With plans in the works to revive the aging Edgewater Hotel, a request from the developer to marshal nearly $17 million in government aid has many talking.
Hammes Co. is certainly receiving a great deal of feedback — both positive and negative — concerning their request for the large chunk of government aid for the project in the form of tax incremental financing, better known as TIF funding.
The company is requesting $16.8 million, one of the largest requests from a private business in the city’s TIF program history.
According to Joe Gromacki, TIF coordinator for the city of Madison, TIF money is not simply a check the government writes off to a company. Rather, it is an investment in a development that will help boost the economy in the future. Often times it helps raise property values, in turn raising property taxes and thus creating more revenue for the government.
Ald. Mike Verveer, District 4, said awarding a TIF request will not occur until a TIF district is expanded from the State Street area and the money is budgeted in the city’s capital budget. He added he will not personally support it until his neighborhood agrees it’s the best move.
The money would pay for promised public space such as a grand staircase to Lake Mendota and a terrace, but some say renovations are unnecessary or that the request is simply too large.
Ald. Larry Palm, District 15, said the quantity requested is “just extraordinary.”
“My guess is this would just never fly,” Palm said. “It certainly doesn’t fly with me — not in the quantity they’re asking for at least.”
The public access appears as if it would be a great asset for the city, according to Ald. Joseph Clausius, District 17, but he said ultimately his vote will depend on future discussions with fellow aldermen and neighbors.
“Basically it’s just a matter of, is this the best application of it?” Clausius said. “Is the city getting the best bang for their buck? Is it really going to be a benefit to the neighborhood?”
Ald. Bridget Maniaci, District 2, said the TIF aid would certainly enable a lot of “infrastructure improvements for the neighborhood.”
A major hurdle the company faced was their inclusion in Mayor Dave Cieslewicz’s capital budget proposal, but Aug. 28 Cieslewicz announced his support for the project and his desire to move it forward as quickly as possible.
“There is a long line of approvals the Edgewater project itself still needs,” said Cieslewicz’s spokesperson Rachel Strauss-Nelson. “It certainly will be a long process that we are at the outset of, but I think the mayor is optimistic about the chances of the project getting approved.”
Strauss-Nelson said the $16 million is divided equally between the 2010 and 2011 capital budget.
A few discrepancies along the way
While plans for the redevelopment are coming along, questions of lobbying law violations committed by Hammes are flying.
Earlier this month, former alder for District 2 Brenda Konkel filed a complaint, alleging the company had made more than a few mere missteps.
Konkel’s complaint to the city attorney’s office lists various violations, including failure of a principal to register as a lobbyist prior to contacting city officials, failure to complete the lobbying registration form, falsified registration documents and falsified expense statements.
“There were multiple times when people said they should file publicly (as a lobbyist),” Konkel said. “I highly doubt it was a mistake.”
Robert Dunn, president of Hammes, said he thinks the amount of attention the issue is receiving is excessive and whatever they’ve done wrong, they will work with the city attorney’s office to remedy.
“We don’t believe that we’ve done anything that was inconsistent with the intent of the ordinance. The fact is that the ordinance is not very clearly written. It’s ambiguous, it’s inconsistent,” he said.
Lobbying entails what exactly?
When Hammes started contacting city officials and Mansion Hill neighborhood residents about redeveloping the Edgewater in 2008, Dunn said he thought they were just testing the waters to see how the city would feel about such an extensive project.
According to the city clerk’s records, the company filed its lobbying registration forms Feb. 6, 2009 — months after initial contacts and meetings occurred.
Konkel alleges the unreported meetings she and other city officials had with Hammes starting in August 2008 should have been considered lobbying efforts and thus the company should have registered as a lobbyist earlier.
However, Dunn said the lobbying ordinance’s ambiguity made him think he did not need to register for those types of contacts.
“We approached this no differently than we would any other thing like this,” he said. “It’s as simple as at what point in time does lobbying start? Does it start, as it does more typically in other cities, when you’ve made a formal request? We were trying to decipher what the ordinance was really saying.”
City attorney Michael May said the ordinance may be in need of a clarification revision, saying some of the wording is vague and imprecise.
“I do think there has to be something more than some preliminary discussions before it’s considered lobbying,” May said. “There has to be a proposal. When the Edgewater got to that point is something I’ll have to look into.”
And because of such a large TIF request, Konkel said she thought the complaints would help alert the community about some possible problems with the company’s transparency — especially in terms of the filing of their TIF application.
Hammes filed its TIF application Aug. 6, 2009, according to city records. The application clearly states the applicant must register as a lobbyist when the application is filed or face up to $5,000 in fines.
While Hammes was already registered as a lobbyist at this point, Konkel claims she and the TIF city staff sat down with Hammes to discuss their TIF request in December 2008.
She added they should have known to register as a lobbyist at that point even though a formal request had not been submitted.
But, again, Dunn said the company thought they filed paperwork as necessary and had not violated what the TIF application outlined in terms of lobbying.
A resolution is in sight
May responded to Konkel’s complaint by forwarding a letter Aug. 14 to Hammes citing the alleged violations and asking for admittance to the violations or an explanation for why they occurred.
May said he has not yet received a response from Hammes, though Dunn said they have sent one and are in the process of resubmitting corrected lobbying registration forms as well.
“I am very confident we will comply exactly as we are directed to comply by the ordinance and more importantly based on the feedback we get out of the city attorney’s office,” Dunn said. “I take full responsibility for this, I should have spent more of my time on this.
Konkel said she’s glad Hammes is going to resubmit their paperwork correctly, adding she hopes to see the contacts in the new forms that occurred in 2008 with herself and other city staff.
“If they file them and they’re thorough, I think that’s a step in the right direction,” Konkel said. “In the future if they were to ignore it again, I hope that there would be some penalties. What’s really important is that the public knows what’s going on.”
A growing rivalry
Every city group with a stake in the Mansion Hill neighborhood seems to have an opinion on the redevelopment, but two have emerged as notable rivals in determining the future of the project.
The Mansion Hill Neighborhood Association, a subsidiary of Capitol Neighborhoods Inc. has come out against the new Edgewater plan on the grounds that the project would create a new, unwanted precedent for the neighborhood, according to association member and Mansion Hill resident Fred Mohs.
After the association released a neighborhood plan outlining long-term goals and limits for structures in the area, the Mansion Hill Neighborhood Coalition formed to better represent property owners in the area, according to Hammes director of development Amy Supple.
“The coalition has really come together as a group of individual interests that have stakes in the area,” Supple said. “It is not a group that is advocating for the Edgewater.”
She emphasized the organization does not represent lobbying interests of Hammes, but instead is interested in general issues concerning the Mansion Hill neighborhood.
Supple added many of the goals outlined by the association for the neighborhood were not goals shared by property owners in the area, leading to a need for a new outlet for them to voice their concerns.
“This group just wants to have a voice and have a vote in what happens in their area,” Supple said.
However, Mohs said he believes the group is a thinly-veiled effort to advance Hammes’ interests.
“The coalition was started by, and is staffed by, the developer that wants to build the Edgewater Hotel addition. With the exception of possibly one alder, I think everyone else sees through what this is,” Mohs said.
Mohs said the neighborhood is in a “fight for its life.”
“The volume, mass, scale of it is totally out of proportion of the standards that are called for in the historic district. If this were to go forward as it’s proposed, it would set a new standard that would obliterate all of the zoning protections that the Mansion Hill neighborhood and Langdon Street now enjoy,” Mohs said.
Unlike the Association, the State/Langdon Neighborhood Association has come out in support of the project.
“Most of the benefits on what this would do to the city really outweigh [the Association’s] concerns on this project,” State/Langdon President Scott Resnick said. “I think it really changes the dynamics of the lake that hadn’t been utilized otherwise. It changes how the street looks and feels and would be a true asset to the city.”
Mohs noted some fraternities and sororities are beginning to take a stance on the development, as their houses represent some of the few permanent property owners on the street.
Alex Hitch, a UW senior who resides in a fraternity on Langdon, spoke out at a recent neighborhood meeting against the project.
He said he is also concerned with the precedence the project could set.
“I think it’s fine for the Edgewater to remodel and do something that doesn’t really intrude on the area. It’s a great hotel to have there, a great resource, but it shouldn’t dominate the area,” Hitch said. “Even though it’s not in our neighborhood, it’s going to affect the feel of the area. I really don’t want a bunch of hoteliers, like the Equinox and LaVille, all going up alongside the lakeside.”
Verveer and Maniaci have both said they will need to hold further meetings with their neighborhoods before being able to assess a general opinion on the project for their districts.
“A number of folks have already drawn their lines in the sand, but I have a lot of other people that I want to hear from,” Maniaci said.
Documents:
Edgewater’s TIF Application: Edgewater TIF Application 8-6-09.pdf
Letter from city attorney: 08-14-09CityLettertoLandmarkX.pdf
Complaint against Edgewater Hotel: AttachmentA-Edgewater.pdf
Dunn’s expense statement: http://www.cityofmadison.com/clerk/documents/DunnRobertLandmarkX7-09ExpenseStatement.pdf
Dunn’s lobbying registration form: http://www.cityofmadison.com/clerk/RegForms09/Dunn.pdf
Lobbying ordinance for Madison: http://www.cityofmadison.com/clerk/documents/LobbyingOrdinance.pdf
