Friday, November 11, 2005

Too Many Credit Cards

Memphis Flyer
By John Branston
Link to original

A $27 million Beale Street riverboat landing and a $400 million train track from downtown to the airport are capital improvements. So are a walking trail and playground at the Bickford Community Center in North Memphis. Guess which one is most likely to be stopped by the city's spending freeze.

The city and county are trying to get their budgets in shape and keep their bond ratings from slipping. The news gets worse by the month. So the city administration and City Council have frozen spending on capital improvements.

Public facilities such as the Bickford Community Center and its customers will feel the chill. Located between Caldwell Elementary School and Uptown, Bickford has an indoor swimming pool, an after-school and Head Start program, and a senior citizens program. The playground consists of a single swing-set and a bare open field. A modest investment that would make a modest improvement in the everyday lives of young and old is on hold.

A spending freeze gives city officials some breathing room, but it won't stop big-ticket projects such as the boat landing and airport train, and it won't fix the budget or restore public confidence. The reason, to oversimplify a bit, is that the city of Memphis is married with children. There are a lot of credit cards out there.

Memphis and Shelby County are like a couple with joint checking accounts and individual accounts. They have rich uncles -- state and federal government -- that shower them with money they must use or lose. And they have children -- the Riverfront Development Corporation (RDC), Memphis Area Transit Authority (MATA), and Metropolitan Planning Organization (MPO), to name a few -- with their own credit cards and some very nice allowances. Unless the parents take away the credit cards and allowances, the spending won't stop.

The Riverfront Development Corporation has groomed Riverside Drive, the bluff, and riverfront parks to an exemplary standard. But now that it has killed the land bridge and written off most of a $760,000 master plan, it should consider its own relevance. A self-imposed sunset clause might be a public service and a recognition that the agency, like the dot-com boom, was a product of an era of excess that is as yesterday as the catered breakfast served up at RDC board meetings.

What's left for an outfit with three former city division directors on its payroll at salaries plus bonuses that exceed what they were making as public servants? Its driving force and guiding light, Kristi Jernigan, is gone. The land bridge is gone, and several board members didn't even bother to show up for the vote that killed it. Mud Island River Park is ready for its annual seasonal shutdown after losing another million dollars or two this year. The University of Memphis can carry the ball for the proposed downtown law school. Lawyers and Friends For Our Riverfront and heirs of the city founders will determine the future of Front Street and the public promenade. The Pyramid has its own reuse committee.

The boat landing is supposed to make the river more accessible, but the river is already accessible from two boat ramps on Mud Island, and you can throw a rock in it from Tom Lee Park or Greenbelt Park.

The city has a contract with the RDC, which in turn signed contracts for the design, construction, and management of Beale Street Landing. With several million dollars already spent, it's not likely that the mayor and City Council will pull the plug on the Beale Street Landing and the RDC. Unless the board acts on it own, as it did on the land bridge, Memphians will have a $27 million tourist bauble.

MATA is another semi-autonomous agency, responsible for the costly and baffling extension of the Madison trolley line to Cleveland in Midtown. With the MPO, MATA is actively studying alternative routes to the airport. The lure of big construction contracts and "free money" in the form of state and federal funds is driving the project.

Once again, unless the board acts or the mayor and City Council specifically target this project, Memphians will wind up paying for it.

Thursday, November 10, 2005

Beale project starts; $500,000 earmarked for landing

Commercial Appeal
By Tom Charlier

Despite grim Memphis budget forecasts and a recent moratorium on new capital projects, construction of the $27.3 million Beale Street Landing got under way this week as crews began widening the entrance to the Wolf River Harbor.

Using an initial appropriation of $500,000, the Riverfront Development Corp. is excavating and dredging parts of Mud Island and the harbor to make way for the riverboat landing planned for the foot of Beale.

The initial work, which should take only a few days, comes barely a week after the City Council and Mayor Willie Herenton's administration agreed to shelve new capital projects to allow for a review of spending.

The action was prompted by concerns over the city's current $25.8 million budget deficit, as well as its dwindling reserves and growing debt.

Still, RDC president Benny Lendermon said the project is proceeding with the blessings of both the council and the administration.

The council approved the $500,000 appropriation three weeks prior to the Nov. 1 decision to halt capital projects. After the moratorium, administration officials told RDC that it could proceed "full speed ahead" with the landing project, Lendermon said.

RDC, the nonprofit corporation established by the city to enhance the Mississippi River front, will follow whatever instructions come from City Hall, he added. "If the council decides tomorrow they want us to stop, then we'll stop," Lendermon said. "But that's not what we've been told."

The landing project features a floating dock for large excursion vessels and a series of landscaped islands built on terraces descending toward the Mississippi River. Completion is set for 2008.

RDC officials say the project is sorely needed because Memphis has no reliable and convenient landing for commercial vessels such as the Delta Queen. Without it, the city could lose all service within two or three years.

Federal and state grants will cover at least $10 million of the project's $27.3 million cost, with the city paying the rest.

But Carol Chumney, one of the two council members who voted against the $500,000 appropriation, said the project should not have been launched until the review of capital spending was completed.

"It's a waste of money if the council pulls the project," Chumney said.

The startup of the project also drew criticism from John Gary, vice president of the group Friends for Our Riverfront. He called the landing extravagantly expensive and unnecessary, particularly in light of the city's budget problems.

"If we had all the money in the world, maybe it would be OK to do something like this," Gary said.

The next phase of work, slated for early next year, involves driving a sheet-pile wall into the harbor and filling behind it to create a foundation. Lendermon said RDC will ask the council for more funds as they're needed.

Tuesday, November 08, 2005

Editorial: Hyneman's gifts carry a price

Commercial Appeal

"DON'T YOU THINK he's just a nice guy?" Memphis City Council member Barbara Swearengen Holt replied when questioned about help she and other elected officials have received from developer Rusty Hyneman.

There's no question Hyneman has quite a giving streak in him, at least where certain people with the power to help him later are concerned.

As a six-week investigation by The Commercial Appeal revealed, Hyneman helped Holt get a luxury skybox seat to a Memphis Grizzlies preseason game.

Hyneman co-signed on a loan so City Council Chairman Edmund Ford could lease a $50,000 Cadillac. Hyneman also bought a $1,200 airline ticket for Shelby County Commissioner Michael Hooks and one of Hyneman's business partners gave Hooks an interest-free $16,000 loan.

And these are only some of the more recent examples of Hyneman's "generosity."

When Jim Rout was still county mayor, he got a free ride in Hyneman's private jet. Hyneman also helped City Councilman Rickey Peete buy a new house and rented County Commissioner Tom Moss a home when Moss needed to establish residency in his new district.

Like Holt, other elected officials who have been on the receiving end of Hyneman favors have described him as just a really good friend. The fact that his company regularly appears before the council and commission to request approval for land-use changes has nothing to do with anything, they claim.

That's just plain silly. Any elected official who believes Hyneman isn't looking for favorable treatment in return for his many acts of kindness is hopelessly naive. Those who clearly understand Hyneman's game and choose to play it anyway are corrupt.

Our community doesn't need elected officials who fit into either of those categories.

In the wake of the Tennessee Waltz undercover investigation, there has been a lot of attention on tightening the state's ethics laws.

It's clear that more work needs to be done at the local level as well. The council's ethics policy is advisory only, which means it's basically worthless.

However, council members might not know where to turn for objective legal advice on making improvements: After all, their attorney Allan Wade is also representing Hyneman in a divorce case.

Another disappointing aspect of the latest revelations about Hyneman is that the elected officials involved seem to be beyond shame.

Hooks, who was indicted in August on bribery and extortion charges, told a reporter that press coverage will only help him in his upcoming trial.

"The more y'all write, the better it gets, baby," he taunted a reporter trying to interview him about the loan he received from Hyneman business partner Henry Weaver. "And I'm going to need public opinion. ... Y'all ain't learned that yet."

Forget integrity for just a second. Don't these elected officials have any pride? Why would they even be willing to let someone think that they could be bought off with free air travel or other perks?

Sure, being an elected official probably gets lonely at times.

But those who need a friend should get a dog.

The messes would be easier to clean up.

Sunday, November 06, 2005

Hyneman a 'friend' indeed to officials

All say gifts, favors have no bearing on development votes

Commercial Appeal
By Marc Perrusquia and Michael Erskine
Link to original

He bought an airline ticket for County Commissioner Michael Hooks and helped City Council Chairman Edmund Ford lease a new $50,000 Cadillac.

When council member Barbara Swearengen Holt wanted to see a preseason Grizzlies game this fall, he helped her sit for free in a luxury skybox.

Multimillionaire developer Rusty Hyneman has provided these and other perks to local politicians while on a remarkable run winning approval for his often controversial land developments.

An investigation by The Commercial Appeal found:


Last year, Hyneman co-signed to lease a Cadillac sport utility vehicle worth more than $50,000 for Ford, who had bad credit and couldn't qualify for the car. Ford says he makes the monthly payments himself.

Hyneman paid $1,200 in April to get Hooks a plane ticket to New York, where the commissioner scouted out college opportunities for his teenage son.

Hyneman's business partner provided Hooks an interest-free $16,000 loan in 1999.
The favors, turned up in the newspaper's six-week investigation, only add to a lengthy list already public.

When he was county mayor, Jim Rout accepted a free trip on Hyneman's private jet. City Councilman Rickey Peete turned to Hyneman for help in buying a new house. Home builder-turned-commissioner Tom Moss rented a home from Hyneman when he needed to establish residency in a new district.

In addition, Hyneman, his family members and business associates have raised tens of thousands of dollars for council members and commissioners in campaign contributions since the 1990s.

Almost invariably, when politicians were asked about Hyneman, they described him as a friend, saying any favors he may have performed had no impact on their official actions.

"You don't think he's just a nice guy?" said Holt, 66, who says she is so close to the 41-year-old developer she calls him "my son."

In a council meeting in September, Holt, Ford and Peete fawned over Hyneman's fifth-grade daughter, who had won a championship riding one of her father's horses, presenting her with cuff links, a blouse, a medallion -- and the symbolic key to the city.

"It's outrageous (what) he can do," said attorney Dan Norwood, an advocate for ethics reform who also once led an unsuccessful fight to block a controversial Hyneman building project in Cordova.

"The local ethics law has absolutely no teeth in it."

Despite a statewide push for ethics reform following corruption indictments against at least 10 current and former public officials, the Memphis City Council still has few hard rules on accepting gifts, maintaining a code of ethics that is not mandatory but simply advisory.

"The next ethics battle needs to be right here," Norwood said.

Hyneman, who served a term in federal prison after a drug conviction in 1988, did not respond to repeated requests for an interview.

Ford's Cadillac

When Edmund Ford drives to City Hall to chair the council's biweekly meetings, he shows up in a sporty 2004 Cadillac SRX.

Ford got the black sport utility vehicle -- worth more than $50,000 and loaded with custom features -- last year from Bud Davis Cadillac, signing a $918 monthly lease.

Ford, 50, a funeral director by trade, filed for Chapter 13 bankruptcy in 1999. His credit was bad, and, he admits, he couldn't qualify by himself.

Records show Hyneman co-signed on the four-year lease.

The car is registered to the E.H. Ford Mortuary, but the title application was signed by Hyneman. Ford said he gets no help from Hyneman making the monthly lease payments.

"I don't need nobody to pay nothing for me. No. No, no, no, no. No sir," Ford said. "He's a friend of mine. ... I mean, he's just co-signing. I mean, what was the problem?"

Asked if Hyneman's co-signing equated to a gift with economic value, Ford said, "Well, I guess it would. ...

"You get people to co-sign with you on a lot of different things. If I didn't pay the note, they'd end up taking the vehicle, or whoever co-signed would be responsible, I guess. But other than that, no."

Former County Commissioner Joe Cooper, the car salesman who handled the Ford deal and who remains a close associate of Hyneman's, said he doubts the developer is paying for the car.

"I'm sure he isn't," Cooper said, but citing customer confidentiality, seemed to reconsider.

"Once the car leaves here, I don't know who pays for them."

Council minutes show that in the months after Ford's March 2004 acquisition of the Cadillac, he voted for two major developments involving Hyneman.

That May, the council unanimously approved Saint Andrew's Place, a 105-lot residential planned development near Houston Levee and Macon roads pitched by Hyneman's Rusco development firm.

In February, the council unanimously approved Fountain Brook, a 335-home development on 106 acres in Cordova. Office of Planning and Development records list Rusco Partnership as the applicant and equitable owner.

Ford said there was no connection between the car and any of his votes: "Nobody influences my vote. I'm going to vote what I think is right. You know, that's on anybody."

NYC bound

Last spring, when Hooks chaired the County Commission, the other major governing board that approves local developments in Memphis and Shelby County, Hyneman bought him an airline ticket.

Hyneman charged the ticket on his American Express card, records show.

Hyneman's account statement shows a $1,249 charge on April 22 to AirTran Airways for a round-trip ticket to New York.

The entry says simply, "Date of Departure: 4/23. Passenger Name: Hooks/Michael."

Asked about the charge, the commissioner's son, school board member Michael Hooks Jr., made it clear the charge wasn't made for him.

"Let me emphatically say that I did not go on a trip to New York," he told a reporter.

But his father did.

The departure date, April 23, was a Saturday, and records show Hooks was absent for the commission's meeting that Monday, April 25.

Tom Moss, who had to chair the meeting in Hooks's absence, recalled that Hooks was on a college trip with his youngest son, which included a visit to New York University and other northeastern schools.

"He had several scholarship offers, and I think it was posed as it had to do something with that," Moss said.

"... They started in New York and they might even have gone up to Connecticut from there. That is my best guess."

Hooks did not respond last week to requests for comment on the tickets, but told a reporter earlier this fall that a $16,000 loan he took in 1999 from Hyneman's business partner had no impact on his voting.

"It's my personal business. It's got nothing to do with government," he said in September.

Records show Hooks has voted for several Hyneman projects through the years, including a 2001 addition to the sprawling Cordova Ridge planned development.

More perks

Holt said she sat with Hyneman last month in a skybox at a Grizzlies preseason basketball game. Hyneman often sits there, yet Holt said she can't recall who owns the skybox or which game it involved.

"I enjoyed it," she said.

Holt told The Commercial Appeal last year that Hyneman had given her Grizzlies club seat tickets worth $140 a pop more than once during the 2003-04 season, but says she now has season tickets that she paid for herself.

"He is a friend," said Holt, who has often supported Hyneman projects, but said the tickets have no impact on her votes. "My integrity means more to me than a Grizzlies ticket."

Councilman Peete, who met Hyneman in prison while serving a term for extortion and who got help from the developer in 1997 in buying a $110,000 home, said he, too, considers Hyneman a friend.

"You can be friends with an individual and at the same time maintain an objective perspective, if in fact there's something they've got that has to come before the body," Peete said.

"And that's the way I try to approach everything."

-- Marc Perrusquia: 529-2545

- Michael Erskine: 529-5857

Reporter Ruma Banerji Kumar contributed to this story.

Copyright 2005, commercialappeal.com - Memphis, TN. All Rights Reserved.

Friday, November 04, 2005

House bill counters eminent domain ruling

Associated Press
Link to original

WASHINGTON (AP) -- Contending that the Supreme Court has undermined a pillar of American society -- the sanctity of the home -- the House overwhelmingly approved a bill Thursday to block the court-approved seizure of private property for use by developers.

The bill, passed 376-38, would withhold federal money from state and local governments that use powers of eminent domain to force businesses and homeowners to give up their property for commercial uses.

The Supreme Court, in a 5-4 ruling in June, recognized the power of local governments to seize property needed for private development projects that generate tax revenue. The decision drew criticism from private property, civil rights, farm and religious groups that said it was an abuse of the Fifth Amendment's "takings clause." That language provides for the taking of private property, with fair compensation, for public use.

The court's June decision, said House Judiciary Committee Chairman James Sensenbrenner, R-Wisconsin, changed established constitutional principles by holding that "any property may now be taken for the benefit of another private party."

The ruling in Kelo v. City of New London allowed the Connecticut city to exercise state eminent domain law to require several homeowners to cede their property for commercial use.

With this "infamous" decision, said Rep. Phil Gingrey, R-Georgia, "homes and small businesses across the country have been placed in grave jeopardy and threatened by the government wrecking ball."

The bill, said Chip Mellor, president of the Institute for Justice, which represented the Kelo homeowners before the Supreme Court, "highlights the fact that this nation's eminent domain and urban renewal laws need serious and substantial changes."

But opponents argued that the federal government should not be interceding in what should be a local issue. "We should not change federal law every time members of Congress disagree with the judgment of a locality when it uses eminent domain for the purpose of economic development," said Rep. Bobby Scott, D-Virginia.

The legislation is the latest, and most far-reaching, of several congressional responses to the court ruling. The House previously passed a measure to bar federal transportation money from going for improvements on land seized for private development. The Senate approved an amendment to a transportation spending bill applying similar restrictions. The bill now moves to the Senate, where Sen. John Cornyn, R-Texas, has introduced companion legislation.

About half the states are also considering changes in their laws to prevent takings for private use.

The Bush administration, backing the House bill, said in a statement that "private property rights are the bedrock of the nation's economy and enjoy constitutionally protected status. They should also receive an appropriate level of protection by the federal government."

The House bill would cut off for two years all federal economic development funds to states and localities that use economic development as a rationale for property seizures. It also would bar the federal government from using eminent domain powers for economic development.

"By subjecting all projects to penalties, we are removing a loophole that localities can exploit by playing a 'shell game' with projects," said Rep. Henry Bonilla, R-Texas, a chief sponsor.

The House, by a voice vote, approved Gingrey's proposal to bar states or localities in pursuit of more tax money from exercising eminent domain over nonprofit or tax-exempt religious organizations. Churches, he said, "should not have to fear because God does not pay enough in taxes."

Eminent domain, the right of government to take property for public use, is typically used for projects that benefit an entire community, such as highways, airports or schools.

Justice John Paul Stevens, who wrote the majority opinion in Kelo, said in an August speech that while he had concerns about the results, the ruling was legally correct because the high court has "always allowed local policy-makers wide latitude in determining how best to achieve legitimate public goals."

Several lawmakers who opposed the House bill said eminent domain has long been used by local governments for economic development projects such as the Inner Harbor in Baltimore and the cleaning up of Times Square in New York. The District of Columbia is expected to use eminent domain to secure land for a new baseball stadium for the Washington Nationals.

Copyright 2005 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.



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