05/28/05  The Mercantile Building

Here is something that is bugging me about Mayor Miller's contention that staff (notably Ryan Evans), botched the Mercantile deal for Downtown.  I recently served on a review panel for a large donor organization that doles out millions each year to worthwhile social services.

My gripe with them is the same one I have with business people coming to the City (or any government entity for that matter) asking for "handouts".  Personally, I find welfare to the RICH exceedingly offensive!  But, I digress.

My point is that many groups come to the table asking for most of the available funding for their project only. In some cases, they are asking for all of the money.  It is not unusual for these deal makers to ask for MORE money than the City has already stated it has available.

Even Ray Charles could have seen this is bad grantsmanship and bad dealing! 

The DMN would have done a better job of reporting this story had they told us the WHOLE story.

How much was the total deal worth? 

Would the City be expected to be more than a 10%, 25%, or 50% partner? 

In so many cases, the government has been left holding the bag while the so called "developers" drop out -- but only after they have spent the City's money and none of their own.

What happened to the "back to basics" mantra that this mayor and council promised us four years ago?  In my opinion, if a deal is not good enough to do with YOUR money, then leave my money out of it!  They are in the development business -- not us! 

The fact is that the Mercantile Building (lovely as it is) is a financial albatross.  The true costs of renovation, asbestos abatement and modernizing to current safety, access and market standards demand that it should just be demolished.  I like to think of myself as a very strong preservationist, BUT, at some point, even the most favorite and beloved of our relatives has to die.  In the case of the Mercantile Building, make it a dignified demise, at least.

The fact is that NOBODY wants to spend five to ten times the replacement cost to renovate a building that should have been removed long ago.  Even a parking lot would have produced more incomes and taxes than what is there now.  Let's face it, this deal is not about about magic -- it's all about math.  The math says either tear it down or find someone with deep pockets who is not "profit motivated" to renovate it.  The City is the wrong partner for this type of a project!

In my opinion, Ryan Evans was right to call off the deal when the developer tried to change the rules at the last minute in order to cover up the mistakes and lies he told about what the project would cost.  Believe it or not, the City has a lot of very smart and very qualified people working for it! The mayor and council would do well to listen to them more often than they do.

Imagine the mess we would be in if we had taken the advice of all of those developers and snake oil salesmen who have darkened the doorsteps of City Hall over the years. 

This solidifies my position that the City should not be in the development business!  First, it is not our core mission.  Second, we are not good at it.

PLEASE tell me why the "so-called" smart millionaires need our money in the first place! 

$125M could go towards a lot more important stuff that we know how to do well.  Imagine if we had really good streets, parks, and City services -- maybe that would be enough to convince investors and developers to locate here rather than trying to become their silent partners in development deals.