Taxpayers could have saved over $5 M if testing had been done up front!!
The City County Observer in its pursuit of journalistic activities that promote good public policy has to pay attention to what is going on in Evansville and Vanderburgh County to achieve its goals. It is expected that local elected officials and especially Mayor Weinzapfel would have the same goals and would work diligently to achieve them as well. Unfortunately that does not seem to be the case.
Last Spring, the City County Observer correctly predicted that structural issues would force a hard decision upon whomever happens to be in charge of the final solution for the Executive Inn complex. Specifically, we predicted that it would be recommended that both the Executive Inn and its parking tower would need to be torn down for their lack of structural integrity. Yesterday, at a meeting of the Evansville Redevelopment Commission, Dennis Dye of Browning Investments confirmed that both the Executive Inn and its parking tower have been determined to be structurally unfit and recommended that both be demolished.
Mr. Dye proceeded to recommend that a new 220 room hotel be built on the site where the Executive Inn parking tower stands without making reference to replacing those much needed parking spaces. When asked about the feasibility of renovating the existing hotel by a member of the Evansville Redevelopment Commission, Mr. Dye responded, “If you do not want to open a hotel on that site then leave the Executive Inn standingâ€. Project manager John Kish followed that statement with his own opinion of “I don’t think that refurbishment is the right thing to doâ€. He later expressed an opinion that some eventual developer should determine that, so the Executive Inn that was accepted back “as is†by the City of Evansville yesterday will stand as a monument and a reminder of this financial boondoggle for the foreseeable future.
When asked by a member of the Evansville Redevelopment Commission, why the structural issues were not discovered in 2008 when the project was still on the drawing board, project director John Kish stated that they did not want to spend the money (approximately $100,000) to conduct structural testing. We were astonished that project director Kish chose to avail the City of Evansville of the opportunity to do a routine structural test as any homeowner would be forced by lenders to do prior to obtaining a mortgage. Mr. Kish also stated that the earthquake in Haiti was the catalyst to inspire him to authorize the structural tests. We were shocked and amazed by that statement. The statement about Haiti drew laughter among the attendees including Marsha Abell, the only political candidate or elected official who bothered to attend the meeting. The Haiti earthquake was after the purchase of the building had been completed and was thus too late to use that study to get a better price on the complex from Mutual of Illinois who had acquired the property through foreclosure from its previous owner. Mutual of Illinois, that supposedly expressed an interest in financing the project, has been taken over by the FDIC for insolvency.
It is sad that we will never know how much money the taxpayers of Evansville could have saved off of the purchase price of $11.9 Million if the structural deficiencies been known ahead of time. Short sales conducted by lending institutions are common with distressed properties. The taxpayers of Evansville could have benefitted from this practice. Could we have saved $1Million, $3 Million, or even more than $5 Million had the due diligence of a structural study been completed before rushing to do a deal? How much does a finding of structural problems devalue a building? It was reported yesterday by Browning that the parking tower needs $2 Million of work to make it structurally sound. Assuming a similar number for the Executive Inn, it is realistic to expect that the taxpayers of Evansville could have saved at least $5 Million on the purchase of the Executive Inn Complex if appropriate levels of patience and due diligence would have been exercised.
It is gratifying for a newspaper to be correct with predictions based on inside sources. Correct predictions however cannot put any savings back into the pockets of Evansville taxpayers. We at the City County Observer will continue to focus our undivided attention on Evansville and Vanderburgh County. Our ambitions for a prosperous future are totally focused here and not in Indianapolis or Washington D.C.
The Weinzapfel administration and its advisors are duty bound as stewards of this project to focus on the needs of Evansville and Vanderburgh County. Finally, after all of these cost overruns due seemly to lack of planning have been exposed, Mr. Kish, an Indianapolis consultant hired by the Weinzapfel administration to manage the Arena project, had his responsibilities expanded to cover the entire project including the Executive Inn and parking garage. We wish him well. There should have been overall oversight from the start. This is not a case of the monkeys running the zoo, there weren’t even any monkeys. There was never any overall project management for the Arena/Executive Inn/parking tower and that mistake has left the taxpayers of Evansville to pick up the tab.
Mayor Weinzapfel is known for his “my way or the highway†management style. In our opinion he is also known for surrounding himself with like minded advisors who look to him to provide them with whatever opinions that he wants to hear. The City County Observer wishes that the Mayor’s ambitions for photo-ops in the fall of 2011, in anticipation of becoming Governor of Indiana, would not have driven this entire Arena/Executive Inn project schedule. We also wish that the small group of handpicked like minded mayoral advisors would have been more diligent and outspoken in carrying out their duties to the taxpayers of Evansville. This is especially so for the Evansville Redevelopment Commission members that includes several bankers who are very familiar with loan requirements for both new and renovated commercial properties.
It seems as though every major project in Evansville is contracted out to a supposedly wiser and more experienced business or consultant from Indianapolis. The oversights in the Arena/Executive Inn project are now glaringly exposed for all to see. Could Evansville people and businesses have done a better job than this? We know so! By our observation, it would have taken a deliberate effort to let things slide for this to have turned out any worse. At this point, the Arena is on track. Mr. Kish has done the job he was hired to do. A Convention hotel is not even close to having definition. If all goes perfectly and according to a plan that we are sure is finally being worked on, there MAY be a hotel by the fall of 2012, three years after the closing of a functional hotel. Ironically enough, at the time of elections to determine the make-up of the Evansville City Council and the Mayor that may prove disastrous to incumbents.
Evansville and Vanderburgh County will lose much business and tax revenue until a hotel is opened. It didn’t have to be that way. Taxes from a Convention hotel are already pledged to pay off the bonds that raised the money to build the Arena. Today that source of revenue is compromised. If there is not a hotel, who will pay off these bonds?
If you agree with the contents of this editorial please contact Mayor Weinzapfel and the Department of Metro Development let them know.
People are heading for the door around here, and who can blame them. When you look at what is in store for you, as a local taxpayer, for the foreseeable future.
Between the school corporation extravagance and the Mayor’s grand plans we would need a greatly expanding tax base in order to pay for all of this. What we have is a rapidly shrinking tax base which will force tax rates up and up.
Amazing post thanks!
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