WCHL Commentary: Library Expansion Next Year or Lot #5 Project, Not Both

Monday, February 1st, 2010

Ron Stutts and WCHL 1360 invited me to do a commentary on a Chapel Hill issue.

I chose to speak out on the fiscally imprudent idea that we can “have our cake and eat it too”.

Run this and the following four year’s budget numbers, look at anticipated impacts – funding Town retirees’ health-care, fixing Police Headquarters, meeting our clean water responsibilities under the Lake Jordan compact, the doubling in demand on our social services, etc. – and it becomes clear – we can walk away now from the discretionary Lot #5 project – at little additional cost to the taxpayer – or do the Library expansion next year.

We can’t do both.

Thanks to Ron and crew for somehow squeezing 10 pounds of commentary [MP3] into a 5 pound bag. Amazing!

Jan. 25th the Council considered two projects with major financial impacts – the Library expansion and the problematic Lot #5 private/public development project.

After discussing their options at length, they decided to postpone approval of the Library expansion pending a more thorough review of the Town’s spending priorities during the Town’s normal budget process which, by the way, kicks off Wednesday, Feb. 3rd.

This was a reasonable and prudent course of action given the serious fiscal condition of the Town, the weakened economy, continued expectations of poor revenues and Council’s touted commitment to public participation.

Unfortunately, the Lot #5 project didn’t get the same level of concern.

The Town’s debt has doubled to $55M over the last 5 years. It’s been used to fund necessary and discretionary capital improvements like the construction of the new Aquatics Center – which at about $7M was almost on budget – and the Town Operations Center – which at $52M went roughly $10M over-budget.

Supporters claim the typical household will ONLY pay $40 more a year but that $40 only covers the increased cost of operating the Library and not the cost of discharging the $16M bond debt.

The Town Manager says that as we payoff existing obligations we can issue new bonds without increasing taxes. This might be true through 2011, but as the Town’s finance director pointed out, from 2012 on the construction debt pushes our overall debt very close – maybe even exceeding – the level necessary to keep our Town’s AAA bond rating.

At that point a tax increase is certain.

The Town Manager’s analysis is also rather one dimensional – challenges like the Town’s rapidly growing unfunded retirement obligations – projected to be as much as $56M or replacing Police headquarters – $10M if Council had purchased Dawson Hall – were not considered.

So what about Lot #5? Lot #5 requires 8 to 12M taxpayer dollars and represents the Town’s greatest, riskiest discretionary fiscal liability.

Part of the sales pitch for Lot #5 was the supposed need to stimulate development Downtown.

With Greenbridge nearly built and other Downtown projects on the way it’s clear that we didn’t need a stimulus. In fact, directly across Franklin St. the University at University Square is already putting forward a much more interesting, integrative proposal which better fulfills the goals of the Lot #5 project – and at little cost or risk to our taxpayers.

Given that the cost reductions that allowed RAM Development to lower their gold-plated condo prices haven’t been passed on to the taxpayer, that the number of pre-sold units hasn’t grown in-line with those price reductions, and that the Town still doesn’t know how it plans to borrow that $8 to 12M – now is the time to drop Lot #5.

Three years out – three contract extensions granted – no significant improvement in proposal.

What does this have to do with the Library?

We can have a Library expansion – hopefully starting next year – or we can have Lot #5 – we can’t handle both.

Contact Council – ask them to pull the plug on the Lot #5 project now so that we can take on projects that are more central to Council’s charter.

More information on my website, CitizenWill.org.

Lot #5 Downtown Development: Do you smell gas?

Friday, March 16th, 2007

As we know, There are known knowns.
There are things we know we know.
We also know there are known unknowns.
That is to say we know there are some things We do not know.
But there are also unknown unknowns, the ones we don’t know we don’t know.

— Donanld Rumsfeld, Feb. 12, 2002, Department of Defense news briefing

Well we know that Rumsfeld was is a jackass.

What the majority of our Town Council didn’t want to know when they rushed forward on the Lot #5 juggernaut, was the extent of the hazardous waste remediation required to make the site suitable.

Oh, they knew that there had been at least one former gas station on-site.

And they knew that during a previous assay an environmental tech had taken an unauthorized sniff of the dirt that revealed gas fumes.

But rather than taking the prudent step of testing before committing to the Lot #5 boondoggle – making this all to known unknown known – to use a Rumsfeldian turn of phrase, the majority stuck their heads firmly in the sand and instructed the Town Manager to move ahead.

Kind of like Bush and Rumsfeld in Iraq. Jump first, measure the consequences later. And we know how effective that has been.

What’s the big deal?

Beside making a decision that has already undercut our Town’s moral authority to set the highest caliber of environmental standards it has exposed our taxpayers to a potentially stiff financial penalty.

The “rah rah” growth folks on Council like to say this ridiculously bad Lot #5 deal with RAM Development won’t cost the taxpayers one pretty cent – except for the hundreds of thousands for required consultants, disrupted city services, staff time, etc. – until the Town’s 161 parking spaces are complete.

The problem? Our taxpayers are on the hook for any hazardous waste remediation – remediation that will have to paid for now. The cost, considering the geology, could run into the multi-millions of dollars.

That’s millions of dollars out out of our taxpayers pockets, this year, for one huge mistake. Millions that won’t go to increasing our Town’s commitment to abating chronic homelessness or increasing social services. Millions that might mean the difference between having an aquatics center or losing our quality bond rating.

On a slightly positive note, it looks like some of our Council took my and others concerns to heart.

Most likely too late to squeeze of the deal without some kind of fiscal damage, Town is going ahead with the environmental assay they should’ve done first.

Good news? We’ll find out the broad outlines the environmental damage.

Bad news? We’ll have to start paying millions of dollars this year to cleanup the mess.

Worse news? If this initial assay isn’t done properly or is oriented to quell criticism rather than measure the extent of the true problem – well, the taxpayers of Chapel Hill better be prepared for the “death of a thousand cuts”. Not an unlikely scenario given RAM Development’s halving the scale of the project – keeping the cost roughly the same – and extracting a 15-fold greater financial commitment, $7.5 million so far, from the Town.

This cleanup, if it follows the trajectory of similar projects I’ve been part of, will probably cost quite a bit more than originally anticipated. It will be the gift that keeps on taking.

Hang on to your wallets folks, we’re in for a messy ride.

Parking Lot 5 to Close for Test Borings

The Town of Chapel Hill has hired a contractor to conduct environmental assessments of a site that is selected for a proposed $75 million three-section building complex combining condominiums, retail, and parking on Town-owned Parking Lot 5 in downtown Chapel Hill.

The environmental assessments, to be conducted by Environmental Consulting Services, Ltd. (ECS) will require closing the parking lot located between Franklin and Rosemary Streets at the intersection of Church Street.

Municipal Parking Lot 5 will be closed from 4 a.m. to 1 p.m. Saturday, March 17, from 6 a.m. to 9 p.m. Sunday, March 18, and 8 a.m. to 9 p.m. Tuesday, March 20. All vehicles must be removed. Accommodations will be made for individuals with leased parking spaces. Call the Town’s Parking Services Coordinator at 968-2835 for more information. Motorists may find available parking at the Rosemary Street Parking Deck, 150 E. Rosemary St., Municipal Lot 2 at 100 E. Rosemary St., or Municipal Lot 3 at 415 W. Franklin St.

The environmental assessment will include a geophysical study to determine if underground tanks are present, as well as up to 30 test borings of the soil. While the Town has conducted previous environmental studies, this week’s assessment will provide a more detailed examination of the soil conditions of the site. Engineers will evaluate and describe site hydrogeological conditions; determine the location, type and concentrations of contaminants; and determine the requirements for remedial action based on the applicable regulatory environmental guidelines.

Negotiations with Ram Development Co. are under way since the Council authorized Manager Roger L. Stancil on Feb. 12 to execute the development agreement. Issues for negotiation have included energy efficiency construction, parking for affordable housing, and environmental considerations. Reflecting its commitment to environmental stewardship, the Town has pursued additional information on the site’s environmental conditions as negotiations continue.

The Town has completed an earlier environmental assessment of the Parking Lot 5 site. Following this phase one study conducted by ECS on Aug. 18, 2004, engineers recommended a ground penetrating radar survey be performed to determine if underground storage tanks are located on the site. Next week’s survey will determine if such tanks are located on the site. ECS also performed work on Oct. 27, 2004, and April 13, 2005, for additional explorations to evaluate the depth to rock in Lot 5 as part of the design analysis for underground parking.

Citizens may review information on the Town website about the Downtown Economic Development Project at http://townhall.townofchapelhill.org/projects/dedi/

I’ll be looking forward to the timely release of these reports and plan to review them in detail.

I also will be calling on Council, as I have before, to stop any further movement on this project pending the results of these tests. To give our residents a chance to catchup and reflect on the consequences of “digging a deeper hole”.

Surely they deserve to know how much the hazardous waste remediation is going to cost before having their Council further the process.

My guess, based on the rushed, imprudent and unfortunate decisions the majority of Council have already made on this project, they won’t stop the juggernaut.

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