting Bid information now and be so much closer to a go once the State gave an O.K. That process  of getting bids could talk weeks doing the investigation required to provide accurate numbers.The sooner that be done the faster the Project get done,

After I sent lets call him Mr. M   links to J-T stories on Porters with his own looking at info on this idea, told me as he saw this “never happen”

So again I ask what is really going on?

Might it be

Flow-of-funds-5a

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3 Responses to Porters, Again we ask what is truly going on?

  1. Mr. Racine says:

    The City of Racine has BIG problems with TID 17 – which will likely be a failure. First – the project has been delayed – for unknown reasons – and as we all know – costs go up! Well, the City has planned for this. From the TID 17 Document – Page 19:

    “All costs are based on 2012 prices and are preliminary estimates. The City reserves the right to
    increase these costs to reflect inflationary increases and other uncontrollable circumstances
    between 2012 and the time of construction. The City also reserves the right to increase certain
    project costs to the extent others are reduced or not implemented, without amending the Plan.
    The tax increment allocation is preliminary and is subject to adjustment based upon the
    implementation of the Plan.

    This Plan is not meant to be a budget nor an appropriation of funds for specific projects,
    but a framework within which to manage projects. All costs included in the Plan are
    estimates based on best information available. The City retains the right to delete
    projects or change the scope and/or timing of projects implemented as they are
    individually authorized by the Common Council, without amending the Plan.”

    Aren’t the above clauses scary? It’s open-ended – the cost is the cost and we will determine the cost as we go. It’s already a guaranteed loser.

    Here is an even scarier clause, from the TID 17 Document – Page 23 :

    “If financing as outlined in this Plan proves unworkable, the City reserves the right to use
    alternate financing solutions for the projects as they are implemented.”

    What types of financing can The City of Racine of Racine use? From the TID 17 Document –
    Pages 20-22:

    1.General Obligation (G.O.) Bonds or Notes
    The City may issue G.O. Bonds or Notes to finance the cost of Projects included within this
    Plan.

    2.Bonds Issued to Developers (“Pay as You Go” Financing)
    The City may issue a bond or other obligation to one or more developers who provide financing
    for projects included in this Plan.

    3.Tax Increment Revenue Bonds
    The City has the authority to issue revenue bonds secured by the tax increments to be
    collected.

    4.Utility Revenue Bonds
    The City can issue revenue bonds to be repaid from revenues of the sewer and/or water
    systems, including revenues paid by the City that represent service of the system to the City.

    5.Special Assessment “B” Bonds
    The City has the ability to levy special assessments against benefited properties to pay part of
    the costs for street, curb, gutter, sewer, water, storm sewers and other infrastructure.

    And for the FINAL KICKER – The City of Racine based the projects upon certain assumptions. One of those assumptions is that the value of the City and Downtown Racine will continue to increase. WELL – it hasn’t – in fact – The City of Racine is rapidly losing value, Downtown Racine real estate prices have collapsed, and the Property Assessments in Racine are grossly overvalued and bear no resemblance to the actual prices received for real estate.

    From the TID 17 Document – Page 21:

    Assumed 2013 City of Racine Equalized Value: $3,809,017,600

    From the 2014 Racine County Budget – Page 46-1:

    Actual 2103 City of Racine Equalized Value: $3,139,701,950

    These numbers are significant in that the equalized value determines the debt limit of The City of Racine and the $$ amount of TIF districts the City may have.

    The Porters project WILL be a loser for taxpayers – and a winner for Team Porters because they have turned a worthless property, that should have been bulldozed into a parking lot, into a gold mine – Team Porters gets the gold – the taxpayers get the shaft.

    TID 17 document available here: http://www.cityofracine.org/search.aspx?searchtext=tid%2017&searchfor=all&orderby=id&orderdirection=ascending

    Racine County 2014 budget here: http://www.goracine.org/crepository/FinBudgets/B2014/is01.pdf

    AC/DC – Kicked in The Teeth Again. Get used to it – Racine.

    • We lost 600 Million in property Value? Wild thinking that number will grow as I see more For Sale signs.
      Sad to say that with Jwax shedding jobs more will flee, can you blame them?

  2. Lizzy Borden says:

    The Mayor’s aggressive borrow and spend program can’t be ignored either – the 5%+ increase that was requested by the Mayor – and voted down by the Voters – was already figured into the equation. John counted his chickens before the eggs were laid.

    Yep – Developer – err. Mayor John Dickert planned on that money in his budgets – and his borrowing reflects that. His philosophy has been to borrow today – buy lots of silly, unnecessary frills that enrich friends and cronies – and let the future generation of Racinians worry about the bills.

    Tens of millions in capital have been wasted with NO return – and only more debt compounded into the future has been created. The specter of Default looms large for the City of Racine. It’s not a matter of IF – it’s just a matter of when. The debt payments climb in 2015 – and make a viable budget without a huge levy increase almost impossible. Bankruptcy awaits Racine and the marks who remain in the City.

    The Voters always forget!

    Jan 16,2013 From The JT:

    RACINE — Voters in the City of Racine will have another referendum to weigh in on this spring.

    The City Council voted 11-3 to approve putting a question on the April 2 ballot asking voters if they would like to permit the city to raise the property tax levy by 5 percent next year and in future years.

    The proposal, which was brought to the City Council by Alderman Mike Shields, comes just months after city officials wrapped up negotiations for this year’s spending plan.

    http://journaltimes.com/news/local/govt-and-politics/levy-referendum-headed-for-april-ballot/article_483e7e56-5fd9-11e2-97de-0019bb2963f4.html

    Good luck, Brave Residents of Racine.

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