Summaries of Sample Articles

Jasbinder Singh, Sep 2016.

1

BIGGEST SELL OUT IN THE MAKING – The Case of Downtown Land

 September 26, 2016


The downtown development proposals are still under review, but we already know what we asked for, what we are getting and what the framework of the costs is likely to be regardless of the results of future negotiations. Further, the developers’ proposals have not changed materially since they were initially submitted in March, yet the Town has chosen not to inform our citizens of Herndon about the sacrifices they are about to make.

The public has a right to know this information before, not after, the election in November. It has a right to understand that a $10 million potential give-away along with another $8 million or so to complete the Art Center and more than $42 million on the Metro Development will not only increase taxes substantially, but also crowd out other important projects for the foreseeable future. It is worth noting that the Town’s operating budget is only $35 million.

As shown below, the gap between what the Town would receive and what it would give up is about $10 million. According to the Town, the gap is only $1-$2 million. The math is very simple. You be the judge.

What Will The Town Receive?

  • Either 280 parking spaces in a private garage, or, a 475-space public garage, and
  • A-yet-unspecified “Cold Dark Shell” for an Art Center. It will take about $8 million more to complete the yet-to-be designed Art Center.

The development will generate future uncertain real estate and other tax revenues from the development; however, the tax revenues should not be counted as a special benefit, because all privately financed developments generate tax benefits for towns and cities. The tax revenues are often used to defray some of the costs developments impose on the our citizens. Therefore, they cannot be counted as benefits.

What Will The Town Give?

  • Free Land: Both developers, directly or indirectly, want all, or, a substantial portion, of the land given to them at no charge, or, at a very low price. The land, if sold at the same rate as that used to buy the Ashwell property, should fetch at least $13 million.
  • Cash Contribution: Both developers have asked the Town to contribute sufficient funds for constructing the garage or garage spaces. This essentially means the developers would use the Town’s money provide the garage spaces. Therefore,

    THE TOWN WOULD RECEIVE NOTHING MORE THAN A YET-UNDEFINED AND OVERPRICED $2 to $4 MILLION “COLD DARK SHELL” IN EXCHANGE FOR THE DOWNTOWN LAND WORTH ABOUT $13 million.

  • Parking Subsidies: As if the above bargain is not enough, both developers want the Town to subsidize already overpriced commercial parking spaces. This subsidy would cost the Town $1 to $2 million more.

The NET Result?

The selling of $13 million downtown land for a $1-$2 million shell would be a cruel joke on the people of Herndon. Most of the financial benefit would go to the selected developer in the form of extra-ordinarily high excess profits of between $7 and $10 million.

This $7 to $10 million gap cannot be bridged. The Town should walk away from the negotiating table, but it continues to want to negotiate regardless of the consequences, probably because it wants to build an Art Center, somehow.

The Town’s Bull-Headed Attempt to Move Forward?

The Town even hired a real estate consultant to “provide a further context for financial assumptions used within the proposals”. Unfortunately, his estimates of the land values contradicted not only the common rules-of-thumb builders are currently using to buy land (such as $40,000/apartment) but also the appraisals the Town conducted in 2013 and 2014. The consultant’s estimates should have been higher than the previous values, but they were lower, by a substantial amount. At the low end, his estimate was $15000/apartment; it should have been close to $40,000/apartment. At the high end, his estimate was $30,000/apartment; it should have been close to $45,000/apartment.

Councilmember Singh came to believe that the consultant’s analysis was a “joke” and said so in the council’s close-door meeting on September 12th. It was apparent that the consultant had used a very biased sample of comparables to do his analysis and obtain the desired result.

Click to Read on …..

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2

 RACE TO UN-ACCOUNTABILITY

Gutting the Official Minutes

May 25, 2016

It was a surprise to discover that “(Reduced) Minutes of the Council meetings” were on the Town Council work-session agenda for October 21, 2014 as a “Discussion” item. Official minutes of the Council meetings (the Minutes) were never a matter of contention. Neither the members of the 2010-2012 council nor members of any prior council had ever expressed any dissatisfaction with “too much detail” in the minutes. Apparently, too much detail had been an issue with Mayor Merkel when she became Mayor on July 1, 2012.

Mayor Merkel had put “(Reduced) Minutes of the Council Meetings” up for discussion (and approval) in the very first council work-session of her 2012-2014 term. The then council approved the new format under which the summary of discussions, required by Section 2.2-3707 of the Code of Virginia, would be reduced, essentially to:

  •  Members of the public, Mr. Bromberg, Mr. Schneider, & Mr. Downer spoke,
  •  Councilmembers Singh, Kirby and Wolf spoke

At first, it was not obvious that the new format might not even mention that a councilmember spoke during the work or public sessions. If council-members debated a public hearing item, their arguments were no longer going to be summarized. In essence, for the purpose of preparing the minutes of the meetings, council-members who had done their homework, asked questions or debated issues were going to be treated no differently than those who did not ask any questions or debate any issues and/or who did not even listen to the concerns of the public. Minutes prepared under the new format could no longer be used to judge whether a councilmember had knowledge of the subject matter or was catering to the interest of a few.  For a variety of reasons, the 2012 policy was not implemented strictly.

 After a new council was elected in 2014 and a few councilmembers started to ask detailed questions, the Town Manager asked the Town Clerk to bring this matter before the new council to “restate its concurrence with the reduced public hearing minutes format approved in July 2012.” Once again, this item was put up as a discussion item in a work session. Only one councilmember, Singh, objected to the policy and asked that the Mayor put this item on the agenda for a public session. The Mayor summarily rejected Singh’s request.  The feckless policy was thus cast in concrete.

 There is more at stake here than their accountability. You, your children, future politicians and researchers may never know this past, not easily any way. A quote by George Santayana should perhaps be restated as, “Those who do not or cannot know the past are condemned to repeat it.” We are all going to be poorer. This article discusses how and why.

This is the legacy of Mayor Merkel.

Click here to read the full article

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 3

The “Bad & Ugly” Art of Purchasing a

Contaminated Property

March 29, 2016

PART I – The “As is, Where is” Provision in the Contract

The Town of Herndon purchased the Ashwell property (the Property) last year, because it had considered it vital to the development of the downtown. The purchase is a prime example of how not to make decisions. It illustrates a pattern of behavior (on the part of town officials and the majority of the council) that sidelines our councilmembers and renders them bystanders. It erodes checks and balances inherent in the Town charter and prevents examinations of potential waste and fraud. In this case alone, the mayor’s “rush to development” would cost the town at least $800,000 right off the bat.

 The 2-Part series shows that time and time again, the Town Manager and the Mayor:

  •  downplayed the extent of the contamination and the cost of remediation
  •  did not provide the relevant documents (to the Council) on a timely basis
  •  preferred to give verbal summaries and conclusions to the members of the council rather than enabling them to make their own decisions.

 Often, sadly, the majority of the councilmembers were just happy to accept whatever information the Town Manager and the Mayor had provided to them and accept whatever conclusions the TM and Mayor had reached. The information was often given either at the last minute (therefore, decisions had to be made under the threat of unreasonable deadlines) or after the decisions had already been made.  The small minority, though, had to fight to receive them in advance.

 This article demonstrates how such actions significantly reduced the Council’s ability to digest the information quickly, ask questions, debate policy, economic and administrative issues, and develop options.  One is tempted to ask,

 “WHY DO WE EVEN HAVE THE TOWN COUNCIL?”

 The presentation of the issues begins with the discussion of the non disclosure of the leftover contamination from the 1990s.

Click here to read the full article

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 4

 The “Bad and Ugly” Art of Purchasing a Contaminated Property – Part II

April 15, 2016

 

PART II – Discovery of the Contamination and its Aftermath

Part I, using the purchase of the Ashwell property as an example, illustrated a pattern of behavior (on the part of town officials and the majority of the council) that disrespects our town charter and harms our welfare.  It also erodes the checks and balances inherent in the Town charter and makes it difficult to hold public officials accountable.

 Part II continues the examination of such a pattern of behavior. It starts with the discovery of the contamination in June 2015 and discusses how the Town Manager, Mayor and the outside counsel gained the Council’s acceptance of the final contract without providing any written information about the contamination and thereby preventing any meaningful discussion of the facts. It is a fascinating story about how to make a Town Council a bystander and keep town residents in the dark. Had it not been for environmental regulations requiring disclosure, the public would have never known the details of this case.

 Click here to read the full article

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5

Herndon Politics: Backroom Deals Cost Residents Million$

September 25, 2015

The town staff, working behind the scenes with consultants and principals of the Herndon Foundation for the Cultural Arts made important changes to the Downtown Master Plan (DPM) shortly after it had been approved on February 22, 2011. Using the pretext of creating a new sketch for the Art Center, they enlarged the footprint of the Art Center, increased its number of stories, and made other important changes out of the glare of the public eye. They considered the following five questions:

  •  What should be the footprint of the Art Center?
  •  Should Art Center Structure have 3 or 4 stories?
  •  Should Pedestrian Bridges Between the Art Center and Town Green be shown in the sketches?
  •  Should Vine Street extension be a street or an alley?
  •  How should truck-loading be configured?

Their emails show that over a period of five weeks of intense engagement with the town staff, they made significant changes that had the potential to impose about a $6 million burden on our residents. The record suggests that they gave no thought to the financial impact of their ideas. 

What is beyond comprehension is that the staff would even want to seek the advice and consent of those who had no relevant background or expertise. The principals’ experience in insurance, car repairs, and business administration was no match for the specialized zoning, geotechnical engineering, theater planning & design, video and television production, capital and operating cost estimation, and environmental engineering expertise typically provided by architectural firms.

Finally, what is also strange is that then-mayor Steve DeBenedittis had no inkling of these extraordinary, outside the established regulatory process, contacts.  The staff and the principals of the Foundation had disrespected the authority of the elected officials and undermined the administrative processes that allow the public to engage meaningfully with our government. 

 Click here to read the full article

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 6

Herndon’s Unfinished Fight For A Small-Town Feel

February 1, 2016

Part 4- SUMMARY

In 2009 and 2010 the people of Herndon came together to create a shared vision of what they wanted their future downtown to be: Three story commercial and mixed-use buildings along the main streets, one or two 4-story residential apartment buildings and a 2-story commercial center on Station Street.  Sketches were drawn to show the look and feel of this revived downtown, and the Townspeople were happy and excited to have their vision come to life in the form of a Downtown Master Plan and its illustrations.

 Mayor Merkel and her supporters on the council started to make changes to the community’s vision immediately after (some say, even before) taking office in 2012.  They had made major changes by the time they produced the Pattern Book six months later. The changes were not so obvious to most people. Small changes to key definitions, or important words made a big difference in what could be built in the downtown.

 The rezoning actions in 2014 and 2015 increased building heights again, in more ways than one, changed the location of Arts facilities, redefined uses by floor at some locations, added sketches that reminded one of modern urban design, and hamstrung the HPRB by restricting its review. In place of 2 or 3-story buildings, developers would be able to build 4-story structures by right.  Rather than mostly 30’- 40’ tall buildings, one would see 54’ to 68’ tall buildings on practically all of the downtown streets. If you had thought the Diamond Hotel was massive, think again. If you think Fortnightly townhouses are too tall, think again. A denser “urban” enclave, instead of a quaint, cherished downtown with a small town feel, seems to be in the offing.

 How and why did this happen?  Parts 1-3 of this Series explain it all. There are good reasons to believe that the 2012-2014 Council increased the density to induce developers to build a “free” Art Center. Follow along and come to your own conclusions. 

 Here is the proof. The proposal submitted by Comstock perfectly conforms to the actions council took in 2014. It includes, residential use on all floors, English Basements, stacked-townhouses, and 54’-68’ building heights. The 2012-2014 council introduced these ideas. They were never discussed before the approval of the 2011 DMP.

Click here to read the full article

 

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 7

TAXPAYER’S SHARE OF THE COST OF

THE DOWNTOWN GARAGE

January 31, 2013

 “Municipal-parking-garages” does not seem to be an exciting topic for public discourse, except that in Herndon it attracted keen interest on the part of many. Downtown property owners generally believe that a garage would be a boon for their business. People connected with the Art Center expect that 60 or so parking spaces would be reserved for them.

 Then there are those who always keep a watchful eye on government subsidies. The high interest is understandable; however, very few people know the following basic facts:

  •  how much money the Town has already spent,
  •  how much would a garage cost,
  •  how many businesses currently participate in the Shared Parking Program (under which the garage would be built),
  •  what would be the taxpayers’ share of the costs, and
  •  how the Art Center ended up laying a claim to more than 60 parking spaces.

 All these issues should have been discussed before the policy was finalized in 1996, but they were not; at least not in a transparent manner.[1]  The business share was supposed to be 60% of the cost of the garage, but it is likely to end up at about 20% of total capital costs spent on the program. As the attached chart shows, the taxpayer will now pay 100% of the cost of the 220 spaces in the PSP program. The taxpayers will also pay 100% of the cost of 60 spaces for the Art Center. Business participants in the program paid about $1.6 million; however, this amount was not even nearly enough to purchase the land and create parking lots that businesses have now been using for 20 years. The record shows that,

  •  No one asked even a single question about the cost of the program to the taxpayer, and
  •  The stakeholders knew that the vast majority of the cost would be borne by the disengaged taxpayers eventually.”

 It is hardly surprising to find that some of the same stakeholders now object to Singh looking into the details and asking tough questions.

  Click here to read the full article

 

[1] The business share was kept low by setting the price of garage parking at an artificially low estimate of $5445 per space.  The town records show that cost of garage parking in 1996 was approximately $13,000 per space.  Accordingly, most of the parking spaces in a future garage were sold at a bargain price of $3267 per space between 1994 and 2009.

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