SB 177 goes to Study Committee - Mayor supports Historic Neighborhoods

As you may have heard, SB 177 will go to a summer study committee. This is a positive development - it has been clear that the author of SB 177, Pat Miller, didn't understand the process, what it takes to become a historic district, how cases are handled at the IHPC, etc. The summer study committee will provide the opportunity to educate elected officials both at the state and local level how the system actually works.

An entire mythology has been created around historic districts that have no basis in fact - it would seem that they have become the bogeyman for local government run amok. From little old ladies in Irvington who have been abused because of her vinyl windows to the paint color Nazis -- when you start digging into the facts, the real story is very different.


The system in Indianapolis is held up as model system for other cities. That's not to say that it couldn't be improved.  I would support mandatory notification of any potential home buyer in a historic district. They should know that the home they are considering includes restrictions that the neighborhood has agreed upon... although I thought that was already the case.


Our elected officials got an ear-full over this issue - and it was entirely appropriate that they should. To try to push such an ill conceived bill through was irresponsible. Neither should we let up. Our state legislators, mayor and local elected officials must continue to hear from the people in historic neighborhoods - and those who hope to be recognized as historic in the future.

Very much to his credit, Mayor Ballard did issue a statement of support it reads:

 “I am pleased that the General Assembly has decided to study the Indianapolis Historic Preservation Commission’s (IHPC) enabling codes this summer. My administration has operated under the belief that no government process is perfect and that there are always ways to improve efficiency and to produce better results.

Although there have been disagreements over individual decisions of the IHPC during its history, as a whole, it has been overwhelmingly successful, leading to revitalized neighborhoods and increased property values. In particular, I would like to laud the partnership between hard working neighborhood volunteers and the IHPC that has brought new life and private investment to many of our core neighborhoods.

I have instructed city employees to cooperate with the legislative study commission to ensure that any reforms at the state or local level are informed by a complete understanding of the current processes and that both property rights and home values in our historic neighborhoods are protected.”

It is my sincere hope that by "property rights" he is including the right for neighborhoods to determine for themselves a set of standards to which property owners are held - and the expectation that those standards would be reasonably enforced.

I also have to give considerable credit to David Wu, the Mayor's policy person, for doing the right thing.

Where is the Mayor?

While SB 177 was passed by the Senate and finds its way through the legislative process, our Mayor is invisible.

For forty years, Republican Mayors have supported the Historic Neighborhoods and the Indiana Historic Preservation Commission.

It will be under this Mayor’s watch that the IHPC and all of the private investment that historic preservation has brought to the City will be reversed. It will be Mayor Ballard’s legacy that beautiful neighborhoods and cultural Icons like Lockerbie Square, Herron Morton Place, The Old North Side and yes, even the grand homes on North Meridian Street may no longer be protected.

State Senator Pat Miller has come completely unhinged and authored a really poorly thought-out piece of legislation.  Senate Bill 177 violates virtually every Republican Ideal. You simply don’t dictate neighborhood-level issues from the Statehouse. Pat Miller's bill is Big Government meddling in what is clearly a local issue. See the Indy Star Editorial.

These neighborhoods chose to become historic districts with a super-majority of property owners voting for it (70%). These neighborhoods then developed their own Historic Preservation Plans – an act of self-determination.  And now Pat Miller and Ben Hunter believe that they know better than the neighborhoods -- and want to dictate to the neighborhoods how things are going to be.

Pat Miler’s amended bill potentially  impacts every neighborhood in the state of Indiana – including the Governor’s mansion and homes on North Meridian Street that are protected under a separate state statute.  It’s shocking, really, that a nationally known corridor like Meridian Street could be ravaged by a State Senator with an ax to grind.

This law is so poorly written that a property owner with virtually any imagined injury could appeal an adverse finding – and it would be compelled to be approved.

Nonetheless, this isn’t just about Pat Miller any longer. This is also about our Mayor. This is where Mayor Ballard should show leadership and should be talking to his fellow Republicans and letting them know how wrong-headed this bill is.

This is about David Wu, the Mayor’s Policy Director – with a degree in economics – who should be explaining that private investment is essential to restoring neighborhoods in the core of the city. He should be explaining that property values improve the tax base that the City so desperately needs.

He should be pointing out that it simply doesn’t make economic sense for an individual to invest the huge amount of money in an old house without some guidelines that everyone agrees to live by.  

David Wu should be advocating for the thousands of property owners in what are currently protected districts who will see their property values precipitously drop under this legislation - because he's an educated man who understands these issues.

I hear urban legends of economic hardship that are caused by historic districts. Let me tell you about real economic hardship: A home in my neighborhood that was in good shape – new windows, new furnace and wiring, hardwood floors, a charming home -- sold at auction for $25,000 a couple of weeks ago. It was bought by vultures. It will be pimped-out as a rental. 

To put that in perspective: that’s just a few thousand more than I paid for my modest car five years ago.  That house is similar to a third of the homes in my neighborhood – including my own home. It’s also sold for substantially less than one-half of what I paid for my home… more than 16 years ago.  

Homes represent the largest single asset that most families own.  The loss of net-worth to families in neighborhoods that aren’t protected by a conservation district is the real economic hardship.  That’s what David Wu-- Mayor Ballard’s Policy Director-- should be saying; but he isn’t doing that. He seems to be standing on the sidelines cheering on on the supporters - but we need more support than that. 

While I appreciate the mansions on N. Meridian Street which may no longer be protected because of Pat Miller’s ill-conceived legislation, that’s not where my passion is.  If it’s not clear already, I don’t live on Meridian Street.

I don’t mean to berate my own community that many of us work so hard to improve– but I am going to be candid for a moment: Parts of this city look like a third-world country. The disinvestment, the crumbling infrastructure, the crime is unfathomable.  I’m showing my age that I’m reminded of a phrase in a Joni Mitchell song:

Pawn shops glitter like gold tooth caps
In the grey decay
They chew the last few dollars off
Old Beale Street's carcass

In some of neighborhoods in Indianapolis that I know, Pawn shops would be considered economic development.

 I know the neighborhood on Hamilton Street where an entire family – seven in all-- were gunned down in their home– children, parents, everyone. I worked on the home across the street. That’s a neighborhood that I know.

Some of the neighborhoods I know don’t have a grocery store. You can buy drugs or guns, but not a loaf of bread. 

The neighborhoods I know saw a beloved and respected business owner robbed and shot in his glass shop – his body found by the mail carrier.

In the neighborhoods that I know - people die in house fires every winter because their gas is shut off and the space heaters catch fire.

That some of these neighborhoods persevere, that they move forward and organize and fight for dignity is amazing. The community leaders in these neighborhoods are nothing short of heroic. These neighborhoods face insurmountable challenges, and the one thing that works – the one tool that has proven to attract private investment—is being taken away from them.

Let me share with you a couple of photos: It’s of a house at 39 N. Randolph Street that’s been boarded up since April of 2008.  It’s not unlike the thousands of vacant and abandoned houses on the near-east side.  

Except that it’s Mayor Greg Ballard’s boyhood home. He evidently points it out – so I will too. (Thanks to Advance Indiana for the photos)

You would think that he would be more supportive of neighborhoods desire for self-determination, private investment and increased property values that come with a historic district.

But our Mayor is silent and is nowhere to be seen.

State Senator Pat Miller seeks to destroy Historic Neighborhoods in Indianapolis.

 

Indianapolis Historic Neighborhoods after Indiana Senate Bill 177 - Authored by Pat Miller - passes. 

"I'm sure if we had just appeased her by sacrificing the Historic St. John Church in Cumberland she would have left us alone." 

Indiana State Senator Patricia Miller authored Senate Bill 177 that would have the effect of gutting the Indianapolis Historic Preservation Commission (IHPC). Part of what the IHPC does is enforce the Historic Preservation Plans that neighborhoods themselves establish when 70% of the property owners vote to become a Historic Conservation/Preservation district. The communities set the guidelines and it’s the IHPC that enforces them. It’s why you can’t put vinyl siding on a house in Lockerbie Square, for example.

The opposite of being a an over-reaching bureaucracy, Historic Conservation/Preservation districts provide a great deal of self-determination by a neighborhood, and apparently that doesn't sit well with Mrs. Miller.

Here’s the issue: Homes in a Historic Preservation/Conservation district are valuable in a large part because of the enforcement of their Historic Preservation Plans. Lockerbie Square, the Old North Side, Herron Morton Place, and more recently Irvington, Woodruff Place, Cumberland, etc. would be devastated by this move.

Thanks in part to our state legislature's cozy relationship with the Builders Association of Greater Indianapolis (BAGI), there's almost a 50 year excess inventory of homes in the Indianapolis area. Urban neighborhoods have to contend with overbuilding, aging housing stock, bad schools, crime, crumbling infrastructure and vacant and abandoned housing. A Historic Preservation/Conservation district is the one bright spot that makes these neighborhoods work and make it reasonable to invest the large amount of money to restore an old home.

By contrast, any new suburban development comes with covenants and a homeowners’ association that’s often far more strict than these Historic Preservation Plans. I don't see Pat Miller interfering with them.

The poorly conceived legislation has been offered in part because some people have made alterations to their structures in a conservation district without a permit – and then didn't get the forgiveness they expected afterward.

Pat Miller has also said that it’s in response to the battle over the Historic St. John United Church of Christ in Cumberland. It's a high-stakes poker game and this appears to be a shot across the bow for preservationist: If you dare try to save the historic church from being bulldozed so that CVS can put a drugstore right across from Walgreen's she will dismantle everything that we've worked hard for over the last 50 years - no matter what the cost to the city.

The truth is that this isn't the first time Pat Miller has offered legislation to destroy historic neighborhoods in Indianapolis. She will not be appeased by sacrificing St. John's Church.

Wishard Referendum

Marion County voters are being asked to “co-sign a loan” for nearly three quarter of a billion dollars for a new hospital. There is little doubt that the old facilities are worn out; however, there is significant reason to believe that the hospital can’t repay the these bonds over the next 30 years as they claim. If they default on the bonds, the taxpayers will be stuck with the bill. This is a huge tax liability that wouldn’t be subject to property tax caps since it was voted on in a referendum.

The parent company of Wishard, Health and Hospital Corporation of Marion County (HHC), makes a significant profit on nursing homes outside Marion County. It is able to do this by leasing them back to a private operator in order to qualify for additional Medicaid payments (UPL) from the federal government. This arrangement and the additional payments aren’t likely to continue in a post health care reform environment. Mitch Roob, former HHC CEO and currently the state's chief economic development officer called the arrangement “a bit of a scam”. “It does not pass most people's smell test," Roob said. "It is legal, and I will tell you that it is that smell test that will eventually get them in trouble at the federal level".

Without that revenue, the responsibility for repaying the bonds falls on the taxpayers. If the hospital were truly able to finance the bonds out of their own revenue as they claim, then they shouldn’t need the taxpayers to guarantee the bonds. If it is as presented, the project could be financed with revenue bonds with the credit markets determining the creditworthiness of Wishard, not the taxpayers.

Wishard is a teaching hospital for a state school. It is a classroom for IU School of Medicine. Although IU benefits from keeping the hospital in close proximity to the school they refuse to commit their own money or loan guarantees to the deal. If Wishard should be rebuilt because of the value as a teaching hospital then IU should help fund it.

I’m not a rabid “No new taxes” person. However, Marion County taxpayers already bear the burden of a large number of regional facilities. There are some good arguments for a new hospital, but asking Marion County taxpayers assume all of the risk is simply unacceptable given the tax burden that we currently face. High tax rates will force businesses and middle class families alike out of the county.

Additionally, any referendum of this magnitude should make it clear the amount of bond issue, the potential impact on property taxes and that it would not be subject to property tax caps. This referendum mentions none of these things. If a bank were to do something similar it would be considered fraud.

It’s arguable that Wishard should be rebuilt. If so, it must be financed differently.

The Wishard referendum has all of the markings of a scam

It’s unfortunate, but the Wishard referendum has all of the markings of a scam. We are being told that we must “Act Now! – we can’t afford to wait!” We are being bombarded with emotional appeals but little hard data including the cost. We are being told to trust a circle of political insiders – but nobody has money in the project or is taking any risk except Marion County taxpayers. It turns out that the “Citizens for Wishard” is funded almost entirely by the IU School of Medicine. Even the wording of the referendum and calling a special election when there’s sure to be little turnout raises eyebrows.

This proposal should be soundly rejected by the voters- even if the project is a good one—for the above reasons. The voters deserve better for what will be somewhere close to a billion dollar project.

First, we should have a clear understanding of the costs. Right now those numbers are all over the map. There should be a “not to exceed” number. After the last couple of projects the public is in no mood to write a blank check. We should know that we are legally authorizing a bond issue as well as a property tax increase – beyond any property tax caps—to pay for those bonds. We should balance this project against the $5.3 billion of unfunded infrastructure needs that the city already has.

Second, if Wishard believes that it can pay for the bonds without a tax increase then we should hear that from a disinterested third party expert. There’s no reason that Marion County, independent of Wishard, couldn’t hire a bond rating agency to do just that. There have been arguments that Wishard can’t make the payments on the bonds for 30 years. I’m not an expert in municipal credit rating… but there are firms who are and the study should have been done already. Taxpayers should reject the proposal until they have that information.

Third, with all due respect to Officer Fishburn and other patients, we should not swayed by their appeals. We know that the hospital has saved lives. We should be less interested in what the hospital has done in the past as the need for the hospital over the next 30 years. By waiting a year we will have a much better idea of how health care reform will shape both the need for a “safety net” hospital and the ability to pay for it.

Lastly, this is a state teaching hospital. It is a classroom for IU school of Medicine. Indiana University should not expect Marion County to pay for their school. IU needs to put up a significant amount of money for the new hospital instead of funding a million dollar PR campaign to get Marion County taxpayers to foot the bill.

If this is a good proposal, it will be a good proposal in a year when we have the needed information and more voters can participate. Until then, we should vote “No” on Tuesday.