AZ Supreme Court renders decision on CityNorth

I'm copying a bit from the Goldwater Institute's press release below (and linked here).

Goldwater Institute Press Release
January 25, 2010

Phoenix--Today in a unanimous decision the Arizona Supreme Court declared that government subsidies to encourage development violate the Gift Clause of the Arizona Constitution unless the developer offers tangible benefits of equal value in return. The ruling clarifies previous decisions the court believed were confusing and applied the rule prospectively. The Court declined to invalidate the CityNorth subsidy and sent the case back to the Arizona Court of Appeals to consider other legal challenges.

The ruling in Turken v. Gordon is a victory for the Goldwater Institute Scharf-Norton Center for Constitutional Litigation, which filed the lawsuit on behalf of six small-business owners in 2007 in an effort to stop giveaways of taxpayer money. "The Court's decision vindicates a core protection of taxpayer rights in our state constitution," said Goldwater Institute litigation director Clint Bolick. "The days of rampant corporate welfare in Arizona are coming to an end."

Read the whole thing of course.

If you remember this case in Phoenix put further negotiations between the City of Kingman and the landowners/developers of the Kingman Crossing area on hold. I don't know how this all shakes out based on this decision, if anything, I'd be happy just to see some news on the potential project again.

Case goes to AZ Supreme Court...

Back on May 22nd I wrote a post about the legal battle involving a developer that made and agreement with a municipal government. The Arizona Supreme Court made its decision to go ahead and hear that case.

More about that here from this report...

The battle over CityNorth is headed to the Arizona Supreme Court.

Both the developer of the project, Klutznick Co., and the Goldwater Institute, which filed suit to end the incentive agreement between CityNorth and the city of Phoenix, will have their arguments heard before the state’s highest court.

At issue is an economic development agreement between Klutznick Co. and the city. The conservative Goldwater Institute says the $97.4 million tax incentive package given to the mixed-use, partially built project is not in the best interest of taxpayers.

The Goldwater Institute challenged the CityNorth agreement in court claiming it violated provisions of the state gift clause. But a Maricopa County Superior Court judge ruled in favor of the developer and city in April 2008 and dismissed the case. The Goldwater Institute appealed the decision and the U.S. Court of Appeals overturned the lower court’s decision late last year.

Klutznick, along with the city, then asked the Arizona Supreme Court to review the matter. The Supreme Court announced Monday that it will indeed hear the case. No date has been set for oral arguments, but they will likely be heard in the fall.

This case apparently is one thing that has put the possible negotiations between the city of Kingman and a different developer on a public/private partnership to build an interchange along Interstate 40 near Kingman Crossing on hold until after the decision of the Supreme Court ruling.

Shame really, since the plaintiff in the CityNorth deal has supported such agreements for actual beneficial infrastructure projects that would enhance the community. Something an interchange would do for Kingman at this time.

While I have the scissors out...

The local guy that called everyone that planned to attend the Tea Party back in April a racist (also known as the editor of the Kingman Daily Loyd... I mean Kingman Daily Miner) wrote a little piece in the Sunday edition worth noting.

Now I don't find myself disagreeing with the column with extreme prejudice (he is not advocating hiding in a shell at least) but there are a couple of differences of opinion here that I wanted to share. So let's make some cuts...

Sunday, May 31, 2009

Wow. The city of Kingman needs a rich uncle to die and leave them everything. He would have to be really rich, though, because the city is completely void of cash to pay for the plethora of capital improvement projects on its "wish list."

At the recent town hall meeting attended by a whole nine residents, Mayor John Salem figuratively scratched his head over the dilemma. He knows that we can't grow responsibly unless we complete some of these projects, but he also knows there's no money in the till to pay for them.

Well it is no surprise that Kingman doesn't have a rich uncle, and no one in the community is hoping that somebody dies and bequeaths enough cash to pull off a few infrastructure projects. However, at this point, if I won Power Ball I'd heavily consider donating 10% of the take to have the Kingman Crossing interchange constructed for once and for all... with one caveat... that the project is renamed after me of course (relax folks... like I'm really going to win Power Ball).

Also interesting to see that the group that refuses to define 'responsible' or even 'irresponsible' (part of their acronym) is now up to nine members. But seriously, kudos to that political action committee for continuing to host the town hall events. Hopefully more folks will attend at future meetings.

As for the dilemma the editor points out of the mayor knowing that the community can't grow 'responsibly' unless some big dollar projects come to fruition but alas faced with no existing money available to pay for the projects... here is a reminder; 1) there is a 168 acre parcel of land with Interstate frontage that is currently owned by the city which by all accounts can be considered an asset to be used to fund a project and/or 2) there is a developer that has been willing to enter a public/private partnership where the developer would front their own funding and build an infrastructure project, at no risk to the Kingman taxpayer for the project, that would almost certainly take care of one glaring need AND want from this community.

Even right now on the front page of the KDMiner there is a little poll that looks like this (at the time I'm writing this post)...

If you could create anything in Kingman, what would you choose?

Please select one:
Art/Culture center -- 8%
Roller rink -- 10%
Water park -- 21%
Shopping mall -- 28%
Movieplex -- 4%
Civic center -- 5%
Other -- 25%

Shocking, Martha, simply shocking.

How many birds might be killed with considering just one stone?? How about 1) getting a new infrastructure project paid for without taxpayer money up front with all the risk, 2) improving the value of a city owned asset by many multipliers, and 3) more shopping venues to placate the 'SHOP HERE!' program currently in place.



Of course there would be a litany of details that would have to be hammered out... but it is just so damn surprising that the city and this media outlet fails to talk further about the possibility, one that would likely increase job opportunities, improve access and public safety, and increase city sales tax dollars.

How many tax dollars are being collected on either the developers property or the city owned property at this very moment?? Seriously... how many??

After voters soundly defeated the city's last attempt to create bonds to pay for some of the projects, the city is skittish on the subject of bonds, especially in this economy. Former RAID (Residents Against Irresponsible Development) president Mike Bihuniak echoed at the meeting what many folks said after the bond failed two years ago. In a clear, concise way, ask voters to fund ONE project at a time. Tell them how much is needed, what you will do with the money, when the project will start and end, and how important the project is to the future of Kingman.

If the project is viable, voters will support it, EVEN IN THIS ECONOMY...

And here I agree with the editor and the reference to Mr. Bihuniak (can you believe it??). I frankly didn't care about the bonds on the 2007 special election as compared to the anti-growth referendums and stupid asset management decisions brought forth by said referendums back then. I since stated many times that I'd likely favor a bond measure that has clear and concise benefits that the community would enjoy. Since the media and political action committees have done their best over the last three or so years to thumb their nose to new investment and development in this community... it may just fall onto the community to pay for any improvements needed (example the increase in the base charge on the water bill). But still... doesn't mean it has to be that way (example earlier in this post).

Raising the sales tax, though, would be stupid, now or whenever. That stifles growth and makes residents angry. How about a gas tax on stations near the highways? Their prices are so high now, no one would notice. How about a tax on people taking their pictures in front of the train at Locomotive Park. I don't know if I've ever NOT seen people there posing when I drive by.

I agree here as well, however not so much on the taxing people in front of Locomotive Park park. More so in the sense of being creative on developing tax revenues. I don't know if there are any quirky legalities with increasing the sales tax rate on fuel purchases made at the 'near the highways' as the editor suggests, but he is obviously alluding to getting more tax dollars from those that are not from the Kingman community, i.e. those passing through... and again, not really a bad idea.

City conscience-keeper Loyd Peterson would like to see more belt tightening by the city, and I'm certain more can be done, but Salem is right when he says there's only so many reductions that can be made before residents cry foul.

City conscience keeper?? More like lead propagandist for the advocacy of hiding in a shell, so please spare us that moniker for the Kingman Daily Loyd.

But again I find myself agreeing with the the one that labels tax demonstrators as racists and the mayor, city services will likely suffer unless more economic development initiatives find success... and soon. Quality of life issues are very important and even if you, say, are against the expenses such as the golf course or the local public transportation service -- taking either away from even the vast minority of residents that partake in the services and the city will have folks up in arms.

The answer is developing more revenue resources... and if Kingman truly was making every effort to do so... they would simply be joining the thousands of other communities competing for the chance to do the very same thing.

Is. Worth. Fighting. For.

I still believe the answer to our money woes is in utilizing our "natural" resources, mainly Route 66. If the city would offer major incentives to transform that small section of the Mother Road, from Beale to the bottom of the hill, into a 1950s-style environment, with drive-ins and putt-putt golf and the ability to turn around at either side for "cruising," people would flock to Kingman from all over the world to "relive" that bygone era.

It's almost like "Field of Dreams," when Kevin Costner's character, Ray Kinsella, builds a baseball field in his cornfield and people come from all over to see it. James Earl Jones as Terence Mann has a good quote that fits here:

"People will come, Ray. They'll come to Iowa (Kingman) for reasons they can't even fathom. They'll turn up your driveway (Route 66) not knowing for sure why they're doing it. They'll arrive at your door as innocent as children, longing for the past. ... The memories will be so thick they'll have to brush them away from their faces. ... Oh, people will come Ray. People will most definitely come."

Okay time for some slight disagreement on this. First of all I don't think Kingman has any former acid dropping owners of corn fields that hear voices in its midst, sadly. Second, Field of Dreams is a made up story that was made into a Hollywood movie. Chances are incredible that if the movie was adopted from a book, you'd find that book in the 'fiction' section of your favorite book store or library.

And even if there was some relevance between the movie and the plight of economic development in Kingman Arizona... there is a huge difference between the fun nostalgia of the 1950's and the American pastime of baseball. The main one is that baseball is still around with popular attention being paid to it and has been for over 100 plus years spanning many generations and will likely continue to be that way long after this current generation has been laid to rest. Dads (and Moms actually) and kids are still to this day 'having a catch' and creating lifelong memories. So it is no surprise that Field of Dreams plays on the heart strings for practically anyone that has shared a bit of catch with their parental unit. Same simply cannot be said for future generations for a stretch of road that is basically by-passed by most these days.

As for the Disney/Pixar animated movie Cars goes (someone is thinking about using that movie in a response right now reading this) well I saw that movie... protagonist wins the race and gets the girl and everyone is happy-happy... like all Disney movies. Kids today growing up loving that movie probably aren't going to be drawn to Kingman in future to check out a road cutting through it. Route 66 was a prop used in the background to tell an all too familiar story.

Our little stretch of 66 has been wasted by the leaders in this town for far too long. Mr. D's and places like it should be up one side of the road and down the other. Neon should be a requirement to build there; the more you plan to have, the more money you save to build. People would come from all over the world to cruise our "Radiator Springs."

I'll take Doc Grahm over Doc Hudson as a better bet to improve the future economic development here in Kingman. Well... no... I won't be that harsh. Though it would still be awesome with a capital A if Kingman landed a minor league baseball team sometime in the distant future.

Actually redeveloping the downtown area of Kingman to this theme isn't all that bad of an idea, I'm just not sure that this alone is the answer to the current economic woes Kingman faces. It would have likely been a better idea 10 or so years ago because that is likely how long it would take from now before all the heads got together, came to some form of agreement on how it would all work out, finding the funding (I'm not voting for that bond measure), planning, and finally carrying out the whole thing.

Face it, the generations of folks that are most attached to Route 66 aren't getting any younger. As a proud member of Generation X I have to admit that the first I heard about the fabled road was in a cover song produced by the 80's mod band Depeche Mode (it is awkward admitting to that). So it isn't all that likely that I would be passing along my affection of the Will Rogers Highway on to the next generation, but don't just take my word for it and I won't speak for the rest of my g-g-g-generation.

The answer to Kingman's financial woes is where one usually finds an answer to a problem. Right there in front of your nose.

Well said editor, well said. Too bad we differ on what is the more likely and viable solution for the economic development fix this town so badly could use. You know... the one you hardly trifle to bother covering.

It's been awhile...

Been away for a bit so I thought that I'd do some catching up. And I think a good place to start is some information on an upcoming Arizona Supreme Court decision on a public/private partnership issue taking place down in the Phoenix area.

More at this link...

The Arizona Supreme Court will consider the CityNorth incentive agreement case on June 1. The court will not actually hear the case that day. Instead, it will decide whether to accept the case for review.

The case could have major implications for cities and developers, who often make deals in which a certain amount of sales-tax collections is rebated to the developer as an incentive to build in that community.

Of course one of the major implications might be on a certain public infrastructure project talked about here in this community for many years now. Yep, talking Kingman Crossing basically. A couple of months back our city leaders indicated that because of this court case that the city and some interested developers would put off continuing discussions towards a public/private partnership to facilitate the development of a proposed traffic interchange in the area of Kingman Crossing.

I've blogged about this here and here for some background.

Earlier this month there was discussion on the ongoing issue that appeared on the Horizon PBS show with attorneys debating the CityNorth 'incentives'. Video below.



For what it is worth I posted an article written by Mr. Gammage on this blog back in September of last year and I have emailed back and forth on the Goldwater Institute's views on public/private partnership agreements for public infrastructure with Mr. Bolick over the last few months. I find both gentlemen extremely interesting and knowledgeable on these subjects.

Now I'm not trying to be an expert on the CityNorth deal or the court case being considered by the Arizona Supreme Court, but frankly I don't see similarities between any proposed public infrastructure improvement here in Kingman via a public/private partnership and the legal issues brought forth by the plaintiffs in the CityNorth ordeal.

If you watched the video above, please click on this link for the Horizon's produced video explaining the CityNorth case with one of the plaintiffs, Arizona State Senator Ken Cheuvront. (I couldn't find a video that could be embedded like the video above for this, sorry). As you watch both videos carefully you will get a better understanding about what the issues are... and really none of them have anything to do with true public infrastructure.

From the transcript from that video (I do suggest you view the entire video though) comes this FROM ONE OF THE PLAINTIFF'S...

Ken Cheuvront:
It is completely a fairness issue. If you are somebody who is competing with a retailer or restaurant in CityNorth and getting a tax advantage and you're not, it's really hard to compete, especially in this market. And to me when the cities are picking the losers and winners, that's just not right. As someone who's invested a lot of my own money in my companies I want to make sure that I have a level playing field, and if my competitor is giving special tax treatment or giveaways, that's going to put me at a disadvantage and probably my income is going to be affected by that.

David Majure: voice over
In the summer have you 2007 the city of Phoenix promised to cover the cost of 3,180 garage parking spaces at CityNorth. That includes 200 park-and-ride spaces for long-term use by the public free of charge. Phoenix agreed to make annual payments equal to half the amount of sales taxes it collects from stores at CityNorth. The payments would stop after 11 years or $97.4 million, whichever comes first. The city would start making those payments only after 1.2 million square feet of retail space is open for business. But that agreement is on hold. The Goldwater institute filed a lawsuit claiming it violates Arizona's constitution. Senator Ken Cheuvront signed on as a plaintiff. He says tax incentives make sense in some cases but not for retail development.

Ken Cheuvront:
If it is for the infrastructure, for building the roads, the sewers, you know, public amenities that would be built anyway, and going to be reimbursed for that, yes, I think that there is room for that. But if it's just to help that one business get a leg up at the expense of other businesses, no. I think that's unfair and it really is against the Arizona constitution.

Emphasis mine above.

I do hope that folks begin to see the difference as to what is being challenged and how it isn't even the same thing that has been only talked about here in our community.

The city of Phoenix promised the developer that it would pay the retail developer for the parking structure that would likely serve to benefit the developer more so than the public (that is the gist of the legal action the way I'm reading and following along). I'll leave that decision to the Supreme Court.

It is NOT the same as a new traffic interchange that offers the public here in Kingman greater convenience, safety, and perhaps increased economic opportunities that would directly benefit the community. The sort of thing that one of the plaintiff's in the CityNorth case alludes to as something there is room for.

Based on the very few facts that exist in the very loosely proposed public/private partnership attempt for a solution at Kingman Crossing the developer is not asking for an 'incentive' that would tilt the playing field for any other business. They would be asking for a 'reimbursement' for the the funding of a very public infrastructure project. That is it, there is nothing else on the table at this point (nothing official by all accounts).

It is time to start having this discussion again in this community... this time WITH the facts not the scare tactics of 'out of control' development or 'slaughterhouse' rhetoric. The city leaders insist that there is a need to emphasize economic development here in Kingman... and this issue has been staring at them for a long time. Time to do something about it.

Was it worth the risk??

The risk I'm talking about was relying on the tax payers of Arizona to fund and develop a traffic interchange along Interstate 40 here in Kingman near what is popularly described as Rattlesnake Wash.

I have to admit that I haven't seen any solid reports delivered by any local media outlets (this blog is not an official media site), so all I'm going on is an eyewitness account of the mayor announcing that Rattlesnake Wash was pulled off the ADOT 5 year plan (scroll to the bottom of that link).

If the eyewitness account is true (and I have no reason to believe it is not), then this news is really bad news... but news that was not all that unexpected. For the last year or so all the reports out of the state government was that there is a budget crisis and the state basically has no money (to spend in Mohave County for primarily Mohave County citizens to be more accurate). The federal government promises money in the form of a stimulus package that is given to the state government, and the state government applies that money to projects in the Phoenix area. Really, are you shocked??

I have been supporting both this proposed interchange and another one referred to as Kingman Crossing since I first heard of them (many years now). Both projects would mean opportunity for our community. Both now are severly threatened by all kinds of forces, espeically economic forces.

I ask if it was worth the risk to rely on the state taxpayer because if the news is correct, now there won't be an interchange in 2014 (or thereabouts) that will connect the Interstate to the airport area, or even connect the southeast bench area to an almost finished hospital that is in clear eye shot of the residents that live on that side of town. This was THE project that had the promise of better than retail paying jobs. It was also the project that would have led to more truck stops being built (if that is your bag, baby).

So now what?? Well first, I hope and pray that the reports are false or that someone at ADOT was simply having a bad hair day and today or tomorrow come out to fess up and say 'my bad'.

The state taxpayers just told us 'NO'. Our local risk was relying on the state taxpayer to pick up 70% of the Rattlesnake Wash project. Highly doubtful that the Kingman taxpayer will step in to pick up that portion, and frankly I wasn't too confident that they would pick up the other 30% portion either.

Meanwhile there has been this other deal in the works for some time. A deal that if negotiated correctly would put the onus of risk and financing on some other entity other than the tax payer of Kingman, Mohave County, or Arizona. And that would only be one way to make that project move forward. Another idea all along has been to sell the property on the south side of I40 (the 168 acres that the city of Kingman owns) to a private property owner and use the funds to help pay for projects that will bring growth opportunities, no doubt jobs, and many other benefits to the community.

Kingman and the powers that be have whiffed badly so far on opportunities that would have not saddled the city or its community residents with that much risk. Will it turn around?? Well I think the count is no balls and two strikes at this point. But as any good hitter knows, there is still a chance to hit a home run.

notable quotable..

Well smack my ass and call me Charlie... the Kingman Daily Miner did a brief write up, including quotes, on the subject of Kingman Crossing. I had to look out the window to see if pigs were flying (none visible).

Shares from this article...

"As HMMC grows and attracts more patients, however, we foresee the local community wanting even faster access by means of an I-40 interchange," Scholer said.

"Appropriate infrastructure growth is surely going to depend on the creation of not just one, but two additional interchanges - one at Kingman Crossing and another at Rattlesnake Wash. From the point of view of optimal access to health care, we believe the community would certainly be well served by the Kingman Crossing interchange.

"The community will also need an infrastructure that grows with it, and that includes access on and off of I-40," (Hualapai Mountain Medical Center President Duane) Scholer said.

I can almost hear the no-growthers now... I remember some crowing that the new hospital stating it didn't need an interchange. Well I guess it is too late for a referendum, dang it. The hospital doesn't need an interchange... but potential patients in need of emergency services might beg to differ.

Optimal access to health care... has a great ring to it.

Of course the reader comments are already laying the propaganda groundwork with cries of 'no tax exemption' and 'driveway to nowhere'... well if you are in need of emergency services of a hospital in that area, that 'driveway to nowhere' is actually a very important somewhere.

Yet for all the coming hand-wringing... none can argue on any factual basis on how a possible new interchange in the Kingman Crossing area might come to pass. Nothing is on the table in the form of negotiations or solutions (pigs might actually fly by the time any of that A) happens and B) gets reported on by the local daily).

There was also this from the article...

On Feb. 9, the city met with Vanderbilt and Vestar for the first of several negotiations concerning a tax reimbursement agreement for Kingman Crossing.

The two groups haven't met since, and no other meetings are scheduled, Mayor John Salem wrote in an e-mail.

Cool of the Miner to finally getting around to reporting on a meeting held over a month ago [sarcasm off/].

Heh...

Hey folks... it's me, your humble spin Meister and propaganda minister here.

It seems that my little post from yesterday motivated a couple of folks at the Miner's website to start tossing out labels and hilarious allegations at my direction. No problem though, I enjoyed the laugh.

I responded to one comment post that appeared on the mayors blog site at the KDMiner.com which I'll link to again here.

But I thought it would be fun to respond to the other post here on my site. It comes from KDMiner blogger and all around good guy Loyd. It starts like this...

It seems to me that a P&Z commissioner is supposed to be dispassionate and fair and open-mined.

And if Loyd had been on the City Council he would have assuredly voted against me when my name was motioned and seconded for appointment to the commission. Instead of being appointed by a vote of 6-1 in favor, I would have been appointed by a vote of 5-2. I'll say this again, there is no one in this community more surprised by my appointment to the P&Z commission than me. I am still very honored and humbled. I willingly serve on the commission at the pleasure of the elected leaders and will do so as long as they have me. It is their gig, not mine.

Loyd, I apologize to you for having the passion I do on the rights property owners are afforded, I'm never dispassionate in those terms. As far as 'fair and open-minded' is concerned... that's very subjective and probably the main reason why the panel of commissioners is made up of seven members and not left in the hands of a planning and zoning czar.

Todd Tarson, newly appointed with the strong support of Mayor Salem, seems to be a willing go-between carrying water and PR clips for out-of-town developers.

Loyd is correct here. I was willing to copy and paste the comment from the project manager that works for the developer. I even went so far as to make the offer to do so. It is not my quote, I do not own it. If you, Loyd, or anyone else has a problem with it... fine by me. Like you and most all others that live in Kingman, save for two elected office holders and some paid city officials, I was not at the meeting so I have no idea what the hell went on there.

If Vice-Mayor Watson, Council Member Lyons, the attorney that the city hired to help with possible negotiations, or the other city officials want to send me, via email, their interpretations of the meeting held on February 9th in Phoenix that they attended... I'll gladly post them here on my blog.

Of course I wouldn't have to make this offer, or even would have had to post the email from the developer, if the media in Kingman -- namely the Miner -- could have somehow found the time to get a few quotes from the parties that attended the meeting. Like it or not... the issues involving Kingman Crossing are a big deal in this community. Getting some progress updates from time to time would be nice.

Tarson is totally unabashed in his vocal support for anything goes wind turbine issues.

Loyd I'm not surprised that you see it this way and really I don't care. Most rational people that may have been following along now with my writing on this subject (all 40 of you, thanks) know that I view this as a property rights issue. Wind turbines are not a self interest for me, I don't want one on my property.

Again, as a commissioner on the planning and zoning panel, I am one of seven (yet of the two agenda items put in front of that panel since I joined, both were approved unanimously... go figure).

And, when it comes to any type of development issues – well – "Yes", "Yes", "Yes" will be the championed cry.

Any type of development Loyd?? I've already voted to deny a developers request to change zoning in their favor... but facts, often times for you, seem to be irrelevant.

However, here is where your comment is correct. Does the proposed development issue lead to additional jobs in the community?? "Yes" will be the championed cry. Will the proposed development issue lead to improved community services and quality of life?? "Yes" will be the championed cry. Will the proposed development issue lead to more investment into our community?? Once again "Yes" will be the championed cry.

Yet no matter what, as a commissioner on the panel, I will only be one of seven and if I'm actually this extremist you're attempting to make me out to be... my vote will be in the clear minority.

But, I guess a "groomed" commission, as a former city manager once described, is what a "Pro-Growth" Mayor would want in place for moving big development agendas forward.

Chance are very good that Loyd voted for this 'Pro-Growth' mayor he speaks of. Also, it seems to me that Loyd has issues with 'Pro-Growth' agenda items... but don't you dare label him non growth friendly.

As far as any 'grooming' is concerned, the only contacts that I have received from the city are the ones that remind me of either the ride-a-round inspection the Thursday before the P&Z meeting or for the actual P&Z meeting.

Tarson seems more than willing to "grease the skids".

Before responding to this one I googled 'grease the skids'.

From here...

1. grease the skids

get things started, to warm up; to get the ball rolling; to not get caught with your pants down

Jon wanted to grease the skids by sending out an email in advance of the meeting

Also from here...

Idiom Definitions for 'Grease the skids'
If you grease the skids, you facilitate something

Heh. Guilty as charged then. I love facilitating open discussion on future development of the community.

Comment/update on Kingman Crossing...

Last week the community was alerted to a meeting that took place in Phoenix between the landowners/developers of Kingman Crossing and the City of Kingman officials.

I wrote about that here at this link.

I thought at some point last week the media would cover some details of the meetings, but nothing (of course) has appeared.

Out of the blue, I was contacted by the project manager of the Kingman Crossing development last week. We had a brief discussion brought on by the blog post I wrote. I asked the Vestar project manager, Ryan Desmond, if he wouldn't mind putting something in an email and I'd post it here.

Here it is...

Vestar and Vanderbilt remain committed to Kingman Crossing. We continue to believe in the need for additional retail options in the City of Kingman and the region as a whole and feel strongly that Kingman Crossing affords the best opportunity to make that a reality. After a meeting with city officials last week to begin discussions on a possible public/private partnership and funding mechanism for the future freeway interchange, the city’s attorney suggested that in light of some current litigation between another developer and the City of Phoenix that is working its way through the courts, it would be prudent for all parties to wait until the matter is settled before entering into any agreement between Kingman and Vestar and/or Vanderbilt. We understand these concerns and agree with the approach. Despite the unfortunate delay, our enthusiasm for the project remains as strong today as it did when we first began our initial discussions with the city. Once the Phoenix litigation is settled, we look forward to continuing our conversations and moving forward with Kingman Crossing.

Ryan Desmond
Vestar Development Co.

While the KDMiner decided that this meeting wasn't news worth covering, the mayor of Kingman did write up some of the happenings on his blog at the Miner. Here is the link to that blog post.

Like sands through the hour-glass...

In the seemingly never ending story of the future of Kingman Crossing, new developments have surfaced. While so far there hasn't been anything reported on by the KDMiner.com online (and I haven't seen the Standard or heard any radio reports), apparently the landowners and developers at Kingman Crossing are backing away from any discussions on public/private partnerships that may have led to future development at this time.

I did get an email a couple of days ago that gave me the heads up about a meeting between the private parties and the city where the city was informed that for now, talks are off.

Also, there is a mention of the meeting found in the online comments that appear at the bottom of this link to an opinion letter to the editor. The author of the comment seems to be the mayor of Kingman and for the most part I believe it is the mayor that left the comment, but in this world of online comments where anyone can be anyone else they want to be... there is at least a tiny bit of doubt if it actually is the mayor that left the comment.

Here is the comment from that link...

Posted: Wednesday, February 11, 2009
Article comment by: John Salem

The KC Interchange is on hold. A meeting was held in Phoenix with Vanderbilt and Vestar. There is a pending lawsuit between another developer and the City of Phoenix with respect to an off-site improvement and who is responsible for payment. This lawsuit will set precedent. Because of this, Vanderbilt and Vestar are backing out of negotiations for at least 6 months. I feel this is a shame because I have been and will be such a proponent for KC. Mayor.

Again, for the most part I accept that this comment was from the mayor. There will most likely be an article published on the Miner's website about this very newsworthy event and I won't be surprised if the mayor is quoted to say something very similar to the above.

So... is this it?? Is this chapter finally over?? Will there be commercial retail development and a new interchange at Kingman Crossing??

Well, if you are of the opinion that this particular infrastructure project would be a benefit to the community at large there is another alternative (there always is).

At the call to the public of the city council meeting on January 20th, long time local real estate broker David Hollingsworth shared a possible alternative with the members of council. Click on this link to see the presentation he made at that council meeting. You'll find it in the early part of the meeting.

It is unclear to me where this possibility will go. I'm hopeful that the city leaders will give this some serious consideration. A simple exchange of property for cash could lead to two infrastructure projects for the price of practically nothing (you really need to watch the video). Practically nothing meaning no increased taxes or bonds on the backs of community taxpayers if the numbers work out.

Worth looking into?? Certainly.

'Shop Here!'

The city of Kingman includes a 'news and notes' document along with the monthly water bill. Actually, I'm not sure if the newsletter comes with every water bill or not, I rarely notice it if it does.

This month though for some unknown reason I gave it a glance. I noticed the ongoing promotion of the 'Shop Here!' program that came about heading into the holiday season last year. Now, I'm not a proponent or an opponent of what the city is doing with this. I fulfill my shopping needs locally as best as I can and for the most part I get by just fine. There are occasions though where the shopping experience in Kingman is lacking so I'll head out of the area to spend a few hours in another community that offers more. So in essence the 'Shop Here!' program neither compels me any more or any less based on my wants and/or needs. I suspect that is true for most.

This months newsletter has many program points included on the 'Shop Here!' promotion and there is more than a few blog posts that I could start a discussion on, but for now I'm only going to take on one. I may revisit the newsletter for more later on.

Here is the one I that caught my eye today...

Local retail adds $6M in sales tax revenue to the City budget. If Kingman has a 30% yearly leakage in sales, the City loses $2M in revenue and local businesses lose $200M in sales. That same lost revenue could be allocated to projects like Kingman Crossing and more retail.

I'm sure you can see why this captured my interest.

One could research the actual budget and revenue figures all day if they'd like to present a more accurate view of reality, however I'm just going to use the above program point.

First off the above identifies the problem or concern about sales leakage, the lost $2 million dollars. I can buy the 30% leakage factor in my own case, it is about right. I probably spend 30% of my shopping dollars in other communities. So a problem is identified and a goal is established to close that leakage gap, perhaps to use funds for future projects or simply to maintain city services. The program point speaks directly to adding more retail as a way to close the gap. Using Kingman Crossing though twists the logic to some degree, but the above is merely a sound byte... a talking point... a program point.

But...

Since Kingman Crossing was brought up, lets use that to see if there is a solution to close that gap of $2 million dollars in lost revenue due to leakage.

So what do we know about this Kingman Crossing thingy anyway?? First we do know that landowners and developers have desired to improve the infrastructure along the Interstate by having an interchange built that would allow for easy access to and from the land via the Interstate in order to attract retail and other business interests. We know that in 2005 a proposal was made to the city that had a series of developers paying for the infrastructure needed to accomplish the easy access aspect, but this proposal never made it anywhere.

After the city rejected the proposal made in 2005, the private land on the north side of the Interstate in the area was sold to different party that also had plans to develop a commercial retail area (retail?? you mean a potential for additional sales tax receipts?? Hmmm...). The new (and still current) landowners and developers also wanted easy access to traffic flows on the Interstate but haven't said that they would pay for the infrastructure needed for that easy access stuff.

However, they did make some intimations that they might be willing to enter into a public/private partnership with the city as a possible solution to the infrastructure need, but to my knowledge no details were ever given or debated to the possible solution.

And that folks, is all we know as it stands at the moment. Sure we could delve into other things that muddy up the waters, the politics involved here might make a decent book (or a comedy routine)... but I'll save all that for another time. So let's get back to the issue at hand... the leakage and lost revenues. To do that though, we have to make some assumptions from this point out.

It is no secret, I am intrigued by the concept of public/private partnerships as I think they offer fair solutions to communities all over the world (they are being used all over the world). In this case the current landowners and developers have made a series of these partnerships with communities right here in the state of Arizona. In the last year I have spoken with city officials and residents of communities where such agreements have recently been made. Based on those conversations I feel I can play out a scenario to see if it could combat the issue of leakage and lost revenue.

In my view, a successful public/private partnership means shifting a great deal of risk onto the private side of the agreement. How much risk is determined by the final agreement, but it needs to be at least half the risk (IMO) and certainly could be more. For an example concerning risk, if the citizens of Kingman had to fund an infrastructure project 100% via a bond or a tax increase then the citizens would be on the hook for the entire cost and risk. In this current economy that would be a stupid decision, and one I would not support as it leaves all of us with ALL of the risk.

From here on out I'll refer to the term public/private partnership as a PPP.

Based on other PPP's this is how the concept could work in Kingman.

First, the private party agrees to fully fund the infrastructure project, in this case we are talking about an interchange offering access to and from the Interstate as well as an alternative crossing from one side of Kingman to the other. There have been many different dollar amounts attributed to this infrastructure project in the past, for this example I will use a round about number of $30 million dollars.

While the private party seems to be nice enough to front the cost, they aren't buying everyone a free lunch... they will want that money back. So how might that happen??

Like other PPP's, the private party is willing to take repayment in installments... okay but at this point the risk is still on the citizens of Kingman. So how do we shift the risk??

Well the city simply agrees to make annual payment to the private party out of a portion of the sales tax dollars that are generated at their development. For this we'll just use a 50-50 split of those sales tax receipts. Okay, the risk has started to shift but has it gone far enough?? Probably not.

So now the city and the private party agree that these installment payments, from the sale tax receipts generated at their development, will only happen for a certain period of time. For this we'll use a term of 20 years. So is this enough risk?? Well, lets take a look at the numbers.

The infrastructure project costs $30 million dollars and now the developer has 20 years to recoup that outlay of funds. So if we divide the $30 million dollars by 20 installments, it would mean that they must generate $1.5 million dollars a year in installment payments. I'd say yes, the risk is more on their side now than it would be on the citizen of Kingman.

Let's also not forget one other thing... if the developer is recouping 50% of the tax dollars generated at the development, it means the city is also putting $1.5 million dollars in the treasury every year. Clearly closing the gap caused by leakage. (at this moment, zero dollars are being contributed to the treasury from that property)

Shop local you say??

Clearly this sort of PPP is a performance risk squarely on the developer. No citizen of Kingman is compelled to risk any of his or her dollars towards the project, ever. Surely there won't be a law that forces anyone to actually shop at the development and therefore generate sales tax dollars. If the developer can't appease your shopping tastes (or entertainment and maybe dining pleasures that require exchange of fundage), then you won't be a patron at the development... yet you still could use the Interstate access or even just get from one side of town to the other on the infrastructure they built at no charge.

There are other possible benefits I haven't touched on either. On the south side of the Interstate directly across from this proposed commercial development is 168 acres of land. The interchange would increase the value of that land... cool for the owners of that land. Just who owns that asset anyway?? Oh yeah, the City of Kingman. Just south of city owned parcel sits a section of land owned by the state of Arizona that has yet to be developed. My guess is that land would also end up with a higher value than the value it has currently. The future sale of that land would help fund education in the state.

I realize the above scenario that I've painted is just one persons view, but it was based on information shared with me by online resources and conversations with citizens and elected officials in other communities that have entered PPP's with developers. I also realize that what I shared was a rather simple example.

There will be a gazillion details likely to hammer out to reach an agreement that could offer the basic fundamentals of this sort of PPP. That is what lawyers are for, and elected officials, and without a doubt -- public input.

A PPP similar to the scenario I outlined was even approved by voters in an election, so yes the public must play a vital role.

And yes, there is always the politics to be worked out but I'm only a 'wannabe' politician so I'll leave it to the pro's. There obviously could be other competing solutions that appear that may even offer the community something better while addressing the need to 'Shop Here!'. I'm all ears and not playing favorites. Whoever can get it done without sticking it to the citizens of Kingman is good in my book.

Reading this newsletter that came along with my water bill, the city is telling me they have a concern with me spending money outside the cozy confines of the city limits. That city services could be threatened and maybe even the quality of life offered by Kingman. I don't want that so I'll do the best I can... and while I make some adjustments I hope the city does all it can to find a solution to the problem they face. The leakage is NOT my problem. City revenues based on sales tax receipts is NOT my problem. The fact that I have always seen another person from Kingman when shopping at the Target in Bullhead City is NOT my problem.

I'll loosely paraphrase the following and substitute characters from a favorite movie of mine...

Todd: I told my wife I wouldn't drink tonight. Besides, I got a big day tomorrow. You guys have a great time.

Kingman City Council Member: A big day? Doing what?

Todd: Well, um, actually a pretty nice little Saturday, we're going to go to Lowe's in Bullhead City. Yeah, buy some wallpaper, maybe get some flooring, stuff like that. Unfortunately we didn't like what Home Depot in Kingman had to choose from. Then Maybe Bed, Bath, & Beyond, Sam's Club, and Target, I don't know, I don't know if we'll have enough time.

If I knew that within a couple of years that it could be possible to pull this off above right here in Kingman... I might delay that wallpaper and flooring purchase.

For today though, at least I paid my water bill.

I heart traffic interchange discussions

While I was away attending to other things on my schedule, I noticed a lengthy letter to the editor at the KDMiner.com website. The subject is a favorite of mine and I thought that I'd examine the letter here and make a few comments as needed.

Find the letter in its entirety here.

First I want to say that I'm merely commenting on some things to perhaps add more things to the discussion. I won't be 'fisking' in harsh disagreement. I think it is better to simply have more discussion than it is to dig in and take sides until the public has been exposed to as many facts as possible.

The subject is on future infrastructure, namely traffic interchanges proposed along Interstate 40 in Kingman. The author of the letter is making it known that he sides with the future plan for the Rattlesnake Wash project and is against the other proposed project known as Kingman Crossing.

The first part of the letter details his observation of the current condition of the two possible locations of the projects. One project is in the midst of existing residential areas and the other is out where there is no development at this time for the most part.

So I'll skip ahead to the discussion of costs for each project.

Then there's the cost of the projects.

Rattlesnake Wash has a price tag to the city of $12 million. ADOT is picking up the other 70 percent of the cost. This is called Phase I and includes the interchange and arterial roadways from Louise to the airport. Phase II has a price tag of $12 million which connects Louise to Hualapai Mountain Road with no ADOT participation. So now, the city has a completed project for $24 million. But wait. I looked on the map, and with the completed Rattlesnake Wash traffic interchange and connection to Grace Neil Parkway, we have roadway that goes from Hualapai Mountain Road on the south to Stockton Hill Road on the north/west near the college. Talk about access! Wow!

I'll also add to this that Mohave County has offered up $2,000,000 to phase I of the project according to this link. I also look forward to the completion of the Grace Neil Parkway and the eventual connection to the Rattlesnake Wash project as I think it will allow for more convenience as the area develops in the future. The Rattlesnake Wash project is very important and hopefully solutions for local funding will be revealed in a timely manner to not give ADOT, which is under the budget microscope from Arizona legislators, any excuse to remove the project from their plans.

One thing that is left out though is the fact that ADOT won't even be taking bids for construction until after the next presidential election. This project is many years away from possible completion as it is structured at this moment. It would be a mighty long time before the community sees any benefit from the new infrastructure, although I remember attending an ADOT public meeting where it was said that the project could move forward sooner if it was funded by a private source... with reimbursement at a later time on ADOT's schedule.

On the other hand, Kingman Crossing would cost the city $24 million just for the interchange with no arterials. But the cost doesn't end there. Vanderbilt and Vestar said they'd front the cost of Kingman Crossing and charge the cost back to the city.

A local citizen estimated the real cost of Kingman Crossing to be closer to $50 million with the interest paid to the developers.

At best this is speculation and the public has not seen any proposals to draw any conclusions. We do not know how much risk the developers are willing to take on in any agreements, so there is nothing to chew on to make any kind of decision. We do know about other public/private partnership agreements that have been made with this developer and other municipalities or governing bodies, but we don't know what is being considered as it may apply in Kingman. Hopefully we will start to hear about the possibilities in the near future. That way an honest debate will be able to take place.

I can't find a way to take the estimate from an unnamed 'local citizen' source as anything worth considering at this time, your mileage may vary. Local citizens are free to say anything they want, I'm looking for citizens that have some information to back them up for their 'estimates'.

But here's where things are going. The hospital doesn't need Kingman Crossing traffic interchange to operate. I know this because I asked them directly.

Correct me if I'm wrong, hospitals are one sort of business where the patrons are sometimes 'dying' to get in, so to speak. While the hospital may not need an interchange for its implementation of a successful business plan, there may be more than a few 'customers' that might find the convenience of a connecting interchange from one side of town to the other rather important. I don't think it matters much even if lives aren't on the line, a person with a broken hip or arm would probably choose less time in route to an emergency room 99.99999% of the time... but that is just my guess.

The only ones who need this are V&V for their shopping mall project. It seems to me this is a cost of doing business, and the cost should be born by the developers and not the citizens of Kingman. I've heard the developer say the interchange benefits the city. I think it benefits their project.

I agree that the developers would want and probably actually need Interstate access to improve their future development. Interstate frontage without access is not worth nearly the same value as Interstate frontage with access to them and possible future tenants.

However, I do believe that the developers are right in saying the interchange would benefit the city. Currently the city is promoting a 'shop local' program as a way to ensure that they collect every sales tax dollar possible... as it is the main source of revenue the city generates. With Interstate access, the developer would likely have a greater opportunity to attract the kind of shopping interests that many in Kingman are hoping for so that many shoppers aren't faced with a choice of perhaps going out of town to spend... plus perhaps tens of thousands of more sales tax opportunities from people passing through on the Interstate.

Again, the city is doing its 'shop local' promotion now in the immediate time frame and I'll guess that they weren't looking forward in doing so with the same urgency for another six years or more (the time it will likely take to complete the Rattlesnake Wash project and develop possible commercial property that can generate sales tax dollars).

I predict that if the developers get their way and get a commitment from the city for the interchange, the property will go up for sale and the city will be making payments for a traffic interchange to nowhere.

Again, the public has yet to see any proposal drawn up between the city and the developers. From what I know about possible public/private partnerships and how they might work is... the developer FRONTS the money for the infrastructure taking on some dollar amount in risk. The city negotiates the repayment of the money out of funds generated by the commercial development.

So let's stop right there. Let's say that the developers spend millions to build the interchange, if the prediction goes as the writer says and the developer instead sells the property and no money is being generated on the property, the developer is not getting paid back. It would be a monumentally stupid business decision to make that kind of agreement on the part of the developer.

None of it matters at this point anyway as there is nothing on paper worth even debating in regards to any partnership considered.

V&V have already cancelled some of their development plans at other locations, to date, and that's understandable with the current economy the nation is facing. Rattlesnake Wash traffic interchange makes a whole lot more sense than Kingman Crossing traffic interchange. I'd rather partner with ADOT than a private entity, but that's just me.

The writer would rather partner with a government entity that may not have funds for future projects more than four years out... this is how I interpreted the comment. No matter though as both projects are different and ADOT is not even considering the use of taxpayer dollars for Kingman Crossing. Basically a moot point is being made.

I think it is easy to forget that ADOT uses Arizona taxpayer money for projects, ADOT is not some philanthropic entity just handing out huge wads of dough. It is possible that legislators, elected by taxpayers (the bulk of them NOT in Mohave County), could demand to change some plans... there are no guarantees. Public money is... well... very tight these days.

Again, I support both projects and hope they come to fruition as I feel both will benefit the local community for decades to come.

With some help from the property owners in the Rattlesnake Wash project, the cost to the city will undoubtedly be less. I know one of the owners involved said he'd pave the roadways if the city graded the way. That's got to be a savings.

Details though... what are the details??

Yes, there is a development agreement on already on record at the city complex that speaks to this. However there is another component to the existing agreement that would trigger the landowners to come up with the money for the paving. I'll venture a guess that if the economy is in the very same sorry shape it is in today (and there certainly are plenty of nay-sayers around here that speak to many years of gloom and doom ahead), and even with a completed Phase I of Rattlesnake Wash project completed many years down the road, the trigger may not be pulled to help with the Phase II part of the project (would have to be understandably cost effective for the private party of the agreement). Unless Kingman finds its growth 'legs' again, I don't see how Phase II of the overall project happens before the year 2020 (and I hope I'm VERY wrong about that).

The other owners will see an increase in their property values, so their investments will come back to them in the long run. This city has the wherewithal and talent to complete our own projects. It creates local jobs and keeps the money in Kingman.

I have to be honest and say that I'm not following this logic. Not a shot against the writer (it is probably the reader), but how is this 'our own project' when 70% of the funds and the final decision to move forward comes from a state government agency??

Another way to help finance the Rattlesnake Wash project is to take Kingman Crossing traffic interchange off the Capital Improvements Projects list.

The CIP is merely a wish list, if there is no money for any project... removing one from the wish list won't magically make funds appear for another. At this point in time these projects are not competing with each other for city funding.

The city is actively looking ways to come up with funds for Rattlesnake Wash as they have real time lines to make with ADOT (a lot sooner than those bids for construction go out in 2013). It may come down to perhaps looking for a voter supported bond measure to get those funds (purely a guess).

For Kingman Crossing, the only thing I'm aware of that the city (at the request of the developer and landowner) is examining the potential of some sort of a public/private partnership funding mechanism, the details of which probably aren't even on paper yet... not even for a first draft. There may yet be other possible solutions that ultimately do not put the risk on the local taxpayer, but NOTHING has even got close to the point to make such a determination.

I suppose this is why I follow these issues so closely. It seems that the critics of Kingman Crossing simply do not want to see the project ever happen... no matter what -- for whatever reason. Sure, they'll use some comments along the way that point to something about finance but they aren't making a determination based on any sort of fact. The facts have yet to reveal themselves. As much as I'd like to see an interchange be built at Kingman Crossing, I haven't made up my mind as whether to support a funding mechanism... ANY funding mechanism... because NONE EXIST. It is difficult to make a determination without facts, and thus far the critics of Kingman Crossing haven't presented ANY.

Think I'm crazy?? Here are some more reasons this person is against Kingman Crossing...

The voters approved Rattlesnake Wash but not Kingman Crossing.

This is incorrect, but instead of harping on this I'll offer a challenge to anyone who wants to take me up on it. When was Rattlesnake Wash approved by voters?? I know the answer I'll get will be the mention of the General Plan 2020. So those who wish to answer in this manner need to reference the page where I might find exactly where this was approved by voters via this link to the General Plan. It is true that there is no mention for funding an improvement plan on the Kingman Area Transit Study (part of the GP) for Kingman Crossing... it is also true that there isn't one for Rattlesnake Wash either. There's a huge list of projects on the implementation of the recommended plan but no mentioned of either future project. My conclusion is that the voters did not approve the Rattlesnake Wash project.

Kingman Crossing traffic interchange was slipped in six months after the General Plan 2020 was voted in, as a minor change to the General Plan. A look back on the records will show who submitted the amendment. I guess I just don't like things forced on me. When we vote, regardless of the outcome, it is the will of the people. It doesn't matter if we agree or disagree on the topic; the fact is it went through a legal process. Not that the amendment didn't go through a legal process, but it involved only a handful of city personnel and usually little to no public input or respect of the public wishes.

Not really shocked that this went to the General Plan discussion (see previous comment).

First of all, nothing is or was forced on anyone. As we saw not even a short couple of years ago, the voter can have the final say on amendments proposed to the General Plan. Short of that though for a major amendment to the General Plan there are many public meetings held for debate and input, a commission panel decision (made up of citizens), and a vote of two-thirds of the voter elected city council before any approval is granted to change the General Plan (even then it is subject to referendum).

The General Plan was approved by the voters, this is true. We shouldn't forget though that nowhere in the General Plan is there anything to do with moving forward on public funding for municipal projects. It is a plan and that is it. It is NOT authority to spend taxpayer money.

I believe if Kingman Crossing had been put on the ballot, it would have failed.

Perhaps. And perhaps it will one day make it to a ballot for consideration by the voters. Up to this very moment in time, Kingman Crossing has never been on the ballot (and neither has Rattlesnake Wash).

I feel compelled to say again that I am not taking issue with the person that wrote the letter to the editor. I fully support his premise of the benefits the eventual completion of the Rattlesnake Wash project would offer the community. I look forward to the day when it might be possible to utilize the infrastructure.

But I also see possibilities for another infrastructure project that I believe will have many of the same kinds of benefits for the community. Benefits that may be derived before the year 2013 when the Rattlesnake Wash project goes out to bid for construction (and as long as ADOT is still playing sugar daddy).

Of course it will depend on what kinds of burdens would be placed on the community to afford such an infrastructure upgrade. The city must be careful not to put itself out to too much risk, and certainly not take on every ounce of the risk that could be involved in such a high dollar commitment. Any financing plan would have to be clear and understandable with obvious community advantages before a big dummy like me would support it.

Lastly, I love this sort of discussion and hope that more and more folks will join in and help it continue. Would love to see more articles about these issues in the local media as well. Hopefully it will be more than possible to disagree -- agreeably -- if we so choose along the path of any eventual decision.

Also, there is a town-hall type of meeting on the subject of the Rattlesnake Wash project. It will be held at the library on Tuesday night at 6:00pm according to a speaker at the last city council meeting.

More this in 2009...

From this article in Sunday's Miner...

Interchange work continues

And while much of it remains behind the scenes, (Mayor John) Salem maintained that work is continuing on both the Kingman Crossing and Rattlesnake Wash traffic interchanges.

"We're moving forward with Kingman Crossing," he said. "We have found an attorney to represent the city with a proposed development agreement and fiscal impact analysis on the proposed development."

I'm hoping for weekly updates this year... I'll settle for monthly.

It's the end of the year and we know it...

Yep... that time again to get all cliche and wonder where all the time went and proclaim how things will change in the New Year.

So lets get this out of the way, shall we??

For me, Todd Tarson, 2008 was the year of living dangerously. New experiences led to new educational opportunity. In 2008 I ran for public office and remained in the real estate industry... danger-danger.

Before I cover the boring political stuff, lets move to the exciting real estate stuff. A look at the market over the past year.

In the first monthly sales report of the year, I reported that the average price per square foot of living space sold was $116 per. Earlier this month, the listings report showed the new sellers asking for an average price per square foot lower than the sales price per at the beginning of the year. While it wasn't the first time this year it happened (August sellers asked $109, and in September sellers asked $116), sellers simply took way too long to respond to the market.

Now that homes in the Kingman area are averaging $91 a square foot when sold, will sellers catch on quicker next year?? I'll keep an eye on it.

The resulting affects of this lack of understanding of the market, sellers were not able to sell their property even though there are more properties for sale now than at anytime in the boom years.


If buyers and sellers figure out each other in the New Year we will see the bottom of the market. For buyers... please check out the bank owned property to establish the low price you would pay for a home. From there you should expect to pay a higher premium for a nice marketable resale owned by a real person (not a bank).

For sellers... please talk to a real estate professional or two (or three) and ask them to mine the data of SOLD properties and separate the bank owned from the human owned. Take a good long hard look at comparable properties and price accordingly. The market has proved itself to be right each day, month, and year. You simply cannot beat the market. Waiting for just the right buyer to like your listing at your price (not the market price) is simply folly. It will cost you more money in the long run.

If you've read reports here at MOCO for any length of time, you know that I can pull data to customize it to your property. Give me a chance to give you a figure that your home will sell for... if you don't like that price... you don't have to hire me.

I'll have more on the real estate market in the coming days. The listings report for December will be out tomorrow and then the sales report later in the next couple of weeks. Also look for the annual report in January.

Care to make any guesses at the percentage point drop in average and median price in 2008 compared to 2007?? Leave your guess in the comments or email them to me. Winner gets a prize (to be determined, but it won't be expensive).

Alright, lets do some political stuff...

All in all, 2008 was not as politically charged as the year before. Yeah, even though there were a few elections of note, at least locally the rancor was limited.

2008, living dangerously, me... that would be my choice to run for city council. I would like to thank all the folks (just over 800 of you) that voted for me in the primary election, also would like to thank the other 8 candidates for a very respectful campaign, for one last time this year. It was the kind of experience and education that you simply can't purchase.

I realized that more activism is needed on an ongoing basis. And no, it doesn't have to be the over the top sort of activism. Simple stuff such as voter registration drives, meetings or town hall type of events on individual issues, mining relevant information from all sides of issues (you know the sort of thing that CIVIC was doing until the Miner and others attacked that group and its members unfairly).



2008 will also draw to close another year that nothing will be done with 168 acres of land that sits up next to the Interstate that splits town. No plans for a new park or drainage ditch like one political action committee used as possibilities when they worked their referendum in 2007. Yet on the other side of the freeway a new hospital is moving along quickly towards completion and many on the southern side of town won't be able to access that life saving property in times of emergency because there is no sensible access.

As luck would have it, in today's paper comes a wish list the city has submitted to the President Elect of the country. On this list is the proposed interchange... there is no such thing as a free lunch. No matter what folks, we will pay for infrastructure improvements... the key is doing it in a way that has the least impact on our pocketbooks. Relying on the Fed is not it.


Water as a subject was not covered with the panic we saw in earlier years, that is until a recent decision by the Arizona Corporation Commission gave the go ahead for a master planned development near Kingman in Mohave County. Now I'm getting emails that say I don't know anything about water and that I shouldn't be representing the people of Golden Valley that are concerned about their water. Well those Golden Valley folks are in luck as I have not been appointed or elected to any office that would equal representation of Golden Valley folks that are all panicky and think that one golf course will mean the death of life in an arid valley.

Before that recent decision... we saw water levels rise at Lake Mead and Lake Powell for the first time in years.



2008 also marked a year will a very interesting national election for president. I had a visitor in my office the day following when Barrack Obama won the Iowa primary. The young man that was my guest and I had a pretty nice conversation about the happening. I remember telling him that while I wouldn't have voted for Obama on that night (or for any election) that the results were, to me, very American of this country. Obama obviously went on to win the ultimate prize and while I may disagree with his politics, I sincerely hope he finds success in managing this great country (and funds the Kingman Crossing interchange... lol!!).

Obama has already done one 'solid' for the folks of Arizona. He's chosen our governor to head up some cabinet position. Cool. Time for the republicans in this state to show some leadership in terms of spending cuts and managing a budget. What a great chance, and hopefully it is not wasted.

Cartoon by Dave Walker. Find more cartoons you can freely re-use on your blog at We Blog Cartoons.

Social networking has become a big deal... and did so a couple of years ago really. I am just starting to catch up and I have to admit that it is at times overwhelming. Every time I think I've found a platform that I like and have mastered to a degree that is usable... something new rolls out and all the cool kids move along.

I have come to like (and be an addict of) Facebook in recent months. Over on the sidebar there, you can click on my info and add me as a friend... I'll accept. Once you friend me I'll send you an invite to a group pertaining to Kingman and positive growth efforts.


And you know... it has started to feel like that. This year I attended a real estate conference and one presenter spoke on social networks, Yvonne talked about it in a post a couple of months back. There was also another conference I attended and basically what was said is that in the not too distant future, all consumers will rely on their own network when making decisions on products and services to use and purchase.

While I work on the commercial use of social networking, in the last year through Facebook and other networks I have been able to reconnect with people from my past, really good people. Next year is my 20 year reunion and I wasn't really that excited about attending... but then folks from those days long gone by started friending me and now I can't wait to attend.

Welcomed in 2008...


Delaney Olivia Linn... appeared in June for the first time. Delaney is the third 'granddaughter' and all are beautiful (prolly because they aren't actually blood related).



I was also blessed with a niece... Jordynn Mae Hernandez was born in March.

Missed in 2008


We lost Arlene Stevenson back in the spring. The family will never be the same, but we feel her spirit often and she is never far from our thoughts and favorable memories.

Just a handful of hours left in this year known as 2008. It may not have been the best year on record, but it is a year I won't ever forget. I have respect for 2008 (hey, the Phillies won the World Series so I can't hate in total), but yeah... I'm curious to see what happens in 2009. I'm feeling positive about many things. I'm 'hope'ful for 'change'.

I'll be tipping one back later this evening, I'll be cheering for you -- the readers and contributors of MOCO. Stick around, I have a hunch that 2009 will be good for at least a few laughs.

Happy New Year!!

From the mail bag...

I'm talking the traditional mail, not email on this one.

Last week I received a newsletter from the Mohave County Landowners Association (no link and as far as I can tell, no web site). I am not a member of this association but I suspect I received the newsletter because I am a property owner in this county and this is an effort to create more association members.

I thought I'd share with the readers here some of MCLA's take on what is happening around these parts. I'll just share some bullet points and offer how to contact the association at the end if you are interested in getting this sort of information in your mail box.

From newsletter #68

From the heading 'MOVING FORWARD'

Despite all the bad news and problems on Wall Street and other national news, MCLA remains optimistic about the future of Mohave County. They talk about the strategic location between Phoenix and Las Vegas, the availability of relatively inexpensive land, and plentiful groundwater to foster commercial and residential development.

Also mentioned is the growing industrial park at the Kingman Airport and opportunity to expand the Interstae 40 Industrial Corridor. Goes on to say that hundreds of millions of dollars have been dedicated to upgrading the transportation routes in the area.

Now from the heading 'KINGMAN'

MCLA offers the opinion that Kingman has the best long-term development potential of the incorporated areas of Mohave County... due in large part the vast expanse of privately held undeveloped land and possible annexation of said land.

Mentioned is the construction of the new hospital in the Kingman Crossing area of Kingman. The hospital under construction had its 'topping off' celebration a couple of weeks ago. The new hospital hopes to start receiving patients in the fall of 2009.

This newsletter included a review on the special election that took place over a year ago in determining the present fate of 168 acres of land that is under the ownership of the city of Kingman near the proposed Kingman Crossing interchange. Included is a bit on the efforts of a slow or no-growth activist group... also known as my favorite local special interest political action committee group... also know as RAID... in that special election a year ago. Moving on...

Goes on to say that the landowners on the north side of I40 are still moving forward with plans of a regional shopping center AND an infrastructure improvement. Talks about a potential sales tax reimbursement agreement between the city and the developer/landowner, but concluded that this sort of agreement would be a hard sell.

Also describes a bit on another I40 infrastructure improvement slated to begin in 2013 with completion sometime in 2015... and that is just phase one of a two phase project. I've mentioned the Rattlesnake Wash interchange plenty of times here at MOCO and the MCLA assesment of the project is very similar.

A map was included in the newsletter focusing in on the more east side of Kingman and notes the proximity of some future projects.

I'll skip the stuff about Bullhead City and Lake Havasu and move on to the heading titled 'JOBS'...

First up is some information about the old North Star Steel plant under new ownership Nucor, and how it plans to invest $30 million dollars to upgrade the plant and actually reopen the middle of next year (2009).

Next is the new county jail that has started construction. Also the new Canyon Distribution Center nearing completion.

Under the heading 'HOOVER DAM BYPASS'

MCLA has indicated that a key element for the future growht of Mohave County will be the completion of the new bridge in late 2010. The go on to mention how it may impact the home construction market as mega developers anticipate future growth in the county once the project is completed. Also mentioned is the funding needed to widen the 15 mile approach to the Hoover Dam Bypass has been identified and bids have been sought for that project.

There's plenty of other good information included in the newsletter as well, for that you will have to contact the association to get a copy (and perhaps become a member). To contact the Mohave County Landowners Association, phone 800-441-2816 toll free -- or 753-3055 locally. You might also try email address HGause@aol.com.

Kingman Crossing in the news...

On Tuesday night there was a town hall meeting on the subject of Kingman Crossing.

Here's a couple of media links for your reading pleasure...

From the Miner.

From the new MohaveBusiness.com site.

I've also asked another person who was in attendance to share her thoughts on the meeting. Hopefully I'll be able to put that up in the next few days.

I hope there will be at least a steady drip of information on this very important issue moving forward. The more the city and the developers can share the better it will be for the community. Long way to go, but I still think it is worth the effort to see if there is a solution that benefits not only the developer, but more importantly the community.

I'm sure I'll have more on this in the weeks ahead.

Kingman Crossing (media coverage from Council meeting)

MOCO's good pal Dave Hawkins sent me the following on one of my favorite local subjects...

CITY RECRUITS EXPERT FOR KINGMAN CROSSING PROJECT DIRECTION
By Dave Hawkins

The Kingman City Council has directed staff to proceed with due diligence in evaluating a possible partnership with the private sector that would involve construction of an Interstate 40 interchange and development of a major commercial retail center on the north side of the freeway. The Council voted Monday to move forward with consideration of the Kingman Crossing Project.

The partnering firms of Vestar and Vanderbilt Farms seek city participation in construction of a $25-million dollar interchange about 1 1/2 miles east of the Andy Devine interchange. They maintain the city should help fund the public infrastructure project that will enhance access to the east bench and spark a retail boom that will generate much needed sales tax revenue for city coffers.

Options for city participation in funding the interchange include a reimbursement of sales tax revenue generated by the commercial center and possible creation of two types of special districts.Vestar project director Ryan Desmond said any one of the options or a combination of them could be used.

"You really have to dig into the minutia of them to understand how they operate to see which of the three, or which combination of the three might be most appropriate in this situation," Desmond said. He urged the Council to hire someone with experience in the arena to represent the city in exploration of possibilities and any negotiations that might transpire.

The Council voted in support of having staff recruit an advisor-negotiator to look after the City's best interest. Part of that process would involve commissioning an analysis of the impact and economic ramifications of the project.

Any proposed partnerships and/or funding agreements would require future consideration and approval by the Council.

Local resident George Cook spoke against city partnering in what he branded a risky venture that should be left to the private sector. Developer Richard Campana, however, remains a staunch Kingman Crossing proponent.

"It's really crucial to the economic future of the city of Kingman that you do this," Campana said. He said Kingman is losing sales tax revenue to other communities that offer better shopping options.

Desmond said constructing the interchange is necessary to land tenants that are eager and excited to set up shop off the interstate in Kingman.

"I would tell you that the tenant market is very interested in Kingman," Desmond said. "They temper that enthusiasm, however, with the follow-up comment which is 'when you've got the interchange worked out call me and we can really talk' because right now it's a terrific site with no access in their eyes."

Vanderbilt representative Jerry Willis said Vanderbilt and Vestar have been busy in recent months working behind the scenes to advance the project. He said they've been working together to hammer out access issues along with state and federal transportation officials and representatives of the Hualapai Mountain Medical Center that is under construction near the proposed shopping center.

Willis also said they've been working with UniSource Energy representatives on easements to bring an electric transmission line through the project site and beyond to serve the growing east bench area.

Those Funding Mechanisms...

Tonight at the city council meeting... actually going on right now... the would be developers of the Kingman Crossing regional commercial development will be on hand to present an update on the status of their project during a workshop that actually proceeds the regular session meeting.

A column appears at the Phoenix Business Journal that speaks to this and the op/ed is appropriately titled (especially for the folks in Kingman... including those prepared and not prepared that reside on the current council).

You have to sign up to read the whole thing at the PBJ but here is the link with a preview...

We need an honest dialogue about infrastructure
Phoenix Business Journal - by Grady Gammage Jr. Phoenix Business Journal

The economic downturn reminds us of how much Arizona depends on growth. In fast-growing times, we can afford to worry about whether all that growth pays for itself. When things slow, we realize what a bonanza growth is and why cities promote it.

In Arizona, sales tax is our preferred public finance mechanism. Because sales tax is paid in small increments, we tend not to notice it as we would other taxes. Cities have promoted retail development to increase sales tax revenue, which pays for public services. Because retail follows rooftops, we also encourage housing. Houses and stores require infrastructure.

Once upon a time, cities used public dollars to build streets, pipes and other infrastructure for new development. After houses, offices and shopping centers were built, cities collected taxes to recover their initial investment. The public invested (either by saving up revenue or borrowing through bonds) well ahead of its payback.

This is risky, as development -- and, therefore, payback -- may be delayed. When the economy slows, government may be left waiting for expected revenue to materialize to recoup the funds it advanced.

All emphasis mine above.

There are some other interesting passages that readers should take note of as well. I'll copy a few...

About 25 years ago, cities began making developers pay for and build infrastructure. Developers can borrow money, make interest payments and generally work faster and more efficiently than cities.

Yet infrastructure costs often are disproportionately high for an individual developer to pay. In addition, the infrastructure built may serve a wider area (including others' land), and physical work may be required miles away from the developer's parcel.

Others' land in this case is OUR land, the Kingman resident owned 168 acres.

Thus, the reimbursement mechanism was born. Cities require developers to build infrastructure, borrow the money to do it and shoulder the risk of cost overruns. Eventually, the cities pay the developers back for a portion of those costs with future tax revenue. In this way, growth pays for itself and cities are saved the risk of investing public funds up front in infrastructure that may not provide returns.

Cities that do this are neither stupid nor corrupt; they're rationally limiting their risk and minimizing the burden of growth on existing residents.

Hopefully these rather easy basics can be understood by the many in the community that seem to have a hard time with easy to understand basics. Hopefully there will be an honest discussion, an open discussion, heck... even a reasoned discussion for a change in city chambers on a very important and key issue that will have an impact on the future of Kingman.