(Editor's Note: The above letter to the editor is based on remarks made by Peter Negri at the June 19 Board of Trustees meeting.)
Fifteen years ago, 85 percent of village residents supported a referendum to spend $8.5 million to purchase the St. Paul's property. The cost to the average taxpayer was $65 per year over the life of the 20-year bond...a great investment.
The Committee to Save St. Paul's recognized this great investment and responded to the Village RFP for redevelopment of the historic building site with the following goals in mind: maintaining village control, benefits for residents inside and outside the building, true historic preservation of the building (and may I quote Mayor Brian Deveney in his 1993 message to residents, who said the benefits of the acquisition include "preservation of an architectural jewel which defines our special historical character...This acquisition will provide the village with control over its destiny and comfort those who fear destructive development."), and lastly, to accomplish the above at an affordable and reasonable cost to taxpayers.
Karen Backus & Associates was original engaged by the village for the sum of $155,000 for a three-phase project: a feasibility study, development of a Request for Proposal after outreach and the designation of a developer by spring 2006. Ms. Backus's billing was at $275 per hour.
In the fall of 2005, Ms. Backus told the Mayor's Committee on St. Paul's that the existing shape of the historical building was not viable. Instead, a "C" shaped building was the way to go, keep the façade and gut the inside, add a floor, and add construction infill in the back of the building. She continued, sell the land for "zero" and the village can share in future profits. A land value appraisal completed by Grubb & Ellis in 2005, based on a condo project built in this "C" configuration, determined that the property was worth $20 million. The village board of trustees and Karen Backus scheduled its first public outreach meeting with the community for December 2005.
Prior to that meeting, the Mayor's Committee chairperson, Trustee John Mauk, wrote the following to Ms. Backus in an email: "We don't even want to mention the C option as part of the presentation. As for the infill, in the public presentation, we don't even want to breathe this as the direction for the future. We need you to plant the idea for now that some minimal new construction may be required." In turn, Backus emailed her team on December 14, 2005: "It's not going to be fun, as we have to walk a fine line between saying the development within the envelope is feasible, but setting people up for us to come back with a redevelopment plan that may involve controversial and unwanted things like new construction or in-fill."
So much for public outreach and honesty. The Committee to Save St. Paul's received the above email correspondence from Karen Backus & Associates during the discovery phase of its 2005 lawsuit, which challenged the village's right to seek condo developers, which would mean a sale of the land, while the property was designated "public trust" and "parklands."
In her public presentation on Dec. 15, 2005, Ms. Backus's findings were that stabilization of the building would cost $15 million to 16 million, demolition, $5 million to 6 million, and the "highest and best use" for St. Paul's is luxury condominiums. Six months later, the RFP stated there was to be an allowance for "some additional, but minimal, new construction." The key elements of the July 19, 2006 RFP included: a Base Case Scenario (stay within the footprint of the historic building) and a Modified Scenario (allowing additional construction, but staying in the Ellis Hall footprint, 16,000 square feet), plus a possibility of public use, return to the village through a ground lease and tax revenue.
The Committee to Save St. Paul's/Canus proposal met the Base Case Scenario, including village control through a ground lease, construction limited to the main building and public space. We held numerous presentations for the public throughout the next year. The village showed nothing to the public with regard to the RFP responders.
Toward the end of the selection process, Ms. Backus required an apples-to-apples comparison of the proposals from the "short listed" responders, AvalonBay, CSSP/Canus and Albanese. She called for each proposal to include no money from the village, no development beyond the Ellis Hall footprint, 10,000 square feet of community space and a profit share plan. At the time, the Avalon proposal called for 62 apartments in the main building plus 37 additional units in a townhouse structure of three stories and basement, 36,000 square feet above grade, 12,000 below; 12,000 square feet of community space, a 35-year PILOT (payments in lieu of taxes) program paying $200,000-700,000 per year. In October 2007, AvalonBay stated the present value of real estate taxes and village share of net cash flow would equal $30 million in current dollars ($28.5 million in tax revenue and $2.3 million in profit share).
Watch how this changed.
In the meantime, Committee chair John Mauk, during the "individual trustee reports" section of the board of trustees October 2007 meeting, announces the selection of AvalonBay and the elimination of the Committee to Save St. Paul's/Canus. The public agenda showed no indication that this report and vote by the trustees was to take place.
Avalon Bay began holding meetings with various community groups with no official Village attendance. No public presentations of the Avalon proposal were made by the village. No schematics of additional development plans were shown, only early plans. No definitive financial information was given.
Fast forward to May 2008. The Avalon proposal now shows: 108 units (the additional development was 37 units, now 46+, given that the state has passed new legislation that could give Avalon an additional 10 percent workforce housing bonus). Parking went to 177 surface spaces with 50 garage spaces. A three-story, 36,000 square foot addition went to a four-story townhouse of 78,000 square feet. (Remember, the RFP developed by Backus called for any new development to stay within the footprint of Ellis Hall.) The plan now shows no ground lease payments and no public space unless we pay for it. Profit sharing changed from the original, too, and will likely amount to zero (remember: it was $2.3 million in the apples-to-apples comparison). Remember the tax revenue of $28 million in the apples-to-apples? Well, now the PILOT payments come to $198,000 ($25,000-30,000 per year split among village, school and county) in the first nine years, and $3.4 million in the next 11, for a total of $3.6 million as the sum of payments over 20 years. The recent IDA deal for The Garden City Hotel indicates a $2.8 million loss for our school district over 10 years. The Memorandum of Understanding between the village and AvalonBay adopted earlier this year, drawn up by consultant Bryan Cave, says, "The village shall lead the IDA negotiations." I wonder how residents will feel about that?
Another property appraisal has been done, and the land value has come in at negative $14 million. Will this be used to justify the gifts of a zero ground lease and paltry PILOTs.
This is a total gift to AvalonBay-no money up front, a no-annual payment 99-year lease, PILOTs versus taxes, no real profit sharing-close to a $50 million gift to AvalonBay. What do we get? No use of the building, 78,000 square feet of additional density, loss of parking for special events at the fields, even the loss of a possible covered sports complex behind the building.
Here are my conclusions:
Terminate Backus. Her original $155,000 contract is now nearing a $400,000 cost to taxpayers with the most recent extension of her contract through the end of the year. Reasons for termination include her conflict with AvalonBay, which is one of KBA's major clients, excessive costs to the village and incompetence.
Terminate AvalonBay. Their plan calls for a giveaway by the village, no financial gains, too much additional density. This plan will not get the necessary home rule and parklands alienation to go forward.
Stop the legal work with Bryan Cave, which has also done work for AvalonBay, and end work with the Greenwich Group-two more consultants hired to assist the Mayor's Committee that have cost us about $40,000.
Take the consultant's money and spend it to maintain the St. Paul's Building. The village should meet community space needs and needs of nonprofit groups.
Mothball is not a dirty word. Fifteen years ago residents were willing to spend $65 per year to buy St. Paul's. With good public use, plus nonprofit tenants, we could add to the value of all homeowners.
We do not have to demolish the historic building.
I call on the members of the village board to start acting like trustees. Protect the assets we have entrusted to you and communicate with residents.
Peter Negri
President, Committee to Save St. Paul's