Something else that was mentioned in the ELi story about the Dublin Square project was the DDA wanting to refinance the bonds for the Evergreen properties.
We went round and round about this for years and years. City officials, with DDA approval, did something incredibly stupid issuing those bonds in 2009 to buy properties at 3 times market value when the economy was in collapse and with a developer who should never have been allowed within a million miles of public money. Rather than admitting how badly they screwed up, firing everybody responsible (including the bond attorney, city attorney, and bond dealer), and cutting losses, they poured more money into the fiasco, caused continued blight where they would have been none in the first place, and tried to avoid accountability.
Responsible people tried to get the bonds permanently refinanced when the temporary bonds came due in 2012, with interest rates at record lows. Instead Triplett, who might be even more stupid about money than Meadows (or not), with advice from the bond dealer who earns a commission each refinancing, prevailed and did another short term bond. Finally, in 2015, the city’s now-retired finance director, the only responsible person in city government, got the bonds permanently refinanced. Luckily, interest rates had stayed at record lows for another 3 years, and she did an amazing job of organizing the debt service payments to have the least bad outcome, in conjunction with older DDA bonds.
Interest rates are now up. There is no possibility of refinancing the bonds for less than what was done in 2015. They might try to kick the ball down the road to lessen burden now but the end result will be worse—you refinance when interest rates are lower not higher.
There is no way out of stupid financial decisions. Trying to get out always makes matters worse. What the city needs to do now is try to sell the Evergreen properties to the highest bidder, stop trying social engineering, which always fails, and let developers build whatever they want, with absolutely no further brownfield tax diversions for the Project Formerly Known As City Center II or any new project, as long as there is no negative impact on neighborhoods. Collect taxes and use that to pay off as much of the bad debt as possible.
Voters agreed to bail out the city with the income tax, without demanding responsible government in return. Some of the new taxes will have to go to subsidize DDA debt. Suck it up!
-Eliot Singer
