Monday, August 20, 2007
Pie in the Hole
I mentioned last week the lack of any realistic date for completion of the Renaissance Tower, the City's responsibility to pay off the TIF bonds that provided corporate welfare to the developers, and the upcoming September 1 deadline that triggers a contract provision for liquidated damages of $25,042 a month to pay off those $3.7 million in bonds.
Local blogger Richard Drake's Street Jazz today joins the fray. He notes both Developer Nock's implicit pitch for the city to ignore the financial penalties for his breach of contract and the cozy relationship between the developers and Mayor Coody. Lots of slippery language and ifs involved. Drake says stop the games and start writing the check for damages.
The business booster Northwest Arkansas Times had an editorial yesterday that took a different position, one much more consistent with its membership in the Chamber of Commerce and the Fayetteville Economic Development Council than as an independent watchdog of government. The editorial writer suggests that the City should temporarily pretend to collect the money owed by the developers, but really let them off the hook. The Times position is that since the developers breached the original contract, they should get a Mulligan and a new contract with yet another completion date sometime in the future. When the hotel is finished, the editor says the City should then refund all the money collected as damages to the developers, meaning that the taxpayers would be responsible for all the bond payments of principal and interest since the bonds were originally issued. In other words, more corporate welfare to reward the developers. At least the Times takes a consistent position to support business interests over the public interest.