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Business Development News Politics Transportation

Parking Lease Deal to Move Forward Following Appeals Court Ruling

Vandalized Parking Meter in OTR

photo (5)This morning the Hamilton County Court of Appeals released its decision on the court case (Lisa McQueen, et al. vs. Milton R. Dohoney, Jr., et al.) concerning whether the City of Cincinnati had the right to enact emergency ordinance provisions in leasing its parking assets to a third party. The decision from the court struck down a lower court’s ruling and in turn upheld the city’s parking lease ordinance and the right for City Council to enact emergency ordinances.

The decision means that the City of Cincinnati can enact its Parking Modernization & Lease Plan, which was passed by City Council 5-4 in March. The ruling also states that citizens do not have the right to file a referendum on items passed with an emergency clause, thus eliminating the possibility of a public vote on the parking lease deal this November.

Immediately following City Council’s March vote, opponents of the plan filed a taxpayer lawsuit against the plan and Judge Robert Winkler issued a restraining order preventing the city from using the emergency ordinance clause for this issue or any issue before the City of Cincinnati. In this particular case, Judge Winkler’s restraining order was issued within minutes of its vote.

Judge Winkler then heard arguments the following week and made a ruling in early-April that allowed a referendum on the emergency ordinance to move forward by questioning the clarity of the city’s charter provisions on the matter.

In May the Court of Appeals heard arguments from both sides. Today the long-awaited decision was announced. In making its decision the Court of Appeals considered several things.

  1. Whether the Plantiff in the case followed the proper legal procedure in filing for the taxpayer lawsuit. The decision documents state in three separate paragraphs that the plaintiffs failed to make the necessary $325 deposit. “The plaintiffs-relators intimate that they cured the deficiency by paying the $325 deposit after the common pleas court had entered its judgment. But the record certified on appeal does not demonstrate that any deposit was made.” Paragraph 23.
  2. Emergency Ordinances are subject to referendum if provisions are provided within the city’s charter: The city’s charter has language outlining the way the city can pass ordinances and emergency ordinances. It also outlines the provisions for referendums. The charter also defaults to state law provisions for what the charter does not cover. Since there were no provisions in the charter for referendum of emergency ordinances, they cannot be challenged to referendums.
  3. The court found that the Emergency Powers provision was backed up by 90 years of case law. In the 90+ years since the enacting of the city’s charter government, Hamilton County and State level courts have ruled in defense of the city’s emergency powers provisions.
  4. The court found that the city properly outlined the nature of the emergency in enacting the emergency ordinance.
  5. The City’s Charter was not ambiguous. The court took the path of interpreting the charter as a whole instead of the sum of its parts.

The ruling is being considered a major victory for the City of Cincinnati as it is now able to move forward with its Parking Modernization & Lease Plan, which will provide an upfront payment of $92 million and annual installments of $3 million from the Port of Greater Cincinnati Authority.

It also defends a wide array of city actions, that are passed with the emergency ordinance clause, from being subject to public referendums. Over the past several years, a host of decisions made by a plurality of City Council had been subject to what some believe is an inefficient way of running a government.

“While Cincinnatians for Progress did not take a position on the parking lease, we believe that good governance is critical to the city of Cincinnati, and we believe that our representative democracy as outlined in the city’s charter is good governance,” Derek Bauman, Co-Chair for Cincinnatians for Progress, told UrbanCincy. “In addition, it is vital for the city to have the ability to pass ordinances as an emergency when necessary. We welcome the appeals court ruling.”

What has yet to be decided is what will happen with the $92 million upfront payment, which was originally planned to cover the city’s budget gap and provide funding for a host of economic development deals.

Since that time, the City of Cincinnati has passed a budget, which originally was to get $25.8M from the parking lease deal, and found alternative funding sources for a number of the projects ($20M for MLK Interchange, $12M for 4th/Race Apartment Tower) involved in the original list.

The result is a $57.8 million question now put before Mayor Mallory’s Administration and City Council.

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News Politics Transportation

Support for Public Transit Grows, While Funding Sources Remain Limited

A new survey conducted by the Mineta Transportation Institute (MTI) reveals that nearly 74% of Americans support the use of their tax dollars for “creating, expanding, and improving public transportation” in their community.

The results were championed by groups like the American Public Transportation Association (APTA) at their annual rail conference being held in Philadelphia.

“We are experiencing this surge in support because citizens can see, touch, and feel the economic impact of investing in public transportation,” said APTA Chair Flora Castillo. “This survey emphasizes that public transit plays a great role in society because it directly touches people’s lives.”

Metro Buses
Ridership and public support for transit has continued to grow in Cincinnati, despite consistent attacks from the Kasich administration. Photograph by Randy Simes for UrbanCincy.

The survey comes as many transit agencies around the United States are experiencing gains in ridership, including an additional 200,000 riders on Metro bus service in 2012. The news also comes on the heels of the approval of Ohio’s budget which includes a provision that bans students in grades K-5 from using transit buses for their transportation to or from school.

“A provision like this would be devastating to these students’ ability to get to school,” Roseanne Canfora, spokeswoman for the Cleveland Metropolitan School District, told the Cleveland Plain Dealer in May.

Cincinnati Public Schools (CPS) also utilizes Metro bus service to get students to and from school. While Metro’s contract with CPS does not include students in grades K-5, the state-level changes reflect a growing anti-transit sentiment from the statehouse in recent years.

While ridership on transit and support for taxes going towards transit increases throughout Ohio and the United States, the State of Ohio continues to invest in almost exclusively roads. In the recommended 2014-2015 Transportation Budget, Governor John Kasich (R) and ODOT Director Jerry Wray call for a mere 1.9% of the $3.1 billion budget to go towards public transportation.

The newly released study championed by APTA focuses on national policy, however, and shows that the non-profit advocacy group aims to arm themselves with the results.

“We look forward to sharing these great results with Congress,” said APTA President and CEO Michael Melaniphy. “In most political circles, receiving nearly 74 percent in favor of increased investment would be considered a landslide.”

The MTI-conducted survey also found that 66% of Americans believe that Congress should increase its spending for public transportation.

Locally in Cincinnati, meanwhile, funding levels for Metro continue to stagnate as the City of Cincinnati has remained as the sole regional financial contributor to the Southwest Ohio Regional Transit Authority (SORTA) since its creation in 1973.

SORTA officials have attempted to grow support from regional partners by restructuring its board, as recently as 2009, to include more regional representation from Butler, Warren and Clermont Counties. The efforts, however, have not yet changed the funding equation.

“Any change to the current funding system is a matter for consideration by Cincinnati and Hamilton County elected officials, and voters in this region,” explained SORTA Board chair, Suzanne Burke. “We are unaware of any changes being considered, and additional public funding from Clermont, Warren or Butler counties is for their citizens and elected officials to consider.”

With no additional funding partners or public taxes envisioned for the near future, SORTA officials are working to continue to grow and restructure its service that is reflective of the changes in the city and region over the past 40 years – something that has not, and will not be easy to do.

“Metro is pleased with the recent news released by APTA,” Burke concluded. “We believe this region’s changes since 1973, when our system was formed, require us to consider possible improvements in public transportation. Public transit is a key job connector and a huge factor in the improved quality of life in our region.”

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Development News Politics

Smart Growth May Offer Cincinnati a Way Out of Its Structurally Imbalanced Budget

Land Use Budget ImpactsThe City of Cincinnati passed yet another structurally imbalanced budget late last week. At the meeting Vice Mayor Roxanne Qualls (C) and other council members admitted that the approved budget once again relied on a one-time fix to get the city through another budget cycle without significant layoffs and major funding cuts.

Despite having its hands tied in coming up with creative ways to find revenues, Cincinnati is not alone in dealing with this dilemma. Hundreds of cities across the nation are struggling with budget deficits with some much larger than ours.

Smart Growth America recently completed a national report, titled Building Better Budgets, with findings that could help many municipalities find long-term solutions to their budget crisis. The report makes three main arguments that smart growth development, described as compact, walkable and mixed-use overall save municipalities on upfront infrastructure costs, service costs and serve to increase the city’s tax base better than suburban style developments.

After reviewing a diverse collection of cities across America, such as Raleigh, NC,  Nashville, TN and Champagne, IL, the study found that smart growth development costs an average of 38% less for upfront infrastructure, saves municipalities an average of 10% on ongoing delivery of services, and generates approximately 10 times more tax revenue per acre when compared to conventional suburban development.

“These figures are conservative, and many communities could save even more,” authors of the report stated. “Smart growth development’s potential for lower costs and higher revenues means that many municipalities can operate smart growth development at a surplus rather than a deficit.”

How local projects stack up
Several projects on the horizon are poised to add to the tax base in Cincinnati’s urban core. Phase two of The Banks, dunhumbyUSA Centre, the 580 Building apartment conversion, hotels at the Bartlett Building and Enquirer Building, and proposed apartment buildings above Fountain Place and the parking garage at Seventh and Sycamore all offer the upfront infrastructure cost savings and long-term revenue advantages discussed in Smart Growth America’s report.

The redevelopment of the Pogue’s Garage into a 30-story apartment tower with a grocery store, and an 11-store Holiday Inn at Broadway and Eighth Street are two other projects that offer similar benefits, but are currently on hold due to the ongoing legal dispute surrounding the City of Cincinnati’s Parking Modernization & Lease Plan. Additionally, a slew of projects in Over-the-Rhine, Walnut Hills and Northside also appear poised to help stabilize the city’s finances thanks to their smart growth advantages.

Property Tax Yield

Not all is well, however, as many recent real estate investments throughout the city have taken the conventional suburban development approach. The Incline District in East Price Hill, Villages of Day Break in Bond Hill, Oakley Station in Oakley, MetroWest in Lower Price Hill, and developments along Red Bank Road in Madisonville all seem to be missing the bigger picture about the financial advantages of smart growth.

In addition to the actual footprint of the development, the report discusses the importance of a project’s site location.

“The per-acre measurement of tax revenue is extremely important because land is a precious commodity for every jurisdiction,” the report concluded. “It is true that in some cases the total dollar amount of tax revenue in conventional suburban settings can be very large, but those conventional suburban developments consume large amounts of land. Many cities in the United States have a constrained land supply and must husband their land resources carefully in order to protect their solvency.”

While many of the real estate investments throughout Cincinnati are being done in a smart manner, others seem to be squandering valuable urban land with suburban-style developments. The City of Cincinnati, and other cities around the region, might be able to make a long and sustained positive impact on their budgets by refusing to go forward with projects that offer an easy, short-term score, and instead demanding more sustainable development practices in their community.

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Up To Speed

Pitfalls and Potential in P3 Infrastructure Financing

Pitfalls and Potential in P3 Infrastructure Financing

As both Ohio and Kentucky look into investing in public-private partnerships (P3’s) for the construction and operation of the new Brent Spence Bridge, other states around the country are already striking similar deals. With the decline in revenues from the gas tax, which has not been raised since 1993, is P3 the reality of future road infrastructure projects? Read more at the Atlantic Cities:

Still, he says, the fact is that private investors come to the negotiation with many things the states both need and want: quick cash, and the ability to fund projects without raising debt, and the flexibility to use limited public resources in other ways. At the end of the day there’s just too much on the line for investors to complete these deals without some reasonable safeguards for success. State pension funds across the country — the massive California Public Employees’ Retirement System notable among them — have made enormous investments in infrastructure precisely because the payoff feels sizeable yet certain.

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Up To Speed

Amtrak aiming to have states pick up operating expenses for short-haul routes

Amtrak aiming to have states pick up operating expenses for short-haul routes

As Amtrak has been recording record ridership on its core routes, federal budget belt-tightening has forced the transit agency to engage the states in cost-sharing measures for some of its smaller lines. However; this also serves an opportunity for some lines to be upgraded with enhanced infrastructure thus enabling some routes to operate at higher speeds. More from the New York Times:

The railroad has traditionally subsidized some local routes, while leaving others up to the states to support, but now state governments will have to pay for all local routes of less than 750 miles in a state. The Northeast line, Amtrak’s moneymaker, is not included. If all the states chip in, Amtrak officials expect revenue to increase by about $85 million a year, which would shrink its chronic deficit.