The CDA and GEH

There’s a meeting of the Community Development Authority today, and of the topics on the agenda, there’s an item (number 7) to “Discuss Development Agreement with Green Energy Holdings LLC.” (The agenda and packet appear below.)

This item is a reference to approval, from last Thursday’s Common Council meeting, of an agreement with Green Energy Holdings, Inc., a Wisconsin corporation. See, from the council packet, the pages as labeled in that council packet as numbers 45-50.

There’s much to consider about all this, but little information available to Whitewater’s residents. The proposal may be a fine idea, but there’s nowhere near enough public information to know. On the contrary, considering the grand way in which Whitewater’s outgoing city manager has announced this deal, one would expect far more. In that way, Brunner’s approach to this announcement follows his method for the Innovation Center, a bus for Generac, and tax incremental spending, generally. Running the people’s government as a shabby private club has been an eight-year error.

A supposedly big deal requires a thorough explanation; that’s not happened here.

Whitewater’s trend is toward openness. Fortunately, and despite the political inclinations of the outgoing city manager, Whitewater’s trend is toward open government. Meetings recorded and televised live, packets with useful information published before a meeting takes place, online information about local government spending – these are all big steps away from a closed, town-squires approach to politics.

Our past. Unfortunately, our political past is littered with dodgy deals, misinformation, excuse-making, and ludicrous exaggerations. We are a people, over fourteen-thousand in number, deserving much better from the city’s leading administrator.

A predictable, unproven claim. In his Weekly Report of 6.22.12, likely one of his last acts while working for Whitewater’s government, Brunner wrote that this deal would “Create 70 New Jobs and at Least $10 Million in New Property Value.”

That’s false.

Anyone reading the terms of the deal as contained in the City of Whitewater’s council packet would know that Brunner’s claim is erroneous. (Again, please see from the council packet, the pages as labeled in that packet as numbers 45-50.)

No deal could guarantee what Brunner claims, and this one doesn’t. The draft agreement doesn’t guarantee 70 jobs or ten-million in property value; on the contrary, the very terms of the deal make clear that the increase in property value may never approach the figure Brunner claimed (see Paragraph 4). The relevant portion of that paragraph states that

….It is agreed that if the estimated fair market value (which shall be determined by the estimated fair market value as shown on the real estate tax statement for each year in question) is less than $10,000,000 for the tax year commencing January 1, 2014, or in any year through the year 2027, or through the year in which Whitewater TID No. 8 is terminated, whichever is earlier, GEH shall pay a sum equal to the tax shortfall (the difference between the actual tax and the tax that would have been paid if the property’s estimated fair market value on the tax statement was $10,000,000) to the City of Whitewater. Said payment in lieu of taxes (PILOT) shall be due when the tax payment would have been due or February 15th of each year….

That’s not a guarantee of ten-million in property value; a payment in lieu of taxes (for as long as it lasts) would only give city government the taxes on whatever property shortfall might occur; the shortfall itself would not be compensated. Millions wouldn’t come to the city – just the much smaller taxable amount on whatever value fell below the stated target.

There’s a vast economic difference between millions in added property value and getting mere thousands in additional property taxes if the property value never materializes.

In the same way, GEH “represents” that 70 jobs will be created (paragraph 6), but there’s no guarantee. Let’s assume GEH is sincere – I’ve no present reason to think otherwise — it’s still no guarantee.

So, did city manager Kevin Brunner actually read this agreement, or did he hope that the residents of Whitewater wouldn’t?

He got a great (but false!) headline, repeated obligingly at all the expected, cheerleading places. Presenting the deal in such flamboyant terms only shows contempt for the abilities of Whitewater’s residents, or an overweening pride in a bureaucrat’s own, exaggerated accomplishments.

Does the CDA even know the name of the party to this deal? On the CDA agenda, Green Energy Holdings is listed twice as Green Energy Holdings LLC, but in the 6.19.12 common council draft agreement, and in the city manager’s weekly report, it’s listed as Green Energy Holdings Inc. These are not the same entities, although there may be a connection between them.

Green Energy Holdings, Inc. was registered in Wisconsin effective 04.03.12, and lists “Bryan Lemmens 6601 Cty Rd R PO Box 396 Denmark, WI 54208” as the corporation’s agent.

By contrast, a Green Energy LLC was registered in Wisconsin on 3.27.08 and lists “Dean Pehlke,127 N 3rd Ave Edgar WI 54426” as agent.

Is this a deal with one, both, or neither (perhaps we’ll hear about yet another company in this line of work)?

Are any other companies associated with Green Energy Holdings, Inc?

A predetermined outcome? The CDA is supposed to be an independent and deliberative body, but one wouldn’t know that from the agenda.

Item 7 is to “Discuss Development Agreement with Green Energy Holdings LLC” [sic] and Item 8 is to convene into closed session for consideration of ‘potential development agreements,” but Item 10 gives the game away:

“10. Approve Preliminary Development Agreement with Green Energy Holdings LLC.”

So much for a deliberative approach – the approval is already assumed from the agenda. It’s not “vote on” or “decide about” – it’s listed as “approve” even before the meetings starts.

A thin packet. There’s not even anything about Green Energy (of whatever business form) in the online documents accompanying the agenda. Not even a brochure.

Open government is the right thing to do. Open government is a better approach than the alternatives, including those from Whitewater’s past. Remnants of that way are still kicking about, but they’ve no enduring future in this city.

How this project will turn out, I’ve no idea; one hopes for the best.

Perhaps this was meant to be a final fanfare before a city manager’s old-style approach came to an end. In that he succeeded: this announcement has all the marks of an narrow, failed way of presenting information. This immediate deal deserves a candid discussion, on its merits and as an example of good government.

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