Posted tagged ‘Edgewater’

A Footnote on the Edgewater Subsidy

May 11, 2012

Planning, the magazine of the National Planning Association, ran a piece in its April issue that paints Madison’s rejection of a $16 million subsidy for the Edgewater Hotel  expansion as an exercise of NIMBYism. Author Greg Flisram, who is  director of economic development  for the city of Green Bay, falls back on the  familiar complaint  that  the Madison review process is just too long, too complicated and prone to manipulation by people who do not want development in their backyard.

You can read his piece here:

http://www.wisconsindevelopment.com/files/nimby.pdf

Whatever the merit of that complaint, Flisram misses the elephant in the room. Here’s my letter to the editor:

Greg Flisram, in ridiculing Madison, Wis., for not subsidizing the $98 million Edgewater Hotel renovation, demonstrates the common failure of urban leaders to distinguish flashy real estate development from substantive economic development.

For a $16 million subsidy, the Edgewater project would deliver little: several hundred low-pay hospitality industry jobs and temporary employment for construction workers who largely live outside of Madison. As an economic catalyst, the project failed.

The Edgewater is boxed in by a residential historic district. It’s too isolated to reinforce Madison’s nationally known State Street shopping district or the city’s picturesque Capitol Square. Worse, it’s not close to the Frank Lloyd Wright-inspired Monona Terrace convention center, which sorely needs new adjacent hotel space.

Flisram seriously erred in saying the tax increment generated by the Edgewater construction would pay for the $16 million subsidy. In reality, repayment hinged on tapping the new taxes generated by a large mixed-use project near the UW-Madison campus.

When the assessor looked at the $98 million Edgewater renovation, he concluded that its underlying economics would only justify a $44.8 million assessment–less than half of its construction cost.

Flisram, who is Green Bay’s economic development director, needs a lesson in economics.

Here is the Edgewater column I wrote for Isthmus in September 2009:

http://www.thedailypage.com/isthmus/article.php?article=26981

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Doubts About The Edgewater Subsidy

September 25, 2009

I don’t cover City Hall much anymore, so most of what I knew about the proposed Edgewater Hotel expansion I read either online or in what remains of Madison’s newspapers. Frankly, I was puzzled why the mayor was prepared to offer a $16 million subsidy in the form of tax-increment financing.

Madison’s TIF policy is notoriously tough…as in a Dick Cheney kind of way. First, city staff waterboards the developer-applicants until they confess all their financial details and then the Common Council and city committees subject them to months of hostile interrogations. Often blood is spilled, and projects die.

A classic example involved Gary Gorman, one of the state’s premier builders of affordable housing, killing his $84 million mixed-used project on East Washington Avenue in 2006 when the penny-tight, pound-foolish city offered him $2.2 million in TIF for first-phase construction when he asked for $4.2 million.

So I was puzzled why the Edgewater developer would seemingly be showered in subsidy. To learn more, I attended one of the project’s public presentations and talked to ten or so City Hall insiders and business leaders. I basically ran down my concerns and asked them to agree or disagree.

No one gave me what I consider a convincing case for such a deep-pocketed public investment in the Edgewater expansion. This is what I wrote for a guest opinion column in Isthmus.


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