By Craig Kootsillas
As sources of capital dry up, developers have turned to Private / Public Partnerships (PPP) touting them as innovative solutions to funding challenges as critics eye them with deep suspicions over the blurring of the line between public and private.
This series of articles is the result of an examiner.com investigation concluded today of a large-scale transit plan now branded as “Connect Cobb“. The public record was examined and this investigation’s findings reviewed by officials at the county, region and federal level. Cobb County is a northern suburb of Atlanta that generally is urban to the south and generally suburban to the north.
A consortium of owners of commercial property centered around the largest malls in Cobb County (GA) lie poised to implement a transit plan they created in secret over a decade ago as all levels of government overlook years of concealment, deceit, conflicts of interest and potential fraud clearly documented in the public record.
The plan, for which development first began in 1999, has come to be branded as “Connect Cobb” and the effort involved a number of quasi-governmental entities, also described as “public/private partnerships” (PPP).
Georgia law provides for the creation of “community improvement districts” (CID) when the majority of owners of commercial property within an arbitrary and contiguous area agree to the formation. They then elect officers and a board of directors from within their membership.
A CID functions similar to an investment club with the government operating as a no-cost money handler. CIDs agree to invest an amount proportional to the the value of the property they own within the boundary of the CID.
This is considered to be a “millage rate” and the investment is collected by the government as a tax. After being pooled by the government, the entire amount is made available to the CID.
When deciding on all matters, CIDs vote in a manner in which the value of each member’s vote is determined by the value of the property owned within the CID.
This process is derided by critics as “the golden rule” wherein “he with the most gold rules” and point to the fact that the largest property owners are conglomerates headquartered well outside the CID and county.
Georgia law provides CIDs the ability to to use pooled revenue as local matching funds to seek grants from federal, state and local governments. With this dynamic, CIDs regularly “leverage” their pooled funds paying only 10 percent of the total cost of large transportation projects with the balance funded by various governments.
This savings is referred to as a “rate of leverage”; in this example a “10 to one leverage rate” would be touted.
Georgia law also provides for the creation of “development authorities”, a PPP to which elected officials appoint board members who then elect officers and establish rules. Development Authorities are able to package “inducements” to individuals and firms that include abatement of school and property taxes, the issuance of tax free bonds and lump sum payments.
Cobb County elected officials view development authorities as independent entities and rely on courts and mandated federal hearings to provide oversight.
While some development authorities will work closely with local government given authorities’ ability to alter and create development patterns, the Development Authority of Cobb County does not. This has led to controversy within Cobb by members of the public and authority board members centered on the charge that the DACC has granted a disproportionate share of inducements to owners of property within the Cumberland CID causing development to focus there.
Examination of the DACC’s record and Connect Cobb’s analysis of job opportunities within Cobb substantiates this claim.
Two local firms worked alongside Bechtel Infrastructure Corporation to develop the plan beginning in 1999 and have since merged.. Don Hix, one time CEO of one of the local firms (then associated with Mayes, Sudderth and Etheridge), now is employed by the other firm, Croy Engineering.
Since before development of the plan and until recently, Hix served as chairman of the Development Authority of Cobb County (DACC) and not the only project insider to serve on the DACC.
Upon completion, the Bechtel plan was delivered to the chairmen of the two CIDs, at the time Kessel Stelling, now Synovus Chairman/CEO, served as the chairman of the Cobb Chamber of Commerce, the Cumberland CID and was a member of the DACC board.
Like Croy, Stelling would return to Cobb during the 2008 update of Cobb’s Comprehensive Transportation Plan (CTP) by reassuming the chairmanship of the Cobb Chamber of Commerce.
During the development of the project transportation planning, management and most other roles of Cobb government regarding transportation were being “privatized”. In a recent interview during his bid to reclaim the chairmanship of the Cobb County Board of Commissioners, an office he held during the development of the transit plan, Bill Byrne pointed out the fact that the privatization plan was developed with guidance from Croy.
Since then, Croy has remained one of Cobb’s most influential consultants.
After overseeing the privatization of transportation in Cobb as Cobb’s Director of Transportation, Croy went on to head the State Road and Tollway Authority (SRTA) and the creation of the Greater Regional Transportation Authority (GRTA) under Cobb native and former governor Roy Barnes. GRTA was a campaign imperative of Barnes. Once elected, Barnes appointed Croy to begin what was labelled as Barnes top issue: the development of transit corridors within the Atlanta metro region.
While heading SRTA, Croy became the center of controversy when it was revealed that toll revenue was being redirected from tollway operations, including $10 million to purchase land for a development located near the terminus of Connect Cobb.
Then, in 2008, Croy returned to Cobb to oversee development of Cobb’s Comprehensive Transportation Plan (CTP), the document in which local governments choose targets for state and federal funding. He went on to serve as Cobb’s liaison to the Northwest Corridor Study (NWCS), a study considered to be a precursor to Connect Cobb during which a variant of the 1999 plan was considered then rejected as too expensive and too slow.
Croy continues to be deeply involved having been chosen to oversee multiple efforts totaling many millions over the years required to implement Connect Cobb.
The original stakeholder committee formed to oversee development of the plan was co-chaired by Tad Leithead, who spearheaded the development of Cumberland while at Cousins Properties, and Bob Voyles, founder of the Seven Oaks development firm, both long-standing members of and developers focused on the Cumberland CID.
Leithead would succeed Stelling as chairman of the Cumberland CID, a title he holds till today. Leithead also served as chairman of the Atlanta Regional Commission (ARC) Atlanta’s federally designated Metropolitan Planning Organization, the local body charged with oversight and allocation of federal funds.
After acceptance of the plan by the Cumberland and Town Center CIDs, the plan received no public hearing and was not brought forward for consideration or adoption by Cobb’s Board of Commissioners.
In spite of having been adopted into Cobb’s 2008 Comprehensive Transportation Plan in a manner that has sparked controversy, the public would remain unaware of the plan until revealed by CDOT at a work session of Cobb Commissioners May 4, 2010.
Next up: The strategy
As we’ve been pointing out over the last few years, there’s more to this regionalism thing that just cooperation between metro counties. There are definite plans for wrestling control away from duly elected local governments and replacing it with regional governance that’s unelected and unaccountable to the people. Even worse, control is being shifted to the federal level which is absolutely tone deaf to “We The People”.
Maybe for some it has to smack you right in the head, or the pocketbook. Or, maybe that’s the way you want it. Now that Cobb County has hired Comm360 to the tune of $186,000+ to lobby state and federal agencies for legislation and grants, I’m sure they’ll be happy to oblige these new federal rules. There are always strings attached to federal grant money. It’s not too late to reject federal money and intrusion into local control and home rule.
The following article by Stanley Kurtz from National Review highlights additional concerns with regionalism.
by Stanley Kurtz July 20, 2015 10:01 AM
It’s difficult to say what’s more striking about President Obama’s Affirmatively Furthering Fair Housing (AFFH) regulation: its breathtaking radicalism, the refusal of the press to cover it, or its potential political ramifications. The danger AFFH poses to Democrats explains why the press barely mentions it. This lack of curiosity, in turn, explains why the revolutionary nature of the rule has not been properly understood. Ultimately, the regulation amounts to back-door annexation, a way of turning America’s suburbs into tributaries of nearby cities.
This has been Obama’s purpose from the start. In Spreading the Wealth: How Obama Is Robbing the Suburbs to Pay for the Cities, I explain how a young Barack Obama turned against the suburbs and threw in his lot with a group of Alinsky-style community organizers who blamed suburban tax-flight for urban decay. Their bible was Cities Without Suburbs, by former Albuquerque mayor David Rusk. Rusk, who works closely with Obama’s Alinskyite mentors and now advises the Obama administration, initially called on cities to annex their surrounding suburbs. When it became clear that outright annexation was a political non-starter, Rusk and his followers settled on a series of measures designed to achieve de facto annexation over time.
The plan has three elements: 1) Inhibit suburban growth, and when possible encourage suburban re-migration to cities. This can be achieved, for example, through regional growth boundaries (as in Portland), or by relative neglect of highway-building and repair in favor of public transportation. 2) Force the urban poor into the suburbs through the imposition of low-income housing quotas. 3) Institute “regional tax-base sharing,” where a state forces upper-middle-class suburbs to transfer tax revenue to nearby cities and less-well-off inner-ring suburbs (as in Minneapolis/St. Paul).
If you press suburbanites into cities, transfer urbanites to the suburbs, and redistribute suburban tax money to cities, you have effectively abolished the suburbs. For all practical purposes, the suburbs would then be co-opted into a single metropolitan region. Advocates of these policy prescriptions call themselves “regionalists.”
AFFH goes a long way toward achieving the regionalist program of Obama and his organizing mentors. In significant measure, the rule amounts to a de facto regional annexation of America’s suburbs. To see why, let’s have a look at the rule.
AFFH obligates any local jurisdiction that receives HUD funding to conduct a detailed analysis of its housing occupancy by race, ethnicity, national origin, English proficiency, and class (among other categories). Grantees must identify factors (such as zoning laws, public-housing admissions criteria, and “lack of regional collaboration”) that account for any imbalance in living patterns. Localities must also list “community assets” (such as quality schools, transportation hubs, parks, and jobs) and explain any disparities in access to such assets by race, ethnicity, national origin, English proficiency, class, and more. Localities must then develop a plan to remedy these imbalances, subject to approval by HUD.
By itself, this amounts to an extraordinary takeover of America’s cities and towns by the federal government. There is more, however.
AFFH obligates grantees to conduct all of these analyses at both the local and regional levels. In other words, it’s not enough for, say, Philadelphia’s “Mainline” Montgomery County suburbs to analyze their own populations by race, ethnicity, and class to determine whether there are any imbalances in where groups live, or in access to schools, parks, transportation, and jobs. Those suburbs are also obligated to compare their own housing situations to the Greater Philadelphia region as a whole.
So if some Montgomery County’s suburbs are predominantly upper-middle-class, white, and zoned for single-family housing, while the Philadelphia region as a whole is dotted with concentrations of less-well-off African Americans, Hispanics, or Asians, those suburbs could be obligated to nullify their zoning ordinances and build high-density, low-income housing at their own expense. At that point, those suburbs would have to direct advertising to potential minority occupants in the Greater Philadelphia region. Essentially, this is what HUD has imposed on Westchester County, New York, the most famous dry-run for AFFH.
In other words, by obligating all localities receiving HUD funding to compare their demographics to the region as a whole, AFFH effectively nullifies municipal boundaries. Even with no allegation or evidence of intentional discrimination, the mere existence of a demographic imbalance in the region as a whole must be remedied by a given suburb. Suburbs will literally be forced to import population from elsewhere, at their own expense and in violation of their own laws. In effect, suburbs will have been annexed by a city-dominated region, their laws suspended and their tax money transferred to erstwhile non-residents. And to make sure the new high-density housing developments are close to “community assets” such as schools, transportation, parks, and jobs, bedroom suburbs will be forced to develop mini-downtowns. In effect, they will become more like the cities their residents chose to leave in the first place.
It’s easy to miss the de facto absorption of local governments into their surrounding regions by AFFH, because the rule disguises it. AFFH does contain a provision that allows individual jurisdictions to formally join a regional consortium. Yet the rule leaves it up to local authorities to decide whether to enter regional groupings — or at least the rule appears to make participation in regional decision-making voluntary. In truth, however, just by obligating grantees to compare their housing to the demographics of the greater metropolitan area, and remedy any disparities, HUD has effectively turned every suburban jurisdiction into a helpless satellite of its nearby city and region.
We can see this, because the final version of AFFH includes much more than just the provisions of the rule itself. The final text of the regulation incorporates summaries of the many public comments on the preliminary rule, along with replies to those comments by HUD. This amounts to a running dialogue between leftist housing activists trying to make the rule more controlling, local bureaucrats overwhelmed by paperwork, a public outraged by federal overreach, and HUD itself.
Read carefully, the section of the rule on “Regional Collaboration and Regional Analysis” (especially pages 188–203), reveals one of AFFH’s key secrets: It doesn’t really matter whether a local government decides to formally join a regional consortium or not. HUD can effectively draft any suburb into its surrounding region, just by forcing it to compare its demographics with the metropolitan area as a whole.
At one point (pages 189–191), for example, commenters directly note that the obligation to compare local and regional data, and remedy any disparities, amounts to forcing a jurisdiction to ignore its own boundaries. Without contradicting this assertion, HUD then insists that all jurisdictions will have to engage in exactly such regional analysis.
Comments from leftist housing activists repeatedly call on HUD to pressure local jurisdictions into regional planning consortia. At every point, however, HUD declines to demand that local governments formally join such regional collaborations. Yet each time the issue comes up, HUD assures the housing activists that just by compelling local jurisdictions to compare their demographics with the region as a whole, suburbs will effectively be forced to address demographic disparities at the total metropolitan level (e.g., page 196).
When housing activists worry that a suburb with few poor or minority residents will argue that it has no need to develop low-income housing, HUD makes it clear that the regulation as written already effectively forces all suburbs to accommodate the needs of non-residents (pages 198–199). Again, HUD stresses that the mere obligation to analyze, compare, and remedy demographic disparities at the local and regional levels amounts to a kind of compulsory regionalism.
HUD’s language is coy and careful. The Obama administration clearly wants to avoid alarming local governments, so it underplays the extent to which they have been effectively dissolved and regionalized by AFFH. At the same time, HUD wants to tip off its leftist allies that this is exactly what has happened.
At one level, then, the apparatus of formal and voluntary collaboration in a regional consortium is a bit of a ruse. AFFH amounts to an annexation of suburbs by cities, whether the suburbs like it or not. Yet the formal, regional groupings enabled by the rule are far from harmless.
Comments from housing advocates (pages 194–197), for example, chide HUD for failing to include a mention in AFFH of the hundreds of federally-funded regional plans already being developed by leftist activists across the country (the “Sustainable Communities Regional Planning Grant” program). These plans entail far more than imposing low-income housing quotas on the suburbs. They embody the regionalist program of densifying housing in suburb and city alike, and they structure transportation spending in such a way as to make suburban living far less convenient and workable. HUD replies that these plans can indeed be used by regional consortia to fulfill their obligations under AFFH.
So a city could formally join with some less-well-off inner-ring suburbs and present one of these comprehensive regionalist dream-plans as the product of its consortium. At that point, HUD could pressure reluctant upper-middle-class suburbs to embrace the entire plan on pain of losing their federal funds. In this way, AFFH could force the full menu of regionalist policies—not just low-income housing quotas—onto the suburbs.
There are plenty of ways in which HUD can pressure a suburb to bend to its will. The techniques go far beyond threats to withhold federal funds. The recent Supreme Court decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project has opened the door to “disparate impact” suits against suburbs by HUD and private groups alike. That is, any demographic imbalance, whether intentional or not, can be treated by the courts as de facto discrimination.
Just by completing the obligatory demographic analysis demanded by AFFH—with HUD-provided data, and structured according to HUD requirements—a suburb could be handing the government evidence to be used in such a lawsuit. Worse, AFFH demands that suburbs account for their demographic disparities, and forces them to choose from a menu of HUD-provided explanations. So if a suburb follows HUD’s lead and formally attributes demographic “imbalances” to its zoning laws, the federal government has what amounts to a signed confession to present in a disparate-impact suit seeking to nullify local zoning regulations. With a (forced) paper “confession” from nearly every suburb in the country in hand, HUD can use the threat of lawsuits to press reluctant municipalities to buy into a regional consortium’s every plan.
Regionalists consider the entire city-suburb system bigoted and illegitimate, so there are few local governments that HUD would not be able to slap with a disparate-impact suit on regionalist premises. It’s unlikely that any suburb has a perfect demographic and “asset” balance in every category. All HUD has to do is decide which suburban governments it wants to lean on. With every locality vulnerable to a suit, every locality can be made to play the regionalist game.
Leftist housing activists worry that AFFH never specifies the penalties a suburb will face for imbalances in its housing patterns. These activists just don’t get it. A thoughtful reading of AFFH, including its extraordinary “dialogue” section, makes it clear that HUD can go after any suburb, any time it wants to. The controlling consideration will be politics. HUD has got to boil the frog slowly enough to prevent him from jumping.
It will take time for the truth to emerge. Just by issuing AFFH, the Obama administration has effectively annexed America’s suburbs to its cities. The old American practice of local self-rule is gone. We’ve switched over to a federally controlled regionalist system. Now it’s strictly a question of how obvious Obama and the Democrats want to make this change — and when they intend to bring the hammer down. The only thing that can restore local control is joint action by a Republican president and a Republican congress to rescind AFFH and restrict the reach of disparate impact litigation. We’ll know after November 8, 2016.
Field Searcy, of RepealRegionalism.com, explains how the regionalist mindset is deteriorating our republic by robbing elected representatives and citizens of their power to vote and breaking down borders into regions that cross state boundaries. What Field discusses can be seen at all levels of government in many towns across our country.
The Atlanta Regional Commission is drafting a new set of bylaws for their governing board. The following remarks are a list of critical issues raised at a recent ARC meeting.
CRITICAL BYLAWS ISSUES
- Bylaws don’t provide term limits for appointed members. Some citizen members have served for 15 years. In fact, 16 of the 39 Board members are not elected by the citizens of any jurisdiction. Research has shown that citizen appointed members attend ARC meetings more often than elected county representatives. Yet, appointed citizen members are not accountable to the voters or taxpayers.
- Past and current ARC Chairmen are appointed chairmen of Community Improvement Districts. The Georgia Constitution and Georgia Law prove that CID’s are political subdivisions. The ARC has violated its own bylaws since citizen “members at large may hold no elective or appointed public office nor be employed by any political subdivision of the area”. Even Lynne Rainey, attorney that setup most all of the CID’s in Georgia and is currently counsel to those CID’s calls them a “government entity” on his website. He’s probably the leading expert on CID’s in Georgia and I think he would know.
- Further, the Georgia Transportation Infrastructure Bank was setup to provide funds for government units which includes CID’s. This is in O.C.G.A 32-10-122. If CID’s are not a political subdivision as you say, the CID’s might need to seek legal counsel on how to return the money they’ve received to avoid legal consequences!
- New Governance Committee creates an excessive centralization of power into the chairman’s role with no established term limits. Chairman may appoint members outside of the current duly elected county commissioners and mayors. To quote one of the Bylaws Committee members, “once a slate is nominated, the tendency is to accept.” The Governance Committee structure removes accountability to the public.
- One of the authors of the proposed bylaws has said that creating the Governance Committee with membership appointed by the Chairman is “more efficient”. Centralized power is always more efficient. Top down centralization is more efficient and I’m sure it begins in this benign way. But as this organization evolves and more authority is centralized into regional governance, given the right “crisis” the more efficient path is usually always taken. But that’s not how our system of government works where power rests with the people.
- ARC directs federal money toward transportation projects within CID’s. When the chairman of the ARC can be the chairman of a CID and also be employed by a firm that has major real estate investments in the CID, this creates a potential to steer funding that benefits investments in the CID. Or worse, the opportunity for inside deals to favored business interests. This inhibits free market competition.
The people gave you authority by electing your to represent them in your county and city, why are you giving up your authority to the chairman’s role?
With secret stadium deals and blocking of public comment, the denial of open records request for public private partnerships, and now insider land deals to sell Ft. McPhearson for pennies on the dollar, the citizens have a right to be distrustful.
The citizens of Georgia and metro Atlanta want and expect open and transparent government with a say. We certainly don’t need more centralized governance that is un-elected and unaccountable.