Wed
Feb 16 2011
02:08 am
By: jbr
From Josh Flory at News-Sentinel ...
The article refers to some TIF complications with City View.
As an aside ...
That is a huge boat dock they have at City View. I am surprised they can commandeer so much of the river. What kind of laws control that sort of thing?
From the article ...
The Cityview condo project may have new owners, but the old TIF deal is causing a legal headache for the city.
Earlier this month, a pair of entities with ties to the South Waterfront project filed a lawsuit in U.S. District Court against the city of Knoxville and Knoxville's Community Development Corp. The dispute centers on a complicated financing arrangement that was established to help spur the condo project, which is across Fort Loudoun Lake from Neyland Stadium, on the former Knoxville Glove Co. site.
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the old TIF deal is causing a
sounds like a 'win-win' to me ..
Do you really hate
Do you really hate everything?
complicated financing
complicated financing arrangement
What a mess. Is there anyone living there yet? Has anyone actually bought and closed on one of these condos? You can't tell from KGIS.
Who dropped the ball here?
Who dropped the ball here? Alvin Nance, Madeline Rogero, or Larry Martin? This is a bureaucratic nightmare. The City of Knoxville plays the fool and bankrupts the first developer and is now sued by the second developer.
Is this how you create jobs Madeline?
First of all, you are going
First of all, you are going to have to include documented evidence of participation along with the appropriate timelines as I have no knowledge whatsoever of Madeline's involvement in this project. Unless you are willing to out yourself as an intentional liar, show me some evidence. To be fair, I do not know what the specific contributions Alvin or Larry made either but obviously, only Madeline is running for Mayor and as such, a target for your clumsy attempts at political assassination.
That has to be the single dumbest question that I have ever seen asked. If one has not imbursed, once cannot possibly be "reimbursed". Are you complaining that a business was not given something for nothing? Really, seriously? That is your big bitch? The janitor could have made that decision and it would still be the correct one assuming the correctness of the italicized portion.
Is this how you create jobs
Is this how you create jobs Madeline?
Madeline had nothing to do with this TIF. Geez, at least do your homework before you attack people.
Hello, Crawfish
The TIF for City View was approved by City Council in January, 2006 and County Commission in March, 2006. The transaction was closed in September, 2006. Madeline Rogero joined the City of Knoxville in December of 2006
Gosh you are no where near as quick to apologize as you are to falsely accuse. I suppose that tells us something about you.
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Though the financing is complicated, according to Josh's report the gist of the dispute seems to be that Cityview sought reimbursement for payments to a subcontractor. The sub, however, told KCDC it hadn't been paid. KCDC apparently determined it shouldn't reimburse Cityview for expenses Cityview had not paid out. So Cityview sued to get the money.
Of course, the legal proceedings will sort out whether Cityview should have received the money, and more facts certainly will come to light. As Josh points out, the legal battle seems like it will turn on how the line of credit can and can't be used. Only then will we find out if anybody "dropped the ball."
Oh, and to answer jbr's question, TVA controls the shoreline and approves boat docks as it sees fit.
"The sub, however, told KCDC
"The sub, however, told KCDC it hadn't been paid. KCDC apparently determined it shouldn't reimburse Cityview for expenses Cityview had not paid out."
Who at KCDC made that decision? As far as the "complicated" part. The PILOT for the News Sentinel was so "complicated" that it was unenforceable. So when the Sentinel transferred jobs to India they got to keep their sweet PILOT.
Who at the City keeps writing these "complicated" TIFs and PILOTs?
These things are supposed to spur job creation, not kill it.
These things are supposed to
These things are supposed to spur job creation, not kill it.
Well, I suppose that's a secondary purpose. The primary purpose is to put a piece of property that is basically worthless for tax purposes back on the tax rolls, while revitalizing said piece of property.
worthless for tax
That's a pretty limited - and regressive - role for city government IMO. That property - inner-city waterfront - surely has more value than that to a city. In fact, couldn't that beautiful old glove factory have been renovated and used for housing, offices, retail, etc, in the way the Cherokee Mills factory has been reused? The latter has taken its time, had ups and downs, but has finally turned the corner to success. Been there lately?
*
Oh, certainly the old glove factory could have been renovated. But the owner was willing to do it, apparently because it wouldn't be worth the money. There are lots of things that could be done, but aren't financially feasible. For example, Baptist Hospital could be converted into a mixed-use, commercial, condo and apartment development. But who is willing to go to that considerable expense, especially in this real estate market?
I meant to say the owner
I meant to say the owner WASN'T willing to do it. My bad.
well, the project began
well, the project began before "this real estate market" existed. it was only people like me who asked whether a TIF could be risky. i was assured - at the time of the previous real estate market - that a TIF was a "win-win" deal.
I thought the Knoxville Glove
I thought the Knoxville Glove Factory was an ongoing concern, that at the time was convinced by the City and Dave Hill to relocate to its current Southerland Road location, so they could proceed with the South Waterfront Plan?
The Factory owner and this site, just proved to be the course of least resistance for the City to begin the project.
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I imagine the buck stops at KCDC with Alvin Nance, though it might have gone before the board of directors.
As for the KNS's PILOT, you are woefully misinformed.
"I imagine the buck stops at
"I imagine the buck stops at KCDC with Alvin Nance, though it might have gone before the board of directors."
This wasn't Section 8 housing. I thought Rogero managed these contracts. Either way, shouldn't you check into it?
Boat Docks
The Army Corps of Engineers used to be involved. Did someone squeeze them out of the picture?
Actually, shoreline permits
Actually, shoreline permits involve TVA, the Corps of Engineers, AND TDEC. TVA will sometimes coordinate all the permitting activity, tho.
These TIFs are all engineered by the lawyers, accountants, and
financial consultants who rip and clip hefty fees from these "complex" financing arrangements but are not stakeholder's in any of the entities ongoing efforts and why the city would extend TIF financing to a speculative residential condo deal is beyond imagination. A factory, a office building, a commercial development is one thing, but a speculative residential condo deal on the wrong side of the river is bizarre.
At best it's UT housing with parents and investors soaking up the condominiums, with the bridge being built from the condos to the arena until saner minds take a look at where it should be.
the wrong side of the river
the wrong side of the river
Some of us would like for you to rephrase that.
My bad, the side of the river with extremely limited vehicle
access and currently burdened with the additional traffic complications associated with the reconstruction of the Henley Street Bridge.
Traffic is not really a big
Traffic is not really a big deal, especially from the CityView condos. They just drive about a half mile to Gay Street bridge and cross over, bam you're in the big city (the north side).
once you get by the potholes
once you get by the potholes at the south end of the henley bridge. any plans to pave that intersection now so heavily used?
Wait...
So a $24.7 million investment in Henley Street Bridge to upgrade and improve access to the south side of the river is a liability. And while those improvements have that bridge out of commission, there's another bridge (also completely overhauled recently) about a 30 to 45 second drive to the east. A couple of minutes east of that, there's a highway bridge (completed just a few years ago) with limited-access highway connection directly to the interstate. This is what you call extremely limited vehicle access. Interesting.
why the city would extend TIF
why the city would extend TIF financing to a speculative residential condo deal is beyond imagination
Dude, you've got a powerful enough imagination to imagine HUD requirements are the primary obstacle to financing condos. You have no trouble making shit up to suit your political ends. I find it hard to believe your imagination is as limited as you claim.
Rikki, In this particular
Rikki,
In this particular instance, no one is imagining. Ask local realtors how hard it has been to help buyers get financing on condos. After Flordia, starting in 2008, lenders had to take a harder look at owner-occupied rates, CAMs, and percentage of the building sold. The lender can write the paper, but if these terms aren't met, Fannie Mae won't buy the mortgage.
Made up HUD regs on condominiums linked here
Mainstream condominium financing has been problematic since the Fall of 2009 and it's not limited to just South Knoxville developments, it affects condomiums on Gay Street, Peachtree Street in Atlanta, Sea Pines Drive on Hilton Head Island, Flyway Drive on Kiawah Island, or Collins Avenue in Miami Beach.
The pertinent restrictions are noted on pages 4 and 5 of the HUD letter.
Maybe the South Knox condo owner can guarantee the underlying mortgages for the condos sold in an effort to keep them moving, but to think that project is free and clear of a number of problematic markets concerns right now is completely laughable. These are not the type of developments the City of Knoxville should find itself in, as if the financial markets will support this type of development, they will support this type of development (which Regions did on the front end)and if the financial markets will not support the development, then by definition the City of Knoxville should not be supporting such developments.
(link...)
to think that project is free
to think that project is free and clear of a number of problematic markets concerns right now is completely laughable
Nothing could be more obvious than the existence of "a number of problematic market concerns." What's laughable is pointing only to HUD as the problem. That's like saying the problem with UT athletics is that the NCAA has standards.
The financing for these condos was written up before the years of fraud and regulatory negligence brought down the real estate and credit markets. By 2006, mortgage lenders had essentially normalized fraud as a standard practice so they could feed an unregulated derivatives market that wound up consuming untold trillions. All real estate projects are floundering right now because no one is buying. That's not HUD's fault.
Pointing to the city and to HUD as the culprits here is pure political prejudice and a weak attempt to cover for the dishonest bond issuers and lenders who crippled the world economy while Republican office holders were drunk on deregulatory zeal.
Maybe the South Knox condo
Maybe the South Knox condo owner can guarantee the underlying mortgages for the condos sold in an effort to keep them moving,
Maybe? Does it help that Clayton has invested in the City View condo project and Clayton has a bank?
why the city would extend TIF
as i recall, it was the TIF-that-couldn't-wait - so urgent that a special redevelopment plan was prepared for the glove factory site alone.
a speculative residential
a speculative residential condo deal on the wrong side of the river is bizarre.
I find it bizarre that you would write such a thing. Having said that, some of us on the south side do speculate curiously about the happenings on the north side.
There are river condos on both sides of the river
There is only one lawsuit pending against the City and KCDC and it does not involve condos on the "other" side of the river. The city and KCDC had nothing to do with the financing of the condos on the "other" side of the river.
Accessibility is a universal real estate concept, it is not limited to particular areas of Knoxville or Knox County, however, those residential developments which carry limited access also have additional pricing and marketing concerns and currently few, if any traditional lenders, are able to lend into the condominium environment given the HUD requirements for lending on condominiums these days.
This creates a major headache for developers looking to sell condominiums and current owners looking to sell or refinance their existing units.
*
The lawsuit is Cityview at Riverwalk LLC and Focus Development Inc. v. Knoxville's Community Development Corp. and the city of Knoxville, Tenn. It was filed in U.S. District Court for East Tennessee on Feb. 1, 2011. Source: Federal courts database, known as PACER.
As an aside ... That is a
TVA gets final say on commercial and residential access to the river. That dock is considerable but isn't really that large. Keep in mind that this project was conceptualized when waterfront property was skyrocketing in price and popularity. This project had most of the advantages of extreme urbanity while also offering easy and unfettered access to the river. In the old economy it was a bet a lot of folks would have made. If the project had happened earlier in that economy, the docks probably would have been covered, at least in part.
If I am wrong and the economy ever does get back to what it was, that condo/dock is going to be stupidly popular and successful. But even if that doesn't happen, there is a good chance for it to be a signature component of the development of the South bank.
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Just a hunch, but my guess is that them that can afford a riverfront condo with a private boat dock ain't doing so bad in this here economy.
Actually, given that sales of
Actually, given that sales of cabin cruiser style boats are down quite a bit, it would appear that those who used to be able to afford the condo with a boat dock are not necessarily the same ones who used to be able to.
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Sorry. Cafkia. I thought the rich were getting richer.
Actually, given your explicit
Actually, given your explicit verbiage, you were probably correct. However, a lot of the people who were buying those condos and boats could NOT afford them. They thought they could once they interjected time along with the assumption of the continuance of atypical growth in the economy. Of course, they were wrong. The much smaller population of people who actually could afford all of those things probably still can for the most part. Unfortunately, there are simply not enough of them to support an economy the size of one built on the purchases from tens or hundreds of times their number.
The "TIF lawsuit is all
The "TIF lawsuit is all Madeline's fault" meme that will not die...
Timing
I have received a few inquiries about this. The TIF for City View was approved by City Council in January, 2006 and County Commission in March, 2006. The transaction was closed in September, 2006. Madeline Rogero joined the City of Knoxville in December of 2006. Thanks.
Thanks, Bill.
Thanks, Bill.
Padgett supporters are going
Padgett supporters are going to make everything City administration ever did "Madeline's fault" right up until 9/27.
It won't work. There are too many people who'll call them on it.
If I were Mark Padgett, I'd be running as far away from Mike Mitchell/SusieQ/slapshot/insert pseudonym of the week here as fast I possibly could.
Urgency
"as i recall, it was the TIF-that-couldn't-wait - so urgent that a special redevelopment plan was prepared for the glove factory site alone."
Michael, that special zone has been in place since 1981 or 2. That's not what I call urgent.