Wednesday, August 22, 2012

Investigative Report: The REAL cost of the Lick Run Project



The Lick Run Alternative (the daylighting of Lick Run creek) is billed by MSD as a ‘cost saving green alternative but is it really? When you look at the combined efforts of the city, the county and MSD and the “back room” deals that have gone on over the years, one must wonder ‘what are the real cost and what are they not telling me?”

The facts are they are hiding many truths from the taxpayers and it all started years ago. Remember the issue of the sewers has been out there for over 10 years now. For years MSD has known about these future costs and, I might add, this idea of daylighting, as they have been talking about it since 2006, but we know the problem goes back before that.

The South Fairmount Business district was vibrant community even a decade ago. Now it wasn’t the heyday of the 1940’s and 50’s when the area was a Catholic stronghold anchored by St Bonaventure. If one looks back at the assessed rates for most of the property however, it was respectable. A typical house along Queen City might be assessed at 60-100K and business buildings considerably more. Economically depressed as it may have been, it was still paying its fair share of property taxes.

That presented a problem for the city/county/MSD, it wouldn’t be cheap to acquire all that property even by eminent domain. If one looks at city inspections one sees a disturbing pattern that emerged throughout S. Fairmount, it appears , based on the numbers that city inspections was ‘targeting’ the area in terms of inspection enforcement. Higher numbers of VBML’s were being issued, Orders were being written and condemn notices began flying between 2002-2008, BEFORE, the announcement of MSD’s grand plans. In fact if one runs the numbers Fairmount has unusually high numbers of demolition " blight abatement" compared to other areas. The question? Did city inspections target S.Fairmount to depress property values and make acquisition of property for the project cheaper? It certainly looks like it.

MSD (via the county) bought numerous vacant lots for this project? How did they get vacant? Well many were demoed by the city at an average cost of 10-15K each. The county bought those lots for 2500.00 but when you factor in the overall costs, those lots cost almost 20K when you add in the cost of the city component demo that took place before and legal fees as part of the purchase.In fact demo cost will be higher for anything else because of tougher lead paint and asbestos abatement regulations

Not to mention, the loss of property tax revenues. Those properties, pre demo, were assessed at 50-75 K and contributed to the tax roles. Now? They pay no taxes because they are owned by the county!

MSD claims the ‘savings’ of the green alternative’ is 8 cents per unit over the deep tunnel based on their project numbers. But when you look at the hidden cost of getting to the acquisition you see the real costs are actually much higher.

V&S building would be demoed according to MSD
There is also no discussion of the overall loss of property tax revenues in MSD accounting, caused by all this demolition for this “green project”. Millions of dollars of property tax revenue will be lost FOREVER when this are becomes a drainage ditch.  That is something MSD, the county, and the city do not want you the taxpayer to consider. Your sewer bill may be a few cents cheaper, but what about your property taxes? For example the Vitt And Stermer building at 1824 Westwood has  market value of  over $258,000.00 , is assessed at $90,340.  and pays $7,653.34 annually in property taxes.  Once this property is acquired by the county it is permanently removed from the tax roles once its demoed for the project. Over 20 years, assuming property values stayed the same, would pay 153,066.80 in property taxes. Who will make those monies up? Most likely you will with higher sewer bills for the initial acquisition and with higher property taxes. That's just one property. The county has lost hundreds of thousands in property tax revenues already just for the properties the county already owns for this project because it is owned by a tax exempt authority and the land will be used for public purpose.

According to MSD this project will be catalyst for redevelopment. Well just who will do that redevelopment? The city has no monies, the county doesn’t have money to spare. Now there may be some federal money for low income housing but according to Moody’s , who determines the city credit rating, there isn’t enough property tax revenue or rate payers to pay for the project. One reason why they threatened to downgrade the bond rating if the area couldn’t be ‘improved’ to generate the necessary revenues long term to pay for the project.

The IRONY, the city redlines a neighborhood via VBML, condemn orders and demolitions which drove down assessed value and drove people out of the area in order to ‘cheaply’ acquire the land, only to now find they do not have the tax base/rate payer base to pay for the project and must now come up with a development scheme to revitalize the area they intentionally drove values down on.

Who loses with this ‘green alternative? You do, your tax dollars went to demo land, so it could be bought ‘cheaply’ on paper by MSD, hundreds of parcels are off the property roles FOREVER meaning that tax revenues have to come from somewhere (higher property taxes city wide), we have driven business from the community, costing jobs (income tax base). While you may save 8 cents per unit with the MSD alternative (Assuming it doesn’t go over budget, and we know it will) but you can look at property tax increases so the city/county with some 3CDC type of group comes in and ‘redevelops the area because most private developers know building 250-300K homes across from an open drainage ditch albeit a pretty on at 195 MILLION dollars is going to not smell very attractive when water levels are low. Did I mention this project simply reduces the amounts going into the system but does NOTHING to improve water quality?

There are REAL unanswered questions about the REAL costs of this project. The next, and last , MSD town hall will be Thursday, maybe its time to look at the real costs and ask some hard questions when you look at this trilogy of entities the city, MSD and County who have to make this really happen.




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