Monday, November 23, 2009

Less than serious blogging resumes

I'll admit that I was one of the guys in high school who gave unmitigated crap to all my soccer-playing friends.  Lots of yapping about it not being an American sport, and thus not a "real" sport, etc., the kind of stuff you say as a teenager to try and get under their skin.  I, of course, played baseball, the most American sport of all.

Fast forward fifteen years. 

Friday, November 20, 2009

Excellent choice of words, Decatur Metro

Decatur Metro, while discussing potential plans to build the multi-modal station Downtown, has a link to a DC blog Track Twenty Nine.  Track Twenty Nine has some schematics for how various rail lines could fill the Gulch area, which DM termed "rail porn".  Excellent choice of words - we salute you!

As far as the multi-modal station goes, GDOT is considering building it with the $87M in federal funds slated for the Lovejoy line.  Also mentioned in the AJC article is one of the ideas floating around for how to pay for commuter rail lines:
The project could address the fundamental problem that has dogged the commuter rail line proposal: Mass transit ticket sales rarely pay the full cost of operating the system on an ongoing basis. One idea is to gain a revenue stream for the rail lines by building and renting out office space above the terminal.  DOT, MARTA and other agencies could move into that space, and form a reliable renter base even in a shaky real estate market.
Sounds good, but I think it is much harder in practice to execute.  If you could fill all (or a lot) of the office space with MARTA, GDOT and other government agencies, you could probably get decent cash flow out of the deal, but I'm not sure what it means for the rest of Downtown.  It isn't like government workers are a revitalizing force for urban renewal - they basically go to work, eat lunch, and go home.  So Downtown will get some more sandwich shops.  To be really successful, I'd love to find a way for the multi-modal station to be more of a draw for different businesses.

Also, moving all those government agencies into the buildings would mean they are no longer renting space elsewhere - such as GDOT at One Georgia Center.  Unless you can  actually generate demand for office space, you are just playing shell games.  Maybe the multi-modal CAN generate demand, but I think we should spend some time laying out specifics on how that is going to happen.  New development doesn't magically generate people who want to move into your space (look at all the empty office space in Buckhead).

h/t: obvs. to Decatur Metro

Poncey-Highland Master Plan; I rant about "road diets"

The Poncey-Highland master plan was released last night.  You can find the details here

The first thing that jumped out at me was the North Avenue "road diet".  (Click the link or the picture at right to see the full-size jpeg.)

Can I just say that I find "road diets" annoying?  I know that there is a lot of traffic on North Avenue - I use it every day to go to and fro at Georgia State.  The reason for the traffic is not because North Avenue is poorly designed north of the BeltLine, it is because North Avenue is a million feet wide SOUTH of the BeltLinePonce and because de Leon is a mess during rush hour.  The real problem there is because there aren't enough east-west corridors other than Ponce de Leon.  All the traffic bulbs, medians, and swervy lanes aren't going to change that - these are band aids.  Hideous, Disney-character-covered, fall-off-in-the-shower band-aids to appease a neighborhood group.

Tuesday, November 17, 2009

NPU F decision on BeltLine a disappointment

I actually hesitated before writing about NPU F's rejection of the NE Beltline plan.  I have not been involved with all the discussion and meetings, and I think the NPU process is a net positive for the city as a whole.

I have previously commented on the plan, so I won't belabor the point.  Suffice it to say that I find the neighborhood's reaction extremely disappointing and short-sighted.  I think it is an excellent example of why NPUs only have advisory power - the city council (either this one or the newly elected one) should realize that it is in the City's best interest to direct responsible growth at this intersection and elsewhere. 

Shameless self promotion

Jon over at A Is For Atlanta asked me to participate in his "Five Questions With..." segment.  He has some very nice things to say about this here blog, and he's spruced up my answers with lots of relevant links and pictures.  Don't miss the old school Al Sharpton pic!

And thanks for asking me to do it, Jon!

Monday, November 16, 2009

Reason from beyond the Perimeter?!

From perhaps the most unexpected place, Peach Pundit enunciates one reason why Kasim Reed is at this point Atlanta's best hope:
Meanwhile, Kasim Reed has the backing of all groups within the City Of Atlanta who must buy into fundamental change. He also commands respect and has good working relationships with the other group that must be brought into discussions to provide the carrot and stick to force the City Hall constituencies to change their ways: The State Legislature.

Kasim Reed holds a unique position in this pivotal point in time. He has the respect of two distinct and distant constituencies who are both integral to the future growth and success of the City. Worst case scenario, it is four more years of status quo while the forces for change are able to recruit a better candidate. But if Kasim is to live up to his challenge, he is the person best suited to bring all parties to the table, and set a course for Atlanta to work with the surrounding region and not against it.
I remain unconvinced about Kasim's ability to affect fundamental change in the city's policies or operational systems.  However, anyone attempting to change things needs to have the buy-in from the stakeholders involved.  I'd say that the most likely outcome of a Mary Norwood administration would be as described by the Peach Pundit post:
Sure she represents change, but is there any evidence it will be change for the better? Or would her inability to communicate or get along with fellow council members or city staff make her a figurehead who goes largely ignored while the city continues to spiral out of control under the weight of its own entropy?
Mary Norwood can complain that the rest of the City Council hasn't been willing to work with her, but that doesn't change the fact that she would have to work with them as Mayor.

Note: beware the entire post liked to above - while largely reasonable, it drips with a certain OTP smugness and condescension that required a large degree of restraint on my part not to engage.

h/t: el hermano

Wednesday, November 11, 2009

Sports and adaptive re-use: Highbury Square

Previously I highlighted an interesting aspect of San Diego's baseball stadium, where they integrated a historic building into a new stadium.  How about going at adaptive re-use from the other direction - adapting an old stadium into luxury housing

That's what English football club Arsenal did when they moved to a new stadium.  Historic Highbury Stadium became Highbury Square apartments.  The stands were hollowed out to became units, and the pitch (the playing surface) became a garden. 

Unfortunately, the deal has not been as successful financially:
Though sales have been steady, occupancy rates remain only around the 70% mark, according to the club. In September, Arsenal sold a tranche of nearly 150 apartments to real-estate group London and Stamford Property at a discount to market value of 20%, with cashflow problems blamed. A spokesman for Arsenal declined to comment on the specifics of the deal. Financially, at least, the stadium move may not have been entirely successful for the club.

Friday, November 6, 2009

Race, party affiliation, and city elections

I previously mentioned that I found the DPG's mailer about Mary Norwood possibly being a Republican to be in poor taste.  I just left it at that, but perhaps you found it odd since I also commented in my non-endorsement post that I found Norwood's "forgetting" who she voted for to be suspect.  Well, Jay Bookman pretty much sums up how I feel about the mailers:

The line between typical political hardball and tactics designed to milk racial suspicions can admittedly be murky. ...

But murky as it may be at times, that line does exist, and it’s important. The state Democratic Party, for example, edged close to or even over that line last week when it injected itself into the nonpartisan campaign with fliers charging that Norwood is a Republican.

On the surface it was a meaningless distraction, and Norwood did herself no favors with her flustered response. It doesn’t matter in the least whether Atlanta’s mayor is tall or short, white or black, male or female or Republican or Democrat.

But in a city in which Republican equals white, the underlying message wasn’t hard to decode.
All of the major candidates have done a pretty good job of avoiding making this election about race.  The DPG basically did all the suburban race-baiters a huge favor with that mailer, and I for one would prefer not to give them freebie's like that. 

Thursday, November 5, 2009

LILO transactions abridged

The paper I linked to earlier (pdf here) concerning lease-in lease out (LILO) transactions is a very good read.  It is also relatively easy to follow if you have a basic knowledge of finance. 

If you are interested in just what it is that Jill Chambers thinks MARTA officers are too dumb to understand, I'll try and summarize:
  1. A tax-exempt organization like MARTA has property and assets that it owns.  Let's call them the "owner".
  2. The owner leases the property to an investor.  Let's call him the "taxpayer".  (I'm borrowing terms from the Yale paper.)
  3. The taxpayer takes out a loan for the present value of the lease obligations, and pays it to the owner up front instead of making annual payments.  The taxpayer takes out a loan to make this payment, so he'll owe principal and interest on it over the course of the arrangement.
  4. The taxpayer then leases the property back to the owner.
  5. The owner takes that lump sum (the present value of the lease obligations), and invests it in bonds.  He'll use this investment to pay for the sub-lease he made with the taxpayer.   
The annual cash flows look like this:
  1. The invested lump sum throws of interest, which the owner (MARTA) uses (in conjunction with part of the invested amount) to pay the taxpayer for the lease.  
  2. The taxpayer uses this payment to pay back principal and interest on the loan he took out to finance the lump sum payment in the beginning. 
  3. The owner (MARTA) doesn't get anything on an annual basis - remember, they got everything up-front in order to invest it.
So shouldn't all this stuff equal out?  Why is anyone making any money on this deal?  I'll quote from the paper:
My analysis reveals that the underlying source of tax benefits is the arbitrage created because a LILO is effectively two sequential loans: the taxpayer borrows money from third parties, lends the money to the owner as a prepayment, and the owner then lends the money back to third parties. Tax arbitrage is created because the taxpayer deducts interest on the funds used to make the prepayment whereas the owner pays no taxes on the interest earned on that prepayment.
Make sense?  While it may look like the taxpayer is the only person making money here (because he's the only one getting tax savings), these savings can then get distributed between the partners if you wanted.  Indeed, MARTA has made $119 million on these deals so far.

The paper notes that the total tax savings are about 10%-15% of the value of the asset.  Assuming the taxpayer/partner stays in business to keep making payments, why wouldn't you expect a cash-strapped entity like MARTA to try and make money on its assets?

Unsurprisingly, the IRS doesn't like these deals, since they are the ones getting screwed.

UPDATE: Atlanta Unfiltered has a link to The Tax Foundation's article about SILO (Sale-in, Lease Out) deals, which are a variation on the LILO deal. In a SILO deal, the owner/agency sells the asset to the investor, who can then deduct the depreciation as an expense.  At the end of the deal, the original owner of the asset typically has the right to buy back the asset for a nominal amount ($1). 

Jill Chambers can suck an egg

I'm a bit late on this news, but MARTA has shown up Jill Chambers in solid fashion.  Chambers requested an audit of MARTA's complicated Lease-in Lease-out (LILO) transactions, and the audit came back saying that MARTA has made $119 million so far on the deals. 

Maria Saporta is right when she says:

This audit review should be enough to silence Chambers once and for all. She has made MARTA and the state jump through time-consuming hoops on her witch hunt for evil and wrongdoing.

And now it’s time for her to stop....

In fact, for the life of me, I don’t even understand why MARTOC exists in this day and age. Remember, the state of Georgia does not have any money in the game.

Unlike all the other major transit agencies in the country, the state shamefully does not contribute to MARTA’s operations, which puts our transit system at a major disadvantage...

Again, no other major transit agency in the country has to deal with this kind of constraint.
I said quite some time ago that while MARTA was not without problems, but that it was fundamentally doing the right things.  In the almost 11 months since I wrote that post, I haven't seen anything to change my opinion of MARTA's managment.

Chambers of course thinks MARTA just got lucky on the LILO deals:
However, she said federal pressure aided transit agencies such as MARTA in escaping fees on the transactions, and the other findings were not a vindication of MARTA leaders' decision-making.

"I’m not sure they knew what they were really voting on," Chambers said, describing the transactions as too complicated for the average person.
So if Jill Chambers can't figure these out,  The bottom line is that MARTA wouldn't need to engage in complicated financial transactions if Chambers and the legislature would let MARTA have access to all of its funds and would get serious about integrating MARTA with a regional transit solution.

I am about to dig into just how LILO transactions work with a 30-page pdf from Yale School of Management.  Hopefully I can do a better job of understanding these transactions than Jill Chambers.

Is anyone really surprised APD isn't cooperating with the CRB?

Atlanta Unfiltered reports that APD officers aren't cooperating with the Citizen's Review Board. 
Ten Atlanta police officers have refused to cooperate with investigations of alleged misconduct, and Chief Richard Pennington has failed to respond to a call for discipline in a case of excessive force against a lesbian couple, an oversight panel said in a letter released today.
Well, I for one am just SO surprised by this.  After fighting it every inch of the way, I expected the APD to act completely contrary to its normal behavior and actually cooperate with the CRB.  Yes sir, when it comes to accountability and transparency, you can always count on the APD.