Tag: Amazon

Council Feb 5 Agenda

The Council has a full agenda on February 5. It includes several items that are guarantied to make someone mad. Here’s what I am looking at (in the order they appear on the agenda):

Public Hearing

Murphy Road developmentBL -1357 and -58: This is the proposed development on Murphy Road near West End. I believe the developers have met with the neighbors and that discussions are ongoing. I understand that CM Kindall will defer the public hearing again.

Resolutions

NES round-up, RS -1508: NES has a program where customers may opt-in to rounding their monthly bill up to the nearest dollar and allowing NES to use the extra cents to fund its low-income weatherization program, Home Energy Uplift. This non-binding resolution would ask NES’s board to consider transitioning to an opt-out program instead. If NES switched to an opt-out program, all bills would be rounded up to the nearest dollar unless the customer opted-out. This is consistent with other large cities in Tennessee. Supporters argue that this is a relatively harmless way to fund an important program. Detractors feel like it a bit like taxing people without them realizing it. Since the program would come with the ability to opt-out and, by definition, it involved less than $12 per year, I’ll vote in favor of this.

Surplussing property to new community land trust, RS-1570: This resolution would send surplus Metro property to our new community land trust (CLT) for future use as affordable housing. This is a tremendous step forward — and a lot better than selling off Metro’s valuable property to make ends meet temporarily. But this is the first surplussing for the CLT and I’ll have some questions at our committee meetings. I’ll want to make sure I understand the process, how long any units built will be affordable, and how these properties interact with our short-term rental laws. Depending on the information we get in committee meetings, I may vote in favor or to defer one meeting to make sure everyone understands this new process of getting properties into the CLT.

Asking Jill Speering for an apology, RS -1597: This one is guarantied to make a lot of people mad. You can read the Tennessean’s coverage of the back story here. The problem, from my perspective, is that there are some people who have been raising legitimate questions about MNPS and Dr. Joseph’s leadership, and then there are others who tend to not talk about the merits and instead talk about Dr. Joseph being “scary” or “intimidating” or having a “crew” to enforce his will. The second group of critics, to my ear, have helped to inject a race element that’s damaging into the dialogue.

Almost a month ago, I called out the second group as being out of bounds:

Back to the pending resolution…with all respect to those defending Ms. Speering’s text message statement, the intent to the statement is beside the point. In the context where some are raising well thought out concerns backed by evidence, but others are using rhetoric that rings of stereotypes, her statement was wrong. And, as I understand it, Ms. Speering has not publicly expressed any regret for the statement or how it has been interpreted.

Having said all that, I don’t know yet how I’ll vote. I’ll abstain because I’m not that interested in opening the door to a lot of future apology seeking, or I’ll vote in favor because my personal opinion is that some public expression of regret would be appropriate.

Censure the former mayor? RS -1598: This is another one that will make some people mad whichever way it goes. Opponents of this resolution say the Council is beating a dead horse and suggest that the former mayor has suffered enough for what she did. Let me try to get the debate framed by facts.

First, the Metro Board of Ethical Conduct received a complaint while she was still Mayor. In December 2018, that complaint was resolved by the Ethics Board and it recommended that the Council censure her. Under Metro’s laws, once the Ethics Board makes a recommendation, the Chair of the Council Rules Committee “shall” file a resolution for the Council to consider the recommendation. Hence, we have the current resolution.

Now, there are some (perhaps including Metro Legal) who feel that the Ethics Board lost jurisdiction once she resigned, and that the complaint should’ve been dropped at that time. Remember, Metro Legal had a conflict of interest and the Ethics Board used outside legal counsel. That outside legal counsel recommended that the Ethics Board continued to have jurisdiction to make a decision after she resigned. What should we make of the fact that Metro Legal probably thinks there was no jurisdiction and outside counsel thinks that there was? Well, I’ve read Metro’s ordinances on this and, wearing my lawyer hat, my expert opinion is that the drafting of the ordinance was crap. I think the best reading is that there is continuing jurisdiction to consider a complaint after someone resigns, but it was poorly drafted and could use clarifying one way or another.

The fact is that the Ethics Board did make a recommendation and under Metro law the Council “shall” consider it. We can either vote no (either because you think the Ethics Board should have dropped it after she quit or because you don’t think she should be censured) or vote yes (because you think admitting a felony also warrants a censure). Either way, this ridiculous episode will finally be over. I’ll keep listening to my colleagues. But for now, I plan to vote to adopt this resolution.

2nd Reading

Match affordable housing funding to job credit funding, BL -1472: This bill would require setting aside $1 of affordable housing spending for every $1 of job credit spending. In particular, this is aimed at the upcoming legislation to approve job credits for Alliance Bernstein and Amazon. For several reasons, I’m opposed to this. To start, I have been consistently opposed to what I call silo-izing Metro’s budget. I think that slicing and dicing the budget with a ton of required micro-spending cuts into the city’s ability to be flexible and match the needs of a particular year. Beyond that, this is really just disguised opposition to the job credits, I think. From my perspective, if you don’t like the job credits, just vote ‘no’ on them. But passing this bill would just make the job credits literally twice as expensive to the city AND cut down on flexibility in future years.

I don’t know how I’ll vote on the Alliance Bernstein or Amazon job credits — we’ve not seen that legislation yet. But I don’t think doubling the cost of the job credits is the right direction. I think I’ll vote against this bill.

Surplussing $5.4 million of real estate for schools budget, BL -1476, -1477, -1478, -1479: Folks, this is part of the “belt-tightening” that Mayor Briley told us about last year. Instead of properly funding the government from its tax base, the proposal is to sell off one-time assets to make money to balance the budget for the year. The Council can either vote in favor and participate in unloading valuable assets that will never be recovered, or we can vote against and help put a bigger hole in the MNPS budget. Both options are bad.

Among the many reasons why this is a bad way to run a city are: (1) all potential buyers know Metro is in a hurry to sell (which tends to drive price down); (2) at least one of the parcels would benefit from  more dense zoning, but it’s not clear whether Metro has time to do that (which may tend to drive price down); (3) nobody is making more land — once these are sold, they are gone forever; and (4) Metro is losing an opportunity to discuss whether affordable housing would be appropriate on these parcels.

Honestly, I don’t know yet whether I’ll vote ‘no’ to protest this method of balancing the budget or vote ‘yes’ to make sure MNPS’s minimal budget this year gets funded.

3rd Reading

Nashville Yards participation agreement, BL -1442 (as amended): This bill would approve Metro paying for approximately $15 million of the proposed $80+ million in infrastructure improvements related to the former Lifeway campus. This bill has gotten some push back because it is downtown and because Amazon will move there in a few years.

My perspective starts with “This isn’t tax increment financing.” Instead of giving away all new property tax revenue for up to 30 years, Metro will make the upfront investment and keep all of the property tax revenue going forward. There should be more agreements like this where Metro and developer share in the infrastructure costs, especially downtown. These agreements allow Metro to get long-sought after infrastructure improvements without Metro having to pay the full cost.

Also, keep in mind that these agreements are not limited to downtown. For example, in Antioch where I-24 and Hickory Hollow Parkway meet, Metro has agreed to pay half ($12 million of $24 million) to improve the interstate exchange. Like with Nashville Yards, that interstate exchange participation agreement was a once-in-a-generation opportunity to dramatically improve the infrastructure in the area for everyone. I’ll vote in favor of this cost-sharing participation agreement.

 

…more on the proposed AMZN incentive…

At the Council Budget & Finance Committee yesterday, the administration gave an extended description of how beneficial Amazon will be for Metro. The numbers were flying so fast, and (so far) not supported by any documentation, and it was hard to keep up. But the gist of the administration’s argument is that there will be many tens of millions of dollars of financial benefit to Metro because Amazon is coming to town and, therefore, the $500 per job proposed incentive is a no-brainer.

I pushed back on that…and that got some twitter coverage:

I’m going to try to give more nuance to my argument on this.

For context, remember during transit when the core foundation of the argument in favor of the referendum was “a gazillion people are going to move here in the next 20 years…so we better do whatever it takes to accommodate them.” Compare that to now when 5,000 of those gazillion are in fact going to move here in the next 2 to 7 years. Now, the argument is “these 5,000 people are going to create a huge amount of new property tax, sales tax, and personalty tax revenue that we really need and want, so let’s pay them an incentive.”

I view the claim that the 5,000 will create enormous new revenue that Nashville could never otherwise obtain to be false, or at least a half-truth. If someone wants to make the argument that Amazon is bringing Nashville a certain amount of new revenue more quickly than we would otherwise get it, I am all ears. But when you figure the value of them moving here, you just can’t count ALL of the revenue they create — we should only be counting revenue that we would not get in some other way.

As an example, let’s talk about property tax revenue. I feel confident that the owners of Nashville Yards fully intended to build a building on the Amazon site sometime in the next 5-7 years, at the latest. Now with Amazon coming to town, the building might be built in 3 years. So, I am open to a discussion about the value to Nashville to getting the property tax revenue for those extra 2-4 years. But don’t tell me that ALL the property tax revenue for the rest of time is due to Amazon coming to town.

Like most everyone, I’m glad that Amazon has chosen Nashville. We need a fully honest discussion of the economic benefit. Not pie in the sky overblown statistics.

Some things I think…

For a brief moment, I think there is no complicated legislation pending before the Council. Soccer, transit, transit oriented development, freezing tax increment financing, and an anemic operating budget are all in the rear view mirror. Amazon, the Church Street Park land swap, and next year’s more anemic budget aren’t here yet.

I know this lull won’t last. I’ll take this chance to throw out some quick thoughts about several topics:

  • The “no economic incentives for Amazon until employees get their raise” resolution before the Council on December 4 is a sideshow. If you’re against the Amazon incentive, just vote against it when it comes before the Council. The current fiscal year is nearly half over. Employees didn’t get their cost of living increase. I worked hard for a different result…but it’s too late to do anything about it until the next budget season. Again, my advice is to handle budget issues in the budget. And, if you can’t vote for the Amazon incentive, just vote ‘no’ whenever it comes before us.
  • In an ironic twist, I hear through the grapevine that the administration might not resist this resolution because Amazon wouldn’t get any money for a few years (i.e., not until after the 2019 Metro elections), and by then employees would have gotten a cost of living increase. It’s ironic because it is hard to imagine the cost of living increases happening without an increase in the property tax rate. So, if they say “no big deal, the COLAs will happen before Amazon gets money,” it will essentially acknowledge an intent to raise the property tax rate after August 2019 but before they pay Amazon an incentive.
  • If my colleagues want something in exchange for approving the Amazon incentive, they ought to have their eyes on the enormous amount of sales tax revenue being collected out of the Council’s control at the Convention Center Authority. Last summer, the administration raided this stockpile to the tune of $10 million per year. There’s more to be had there…and that would be a more meaningful and long-lasting win.
  • Metro’s annual audited financials will be released in a few weeks. State law allows an ongoing audit to be discussed in an audit committee executive session. So, as a member of the Metro Audit Committee, I’ve seen a draft of the audit in an executive session. Due to a change in accounting rules, Metro’s unfunded retiree benefits obligation has to be restated this year. I’ve already been talking for a while about this completely unfunded obligation going over $3B this year. With the new accounting rules, the number in the audit is going to be around $3.9 billion. That means Metro is going to cruise straight through the $3 billion range and cross over $4 billion in 2019.  That’s a lot of unfunded retiree benefits.
  • About the ongoing Tax Increment Financing Study Group, I think we are on track to recommend some meaningful changes. We’ve got a robust web page up. Follow the link there to “TIF Committee Document Library” and you’ll find just about anything you could want to know about TIF generally and also about how it is used here in Nashville. Here’s a video of our November 20 meeting.
  • While we work on the TIF study group, I think deeper changes are needed at MDHA. The Tennessean’s Nov. 21 reporting about conflicts of interest was pretty brutal. I think they need re-invention and not incremental change.
  • I get lots of people asking me who will run for Mayor in 2019. I only know rumors, which means I don’t know anything. As reported in the Scene in September, here’s what I am looking for in a candidate for Mayor:

“We Nashvillians are an optimistic bunch, and for good reason,” says Mendes. “But we need a dose of honesty injected into our politics — honesty about inequalities that hold us back and honesty about deals that move Nashville forward. I’ll be looking for a candidate who believes in a better Nashville and who believes that citizens truly are partners in government. Partial truths and con jobs need to end.”

I hope everyone has a happy holiday season!

 

Bob