CRA's draw public scrutiny for a variety of reasons

Published: Jun. 26, 2017 at 6:51 PM EDT
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By: Mariel Carbone

June 26, 2017

TALLAHASSEE, Fla. (WCTV)—Federal authorities are investigating city development deals that involve some of the “movers and shakers” in Tallahassee.

The FBI, handing out two subpoenas. One, to the City of Tallahassee and the other to the Community Redevelopment Agency. The documents demand any communication, bids for proposals, applications, records and more from nearly two dozen business entities or people in Tallahassee.

“It’s never good when our City is viewed in this light, but I will say the FBI plays an important role in keeping law and justice and running these kinds of investigations,” said Tallahassee Mayor Andrew Gillum.

CRA’s oversee designated areas of the community. They’re funded through local tax dollars, specifically through tax increment funding. The property value of the area is determined on a fixed date. Then, when property values go up for that area, any tax revenue above that fixed rate goes straight into the CRA fund, which is in turn used to fund projects in the designated CRA area.

Specifically in Tallahassee there are two CRA's which include the Downtown CRA and the Frenchtown-Southside CRA. Projects involving CRA’s include the demolition of the former homeless shelter, the Big Bend Cares project, and the recent sale of the Bloxham and Firestone buildings on Gaines Street. The CRA's are intended to help blighted areas and are set for a specific time frame. In the City's case, that time frame is 30 years, which we are about half way through.

But, Tallahassee’s CRA is not the first CRA system to come under scrutiny. In fact, some lawmakers in the Florida Legislature pushed to phase out CRA’s because of mishandling of funds in certain cities.

Samuel Staley, Director of FSU’s DeVoe Moore Center and Applied Policy Research Center in the College of Social Sciences and Public Policy, has done extensive research on CRA’s. And, said there are two big problems that CRA’s face.

One, is an academic policy problem.

“We just don’t find much research evidence that the CRA’s actually have a meaningful impact on the areas that they’re trying to redevelop,” said Staley.

The other, he called a political problem.

“In order to get the private sector to invest… you have to develop relationships with not only the regulators, but the elected officials,” said Staley. “Those relationships end up becoming the beginning of a negotiation. And as you go forward in a negotiation there’s reluctance to cut off a negotiation. So the person who gets in the negotiation first gets the contract.”

He said that leaves the perception that it’s a “crony” system.

Plus, accountability becomes an issue. Unlike in the private market, government has a different standard of accountability when it comes to development projects.

“In the private market if I’m negotiating a contract I’m either risking my own money in an investment or there’s a consequence that’s built into the contract that I’m held accountable for. When we’re talking about government, we’re talking about tax dollars,” he said.

Elected officials don’t have the market-based accountability that private sector investors have, and don’t feel the direct consequences if a project fails. He calls accountability one of the main factors needed for a successful CRA.

Another factor, would be transparency.

“Even when cities do something that the public doesn’t want, when there is transparency and accountability they are willing to either go alone with it or give the policy a chance. Or, they go to the ballot box and they elect someone different into those positions,” he said. “It’s when people don’t trust their local government because they don’t believe they’re being given all the relevant information that you get the kind of environment we have now.”

He said as government expands the scope of what it does, it’s harder to keep transparency because there is so much residents would have to keep track of, that it’s not practical.

At this point, it is unclear what the FBI’s investigation is actually looking into and if transparency or accountability play a factor in it. It’s also unclear who the actual target is. However, the subpoenas demand documents regarding any communication with about two dozen business entities, developers and businessmen and women in Tallahassee. Notables include Adam Corey, the developer behind the city backed restaurant The Edison and Gillum's former campaign treasurer; JT Burnette, the developer behind Hotel Duval; Paige Carter-Smith, the Executive Director of the Downtown Improvement Authority; and Kim Rivers, CEO of the medical marijuana dispensary Trulieve.

Staley said it’s important to not jump to any conclusions based on these names and to not pass judgment on the individuals or companies listed.

“We can have a system that doesn’t work, and a system that’s not transparent. But, that doesn’t necessarily pass judgment on the individuals,” said Staley. He continued to say it is important to wait and see what- if anything- the FBI comes up with following its investigation.

A grand jury is set to convene on July 11.