NRI

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Vote no on issue #6, part 2 – the NRI deal

Published October 19, 2018 by justicewg

Three signs #6The school is trying to complete a negotiation with NRI that could accelerate the tax payments from the Yard, to the point where the boost in tax money may becomes as much as 50% of the cost of the bond the board needs to build a new middle school. Why should voters pass the present levy, when we could have a significantly smaller one via waiting until the negotiations are finished?

The deal

Early in 2018, the school board started negotiation with NRI over increasing the rate of tax money coming from the Grandview Yard development. The board had almost completed the facility meetings, and had set themselves a goal of building a new middle school – the only uncompleted work was the finance committee recommendation to increase the already high $50 million plan from Culp up to a $55 million plan with the extra connector between the schools.

The board was also fully aware of the objections to the new school plan by the G4G group. That unprecedented group spelled levy doom for board members who were not living in a fantasy world. Normal, uncontroversial levies have only passed with 60% yes votes in the past, an opposition group insured failure of the levy (and the two additional NO on #6 groups are the nails in the levy coffin).

I’m of two minds over the board’s attempt to cut a new deal with NRI. Was it just an amateurish mistake to attempt to renegotiate taxes with NRI. and pass the bond at the same time? Even the slowest members on the board must have known they were shooting themselves in the feet with the uncertainty added by the NRI deal. I also think it might have been a desperation move by the board, they knew they would fail in the levy attempt, so they wanted to have some way to win – even if it was by completing a deal that would be bad for both the the school and the city. As long as they got some money, they could claim victory, as long as THEY were the ones who got some money out of NRI..

Whatever the motivation, we now have a deal in progress that might bring substantial money from Grandview Yard, well ahead of past deals. Lets look at what the Mayor said about the deal.

The Mayor and the council

Before the quotes from the Mayor, to be clear – he supports the school levy, So do all the council members who have been asked. They support it because:

It is a normal thing for the board and the council to support each other when they have a levy on the ballot. This is standard mutual support – it is what good politicians do *.

And the council will be asking for new tax money for a new city hall next May. They want the school levy issue completed so they are not both asking for new taxes at the same time.

The mayor speaks

How much additional money will (the NRI deal) mean to the school?
There are some initial estimates using various assumptions, but I do not want to speculate until we have an agreement. I believe we are close. It should be recognized that until recently the City and School have estimated only the dollars coming to the school of what is actually built. We both are fiscally conservative. Those figures indicated that the school would receive about $60 million over the next 20 years. For a long time, this was the figured used. We now have more information on what is being proposed in the current project, which would bring an estimated additional $18 million, or $78 million total to the school. Add to this the development to the south of Goodale and modified school compensation agreement and that figure could almost double. – Mayor DeGraw

Re-read that last sentence for the most important news. The school might be getting $78 million, through modifying the TIF agreement. But the additional taxes that might come from the construction of new buildings south of Goodale could be another boost, up to $156 million total.

This is the most important question – why are we being asked to pass a high levy by the board, when they are on the verge of receiving news that could completely change the financial position of the school?

Committee for Grandview Heights Schools pamphlet

The Pro-levy committee sent a brochure out to every home in the city, answering questions about the levy. What do they say about the NRI deal, in a bullet point section?

The need is now, and at this point no agreement has been reached with NRI.

OK, most taxpayers want to know what they are getting into, and can wait a year for a deal to be completed. What is the rush? Are their bulldozers sitting near the middle school, ready to start the demolition?

The NRI deal could reduced costs to residents by 50% , but could never cover the entire costs

So what? If my income might go up by 50%, I sure would want to wait until I know for sure, before I buy a house. Who cares what percentage the NRI deal covers? If it is significant, we should wait.

Delaying the project would result in added costs.

The committee doesn’t have a crystal ball that allows them foolproof projections on cost, but they do have this thing called “history”. The cost of construction went down in 2008, due to recession. “Costs always rise” is not true. Also, income to the school will be rising, because of the additional tax money from the Yard (tax money that was negotiated in the past, not the current deal). Everyone with any financial skills at all should be shouting “STOP, do not sign contracts for construction when your income is in flux”.

Waiting until the NRI deal is reached would not change the ballot millage, however, it would reduce the taxes the school could collect from residents.

I think the brain power of this committee just completely gave out at this point in the brochure. That talking point is one that belongs to the anti-levy groups, the important issue is the tax rates we are going to pay. If the need for operation millage is going down, we should wait until the financial position of the school is clear.

Implied in the statement “no change in the ballot millage” (I think they mean to say bond millage) is a threat – pass this levy, or we will come back, over and over, asking for the same amount. We will never listen to critics and cut the size of the school facility plan. That threat supports the need to vote the current board out of office.

Part three of my “reasons to vote no on issue #6” will be covering the effects of high taxes on the community, and how the board has failed to make obvious moves that could have protected fixed income and lower income residents.

The YT information session

In past years, the school used to hold public meetings before levies, and would answer questions from the community. I just read the following from the school:

Superintendent Culp and Treasurer Collier are holding an online Community Conversation on Monday, October 22 from 6:30-7:30 p.m. They will be at the YouTube feed at  https://www.youtube.com/channel/UCvM52He47uyzfX0bnjSsz-w.

The superintendent is so deep in the bunker, he can only answer pre-screened questions on YT? For one hour?

(Later) The YT session had “technical issues” and started late, and probably lost all the viewers. They only answered questions that were the softest of the softballs – for 26 minutes. There was one answer that was important, to a question about what the board will do when the levy fails. Will the board do some self examination, and rethink the $55 million plan? Or ignore all the critics, and start plans to cut programs at the schools? Spoiler – Culp only talks about the latter. More on this later.

Previously – Reasons to vote no on the levy, part 1 – The Grandview Heights school board is not trustworthy

Read the rest of this entry →

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Econ committee votes to start city onto a track that leads to a bad deal with NRI

Published September 18, 2018 by justicewg

The city council members on the economic development committee voted on Sept 17 to approve a resolution that supports the deal the school board is making with NRI, which might lead to more money for the schools, but at the cost of approving a deal with NRI that is bad for both the city and the schools. This deal is on a track that will be hard to stop, unless many residents of Grandview Heights speak up, and tell both the board and the council to stop being poor negotiators. With the pressure of public comments, both via email and in city council meetings, the citizens of this city can stop this poor deal, and work for something from a position of strength.

Details of the deal

The full story on the NRI deal is complex, I’m trying to give a short summary that might pass over parts that are important to get a full understanding. I will be posting as many documents and videos from the city as I can, in the future.

Mayor DeGraw was part of the Finance committee at the school (the closed, hand picked group that made major decisions on the school facility plan with no meeting notes or video being taken). The group was looking hard at ways to improve the poor deal the school made with NRI back at the start of the Yard development, but as the mayor told the group, the city and the school had no bargaining power, a slight revision in 2014 didn’t help the school much.

The mayor told the school board that there was only one possible way to get movement from NRI, that was the land south of Goodale near the Yard. There were problems with the ownership of the land (at the time of the finance meeting), and there are big issues with cleanup of the land from pollution, but it was the only way that the school might get a lever on changing the deals made with NRI.

The school board saw this as a green light to start a new negotiation with NRI, and in the first months of 2018, they pressed NRI to make a new deal. NRI, being some of the best deal makers in the Fortune 500, immediately saw this as a way to come out on top of a deal with the rubes on the school board.

NRI must have been fully aware that the school was throwing every bit of influence they possessed into the quest to build new school buildings, and they are now almost certain to fail in the November levy request. The only way the board can pull some respect out of their floundering is to make a deal that brings more money out of NRI. This was a setup that NRI used to make a terrible deal for both the board and the city.

What is wrong with the NRI deal?

Both council members Anthony Panzera and Steve Reynolds spoke at length before the econ committee about the bad position the city and school are placing themselves into. I will be posting video of their talks. A short summary:

The council is allowing itself to be leaned on by the school board, and is shortcutting the normal channels under which the city would review and approve deals like this.

There is no reason for linking the development of the south of Goodale area with a renegotiation of the TIF with NRI. The only reason this is happening is that NRI knows the board is desperate for something they can call a win. The only one winning is NRI.

A housing development with 400 new units is not the best use of the land, and the city can do better.

The school board has been talking lowering their tax rate if they get the NRI deal. First, this is pure fantasy, the board will just use excess money to tear down Stevenson and build a new middle school. And even if the board did cut taxes for residents property, the one entity that would get the biggest tax cut would be – NRI, the largest land owner in the city.

(UPDATE) The board is now officially saying “vote for the full tax levy in November, but we probably will not need all that money if the NRI deal goes through.

While the combined bond issue and operating levy on the November ballot as Issue 6 would still be needed, this agreement would likely enable the district to reduce the amount of taxes that are collected on the November ballot issue. – Andy Culp

Amazing. The board is now saying “pass our levy, but trust us to give some of the money back to you – maybe”. This is self sabotage, why will anyone now vote for taxes that the school says they might not need? I think the board is so sure the levy will fail that they are giving themselves an excuse for the failure.

What about the Comprehensive city planning committee?

There is a large group of residents who are in the middle of a comprehensive city plan, one that is supposed to set the direction the city will take in future development. That group is not finished, and is not scheduled to be done until sometime next year. The fast tracking of the south of Goodale development is a blow to the integrity of the process – it is the city telling all of those people who spent hours in meetings “sorry suckers, you just wasted your time, because we are going to do what we want, to heck with your plans”. This is the kind of action that generates cynicism in the community. This is what makes people say “I though Grandview was different, but I guess we have a city government that is the same as anywhere else”

Check back on this post often, I have lots more to post – city documents, video, etc. Until those updates, you can watch the video of the NRI deal discussion in the last council meeting, starting at the 1:04:30 point in the YT video.

(UPDATE 2)

Video of the Sept 17 full council meeting

All of the preceding discussion happened at the Econ committee meeting on the 17th, and was not recorded by the city. Immediately following that meeting there was a full council meeting, which was video recorded. The speeches given by school board members at this meeting are just carbon copies of the ones they gave to the committee, except for one from board member Brannon. The things she said about NRI needs to be listened to carefully.

Read the rest of this entry →

City council video 09/05/2018 meeting – Scooters, Green Space, School Board Taxes

Published September 6, 2018 by justicewg

The city of Grandview council meetings were video recorded and posted to YouTube since spring of 2017. The quality of the recordings have been all over the place – some OK, some totally unusable because of low volume and noise. I have been monitoring the city’s attempt to do a better job with council member Keeler, and for the first time, the council has gone to a more professional recording setup, with a camera operator tracking the conversations and working the sound levels.

This council meeting was the perfect time to get the video right, because of all the important issues that were on the agenda. Scooters, the Green Space ordinance, the school board negotiation over the TIF with NRI – all topical and of high interest to the community. I did some quick note taking of the action in the video, this is not a complete record, just the high points.

City council video 09/05/2018 meeting summary

6:25 Michel Martin talked about suicide prevention.

13:20 Tijs van Maasakkers was appointed to the BZA to fill a vacancy. He is an Assistant Professor in City and Regional Planning at Ohio State University

14:20 School board member Melissa Palmisciano said the board and the city administration have been in negotiation with NRI over the taxes received from the TIF in Grandview Yard. More later.

15:30 Jody Oster, a member of the group behind the Goodale Green Space initiative, spoke to the council. She objected to the fact that the council had not voted to approve the Mayor beginning the legal moves to block the Green Space ordinance. She though the mayor was not following the laws in appealing the ordinance before the county Board of Elections. President Kearns said there was an executive session at which the council “provided input to the city”, but no vote was held. Kearns said she doesn’t think the Mayor or the city attorney needs the vote from the council for pursuing the appeal. The Mayor said he acted because he felt the appeal was in the best interests of the city.

36:47 Mayors report. The “Invasion of the electric scooters” was talked about, the city had to tell the scooter companies they can’t drop them in the city without an agreement in place. The city is still in negotiation, but it sounded like the Mayor will require then to ride only on the street (no sidewalk rides), helmets, and no two up riding. The Mayor said that we will be following the city of Columbus in their rules, since we are so close.

38:05  5G data transmission poles being installed in the city. The Mayor said he would post a map on the city website (I don’t see a map, but this city blog post lists the locations)

51:30 City attorney Khouzam presented the Grandview city side of the debate over the Green Space initiative appeal. Council member Reynolds clarifies that the appeal is coming from the administration, the council has not voted on the issue. Some back and forth happens – watch this part of the video.

1:04:30 Resolution on renegotiation of the Grandview Yard TIF. The mayor talked about re-allocation of taxes to the school, also part of the issue is more development in the Grandview yard south area.

Council person Reynolds expressed his disappointment with making any agreement that would be tied to the development of the Grandview Yard south area as it has been presented thus far. The addition of 400 units of housing is not what he feels is the best use of the area, nor does he feel that the addition is that good for the school board. He didn’t think it is a good idea to plan to transfer money from the city to the school when the city will be looking for new money to do its own new construction.

He also mentioned that if some agreement with the school was made that could cut the tax rate, the one entity that would get the biggest break would be NRI and Grandview Yard. He doesn’t feel this is a good position for the city to enter into.

1:22:15 Anthony Panzera expressed opposition to the resolution. He doesn’t feel that the negotiation over the TIF should have any connection to the Grandview Yard south deal, and thinks the city is being pushed into it for the advantage of developers, not the citizens of the city.

1:23:10 Jessie Truett, school board president, gets up and walks out of the council chambers in the middle of an important debate, disturbing the council and blocking the video. If there is anyone still wondering why the city council and the school board don’t have a good relationship, dumb insults like this from Truett are just par for the course.

1:25:10 A visitor points out that the city is still deep into the city Comprehensive Planning process with the residents, but has not completed the work. Why is the city in a rush to make this GY south development planning all on its own, with no completed city plan? The mayor tries to say that a road south of Goodale has been in the plans for years, but that is not what is under discussion – hundreds of new residential units are on the table.

On the quality of the video – so much better, but still distracting sounds are in the background. Some of them might be impossible to stop – shuffling papers, thunks on the table. Some come from people in the room, because everyone is cramped into a small space right beside the camera. Some of the noise is from people talking in the hall outside the room – maybe some signs can help?

Why can’t the school board video record their meetings?

The city council is now perfecting their video recordings, after more than a year of posting them on YouTube. The school board has never made video recordings, and will never bring a camera into the room. There are supposed to be audio recordings somewhere – good luck finding them.

This was the response I got from Jessie Truett the last time I asked him to record meetings:

“Today’s meeting was not recorded and as in the past, we do not intend to record future work sessions. “ Jessie Truett

The school board doesn’t want to provide audio recordings, they don’t want your opinion, and they really don’t want you to see what they are doing in their meetings.

NRI lays out the future of Grandview Yard

Published June 30, 2014 by justicewg
Brian Ellis announces the new Nationwide Ins. campus at Grandview Yard

Brian Ellis announces the new Nationwide Ins. campus at Grandview Yard

The future will be dominated by the Nationwide Insurance campus. The retail dream of a mini-Easton might have been a possibility back in 2007, but it’s dead now. There were some holes in the map of the Yard that were plotted as ghost white possibilities, but it seems clear that the Yard will be a Nationwide Insurance campus foremost, with 1300 residential units second priority. Another hotel, and retail and food/drink establishments will fill in the gaps, as announced at the June 30, 2014 meeting.

I was encouraged to see the three new parking structures placed firmly on the map. A couple of years ago when the future of the Yard seemed to be headed for a big box store dominated retail there were surface parking lots plotted all over the map. The four story parking buildings will go a long way to insure that the development has the right density of mixed-use construction.

The big surprise was a new 135 room hotel and conference center, with a ballroom for 300 and multi-use areas. I always wondered how it could be possible for the hotel market to have any room for expansion given the new hotel on Olentangy and the hotel being constructed in the short north. Somebody thinks that the market is not saturated. The hotel taxes from the current Hyatt Place has been a boost to the city, if the new hotel is as popular the taxes will be a windfall for the city.

Well, almost a windfall. The current businesses in the Grandview Yard have not caused much of an increase in city employment, but as the thousands of jobs move into the office buildings and retail businesses open in this round of expansion, city police and fire personnel will need to increase.

Mayor Degraw wins big time

Mayor Degraw wins big time

We should be glad?

Mayor DeGraw took some time to point out that Nationwide Insurance is a top 100 corporation who had a lot of different choices in where they could have located their campus, and that Grandview should take pride in being the kind of place where a top business would want to move. There was a bit of obsequiousness toward Nationwide in that pronouncement.

Ray has done some good work for the city, and he will go down in the history books as being the Mayor who brought our small, landlocked, drifting into obscurity city into the big time, while the rest of the region suffered through a major recession. There was no guarantee the G.Y. development would succeed. He has every reason to feel thankful for Nationwide’s choice.

If I were the Mayor of Dublin or Westerville though, who will lose all those jobs, I would not be so happy. There is an element of Greek tragedy to modern business machinations, in which the Gods make their moves while us little people dance around and must cope with tragedy or are blessed with good fortune.

There is a term in business called “eating your own dog food”. That happens when a business uses its own product in the daily business activities of the company. This doesn’t happen as much as you would expect, because the people who make the product are fully aware of the limitations.

Did Nationwide Insurance “eat their own dogfood” when they selected their own development for their campus? Nationwide Realty Investors is a subsidiary of the Insurance company, the choices the insurance part make are supposed to be independent of the investment arm. But it sort of looks like dog food chow to me.

Poor map of the Yard, I added some callouts. Click to bigifye.

Poor map of the Yard, I added some callouts. Click to bigifye.

Connecting the Yard with the city

One of the most difficult problems for the city has been connecting Grandview Yard with the rest of the city. When the area was light industrial, nobody wanted to walk there, and the street layouts helped to wall it off from the rest of the city. Now that the Yard is trying to become a walkable destination, the old layout works against the plan. The solution on the maps for now is to re-build the intersection of First Ave. and NW Boulevard, and create a walker friendly, tree lined entrance to the Yard as an extension of First. The new improved road into the Yard will end at a 2 acre park, roughly in front of the Nationwide campus.

This also enhances the car traffic into the Yard. The planners expect Third Ave, and Goodale to be the main traffic feeders for the Yard, but First Ave. will also become a commuter route for local traffic. An expert hired by the city said that 8 percent of the traffic on First would be going to the Yard.

Residents at the meeting were not happy with the though of sleepy commuters driving down First in the morning, as the kids are being dropped off at Stevenson. Even with a relocated school entrance and drop off area to the east on Hilo Lane, the additional traffic on First will be a problem for the school. A board member at the meeting said they were not involved in the negotiations with NRI, explained by the city council as being needed for sensitive talks.

How do you make an inviting connector to the Grandview Yard without increasing car traffic? My suggestion – widen the road and plant the trees, but make the road going into the Yard at First a bicycle path and walking route, and keep the cars out of this entrance to the development.

Where is this push-back originating?

I had a short email conversation with council president Panzara, mainly to find copies of the traffic studies that were mentioned at the meeting. His take on the traffic problems that G.Y. might cause was that the issue was overblown by the reporters at the meeting. He had personally gotten very few comments or question from Grandview residents about traffic problems.

Today in the Dispatch (July 7) there is an unsigned editorial that is headlined “Increased traffic is manageable” , it is a rebuttal to the questions about the traffic that will be driving into the yard every day. Like the council at the meeting, we are reminded that this was all in the planning documents since 2009, so our objections are unreasonable. Never mind that the whole plan for the business tenants and expected traffic has changed multiple times in the years since the first announcement, we should have foreseen the future and raised objections five years ago.

Then the editorial states “But Grandview is an urban suburb, and that means traffic”. As the first commenter to this editorial reminds us, Grandview Heights likes to think of itself as a small town surrounded by the big city, but still small enough to avoid bad traffic. If the choice was living with choking traffic (like Powell, OH), and  receiving all the new taxes, or forgoing the big development for more modest traffic, I think the majority of the residents would vote for less traffic. (I don’t think Powell levels of traffic were in the plans, but I have yet to read the documents).

Why are the small time traffic questions for Grandview Heights receiving editorial page coverage in the Dispatch? Oh , I forgot, “Capitol Square Limited, the commercial real-estate arm of The Dispatch Printing Company, publisher of The Dispatch, owns a 20 percent stake in Grandview yard.” Funny that this disclaimer is often included in articles, but is not added to the editorials in the paper.

Another Dispatch article was printed on July 8th, telling us about the funding for the streets and other public utilities inside the Yard. The issues with traffic on First Ave. were again mentioned, with assurances that the city had plans to cope with the increases.

Big announcement about the Yard Monday evening

Published June 30, 2014 by justicewg
NRI announcment 2007

NRI announces the start of Grandview Yard in the middle school, Dec. 19, 2007.

Mayor Ray DeGraw will be giving us the details of a new development in the Grandview Yard on Monday at 5:30, in the Community Center. A big change in focus for the Yard will be on the way following Nationwide Insurance’s announcement that they will be moving 3K jobs to new offices inside the development. There have been stories about the move in the Dispatch and the Business First.

Two thoughts on this news before the meeting.

This will mean jobs and a big increase in the income taxes Grandview will be receiving from the Yard. So, hooray. I’m not so happy about getting those jobs by taking them away from Dublin and Westerville. This moving jobs around inside the central Ohio area is not real growth, it is moving the chess pieces. Grandview might be the winner now, but if the numbers are run in 10 years and some place else looks better, we could be left with a lot of empty buildings as Nationwide moves on.

Second, this is not bringing us any nearer to the large retail shopping development that was promised back in 2007. Although NRI never said anything other than “commercial development”, we were hoping for a Mini-Easton. I don’t see how that is possible now with 500K sq. ft. of office space being used up by Nationwide (the current offices built and in construction are only 200K). We will hear NRI’s plans on Monday, I’ll be interested in hearing them say if any big retail shopping is now possible, or if that dream is dead.

Tax questions for candidates (and a TIF flashback) – G.W.

Published September 23, 2013 by justicewg

One of the most important facts that any candidate for office in Grandview Heights must know is how the tax negotiations with NRI were made, and the results that we can expect from those deals in the future. TIFs are complex, but all candidates, both city council and school board, will have to deal with them, and understand how they affect current policy. We have had a slow start to the development, but with more housing units on the way we are well into dealing with the outcome, and it will be a top concern for years to come.

If a candidate comes to my door, the most important question I could ask would be “Can you give me a short lesson on the TIF agreements with NRI in the Grandview Yard development?” If they sputter and talk in generalities and obviously don’t know what was done in those TIF agreements, they have not done their homework, and should not receive your vote.

To help give you a better base of knowledge on the TIF here is a post from July 2009 that covered the negotiations with the school board. Be sure to read both the post and the link it contains to the TVN story about the deal.

(From July 2009)

A story in the TWG had a lot of detail for the negotiations with NRI over the compensation the schools will get from the G.Y. project. Read the story for the exact numbers, the school seems like they have worked out a sliding scale of increased compensation with steps in the number of housing units.

I sent an email asking O’Reilly about the quote where he seems to imply that accepting the deal from NRI on the number of units is not up for negotiation.

You are quoted saying about a possible cap on the number of housing units in G.Y., “If we put in a cap the 11% is gone and the other pieces are gone”.
Can you explain what would be gone if a cap was put in place?
How do you know that those elements of the deal with NRI would be gone with a cap – has NRI said that it is nonnegotiable?

This was his quick reply:

I am assuming you are expecting a complete answer from me and I wish to provide that to you.

I would prefer to wait until the negotiations are finalized and approved. However, I can tell you it is my feeling that it was going to be extremely difficult to get agreement on any caps that would be meaningful.

In addition, we were able to negotiate receiving a higher percentage of compensation as the number of residential units increases.

In providing more information surrounding my quote, if we pressed for a hard cap and NRI would agree, we would have needed to renegotiate our compensation package (which includes 11% of the total increase taxable valuable of the improvements plus an additional percentage of any residential growth) with the city to lower levels than we are set to receive (if NRI would actually agree to a cap).

I will also share that in order for the finances of this to work out for NRI, they will need to self-impose residential limits.  Money to pay the bonds from the TIF will be generated at a much greater rate from the commercial side versus the residential side. Ed O’Reilly.

OK, the deal is still on the table. But the question is still present – why can’t Grandview place a hard cap on the number of units? What is NRI going to do, walk away from the table? The school has a limited ability to accept new students without hitting the wall and becoming required to build a new school. When that happens, the money gets tight fast. Read the rest of this entry →