Clark: Reallocating $9M from Downtown ‘just a matter of time’
A $9 million account established in March for Downtown economic development is instead one step closer to being used to balance the fiscal 2013-14 City budget.
By a 4-3 vote, the City Council Finance Committee on Friday passed an amendment to reallocate those funds, along with $2 million for countywide economic development, to a Council-controlled account within the general capital projects fund.
Several Council members publicly discussed the idea in the weeks leading to the committee's budget review, which runs through August in preparation for the Oct. 1 start of the fiscal year.
"It was just a matter of time," said Council member Richard Clark after Friday's meeting.
Clark introduced the motion.
"Everyone on the dais agreed, it was a matter of when," he said.
The money comes from City savings from refinancing more than $1 billion in bonds and was intended for the Downtown Investment Authority to use in its mission to revitalize Downtown.
Clark and Council member Robin Lumb, who was one of the four in support of the transfer, both said in March when the Council passed legislation to create the accounts that they wanted to see a plan from the authority before appropriating the money.
Finance members Clay Yarborough also supported Friday's action. Members Greg Anderson, Reggie Brown and John Crescimbeni voted against it.
Clark said he expected to see "a little bit of reaction" and backlash from the move, but that the authority in its current state "was never the intent" because it lacks autonomy. He mentioned how the City Office of Economic Development has taken the reins on negotiating several Downtown economic development deals.
The authority at its July 24 meeting voted to allow the Office of Economic Development to negotiate deals for the Laura Street Trio and Barnett Bank Building, the Sax Property in LaVilla, the Shipyards, the Bostwick Building, the former Haydon Burns Library and a retail build-out program.
Clark said he was "not thrilled" with the idea of using the one-time funds for operations in the upcoming budget and the City has capital needs, such as an aging vehicle fleet and computers that should be paid for on "paygo" to not accrue additional debt.
He also said the decision was easier after seeing that Mayor Alvin Brown's administration is willing to use one-time funds to balance this year's budget.
Although the funds have not been allocated to any project and still could be recaptured for Downtown, the committee's action is "another hurdle to go through" and interrupts Downtown's momentum, said Ted Carter, Office of Economic Development executive director.
Carter said he was not surprised the committee took the action, only that it happened as the meeting was about to conclude.
"It was a huge statement to the development community that the City has finally stepped forward," Carter said, referring to the $9 million account.
"Predictability is important," he said.
Carter said the mayor and members of the administration in the next several weeks will highlight to Council members Downtown's momentum and reasons the funds should be retained, but that the authority should "take the point on this."
"I think we have a pretty easy, rational message to give them," said Oliver Barakat, authority chair.
Barakat said the committee's action was "disappointing" and "sends a mixed message to the market."
Aundra Wallace, the authority's first executive director, is scheduled to take over the role Aug. 19.
Authority member Mike Saylor addressed the committee before the vote and called the dedicated funds "a stimulus that is making the phone ring" from people in the industry interested in Downtown.
"There actually is huge momentum," he said.
Saylor said the authority's development plan, which must be approved by Council, will be done by year-end.
The committee next meets at 9 a.m. Thursday.