Friday, September 14, 2018

Rising High

 I am finally saying openly now how I loathe Nashville.  I used to say it was interesting but we are well past that meaningless phrase as I have found cities undergoing similar change aka gentrification and found them to be far more "interesting" than this city that is delusional about its place in the Country and its comparison to cities that are too changing in these new times.

Nashville is a Tier B city.   No, Nashville you are not a Tier A city and frankly can never B.  Tier B cities are great ones, they have long histories and places demographically as firmly important ones when it comes to offering their state income and growth.   Cities are often called Tier 1, 2 or 3 in urban planning and is done with regards to convention and tourism.   Nashville has certainly mad itself a Tier 1 city given the money spent,  our two convention brokers/leaders make more income than the Mayor or any public official in the State.  That money lies on a stretch of road that is not even a mile long - lower Broad - and that is where all the growth and income lie.  But the city itself is still Tier 2/B.  Why?  Lack of a Downtown urban core and despite the buildings being constructed it is late in the game when retail and urban malls are declining so who will fill these cavernous spaces when we have massive commercial  structures all over the city only partially filled and the older ones vacant.  They move pieces here like a chessboard but frankly that still means the same pieces are on the board and those eventually fall off the board.   Who or what will take this space?

Back in the day, (a phrase I hear REPEATEDLY)  residents lived in outlying areas.  The core area around Vanderbilt was subsidized by Vanderbilt to encourage staff to live in the neighborhood and it is still an actual walkable area with businesses and services there to accommodate.    The actual "city" itself was neglected its periphery surrounded by major housing projects that were for minorities and in turn enabled the powers that be to leave the dilapidated city core as it was until it no longer wasn't.  The flood led to that change.   Until that time  the city and government employees would venture out at lunch to the dumps that align the city street and there was the Hermitage Hotel that was the "good" place to drink after work.  Then in cars and back to the areas that align the city.  And all of it was done in easy time. Then a flood and a desperate need to rebuild and tourism was the key to success as the adage goes: "Build it and they will come" And build they did and they did come but at what cost to taxpayers?

There are serious issues about infrastructure from transportation to sidewalks not to mention the dumpsters that are schools that dominate the discussion but remain a discussion.  There is a lack of financial support and even a willingness to engage that these are truly major problems that will prevent the City from ever moving up a tier.   And that is partially fear as Nashville was built with its periphery surrounded by major housing projects that were for minorities and in turn enabled the powers that be to leave the dilapidated city core as it was until it no longer wasn't. The flood did change the conversation and that centered around who gets the perks and the breaks and damn the rest.

Nothing has been done to abate the issues surrounding the flood, the city has been so insane on giveaways that now 35M in the hole the Mayor is in now taking a new page from the playbook and denying there is any shortfall.  Funny ask Metro employees that include Teachers how they feel about the subject.

Stadiums and sports were another taxpayer funded incentive and today it is the massive Soccer stadium they are building and in turn offering more tax incentives and bonds in which to do so.  But what is fascinating is that again Nashville copies everyone and they found this in Pittsburgh which has proven that stadiums can be money makers (although again debatable), this led to a forming of a new grassroots group which forced the developers to sign an agreement signed with them over issues of  housing and wages and other accommodations in which guaranteed any holdouts on the City Council to vote yes.  Was this with the city signing off or just voting off as the gesture was made and then who or what will enforce this when all is said or done?  I am confused as how can a private entity come to an agreement with another private entity and in turn a city uphold that and in turn pay for it?   Lived in the South? They lie and renege on deals as those are two of the elements of what comprises meat and threes here.

Endless proclamations that Nashville is still growing at 100 people a day and when you ask the same people what that means they actually think it means that 100 people are moving into Nashville every day.  Dear god these people are dumber than anyone you have ever met and I can blame a Teacher as I am in the schools.  

So as luxury apartments are built en masse, the salaries needed to sustain them not rising as fast. The vision of the city is one overdue but one wearing rose colored glasses. The coterie of white men who run this town with their friends in church places - the role of exploiting the Church and particularly those with faces of color in their congregation - cannot be lost for without their consent they have potholes in which need massive covering that just seem to come back. True here they come back in the endless parades of non-profits that form up on drop of a dime then disappear when the issue is closed. Just ask Mayor Slattern about that and the Transit folks.  A bad penny never really goes away.

But here in Nashville this is a city built on the backs of the poor and they just keep building.  Ft. Negley is not a park..... yet.  But the Developers of Nashville's rising skyline, they just keep on getting.  Not a bad penny in the lot, the parking lot that is.   No stone unturned, no song unsung. They keep on giving and giving it way now.

Tax Breaks for Luxury Towers Spur Redevelopment, and Backlash

By Joe Gose  The New York Times Sept. 11, 2018

Twenty years ago, it was unimaginable that a new residential high-rise would ever adorn the modest skyline of downtown Kansas City, Mo. But in the last three years, two luxury apartment towers have opened, and a third is planned.

The buildings are part of a revitalization effort in the city’s core, but some officials are questioning whether tax abatements and other incentives given to the developer, Cordish Companies of Baltimore, are appropriate for residential projects that cater to the affluent.

“You can take incentives too far, and it does create viable pushback from the community,” said Terry Ward, who represents a local school district on Kansas City’s Tax Increment Financing Commission.

The debate over incentives is not exclusive to Kansas City as new luxury apartment developments are driving urban renewal in other mid-tier markets around the nation. But the concessions given to developers are criticized by community advocates, who say that the sweeteners crimp tax revenue that would otherwise flow to infrastructure, libraries, schools and other needs.

Large cities like Chicago, Los Angeles and New York have long used tax breaks to lure developers, but the trend, and the pushback, is starting to heat up in smaller markets as developers return to downtown areas.

In St. Louis, for example, an affiliate of Antheus Capital is receiving an $11 million abatement for the One Hundred, a $132 million, 36-story tower being built in the Central West End neighborhood. And a partnership that includes CA Ventures, a real estate developer in Chicago, was granted a $14 million abatement for a $100 million, 33-story high-rise in downtown St. Louis.

CA Ventures also obtained some $9 million in abatements for the development of three new towers in downtown Phoenix. Nearby, RED Development is receiving $18.3 million in incentives to help fund a mixed-use project with high-rise apartments in its CityScape development.

Officials are using the developments to attract more residents to their districts. Phoenix wants to provide more apartments for some of the 168,000 downtown workers, said Christine Mackay, the city’s director of economic and community development. St. Louis has been trying to reverse the population loss that plagued the city in the second half of the last century, said Scott Ogilvie, a city alderman.

“There’s an ideological problem with granting incentives to luxury apartments,” he said. “But there’s going to be luxury housing somewhere, and we want high earners living here paying some taxes rather than in the suburbs paying no taxes.”

In Kansas City, Cordish’s projects, known as One Light and Two Light, are the first high-rise apartments to be built in or near downtown since the 1970s. They also are part of a revitalization effort that has added housing, a new arena, a streetcar system and other amenities to the urban core, and Cordish has played a big role in the renewal as developer of the Power & Light District entertainment quarter.

“It certainly wasn’t a given that downtown was going to come back,” said Nick Benjamin, a vice president of development for Cordish who oversees the company’s investments in Kansas City. “But we saw that the pieces were there in terms of the metro’s size, and its location, big local companies and civic spirit.”

One Light and Two Light are fetching top-of-the-market rents of around $2.25 per square foot, up from around $1.85 per square foot in 2015. The average rent in the Kansas City area is $1.04 per square foot, according to the website Rent Cafe, but renters can expect to pay about 60 percent more to live downtown. To a large degree, the success of the first two towers fueled criticism of providing incentives for the third, the $130 million Three Light, which will begin construction in early 2019.

“People saw One Light and Two Light lease up and wondered why the city was subsidizing high-end apartments when schools are underfunded and sidewalks are crumbling,” Dr. Ward, the school district representative, said.

Despite the rebound in urban areas, developers maintain that rental rates in smaller markets still fail to justify new high-rises without incentives, especially with skyrocketing construction costs. The One Hundred tower in St. Louis should command rental rates of $2.50 to $3 per square foot when it opens in 2020, which are below rates for comparable housing in major markets, said Eli Ungar, founder of Antheus Capital, a real estate developer in Englewood, N.J.

“In the long run, we are investors in communities, and it would be shortsighted of us to try to extract a concession we don’t deserve,” Mr. Ungar said. “But is it better to have a surface parking lot, as there has been for years, or it is better to have a building that eventually is going to pay very significant taxes?”

Critics acknowledge that incentives have spurred development that may not have happened otherwise. But as urban cores grow, they argue, cities should taper the programs to realign tax burdens and priorities.

A popular abatement program that has removed properties from the tax rolls in Phoenix has led to a tax burden of more than $1 for every $100 of assessed value for downtown business property, said Kevin McCarthy, president of the Arizona Tax Research Association, a public finance and tax policy watchdog group. That’s about double the property tax rate in nearby Scottsdale, he added.

Dr. Ward, who wrote a dissertation on the impact of incentives in Missouri, said the Kansas City Public Schools district and area charter schools were missing out on $35 million a year.

From 2000 to 2014, St. Louis diverted $709 million in taxes to development incentives, according to a report by the PFM Group, a financial consultant in Philadelphia. But almost 75 percent were doled out in the city’s Central Corridor, which is hardly a bastion of blight, said Andrew Arkills, a member of Team TIF, a grass-roots group advocating transparent and racially equitable incentive policies in St. Louis.

“No one is under the illusion that all of those taxes would have been generated or that all of the construction would have occurred without incentives,” Mr. Arkills said. “On the flip side, no one has been asking how many incentives are actually necessary.”

The pressure is yielding results, to varying degrees. Arizona has tightened rules around its primary abatement tool, and the St. Louis Board of Aldermen has drawn up guidelines to cap incentives based on a project’s size and location. Officials in Kansas City are reducing incentives in about half of the projects it considers, said Greg Flisram, senior vice president for business and real estate development with the Economic Development Corporation of Kansas City. Where possible, the agency is also looking to link the creation of affordable housing with incentive awards.

At Cordish’s Three Light project, for example, Kansas City approved a tax abatement for 25 years, and it committed to fund a $17.5 million garage, in accordance with a longstanding agreement. In return, the developer is paying $16.4 million to the city, the school district and other taxing jurisdictions over the abatement period — some $5 million more than it is paying as part of the Two Light incentive agreement — and will take over some of the city’s downtown garage management duties. Cordish also will develop affordable units in an old office building that it plans to convert into apartments.

“There are a lot of people that think it’s time to take the foot off the gas downtown,” Mr. Flisram said. “But Kansas City still has a long way to go to achieve the density that supports transit, urban retail and major corporations, and there will be pressure to use incentives until we get there.”

No comments:

Post a Comment