Tag Archive for 'development'

Perdue, Mercer Reynolds, Jekyll Island & Money: Hanky Panky in Georgia Politics

Published
by
Wilson
on October 12, 2007
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If this interview with Wade Shealy of The Jekyll Island Company doesn’t piss you off, nothing will.

On September 24, 2007, the Jekyll Island Authority, in a display of arrogant stupidity (where you do something arrogant in front of the world for everyone to see), if not downright corruption, awarded a redevelopment project, worth billions, to Mercer Reynolds’ company, Linger Longer. You know Reynolds as in Reynolds Plantation on Lake Oconee, as in Bush’s former Ambassador to Switzerland, as in Advsior to the Scooter Libby Defense Fund, and as in one of the biggest fundraisers and contributors to Bush and the Republicans. An ambassadorship is an appropriate reward, bilking the State of Georgia isn’t.

In June 2007 the Jekyll Island Authority solicited proposals (RFP) to develop 45 acres (the acreage specified in the RFP) on Jekyll Island. Bids were turned in by the middle of August. Four companies submitted proposals: The Jekyll Island Revitalization Group, Linger Longer Communities, Cousins Coastal Ventrues, and Trammell Crowe Company.

One company’s proposal, Cousins, was culled because only the top three could be considered for the award. The winner was announced on September 24th by Ken Bleakley, the consultant hired by the JIA to oversee the process. (NOTE: When the consultant was being selected, Ken was the only one interviewed. At least two JIA Board Members wouldn’t even vote because only one candidate was being considered for such an important position. Ken, of the Bleakley Advisory Group, was the focus of some controversy in Macon in 2006. And, I couldn’t find a website for BAG which seems odd.)

The selection committee was composed of two employees of the JIA, together with the Chairman, Benjamin (Ben) G. Porter of Macon and JIA Board Member, Robert W. (Bob) Krueger of Hawkinsville, GA, both of whom were appointed to the JIA by Perdue in August 2006. While the full JIA Board apparently voted, they apparently had no opportunity to do any evaluation of the various proposals and just had to accept the selection committee’s choice.

When Ken announced Linger Longer as the winner, he said the reason was their proposal provided more green space. He seems to have forgotten to mention that the reason their plan had more green space was that it included a 19 acre park that was not located on the 45 acres specified in the RFP.

QUESTIONS OF THE DAY: (1) Why is it that the other 3 companies were never told they could include an additional 19 acres if they wanted to? (2) If this were an innocent mistake (as opposed to intentional rigging of the process), why weren’t the other companies allowed to resubmit their proposals based on an amended RFP? (3) Why wasn’t Linger Longer’s bid thrown out (rather than Cousins’) for failiing to comply with the specifications of the RFP? Why didn’t Ken Bleakley get in trouble for screwing up the process.

Wade Shealy, the Managing Partner of Jekyll Island Company, thinks his company submitted a much better and more favorable proposal for the State of Georgia than did Linger Longer. Here’s why:

(1) His company was going to fund the project without borrowing any money from the State. Linger Longer’s proposal includes two loans from the state totalling $84.5 million. (Good grief, not only do they get to make millions, we have to finance it for them!)

(2) His proposal would have returned to the State almost $100 million more in income over the specified 15 years than Linger Longer. (Apparently, Linger Longer’s money doesn’t linger longer.

(3) His proposal included 277 condos that would sell for less than $400,000. LL’s proposal provided for 17 condos below $400,000. (For the concern about keeping Jekyll affordable for average Georgians, see my interview with David Egan.)

(4) His proposal gave the residents of Georgia a 30% discount. LL’s, none.

(5) His proposal also gave $500,000 a year to the Jekyll Island Foundation, which would certainly go a long way in helping to preserve Jekyll.

(6) His proposal included establishing a permanent conservation easement on teh 65% of Jekyll that is to remain undeveloped so that politicians can’t change their mind in the future and open more of it for development.

Being awarded the Master Developer contract means profits in the millions of dollars, maybe even hundreds of millions. While that may be a hell of a lot of money, the risk of failure, poor sales, etc. is always there. But if this project is to be so lucrative, if Jekyll is to be the “Jewel of Georgia,” it is a disgrace to have the award of the contract sullied by these types of shenaningans. And that is putting it lightly!

Now why, you may ask, would the State accept Linger Longer’s proposal over Jekyll’s? Why would the JIA allow deception in the proposal procedure. As it always is in politics, follow the money!

According to Wade, he was told before the proposals were submitted that the choice of who would get the project had already been determined.

After the winner was announced, Wade even called one of the Board Members, Sam Kellett, another big Republican contributor, to see if he was concerned about the integrity of the process. Kellett’s response: Don’t make trouble, don’t go to the press, and there will be something for you later on!

You should also know that Senator Eric Johnson and Representative Jerry Keen are “advisory” members of the JIA Board. I haven’t heard about any outrage from them. Wonder what their advice was?

And there you have it. Contribute money. Get appointed to influential boards. Boards that spend millions. Contribute money. Submit bids for million and billion dollar projects. Someone will find a way to get you a good return for your money.

I guess Linger Longer lingers longer at the trough because it has a lot of political contributions to make.

If you think this is a disgrace, call the Governor’s Office and let them know. The number is 404-656-1776. You call the Governor, I’m gonna call the Attorney General or the District Attorney!

 
 Wade Shealy, The Jekyll Island Company [30:07m]: Play Now | Play in Popup | Download (415)

GEFA, Sewers, Conservation and Water!

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Wilson
on October 11, 2007
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If you haven’t heard of GEFA, you need to. It may have a lien on your toilet–or at least the sewer pipe that connects to it.

Chris Clark is Executive Director of the Georgia Environmental Facilities Authority (GEFA), a little known (to us ordinary folk, anyway) state authority that will hand out $288 million in 2007 to city and county governments in loans for infrastructure. In addition to his responsibilities with GEFA, Chris is also a member of the Water Council, and as head of GEFA, finances the Governor’s Land Conservation Program. On top of all that, GEFA houses the State Energy Office which administers the State Energy Program.

Chris and I started out discussing the rather mundane but important job of financing community infrastructure, like water and sewer. A lot of the money he dispenses comes to us from Washington in one of those don’t tax and spend programs. (I didn’t mention it to Chris, but GEFA sounds like the perfect Democratic scheme for funding things government can’t otherwise raise taxes to afford.) No offense Chris, I am all for government funding of essential government services, but I just could not resist the comparison.

The we hit the Governor’s Land Conservation Program which buys up land that is worth preserving in perpetuity to save it from development. (I did not ask Chris if this is the program that would have bought that property located next to the Governor’s last year, but the decision was made to let it go to the developers.)

And then we turned to water. Chris told me some things you might want to know, as well: (1) the current population of Georgia is around 9 million and is expected to grow to 18 million iby 2030, (2) our drought levels across the state have recently been changed to Levels 2 and 4, and (3) Lake Allatoona is apparently empty! That last one bothers me.

He indicates that at least part of the answer to the water problem is building more reservoirs to supply more water to North Georgia, meaning Atlanta. Currently it takes 14 years to plan and build a reservoir from start to finish. Chris says they want to cut this time in half. The problem with reservoirs: they are expensive. Chris estimates that it will cost billions of dollars over the next 30 years to build the water supply infrastructure that we need to deal with these problems. (I just don’t see where the money is coming from with all the tax cuts we have grown to love.)

If you wonder why Lake Allatoona is dried up, you need to listen to my interview with Neill Herring. Lake Allatoona is supplied by the Etowah River and provides a portion of the water that Atlanta needs. Alabama also gets water from the Etowah and Lake Allatoona and is threatening to sue Georgia demanding more water from this source.

When it came to the issue as to whether or not development in Atlanta will have to restricted in order to deal with this issue effectively, Chris was hesitant to jump into that pond. I don’t blame him, but the answer appears pretty clear. Atlanta has got to curb its growth or there are going to be more dried up Lake Allatoonas and Etowahs all across the state.

And remember, attacking Atlanta is political suicide, even if it is an environmental necessity. The guy that tells Atlanta to quit growing better have a club of some kind, a big one, because his days in power will be numbered, unless the rest of the folks in this state pick up a club and join him. Is there such a person who has the interest of all Georgia at heart? Do we have a leader who doesn’t owe the developers and the Chamber of Commerce and the insurance lobby their poliitcal loyalty? We sure as hell better be looking for one, because around 2030, I am expecting some armed combat!

 
 Chris Clark, Georgia Environmental Facilities Authority [29:14m]: Play Now | Play in Popup | Download (250)

Say So Long to Jekyll Island, Hello to Money and Developers!

Published
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Wilson
on September 17, 2007
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In the nasty way that money and politics work in Georgia, the next victim appears to be Jekyll Island. In this interview with David Egan, Founder of Save Jekyll Island, you will, hopefully, better understand the battle that is being fought between the Jekyll Island Authority (JIA) and the residents and visitors that love Jekyll and want to see certain aspects of its beauty preserved and remain undeveloped.

If you have time, you might want to compare Egan’s comments with those of Eric Garvey, Senior Director of Marketing for JIA, in an interview a few weeks ago.

It seems that everyone agrees the motels on the Island need replacing. Fine! It seems that everyone agrees there should be motels that ordinary people can afford. But the JIA is planning to put the ordinary folks (Say, those who don’t want to pay more than $150 a night for a room!) across the street, not on the beach, while the higher priced motels get the beach side. And the word is, there will be a “few” of the more reasonably priced establishments.

A few? Why not all of them? Why not most of them? Let the rich boys drive a little further and go to Amelia Island!

Another big issue seems to be blocking the view from the road to the ocean. Anyone that has been to Jekyll should recall the fact that you can drive for several miles from the entrance road before concrete and steel blocks your view of the ocean. There aren’t many unobstructed views like that left on the Atlantic, at least not from a developed island as opposed to an undeveloped one like Cumberland.

The JIA apparently wants to develop a town center between the road and the beach. The question is why do you have to mess with that view? Why can’t you build the town center on the other side of the road? That’s where all the land is!

What really gets me is the way the JIA treats the citizens who are interested enough to attend their meetings. They treat them just like every other board that I know anything about in this state that is filled with Perdue appointees: the public doesn’t matter and the JIA will do what it damn well pleases. And that is the legacy of the Republican Party as a whole. They believe this State is red enough, that they will continue to get elected no matter what they do and they can continue to promote their individual interests and the interests of business above all others. The national Republican Party shot itself in the foot, and its just a matter of time until these guys in Georgia do the same.

I understand that even the local Senator from Glynn County, Jeff Chapman, is not happy with how the JIA is handling development issues.

Why did Tommie Williams remove Sally Bethea from the DNR Board? Why is the JIA going to do as it pleases in developing Jekyll? The answer is simply this: developers and their money! There are developers on the JIA. There are developers on the DNR Board. A majority I would bet. There are developers who want to plan the development of Jekyll. There are developers who want to build the motels and restaurants. There are developers who want to lease and operate the motels from the State. And all of them want to make money, lots of it.

Space for development on Jekyll is limited by law to 35% of the Island. There are only a few acres left and you can bet the next development plan adopted by the JIA will be the last opportunity the developers will have for decades to get their hands on Jekyll. There just aren’t that many opportunities to make sure that every inch of the best land with the best view has a building on it so they can make the most money possible.

And who are these developers? The ones that get the leases will be the politically connected ones. The ones that get the lucrative contracts will be the ones that contributed the most to the campaigns of our elected officials. And do we care?

Jekyll is called “Georgia’s Jewell” and we know what happens to jewels when they are not protected. They’re stolen. Jekyll wasn’t purchased by the State so developers could make money. The JIA wasn’t created to develop Jekyll to the fullest extent possible. And the State certainly didn’t buy the Island so that developers could get rich!

 
 David Eagan, Save Jekyll Island [27:07m]: Play Now | Play in Popup | Download (296)

Interview with Eric Garvey, Jekyll Island Authority

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Wilson
on August 31, 2007
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Eric is the Senior Director of Marketing and Business Development for the Jekyll Island Authority. Jekyll Island was bought by the State in 1947 from those rich boys who called themselves the Jekyll Island Club. You know, the Morgans, Rockefellers, Goulds, Vanderbuilts, but no Smiths.

In case you didn’t know it, the State owns all the land on Jekyll Island, even the land that homes and hotels are built upon. They all pay rent to the Authority and when the lease is up, usually 99 years, they can take their building with them. Sure they can! Even the Jekyll Island Authority has a 99 year lease which expires in 2049.

Eric explains some of the issues surrounding future development on the Island, particularly the hotels. According to Eric, a new hotel has not been built on the Island since about 1972 and the present hotel buildings are outdated. As a result, the Island is losing tourists and money.

To build new hotels or to renovate the old hotels would require the Authority to grant the hotel operators new and longer leases. Since the Authority’s lease expires in just over 40 years and since the hotels want 90+ year leases, the Authority can’t grant them what they need to invest in new hotels. Or can it? I checked and it appears that after the initial 99 year term, the lease is automatically extended for another 40 years.

Another issue is what kind of hotel to build. Should it be the Ritz Carlton or Comfort Inn. Should it be cheap hotels affordable by all Georgians or should there be some high priced hotels? According to Eric, the goal is to have a mix of hotels with a mix of room rates that might attract a broader spectrum of tourist.

By law, 65% of the Island must remain undeveloped. According to Eric, the Island consists of only about 5000 acres, that means that about 1700 acres can be developed. (The statute creating the authority states the Island consists of 11,000 acres.)

The Authority operates the Island without any financial support from the State. That is why the Authority pays the State $1 for the lease and why you pay to even drive onto the Island. And remember, in addition to hotel tax, etc., they have a golf course and a water park. The Authority also runs a restaurant and other enterprises. There is apparently some criticism of the State operating such mundane enterprises and there is an effort to turn them over to private enterprise. Hmmm! That smells like a lease I would like to have–and everyone else.

There is a Jekyll Island Foundation which helped raise the $3M for the Georigia Sea Turtle Center.

So there you have it, the usual tension between development and conservation. Who gets the leases? Who gets to make tons of money? Do the sea turtles still visit and lay their eggs on the beach or do they have to get a room?

 
 Eric Garvey [29:59m]: Play Now | Play in Popup | Download (307)

Interview with John Henry, Effingham Economic Development Authority

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Wilson
on August 19, 2007
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Not only is Atlanta and Gwinnett County growing, but Effingham County, next door to Savannah, Chatham is growing by leaps and bounds as well. In 1990 the County was around 25,000 residents, today it almost 60,000.

John Henry tells us what this kind of growth means in the context of a limited water supply. Because Effingham County is located in a area of the Floridan acquifer that is depressed, it can only pump 6.5 million gallons of water a day to supply both homes and business. As a result of this limitation, Effingham just can’t handle industries that require a lot of water.

Located on the Savannah River and near the Georgia Ports facilities, Effingham has a lot of attraction for industry. The Georgia Pacific paper mill located there years ago. But the pressures of rapid growth and development impact more than just water consumption. It takes money to provide the infrastructure for a county growing by a third every 10 years or so. And money means taxes, property taxes in particular. According to Henry, residential property requires 9 times the county services required by commercial property.

And property taxes are something that the 2008 Georgia Legislature may do something about. I predict that it is going to be very hard to convince counties like Effingham to give up local control of property taxes, the bread and butter of local government. Our cities and counties are not going to like having to ask the State legislature for more money. Think about that? A lot of people understand that all this talk about doing away with the property tax is, at least in part, an effort to concentrate power by the boys in Atlanta.

So if you are just thrilled about paying no property taxes, you better be thrilled enough to get in the car, head to Atlanta and hold out your hand when you need a new school or fire station. Tax reform ain’t gonna happen in 2008. Wanna bet?

 
 John Henry, Effingham County Development Authority [29:44m]: Play Now | Play in Popup | Download (330)