It is time to try to quanitfy the problems. First, if you disagree with me, that is fine. It is presumed you've researched your own facts and reached a different conclusion. There is certainly nothing wrong with that. However, it is hoped that you did your own research instead of blindly following someone else's lead. If you disagree with me, it is probably okay to stop reading at this point. From this point forward, I build on the basis that my analysis is correct, based on my research of the facts and my experience as a real estate professional.
I have often criticized the actions of Rowlett's "officialdom," but tried to take no shots at individuals. I may have stung them a little, but nothing serious. My sole exception was our previous city manager, who I consider to be an awful real estate analyst.
Let's clear the air of some "stuff." First, I have absolutely no evidence of any clandestine behavior, nor do I suspect any untoward behavior. I think our appointed and elected officials work as best they can for the city of Rowlett. Some are just better at it than others. Secondly, I don't think anyone in "officialdom" is dumb or stupid. They are all intelligent. However, I think personalities play a part in some of the real estate decisions effecting our tax base. Some are more bold, adventurous, studious, shy, and manipulative than others. You should expect that.
Now, lets look at some things. In Northshore, I think the consultants we had totally "blew" the analysis of Northshore. Much of this mistake I lay right at the feet of our previous city manager. I think we citizens got the study the previous city manager wanted, not what a real in depth study supported. By pure chunzpa, she hammered this concept right down the throats of "officialdom." The consultants didn't have much choice. Our previous city manager had the check book. Intimidation was a comfortable tactic of hers. For this mistake, I fault the previous city manager, the consultants, P&Z, Planning Department, and of course, City Council. Part of this blame should be placed on me. I allowed some of this to happen without speaking up. I attribute some of this to trying to get along, but that's a cop out. I should have taken a more public stand. However, I was not totally quiet. I spoke up loud and clear many times to the mayor about my true feelings. I was not nice. I felt the mayor was "boss." I was brought up to take your problems to the "boss." Almost my last comment from the Dais was to mention to another City Councilman that I would fire the city manager, and who to replace her with, fire another official and who to replace that official with. One of the two is still there. In any event, the mistake on Northshore was made. Cost to taxpayers every year so far.............$1,200,000 per year.
The next large piece of land needing city guidance was the 100 acres east of the Community Centre, I think called Pecan Grove. This piece never did get to a council vote, but boy was it close. Although all the hoopla called for an "exclusive" development, I think it was just a plain old apartment project. It doesn't matter. It didn't fly. However, the eye opening jolt was caused by the Staff Report, authored by the previous city manager and the proposed lease reviewed by a committee of three city councilpersons. My goodness, it was horrible. Land value was calculated at $200K, when in fact, it was worth $3-$4 million. There was no escalator clause in the lease.......elementary lease provisions. No knowledge of subordination and assignment agreements. This is all very elementary and entry level real estate leasing. Just awful. Thank goodness it never came to life.
The next project is The Village of Rowlett. This is a project I am in total support of...........as a project. It would be good for Rowlett. However, the cost to taxpayers is astronomical. If the information I have is correct about 380 Grants, I have added up costs exceeding $11,000,000 and all the costs aren't in, yet. Compare that to the cost to Plano of $14 million and got Toyota. Or, the cost to McKinney of $9 million and they got 1450 jobs. We get a nice apartment complex in which we won't receive any tax revenue for 15 years.
Lastly, so far, is Homestead of Liberty Grove, and it's attending Form Base Codes. This should be a pretty good project. It's one I think I would like. I would not buy a home in there because I like larger lots, but I think a lot of people would. It is a nostalgic look.......one that I like. The homes would be reminiscent of the 1920's and 1930's. However, in this development, Rowlett is experimenting with Form Based Codes. FBC is okay in intercity urban areas. I don't think they have proven themselves in a cow pasture. That is precisely where Rowlett put them.....a cow pasture. I would have been much more comfortable with them downtown, or maybe over by the Community Centre, but totally unsure about a cow pasture. This is highly experimental. I would have not turned down two proven marketing concepts nearby to protect this one. In fact, I think nearby upscale development would have helped this development. Now we have to wait for years to see if the market accepts this product before we know if it was a mistake. We have a red hot residential market right now. This might disguise market acceptance to be better than it really is. Right now you can sell a Montgomery Ward pup tent for top dollar. Higher, if it's already erected.
So, the above are the projects we have discussed to date. A lot has been written about them to get us to this point. Why write about them at all? These projects represent the collective thinking of current Rowlett "officialdom." It is indicative of where we are in cultivating our tax base and where we can expect to go with it. Why tax base? Tax base is, in my opinion, the single most important ingredient in the annual tax bill, and a barometer of Rowlett's life style. The higher our per capita tax base, the better our lifestyle.
Nice shops, new business, higher real estate values, and new jobs all feed on themselves. Success breeds success. Why do you think Highland Park has such a low tax rate? Because it's some of the most expensive real estate in the Dallas area. Look what's happening in Frisco and Murphy.
Now, the all important questions. Why did we construct the developments above the way we did? Why did we mis-analyse the Northshore market? Why did we miss so terribly the math and structure on the land beside the Community Centre? Why are we forfeiting $11 million to build an apartment complex? Why forgo $1,200,000 in annual income to date, for an experiment on unproven Form Based Codes?
The assignment of this blog last February was to discuss Rowlett's tax base. We have not wavered. The re-occurring question that continuously emerges is "Why?"
In an earlier post, I referred to my best friend. He was a brilliant lawyer. I have seen him often on network TV being interviewed about a case. He was intelligent, self assured, and dedicated to his profession. However, as smart and dedicated as he was, I would never let him take my appendix out. He would have made a lousy surgeon.
We have Rowlett's "officialdom" made up of intelligent and dedicated people. I do not deny that. However, how many of them have ever "cut" a real estate deal more complicated than their house? Rick has a real estate license, but I think he has primarily worked in property management. Carl sometimes says he is a real estate lawyer, but more accurately, he is a title attorney. He is in the insurance business, insuring customers against defects in title. These are the two councilmen with more real estate exposure outside of "officialdom" that Rowlett has. To the best of my knowledge, none of the rest of "officialdom" has done a deal larger than their house; certainly not in the multi-million dollar category.
In my opinion, we have made some very serious mistakes regarding Rowlett's future. It is at a most important time in Rowlett's history. It will effect Rowlett's future for the next 100 years. The question that emerges all thru these blog posts since February remains "Why?"
In Northshore, no one challenged the results of a consultant. Consultants aren't bosses. They are consultants. They need to be challenged. In Pecan Grove, unbelievable misunderstanding and lack of knowledge of basic real estate contracts and deal making were displayed. In The Villages, the city gave away $11 million, which compared to other cities deals were way over the amount needed to make a deal. In Homestead the city is gambling on an unproven zoning concept at the expense of turning down other developments that would have helped in the marketing, and certainly provided more revenue for Rowlett.
Our "officialdom" is intelligent. They are dedicated. So......Why? The simple answer is our "officialdom" is incompetent or inexperienced about real estate matters. They probably make lousy surgeons, too. However, they are probably good at other stuff. The most danger is made up of people that are incompetent, but think they aren't. It's council's job to find them and challenge them. It's council's job to seek expertise they need.
So, where do we go from here? Stay tuned. We may go to real estate school and conduct some polls.