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February, 2007:

Nice surprise

Surprise! Today’s Knoxville News Sentinel business section features a full-page spread about my husband, Rich Norby, and the ORNL research experiment he heads up. There’s an article and a large diagram of the FACE (free-air CO2 enrichment) facility where a stand of sweetgum trees is exposed to elevated levels of atmospheric carbon dioxide in studies intended to understand how the future atmosphere will affect plant growth and carbon storage in forest ecosystems.

This came as a nice surprise — Rich did not realize that reporter Frank Munger (who talked with him recently) was preparing an article for publication. Positive attention is always appreciated, though.

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Instead of Crestpointe, let’s redevelop the City Center

Previously I posted my views on the Crestpointe proposal. The obvious follow-up question is “What would you do instead?”

My answer is “Let’s commit to redevelopment of the City Center.”

A little history may be necessary to explain what I’m talking about…

Back in 2000 the City (with the help of consultants) developed — and City Council adopted — a conceptual master plan for the 293-acre heart of the city (roughly, the area bounded by Oak Ridge Turnpike, South Illinois Ave., and Rutgers Ave., including the Oak Ridge Mall area, Civic Center, and Oak Ridge Associated Universities campus); see the city’s website for some details. Some of the details shown in the plan maps (such as relocatiThumbnail image of City Center Master Plan mapng Recording for the Blind and the Children’s Museum of Oak Ridge) were ill-conceived and caused citizens to criticize the entire proposal, but those were details, not the main thrust of the recommendations. At the heart of the plan was a recommendation to increase the overall density of development in the city center area, while reconfiguring the area with additional roads and walkways that would draw people in to shop, visit attractions, and participate in community events. Notably, the plan recommended “de-malling” the mall (which was already moribund), putting roads and pedestrian ways through it and eliminating about 40% of the enclosed space, to convert it into a “town center” type of shopping center development. The City’s consultants had concluded that the mall was greatly overbuilt (the local market could not support the amount of shopping space it contained) and recommended this change to bring new vitality to the area.

At the time, it was understood that implementing these concepts would require a public-private partnership — because the proposal promised to benefit both the community and center-city businesses, both the city and private landowners/developers would need to share the costs. City staff and prospective developers proposed a modified version of the “de-malling” plan in 2002, but the extravagance of the plan and other issues (too numerous to review here) caused the $23.2 million bond that was proposed for the project to be defeated in a referendum. Chattanooga developer Steve Arnsdorff ultimately purchased the mall with the intention of revamping it. He has publicly stated his intentions to proceed, but he has been offered far less city financial assistance than GBT Realty is now requesting.

If in 2007 Oak Ridge is now so desperate for retail that the City would spend $10.5 million in public funds to flatten a mountain to build a shopping center (in a location that is zoned industrial and is isolated from our existing retail areas), it stands to reason that we should be willing to consider committing some public funds to bring functioning retail back to the center of the city, particularly to the site of the dead Oak Ridge Mall, by recommitting to the vision that the City embraced in the City Center Master Plan.

There is no denying that there are significant issues to overcome in bringing new retail to the center city area (not the least of which are deed restrictions imposed when Wal-Mart bought the tract where its store is located from former mall owner Crown American), but I believe these issues are not insurmountable, and I am convinced that if we do not try to resolve these issues we will never recover a functioning retail sector in our center city.

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Petition drive for referendum on borrowing for Crestpointe

Well, if you have been paying attention, you know that on Monday evening the City Council passed a resolution authorizing the issuance of up to $6 million in general obligation bonds for the Crestpointe project.

Actually, the bond resolution doesn’t name Crestpointe; instead, it says the bonds would pay for various types of generic civic improvements (which are listed in the resolution). This vagueness is necessary because a municipality can’t borrow funds backed by the full faith and credit of the municipality (that’s what “general obligation” means) to benefit a private entity, but it can borrow funds for public purposes such as road improvements, electrical lines, and other civic improvements that happen to benefit a particular project. This resolution calls for public improvements that are intended specifically to benefit Crestpointe.

Some city informational materials and press reports have generated a misconception that the developers would be responsible for paying back the loan. For example, today’s Oak Ridger says “The proposed 60-acre Crestpointe project would require a $10.5 million repayable city contribution.” Don’t be misled — the city would be responsible for paying off the debt using tax revenues. All that means is that the city is counting on future tax revenues from the project (mostly sales taxes) being more than enough to compensate the city for its “contribution.”

The publication of a legal notice on Wednesday that announced the bond resolution started the clock on a 20-day period during which Oak Ridge voters can petition to force a referendum on the proposed borrowing. Petitioning is under way. If 10% of the city’s voters sign the petition, the city’s voters will be the ones to decide whether to issue $6 million in bonds. Conveniently, I expect that the referendum could be held in June at the same time as the city election, avoiding the costs that the city would incur if it were necessary to call a special election.

We’ll all know the outcome of the petition process well before March 19, which is the date set for City Council to consider a development contract with GBT. If the petition drive is successful, the City Council will not be in a position to make any contractual commitments on March 19.

There’s a website for the petition process — click to download blank petitions, register as a petition volunteer, or find out where to drop off your signed petitions.

I had to laugh when I heard that some project opponents are signing another petition that’s circulating around town — a petition with no legal significance that states support for the project — because they heard “SuperTarget petition” and they assumed it’s the referendum petition they’ve heard about in the news. Whatever your views are, pay attention to what you’re signing, folks!!

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Oak Ridge can be proud…

Oak Ridge may have its share of contentious local issues, but we can take pride in being a progressive community where government employees are professionals — unlike certain neighboring communities where nepotism seems to be standard operating procedure, as Average Woman discusses today.

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Proposed “Crestpointe” development – wrong proposal for Oak Ridge

Well, it’s no secret that I’m a candidate for City Council in the June 5, 2007, election (with the filing deadline still several weeks away, all of the local papers have reported that I have filed as a candidate). It’s also no secret that the hottest local issue of the season is the proposal for City taxpayers to help fund the GBT Realty proposal to build a shopping center (“Crestpointe,” expected to be anchored by a SuperTarget store) on the site formerly known as Pine Ridge.

In an article by John Huotari entitled “Potential candidates weigh in on Target,” the Oak Ridger correctly reports my opposition to this proposal:

…two other potential council candidates said they oppose the Pine Ridge project, tentatively called Crestpointe of Oak Ridge. They would prefer that redevelopment efforts be focused on the city’s downtown area, which includes the former Oak Ridge Mall.

“If we develop retail on the top of the mountain, on Pine Ridge, we’ll be putting a nail in the coffin in the center of the city for a long time,” said Ellen Smith, who serves as chairman of the Oak Ridge Environmental Quality Advisory Board.

Smith, who has qualified to run in the June 5 election, said she is also concerned about Crestpointe’s potential impact on existing Oak Ridge businesses.

I’ve studied the proposal, and I’ve concluded that it is the wrong proposal for Oak Ridge, although I believe that its proponents are pushing it for valid reasons.

Yes, I do think there are some good reasons for this proposal:

  • There is a substantial pent-up desire for more retail in the city. I have long believed that the dearth of retail in Oak Ridge (not a shortage of housing, as some others have said) is the single most important reason why people who work here choose to make their homes elsewhere. Many local residents identify Target (which calls itself an “upscale discounter”) as the single store that would go the farthest toward satisfying their shopping needs. Target claims to be particularly attractive to “young, well-educated, moderate-to-better income families who live active lifestyles,” who are exactly the kind of people that Oak Ridge would like to have more of as residents.
  • The local sales tax is an important source of revenue for Tennessee municipalities and counties. When Oak Ridgers spend their money outside the city, the city loses out on potential sales tax revenue. Conversely, if we spent more money in town — and if our stores and restaurants brought in more trade from people who live elsewhere, local public coffers would benefit.
  • Oak Ridge’s retail sales (and sales tax collections) are declining from one year to the next, indicating that the city is losing more and more business to surrounding communities, the Internet, and mail order.
  • Shopping center developers say that they have been unable to identify available commercial sites in the city that are both big enough to site a Target store and would give the company the visibility and accessibility to potential customers that it wants. Therefore, GBT, the Chamber of Commerce, and city staff have looked for a creative siting solution.

Good reasons notwithstanding, the proposal before the city right now is all wrong. Here are some of my thoughts on it:

  • It’s contrary to good planning. The proposed Crestpointe shopping center would occupy a site (on Pine Ridge) that is not zoned or planned for commercial use (its zoning is industrial), is not adjacent to or connected with any existing retail areas, and currently even lacks road access. Locating retail at this site would, in effect, mean tearing up the city’s existing comprehensive plan. I believe that the city’s demonstrated eagerness to abandon comprehensive plans in order to accommodate every development request is a principal reason why the city’s recent survey of a sample of residents found that, when asked to “rate how well you think the City does overall in providing each of the following services,” 29% of respondents (40% of those who gave a rating) rated Planning and Zoning as “poor” or “fair.” (Only Attracting Industry and Economic Development drew stronger negatives.)
  • What we are being asked to subsidize is the continued destruction of the ridge, not the creation of something of value. The $10.5 million that the city is being asked to contribute to this development would not be an “investment” in something of value, as some citizens have been led to believe. Rather, about $9 million of this money is budgeted to pay for continuing the flattening of Pine Ridge (note that among other things, this would involve extensive bedrock blasting, which likely would be detrimental to nearby high-tech industrial companies) and building massive retaining walls (estimated to be 50 feet in height and totaling more than 2000 feet in length) on the sides of the ridge in order to make this privately owned site buildable. Basically, we are being asked to spend public funds to finish the destruction of the ridge.
  • Crestpointe would not boost the city’s existing retail. Retail developers and planning consultants tell us that retail begets retail. Thus, if new stores or shopping centers are established near existing retail centers, both the new stores and the existing stores will experience more shopping activity than if they sat by themselves. One of the reasons I have wanted new retail in Oak Ridge is that I expect that new stores would enhance our existing shopping areas. However, because the Crestpointe site is a stand-alone site that is not convenient to any existing shopping areas, it would not have this positive impact. Thus, we would miss out on the opportunity to boost our existing retail sector. Instead of locating a smaller shopping center near existing stores where the new stores would get positive synergism from other shopping areas, the developer proposes a large development (on a scale almost as large as the former Oak Ridge Mall) where synergism (and profits) would come from stores within the shopping center.
  • This development would eliminate chance of redeveloping the City Center (former Oak Ridge Mall) area. The 450,000 sq ft of new retail space at Crestpointe would fully absorb any need for retail growth in the city — the city population would have to grow quite a bit to generate enough additional demand to support additional retail in the City Center area. Thus, if we support this new development, we can expect the City Center property to remain in its present state for many years to come.
  • Not only that, but Crestpointe would detract from existing in-town retail. If the stores to be located at Crestpointe are as successful in drawing retail business as GBT’s projections and the city’s analysis assume, their gross sales revenues would total $140 million a year, of which the city assumes about $80 million would be diverted from existing retail business in the city. Retail sales in the city currently total about $440 million a year, so diversion of $80 million in retail activity would mean a loss of 18% of the business from our existing stores. That’s a big loss o f business that I expect would lead to the closure of more than a few existing stores. (If you think that some of our shopping areas look blighted now, just wait!)

  • The financial analysis of benefits to the city government appears overly optimistic. As some of my fellow citizens have pointed out (see Oak Ridge Citizens for Due Diligence and Citizens for a Progressive Government of Oak Ridge), there is reason to question whether the city has done appropriate “due diligence” on this proposed deal. The developer’s analysis of site preparation costs were checked out with TVA staff — that’s a good start. However, the city’s optimistic analyses of tax revenues rely on the developer’s assessment of market potential, which the city has not independently verified. For example:
    • It appears that in order to achieve the $60 million increase in Oak Ridge sales that the city projects, Oak Ridge would have to change from a community that “leaks” sales of consumer goods (clothing, electronics, home furnishings, etc.) to other communities into a community that sells more consumer goods than its residents buy. That seems very unlikely in view of our city’s position as a secondary city in the Knoxville metro area. I don’t want to stifle optimism, but I don’t want to bank on unrealistic assumptions.
    • The analyses seem to implicitly assume that the people who live outside Oak Ridge would shop at Crestpointe instead of at similar centers located closer to their homes. That’s little more than wishful thinking, if you ask me.

    Additionally, the city’s analysis of potential tax revenues assumes that increased property taxes (from the value of the store buildings) and sales taxes (from new sales) will flow in starting with the first year after the proposed bond issue. That’s just plain impossible! If it takes 2 years to build the shopping center (as expected), there would be 2 years without any additional tax revenue. If someone like myself can find that kind of mistake by reviewing presentation graphs and summary tables, what other errors are buried in the analysis? Remembering how poorly the last city’s last “can’t possibly lose” investment (the Centennial Golf Course) turned out (last time I looked we citizens were subsidizing the golf course at the rate of $300,000 per year), I think it is irresponsible to put taxpayer money into this proposal without some independent verification of the numbers.

  • Aesthetics (another planning issue). I don’t want the most prominent view from many parts of the city (and the scene that greets people arriving from Knoxville) to be of the neon commercial signs atop a hill that resembles a medieval fortress, but that’s my impression of what this development would look like. We might as well change the city’s nickname to “Target City.”
  • Traffic (yet another planning issue). Now that the road has been 4-laned, traffic flow on South Illinois Avenue en route to Knoxville is pretty smooth now at most times of the day (at least until you reach the Solway Bridge area), but retail traffic from Crestpointe is likely to change that. Access to this shopping center would be from South Illinois Avenue (a new stoplight would be installed) and the Boeing interchange, adding tremendously to traffic volume on this main highway into and out of town…

Now, I imagine you are asking “What would you do instead?” I have some thoughts, but I’ll save them for another post.

In the meantime, I’d like to note that if City Council votes Monday night to authorize general obligation bonds for this project, there almost certainly will be a successful petition to place a bond referendum on the June ballot. That will give voters the opportunity to make their own decisions. I hope, however, that Council will exercise some leadership on Monday night and vote this down, sparing voters the need to go through another divisive referendum process.

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Oak Ridge leads the region — but it’s a dubious distinction

Earlier this week the Knoxville News Sentinel reported on the phenomenon (discussed here earlier) of local governments employing Washington, DC lobbyists to give “extra muscle” in seeking targeted pork-barrel funding for local projects. The report indicates a new dubious distinction for Oak Ridge — we spend more on federal lobbying than any other local government in the area.

The City of Oak Ridge’s annual expenditure of approximately $100,000 for work by the Ferguson Group leads the Knoxville metro region in lobbyist spending, exceeding the $40K spent yearly by the City of Knoxville and the $90K total cost of a lobbying contract shared by Blount County, the cities of Maryville and Alcoa, Maryville College, and Blount Memorial Hospital. Within Tennessee, Memphis seems to be the spending champ at $160,000, but at just 24 cents per resident, Memphis’ spending on DC lobbyists doesn’t come close to Oak Ridge’s expenditure of almost $3.60 per resident. (Chattanooga is reported to have spent $90,000 in the first half of 2006; the article doesn’t indicate whether their annual cost is twice that, or if they dropped the contract after mid-2006.)

In an editorial today, the News Sentinel appeared unable to decide whether this is a good thing or a bad thing, but they the editorialist did point out that “there are problems with using taxpayer money at the local level to chase more taxpayer money at the federal level.” There are problems, indeed — so let’s stop paying lobbyists to “game” the federal system on our behalf.

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