Mayor or League lobbyist: which one answers for Topeka's double standard?
Mayor Duncan,
You hold two jobs. By day, you're the League of Kansas Municipalities' Government Affairs Director, the man who tells legislators how Kansas cities ought to behave. By night, you're Mayor of Topeka, a city that doesn't follow the advice the League would give anyone else. I've copied the League's executive director, Nathan Eberline, because I'd like to know which of your two jobs is going to answer this.
Topeka runs two sets of rules.
If you're a private owner asking for a TIF, CID or RHID, the city makes you pass a "but-for" test. It caps your return at a 7.5% cap rate, and you get to pay for the privilege of having Jeff White at Columbia Capital decide whether you might make too much money. Kansas law doesn't require any of that. Topeka invented it.
If the deal belongs to the city or GO Topeka, the rules vanish:
HOTEL TOPEKA
- City spent: $18,350,135.96
- Sold for: $1,000,000 cash
- City bid $7.6 million against a $3 million county appraisal
- But-for test applied: none
220 SE 6TH ST (FORMER AT&T BUILDING)
- Owner paid $1,512,500
- Taxpayers put in about $9.4 million, including a GO Topeka-backed lease
- Owner's gain at the $8 million asking price: $6,487,500, about 30% a year
- Return test applied: none
GORDON CENTER (CHICK-FIL-A AND WHATABURGER)
- Went through two bankruptcies before the site came back
- About $1.7 million in extra cost tied to the Chick-fil-A and Whataburger work
- In the traffic study, the site's own history wasn't allowed to count
A private developer who lost $17 million on a hotel would be out of business. A private owner asking for a 30% return would be laughed out of City Hall. Topeka does both, and calls it policy. Meanwhile the owner who carried a site through two bankruptcies gets told the past doesn't matter.
So here's the question, Mr. Lobbyist: if another Kansas city called the League tomorrow and said, "We hold our citizens to a strict rate-of-return test, but we exempt ourselves and our economic development partner," what would you tell them? I think we both know. You'd tell them to apply the policy evenly or get rid of it. The League says it exists to help cities follow the rules, not get around them. Topeka is your hometown and your city. Take your own advice.
I'm asking for three things:
1. Your answer, as mayor, on whether this double standard is acceptable.
2. The League's view on how a member city should handle a policy it applies to its citizens but not to itself.
3. A council agenda item to retire the but-for test or apply it to every city and GO Topeka deal.
I'm not asking for another "my initial response was clear." I'm asking for a straight answer, and I'll be sharing whatever comes back with the public.
Henry McClure
(762) 291-2765
You hold two jobs. By day, you're the League of Kansas Municipalities' Government Affairs Director, the man who tells legislators how Kansas cities ought to behave. By night, you're Mayor of Topeka, a city that doesn't follow the advice the League would give anyone else. I've copied the League's executive director, Nathan Eberline, because I'd like to know which of your two jobs is going to answer this.
Topeka runs two sets of rules.
If you're a private owner asking for a TIF, CID or RHID, the city makes you pass a "but-for" test. It caps your return at a 7.5% cap rate, and you get to pay for the privilege of having Jeff White at Columbia Capital decide whether you might make too much money. Kansas law doesn't require any of that. Topeka invented it.
If the deal belongs to the city or GO Topeka, the rules vanish:
HOTEL TOPEKA
- City spent: $18,350,135.96
- Sold for: $1,000,000 cash
- City bid $7.6 million against a $3 million county appraisal
- But-for test applied: none
220 SE 6TH ST (FORMER AT&T BUILDING)
- Owner paid $1,512,500
- Taxpayers put in about $9.4 million, including a GO Topeka-backed lease
- Owner's gain at the $8 million asking price: $6,487,500, about 30% a year
- Return test applied: none
GORDON CENTER (CHICK-FIL-A AND WHATABURGER)
- Went through two bankruptcies before the site came back
- About $1.7 million in extra cost tied to the Chick-fil-A and Whataburger work
- In the traffic study, the site's own history wasn't allowed to count
A private developer who lost $17 million on a hotel would be out of business. A private owner asking for a 30% return would be laughed out of City Hall. Topeka does both, and calls it policy. Meanwhile the owner who carried a site through two bankruptcies gets told the past doesn't matter.
So here's the question, Mr. Lobbyist: if another Kansas city called the League tomorrow and said, "We hold our citizens to a strict rate-of-return test, but we exempt ourselves and our economic development partner," what would you tell them? I think we both know. You'd tell them to apply the policy evenly or get rid of it. The League says it exists to help cities follow the rules, not get around them. Topeka is your hometown and your city. Take your own advice.
I'm asking for three things:
1. Your answer, as mayor, on whether this double standard is acceptable.
2. The League's view on how a member city should handle a policy it applies to its citizens but not to itself.
3. A council agenda item to retire the but-for test or apply it to every city and GO Topeka deal.
I'm not asking for another "my initial response was clear." I'm asking for a straight answer, and I'll be sharing whatever comes back with the public.
Henry McClure
(762) 291-2765
Comments