For the first time in its four-year history, the Downtown Development Trust is set to buy a property for which it has no immediate buyer or use. And so, regardless of what it ultimately does with the former Greyhound bus station at Washington Boulevard and Lafayette Street, this is the ideal time to ask an obvious but crucial question:
With the private sector increasingly willing to invest in downtown Fort Wayne, to what degree – if any – should the not-for-profit, quasi-public Trust compete for prime real estate?
Until now, the Trust – a joint venture of the Downtown Improvement District and the Economic Development Alliance funded to date primarily through a $1 million line of credit from the Community Foundation of Greater Fort Wayne – has acted with a specific purpose in mind. In 2012, it paid $250,000 for the former Instant Copy building at 232 W. Wayne St. knowing businessman Scott Glaze was interested in opening a grocery there. This year, the Trust played a vital role in acquiring the 10 properties needed for the recently announced $71 million office, housing and commercial project in that same block.
The Trust has signed an agreement to buy the depot, vacant since January, for about $450,000, with closure awaiting Greyhound's removal of underground fuel-storage tanks. The Trust would then raze the building and hold the land pending arrival of the “right” development opportunity.
It's hard to argue with the Trust's actions in this case. Karl Bandemer, the Economic Development Alliance's senior development officer and Trust member, correctly pointed out that the unsightly former gas station sits at one of downtown's busiest intersections – a high-profile spot he and others believe should be reserved for a high-end project of broad community value. “(Downtown) wouldn't be served by another tattoo parlor (there),” said Bandemer, who will take office as deputy mayor next week.
I don't disagree. But I'm not looking for a good location for my tattoo parlor, either.
The Trust is designed in part to assume the land-acquisition role government once played in redevelopment projects. Courts have made the use of eminent domain more difficult, and although Indiana law allows officials to discuss the purchase of real estate behind closed doors, action must be taken in public – scrutiny that can make it more difficult or expensive to acquire land, Redevelopment Director Greg Leatherman said. What's more, the price government must pay for a property determined by two appraisals – each of which could cost more than $3,000.
The Trust faces no such constrictions. Bandemer has been able to negotiate deals quietly, and as a not-for-profit agency some owners have been willing to sell at below-market prices in exchange for a tax deduction. The Greyhound station's appraised value, Bandemer said, is about $100,000 higher than the amount the Alliance has agreed to pay.
But even then, word can leak out. When the city's Redevelopment Commission earlier this month paid $4.29 million for the land needed for the $71 million project, some of the prices were below appraisal, but others were higher – including one that sold for more than $563,000 above appraisal, apparently because the owner got wind of the project and held out for more.
It is precisely because the Trust can operate in relative secrecy that its actions, guidelines and motives must be as transparent and consistent as possible. When the Redevelopment Commission bought Glaze's building earlier this month for the $71 million project, for example, it paid $285,000 – $35,000 more than Glaze had paid. That was done to reimburse Glaze for expenses related to the building, Bandemer and Leatherman explained.
I'm not suggesting anything inappropriate was done, but some might question why taxpayers should pay a premium for a building Glaze ultimately chose not to develop, and will now be demolished.
Control of property is key for any development, and the Greyhound station is across the street from a large warehouse that is for sale. Bandemer said the Trust's ownership of the depot could boost efforts to develop the larger building, and if the right buyer is found, Bandemer said, the Trust may be willing to sell the station for what it paid, or even less. In the end, Leatherman said, that's how the Trust should be judged: Does its involvement create jobs, attract investment or increase the tax base?
A more meaningful yardstick might be: Did the Trust's involvement produce a better result than would have been achieved by the private sector alone? But how is “better” defined, and by whom?
The organization has already accomplished much, and has great potential. But to keep the "trust" of the community it represents as it expands its scope, the community should be invited to help answer that question.