Jackson Free Press

The JFP warned when taxpayers were voting on funding for the Jackson Convention Complex that powers-that-be would be back asking for a hotel in the future. Now that's happening, in the disconcerting form of a "public-private" partnership. The JCC was a fully municipal effort. The city got a hotel tax voted through, and now we have one.

For the hotel, the city is opting to, in the words of Ward 1 Councilman Jeff Weill, "co-sign" a loan for the private developer. While the city is trying to build in safeguards, it's essentially using its credit rating and ability to issue bonds to benefit a privately held limited-liability corporation.

The developer—a newly formed Mississippi LLC with out-of-state owners and offices—was apparently encouraged by former Mayor Frank Melton and other downtown cheerleaders to buy up property across from the convention center. The renderings were gorgeous (apartments! parking garage! a retirement community!) and the future bright. But with tightening of the lending market, that developer needs the city to "co-sign" the deal and cough up direct loans.

Of course, we're told we "need" a convention center hotel in order for the JCC to succeed. (Recall that the JCC wasn't sold to us that way in the first place.) Oh, and it'll create jobs. (Of course, so would beautification, parks, transportation and infrastructure projects.) It's a question cities around the country have faced for decades, and the best practices aren't totally clear. In many cases, the convention center hotel doesn't meet the rosy projections and doesn't make money. Taxpayers stay on the hook for improvements or refinancing.

The JFP would prefer our readers know more about TCI-MS and more about the deal before giving it our blessing—as taxpayers and citizens, we weren't really asked. So far, the flow of information on this deal has been a problem. The city's willingness to sit on—and then deny—the JFP's open-records request for the mayor's executive summary regarding this deal is cause for concern. The reason? The city attorney wrote us a letter after the 14-day window had expired, quoting Mississippi law regarding the "confidential commercial or financial information," saying that required them to withhold the executive summary.

It's not clear to the JFP what was proprietary about this deal. It seems unlikely that TCI-MS has significant competition at this point. If the deal is worth doing, then it should be worth talking about in public.With the council vote behind us, we call for the city to abandon secrecy on this "public-private" project as it goes forward with taxpayer dollars, loans and guarantees.

We call on Mayor Harvey Johnson to be vigorous in his support for open discussion of this project with the public and media. We have some critical decisions to make with this project, and they need to be made in the light of day.

Previous Commentsshow

I support the mayor on this one, the last administration forced our hands on this one. Yeah I know jfp has an issue with gene philipps but we are at a point that this thing is moving forward and I think this thing will work regardless of the doomsday scenerio everyone including Jeff Weill is predicting and in some cases hoping for, My opinion.

NewJackson

Jul 1 2010

NewJack: Your statement is eerily similar to folks who brushed aside our concerns about Melton. For the record, we are concerned about more than the company on this, as you can see. We're not convinced the numbers will add up on the side of the taxpayers. Once again: We hope we're wrong on this one. It's a drag being right about things that people don't want to be true, and that end up costing the city and taxpayers.

DonnaLadd

Jul 1 2010

At this point that's all we can do

NewJackson

Jul 1 2010

My experience in working with public/private partnerships is that usually the split is the public takes the risk and the private sector gets the reward. Or that the debt is public and the profit is private. Nice work if you can get it. These stories rarely end happily. JFP is correct in saying that IF (and it's a big if) this is a good deal for the taxpayer than it should stand up to public scrutiny. Of course that supposes that there is an opportunity for scrutiny. There is usually only one reason to withhold information on a deal like this. It doesn't pass the smell test. It wouldn't stand the scrutiny. So trust them, because they (fill in your favorite decisionmakers) know best. I'm not saying that the public (in the form of those same elected officials engaging in public discussion and decisionmaking) can't sometimes be the party that makes the deal possible, be the deal maker, by choosing (sometimes by referendum) to invest in something that could have long-term benefits for the city. But you can't choose if you're not presented with all the facts. And government officials shouldn't choose for you if they are not willing to explain their decisions and the information they based it upon. "Confidential commercial or financial information." That bit of artful doublespeak sounds suspiciously like it is taken from the public records act, if I am not mistaken, and brilliantly omits what comes after. Under exemptions to the act, item Z: z. Commercial and financial information of a proprietary nature required to be submitted to a public body is exempt, unless it is submitted to a regulatory agency by a public utility and is related to the establishment of, or changes in, rates regulated by the agency. § 79-23-1(1) (Supp. 1987). I think this is pretty clear as a statement of what records or info are subject to public scrutiny: 1. Records are covered if they are used, or have been used or are "prepared, possessed or retained for use in the conduct, transaction or performance of any business, transaction, work, duty or function of any public body" or are "required to be maintained by any public body." § 25-61-3(b) (Supp. 1996). Makes sense, doesn't it? If you are doing the public's business the information, the data, the stuff you are using to make an informed decision must by definition be a record that is available to the public. Finally, take the city's position to its logical but absurd end. I don't know what percentage of guarantee the city money represents, but would the same argument hold true if it guaranteed 50%, or the whole 100%? Or if it was an equity partner in the development? The public wouldn't have the right to know and examine the financial data? That's absurd. Now I have to get back to watching Howie on Deal or No Deal. I think it's a rerun.

annyimiss

Jul 1 2010

My experience in working with public/private partnerships is that usually the split is the public takes the risk and the private sector gets the reward. Very true. It's also ironic that some of the biggest cheerleaders for these kind of projects that cost and bring risk to taxpayers are very often one and the same folks who claim to hate government and want it smaller.

DonnaLadd

Jul 1 2010

Oh, and I've met very few public servants in Mississippi who really give a damn about transparency. It's bad in other states, too, but among the worst here. We've always done things behind curtains, so even people who say they want transparency go along with the status quo. It's how we've ended up one of the most corrupt states.

DonnaLadd

Jul 1 2010

You have anyone in mind? (had to ask)

annyimiss

Jul 1 2010

The shares of the publicly traded Transcontinental Realty Investors Inc. (TCI) have fallen 27% in the last 52 months. The firms stock is mainly owned by insiders which is not a good sign. The firm is currently not profitable. The return on equity is negative 31% but the revenue growth year over year is 3%. The earnings before interest, taxes, etc. (EDITDA) is $46 M. The profit margin is negative 52%. The current price of the shares ($9.23 close July 30, 2010) is half of its sales and 30% of its book value. The parent company is probably at risk for a restructuring, buyout, or bankruptcy. One of the Texas subsidiaries is in bankruptcy...one that was going to build a hotel in Dallas on the LBJ freeway. See their corporate filings on various Nevada, Miss., Texas, subsidiaries: TRANSCONTINENTAL REALTY INVESTORS INC - FORM 10-K - EX-21.0 - SUBSIDIARIES OF THE REGISTRANT - March 31, 2010 Read more: http://www.faqs.org/

Aeroscout

Jul 1 2010