Month: September 2016

That TIF Ordinance Earlier This Year…

I have a feeling that the TIF ordinance the Council passed earlier this year might be coming up in connection with the Gulch pedestrian bridge.  I wrote about the ordinance a few times earlier this year — this link will get you to those posts.  For purposes of the Gulch pedestrian bridge, there are two parts of the ordinance that matter. I described these in earlier posts:

…going forward, for every TIF loan, MDHA will no longer receive the tax increment for the property after the loan is paid. Instead the tax increment will go to Metro after the loan is paid.

and:

Under this ordinance, MDHA will provide annual reporting about each TIF loan, including the current loan balance, the estimated maturity date, the amount paid in the last year on the loan, the parcels whose tax revenues are pledged to support the loan, and the amount of tax increment funds received by MDHA from each of those parcels.

On July 1, MDHA provided its first annual report under the ordinance.  You can see the Gulch area TIF projects on page 4 of the PDF under “Arts Center.”

These topics are coming up because, in a summary to the Council from the Mayor’s Office earlier this week, we were told that re-captured tax revenue from TIF projects would pay for the bridge:

These properties currently have TIF loans through MDHA which will be paid off over the next several years. As these loans are retired, rather than MDHA keeping the tax revenue for other public purposes, it will return the money to the City to be used to pay for the project.

If you are trying to figure out which current TIF loans will get paid off over the next several years, you can look at that report and compare the loan balance to the tax increment revenue.  For example, the ICON loan was reported to have a balance of about $2.7 million, and reported to be generating about $1.6 million  per year in tax increment revenue. You can assume that loan will be paid in full in short order. Others look like they will take longer.

If you are asking whether this makes the pedestrian bridge a TIF project, the answer is no. Under the new ordinance, once the existing TIF loans are paid, the tax revenue goes to Metro’s General Fund.

If you are asking whether the re-captured property tax increment funds have to be used in the Arts Center Redevelopment District, the answer is no. Again, the re-captured revenue goes to the General Fund for use by Metro.

The way I understand the comments from the Mayor’s Office is that the large Gulch area projects are generating lots of property tax revenue, that Metro will be re-capturing significant additional tax revenues in the coming years as Gulch area TIF loans are paid off, and that the costs of this project are easily covered by that additional re-captured tax revenue.

This argument is a double-edge sword. On the one hand, it is clear that the tax revenue that  will be re-captured from existing TIF loans in the coming years is enough to pay for the bridge project. On the other hand, it is clear that re-captured tax revenue is for the General Fund to be used for general purposes. So, injecting the idea of using former MDHA tax increment funds into the bridge conversation raises the question about whether these new General Fund dollars should be spent in the Gulch.

I would prefer to look at the bridge project on its own merits — is it a good investment to further tie SoBro and the Gulch into an easier-to-navigate economic engine for the whole city, or not?  Are the prices for the land swap being proposed by the Mayor fair, or not?

Sept. 20 Council Meeting

The Council still has a lot going on. Here’s a quick summary:

One Touch Make Ready

You all know what this is.  The bill is on 3rd reading. Council Member Weiner has proposed a resolution related to OTMR. I also am proposing an amendment that would allow, under some circumstances, for the costs of any litigation to be absorbed by a new attacher.

Since the Council Rules don’t allow amendments on 3rd reading for this bill, I would need to successfully get the Rules suspended for my amendment to be considered.  Never say never, but it only takes two objecting Council Members to stop the Rules from being suspended. So, it would be pretty easy for just the lead sponsors to stop my amendment from being considered — if that’s what they would prefer.

I’ve written previously about this topic here, here, here, and here.

Short Term Rental Property

There are three bills on 3rd reading — 257 (about stop work orders and the penalty for operating without a permit), 373 (about posting a permit number online), and 374 (about verifying an STRP application under oath, and adding a statement to the application about homeowner’s association rules).  I expect all of these to pass on 3rd reading. At the request of some STRP owners, I will try to add an amendment to 373 to allow the alternative of posting an image of a permit. Either way, the permit number will be required to be included in online advertisements.

There are three others on 2nd reading — 375, 381, and 382.  Don’t get too attached to the text at these links — I expect all of these to have fairly major amendments or substitutes offered on Tuesday. I think that each then will be deferred to allow more time for public conversation about the newly proposed provisions.

Marijuana

The bill to offer law enforcement in Metro the option to give a civil citation or make an arrest for small amounts of marijuana is set for 3rd reading. It passed easily on 2nd and I think it will pass on 3rd also.

The impact of current marijuana laws is unfairly focused on minority groups. That’s really bad. But I have been concerned about whether the new law (that gives discretion to either arrest or give a citation) will make that unfair enforcement problem worse. The lead sponsor has said that he intends to follow this closely after the bill is passed to make sure that the discretion to give a citation or make an arrest is not exercised unfairly. So, I voted for this and will again on 3rd reading.

Fair Deals?

There are always several items on the agenda that I want to know more about just to make sure I understand the deal.  RS2016-373 would amend the terms of a fire hall property on Richard Jones Road. RS2016-378 is about an economic impact study on certain historic properties in Nashville due to placing “Distributed Antenna System Nodes” around the county.

And, on second reading, BL2016-388 relates to the Metro Health and Educational Facilities Board (a new one for me) entering a Payment In Lieu Of Taxes agreement for land on 12th Avenue South. I’ve asked for the various exhibits mentioned in the bill — you can’t tell much from the bill itself.

On 1st Reading

CM Cooper and I have introduced a bill that would require all reports that any Metro agency has to give to the Council to be posted online in an electronic format. That doesn’t happen now.

I also have a bill on first reading that mirrors my proposed amendment to the OTMR ordinance. If I am not able to get the Council Rules suspended to consider my amendment, I’ll still have this new bill that would have to be considered on subsequent readings.

And, the Gulch pedestrian bridge bill is on first reading also. I’m sure that will draw attention in the coming weeks.

“Hold Harmless” Amendment Follow-Up

In my last post, I described the “hold harmless” amendment I am proposing for OTMR. A Google representative promised to get back to me about whether Google would support the amendment. He has now gotten back to me. He reports that Google won’t support the amendment.

Here’s where I see us on OTMR. As the process has unfolded, it looks like Metro’s policy decision, and perhaps the weight of public opinion, is that the city wants to give Google the OTMR that it has asked for, pretty much no matter what.

The goal of my amendment is to protect Metro from the costs and legal fees that we will have if we are drawn into the pending nationwide dispute between major telecommunication industry competitors. The amendment relies on market forces to guide an attacher’s decision about whether to agree to hold Metro harmless for litigation costs.

The amendment would require that, if any pole owner or existing pole attacher were to provide notice of a legal dispute over proposed Make Ready work, the new attacher would be able to choose either to: (1) hold Metro harmless for all losses including attorneys’ fees and then proceed with the disputed One Touch Make Ready; or (2) not hold Metro harmless and not proceed with the disputed One Touch Make Ready. This would let the new attacher balance the incumbants’ slowness, the specific litigation threat being made, and their own potential cost savings by having faster deployment, and then make an informed business decision about whether the new attacher’s own interest is served by holding Metro harmless, or not.

The “hold harmless” amendment does not delay the OTMR ordinance. It relies on market forces to give a new attacher the choice to hold Metro harmess if it makes economic sense for the new attacher.

Let me also say a word about the process so far. While there is a lot of talk about delay, it is important to remember that the only delay so far was for three weeks at the request of the bill sponsors! My issue is that, on a bill drafted and pushed by a single private market competitor, I don’t think Metro (whether it’s the Council, the Mayor, or the Vice Mayor) should adopt the position that we’re going to pass it no matter what. There can be no principled negotiation after you make it clear that you’re going to give the private market competitor exactly what they’ve asked for.

For me, a principled position with Google would have been to dig into whether their number one objective is “obtain faster and cheaper deployment” or “obtain faster and cheaper deployment in an ordinance that guarantees Nashville will join the existing litigation battle.” Wanting Metro to have a principled negotiation with Google about this is not being anti-Google or pro-AT&T or pro-Comcast.

Some have been very dismissive of the litigation threat here. I urge you to read the Council Analysis on this topic. I urge you to read a copy of the Louisville lawsuit. Not all litigation threats are created equal. Not all lawsuits are created equal. Here, Legal Director Cooper says the likelihood of litigation is 100%, and we know that a U.S. District Court Judge in Louisville has already denied the city’s request to dismiss AT&T’s lawsuit there. The argument I hear from some that the Nashville they know isn’t afraid of a little ‘ole lawsuit is a sloppy one. The Council should be evaluating risk not thumbing our nose at it.

If our collective policy decision continues to be that we want OTMR now, and that we’ll sort out the problems later, I’ll respect that choice. Until the bill passes, though, I will continue to argue that it is possible to be pro-Google and also still explore whether their real goal is faster deployment or also for Nashville to be pawn in an ongoing litigation fight.

Trying to add “hold harmless” language to OTMR

I filed an ordinance for first reading on September 20 that would amend the pending OTMR ordinance to allow an Attacher the choice to hold Metro harmless if threatened litigation were to materialize. The Attacher could choose to cover Metro’s losses and attorneys’ fees and proceed with its planned Make Ready work, or the Attacher could choose not to cover Metro’s losses and attorneys’ fees and not proceed with the work.

The proposed ordinance is here.  I know those things are hard to read — so here’s what the OTMR ordinance would like if my new ordinance were passed.

Also, I plan to offer the substance of this ordinance as an amendment to the main OTMR ordinance next Tuesday.

The Council procedural stuff gets complicated.  But, the starting point is that I would prefer to offer these changes as an amendment to the main OTMR ordinance on third reading on Sept. 20.  But because amendments can’t be considered for this bill on third reading under the rules, I would need to ask to suspend the rules.  And, if any two Council members object, I can’t suspend the rules.

My sense is that if Google were okay with this language, I could probably succeed in getting the Council rules suspended to allow the language to be considered.

If my effort to amend the main OTMR ordinance on third reading fails because two or more colleagues object, then I have my ordinance with the same language as a fallback. Of course, it would take three readings to move it forward — just like any other ordinance.

I gave Google’s lobbyist a copy of the proposed amendment today.  They said they’d get back to me.  I will be curious to see if Metro Legal or the Council Director will have a position about the legality of what I have drafted. I assume the Mayor’s Office will continue to not take a position. Having said all that, you would think that most people could get behind Metro being protected as much as possible if the promised litigation actually happens.

It should be interesting to see how this goes.

My unscientific OTMR poll

Over the last month, everyone in the Council has received huge numbers of emails about the proposed “One Touch Make Ready” ordinance.  Many of them have had an identical “Subject” line and look to me like they were generated from automatic email bots connected to Google in some way.  I wanted to hear more from these emailers.

(I want to be clear — sending me thousands of emails all with essentially the same content from an email bot is fine. I’m okay with that. Really, I am. But it is fair for me to then want to dig a little deeper with that group of folks.)

Different people email for different reasons.  I wanted to explore whether these constituents were being motivated by the thought that “Google asked for help, and I hate Comcast/AT&T” or motivated by having independently worked through the issues, some of both, or something else entirely.

I’ll include results in a link later in this post. But hopefully, you’ll stay with me long enough to hear me say that I did my best to ask the questions in a fair way.  I sent it to approximately 1,700 people whose emails made me think that a piece of software actually hit “Send” on the email — although obviously I can’t be sure if that was true for all of the senders. Within several hours, I got 442 responses.

I have been happy to see that only 5 people have written me to accuse the questions of being loaded to get a particular result. Many more have written to separately thank me for asking for their feedback.

I won’t spend a lot of time here trying to analyze the results. I think they largely speak for themselves. But I will make a few quick observations. Just over two-thirds of respondents said that they were motivated to email Council members after hearing about the ordinance through the media.

There was one open-ended question that asked people to describe the ordinance. There were more lengthy (multiple paragraph) responses than I had expected.  I appreciate the time people spent in responding.

The meat of the survey had to do with two questions asking about whether respondents thought there were alternatives to a One Touch approach. I am sure Google would note that 78% of respondents thought that One Touch is the only way forward. And I am sure others would say that just under 70% of these same respondents said that other solutions could achieve the same goals. Beyond that, I’ll let people reach their own conclusions.

Here is a summary of the results.

Finally, again, I do NOT mean for this post or the survey results to be advocating for anything. I wanted to hear more from these 1,700 people. I sent the survey. Now everyone has the results.

One Touch Make Ready

On September 6, Google’s Model One Touch Make Ready bill is up for second reading. I have told all of the main players that I won’t decide my vote until the day of the vote. But, I think they all know that I am leaning against voting for it.  Here’s what I think I know —

I want Nashville to have better broadband access. I want it to be deployed more quickly.

Unlike some threats of litigation that we hear about, AT&T’s threat of litigation is very real. There is a lawsuit in Louisville already. If we pass Google’s proposed ordinance, all AT&T has to do is change some names and details in their existing lawsuit and file it here.

One of the things I do for a living is help clients make assessments and business decisions about existing and potential legal disputes. While I’m no pro at federal telecommunications laws and regulations and I make no predictions about whether AT&T or Google is right about the lawsuit in Louisville, I do know enough about the legal issues to be 100% confident that both sides have legitimate, good faith legal arguments to make. The Louisville lawsuit will almost certainly be decided ultimately by the U.S. Court of Appeals for the Sixth Circuit, in Cincinnati. This will take years.

If at all possible, Nashville should not spend tax dollars to litigate a sister lawsuit to the one going on in Louisville. A lawsuit in Nashville would end up in exactly the same place as the Louisville lawsuit – the 6th Circuit Court of Appeals. If possible, I would rather avoid spending dollars litigating when we could instead wait to see what the 6th Circuit says in the Louisville lawsuit.

In addition, while there is talk about wanting a 21st century solution for broadband deployment, I am not sure about this premise.  I mean, is it really a 21st century solution to have a minimum of three companies all deploying literally identical sets of glass fiber on our telephone poles? Wouldn’t a 21st century solution be to deploy high speed wireless technology? Google already is experimenting with wireless in a few other cities.

Because high speed wireless deployment should be our real goal, and because I do not understand why we would opt into a guaranteed lawsuit that is already underway in Louisville, I prefer an agreed solution where the parties all agree on a way to make the process go more quickly in Nashville while the litigation is being resolved. This would require compromise by all – Google wouldn’t have the process go as quickly as they would like, but it would move more quickly than the incumbents might like. I think the Metro Government has conveyed, and must continue to convey, to all of these companies that we demand an agreed approach and that we won’t participate as a litigant in their ongoing nationwide court battles.

I have urged this approach to all parties.  And I have told all parties that, more than anything else, I am in favor of working out a compromise.  I have told all parties that I will most likely vote against the interests of whoever I think is being the least cooperative in reaching an agreed upon solution.

Honestly, it is a close call about who is being the least cooperative in working something out while we wait for the Louisville litigation to get resolved. As of today, my opinion is that Google is (just barely) being the least cooperative in reaching a compromise agreement. For this reason, if I had to vote today, I would be leaning toward voting against the bill on second reading.

There are still 5 days until the Council meeting – so this might change depending on how any further negotiations go. I urge Google, AT&T, Comcast, NES, and the Mayor’s Office to continue their discussions.

 

Affordable Housing

I support both affordable housing bills that are on 3rd reading on September 6. This includes the inclusionary housing bill and the Mayor’s incentives bill. These have been discussed at length at many Council committee meetings, and both the development community and the housing advocacy community have participated extensively. Both bills will have a final amendment come out, probably tomorrow.

To me, the end product is a small, cautious experiment that cannot possibly hurt the market, and may give Nashville a real opportunity to produce new affordable and workforce housing.

It is a small experiment because it is limited to just $2 million (plus any “in lieu of” fees collected by the program). With the size of our economy, $2 million can only be described as a discrete pilot program.

These bills – especially the Mayor’s incentives bill – have been crafted to make developers whole. The bills will always pay cash incentives in exchange for affordable/workforce units. This is capitalism not socialism, folks. I give the Mayor’s office, especially Matt Wiltshire, credit for having extensive conversations with the development community and major national multi-family housing lenders to see exactly what format the incentives would need to take to be useful for developers. I think the end product is innovative, and will probably end up being copied in other cities.

The bottom line is that this is a small experiment. Let’s pull the trigger and see how it works.

Short Term Rental Property Bills on Sept. 6

I have three short term rental property bills on second reading on September 6, and another on first reading.

I will ask the Council to approve two of the bills on second reading, and defer the third. The first two – which would require a permit number to be included in all online advertisements, and require an STRP application to be made under oath – have not generated any opposition that I know about.  I would like to see those pass on second reading.

The other bill on second reading would clarify the maximum occupancy rules for STRPs. I have received lots of emails in support, and lots opposed to this one.  To allow my colleagues more time for discussion, I am going to ask to have this bill deferred one or two meetings.

Finally, the new bill on first reading would set new caps for investor-owned STRPs. Currently, for investor-owned single and double family units, the cap is 3% of the housing units in the Census Tract.  I propose changing this to 1% and grandfathering in any existing units with permits.  And, currently, for investor-owned units in multi-family developments, there is no cap at all.  I propose adding a 1% cap and grandfathering in any existing units with permits.

There is near unanimous opinion from all sides that the current system is not working and that changes must be made.  Some want more regulation.  Some want more enforcement.  I trust that, in a few more meetings, the Council will find a new balance to try to improve the situation.

High Velocity Ammo Protection

The Mayor has asked the Council to approve spending just over $1 million on new body armor for our Police Department. This is a request from MNPD in the wake of the Dallas police shootings. The new armor would help protect officers from high velocity rounds fired from assault rifles. Officers would not wear the armor at all times, but would have it available for easy access in their vehicles if needed. I am voting in favor of this.

Last week, the Council received several dozen emails asking us to disapprove this measure because it represents a militarization of our police department. That’s not how I see it. I certainly am opposed to the militarization of any police department. But, with the ready availability of powerful assault weapons in the United States, it is an unfortunate reality that our officers run the daily risk of being confronted with military-style rifles. Our officers and their families deserve to have reasonable protection from these weapons.

I will vote in favor of this funding request.