10/08/2006

Editorial

Lack of tax credit oversight taints Petoskey Pointe plan

"Stuff happens."

To taxpayers, anyway.

At a meeting of Emmet County's Brownfield Redevelopment Authority last week, a county consultant brushed off the fact that developers used results from a bogus contamination test to land $4.5 million in tax credits. "Stuff happens," he said.

That crack pretty much sums up the reaction of Emmet County's Brownfield Redevelopment Authority, whose members didn't ask a single question about how AKT Peerless botched tests on which the credits were awarded.

Board Chairman Herb Carlson said the testing issue was a "moot point." Hardly.

Thankfully, there are other people with a greater sense of the need for transparency and accountability than Carlson and his board.

Concerned residents quizzed AKT representative Brian Eggers for more than an hour on how soil samples taken from the site of the proposed Petoskey Pointe project were contaminated in the lab.

They also wanted to know how an AKT estimate that up to 10,000 cubic yards of contaminated soil had to be removed from the site made it into a tax credit application some six weeks after the state blew the whistle on the contamination claim.

So far, no one, from the governor's office to Emmet County to the Petoskey City Council, has acknowledged or disputed the bottom line — if developers Lake Street Petoskey Associates had submitted a tax credit application that said only 200 cubic yards of soil, not 10,000 cubic yards, had to be removed from the site, they should not have landed $4.5 million in credits.

According to the developers, not winning the credits would have jeopardized the entire project. In an April 20 letter to state brownfield officials, developers said that without the $4.5 million "the project's success becomes questionable." " ...(W)e now consider it a necessity," they wrote.

If anything, that information should have given Emmet and Petoskey officials pause. If a $60 million project can be halted over $4.5 million in tax credits that developers "originally considered ... an attractive incentive" (according to the April 20 letter), should the city partner with them on a planned public/private parking deck at the site?

Someone other than area residents needs to ask tough questions.

State Sen. Jason Allen (R-Traverse City), who describes himself as a firm supporter of the brownfield redevelopment program, said he thought it be appropriate for the DEQ and the Michigan Economic Development Corp. to make a full review of "the problems that are going on."

In late September, spokeswoman Liz Boyd said Gov. Jennifer Granholm was "troubled" by the news.

"We want the MEDC to fully review what occurred, whether things occurred as they should have, whether it impacted their final decision." There has been no word on that review since then.

Incredibly, the Petoskey Pointe saga became even more muddied Thursday when a building permit for the project was issued to Petoskey City Manager George Korthauer one day before a deadline in a city development agreement lapsed.

An Emmet County official had refused to issue the permit to Lake Street Associates because they didn't yet own all of the land, but he handed it over to Korthauer — even though the city didn't own the land, either.

Dick Crawford, Emmet's chief building official, said the department's attorney said "this is the way that makes sense." To her, perhaps.

Given the near total lack of interest exhibited by local officials in pursuing the tax credit fiasco, the questionable legality of issuing the permit to Korthauer to beat the deadline may be just more water over the dam.

Contrary to the opinion obviously shared by Emmet County and Petoskey officials — that brownfield funding is "free" money — this is, one way or another, taxpayer money. Tax credits are taxes not paid. And public officials, no matter who they are, have an obligation to put taxpayer interests first. If they can't, or won't, they don't deserve their jobs.

As was said about a failed downtown Traverse City parking deck project rejected by voters, process counts. While development or redevelopment is crucial, it can't come at any price — and that includes using contaminated test data.