Sunday, March 29, 2009

More Bad Executive Oversight of Nashville's Economic Health

If you have not yet done so, you should add Brad Schrade's Tennessean piece on how Metro government has allowed developers to walk away from their obligations to build to your reading list of significant local stories this week.

These are bad problems that could turn worse for local neighborhoods and homeowners due to Metro Planning dereliction.

Witness the carnage and the $11 million that hangs in the balance:
The financial slump has made these unfinished developments a growing problem in Davidson County and across Middle Tennessee. They pose potential public safety and health issues, as areas become dumping grounds and roads sit incomplete. Residents are frustrated. And in Metro, the city in some cases has lost one of its key tools for remedy.

Metro auditors said last fall that a bonding program, managed out of the city's Planning Department, was lax and let certain securities expire that protected residents and taxpayers.

Developers are required to provide performance bonds or letters of credit issued by insurance companies or banks so that if they fail to complete roads, storm drains, sidewalks and other infrastructure in a new subdivision, Metro can get it finished at no expense to taxpayers.

By letting letters of credit expire, the city is unable to force money to be spent to finish such infrastructure in some stalled projects. That could mean even more waiting for residents.

At Keeneland Downs, for example, Metro allowed a $1.1 million letter of credit to expire last May.

Overall the city has about $11 million in surety bonds and letters of credit involving more than 60 projects that are incomplete or unresolved. About half the money involved relates to letters of credit that the city let expire through lack of oversight.
Ultimately, responsibility for the performance of Planning since 2007 falls on the Mayor's Office, but Schrade mentions several Planning Department problems that underscore the probability of top-down neglect: software and staff shortages and systemic communications barriers between Planning and other departments. Each of these deficiencies speak to Karl Dean's budget and administrative priorities.

The neighborhoods that are deteriorating and neglected are alarmed and they should be. The Mayor seems to have scaled back and demobilized the once prominent and responsive Mayor's Office of Neighborhoods (MOON), where Nashvillians could go and get some coordination. When was the last time you can remember seeing a quote from someone in MOON? I am aware of only two media articles that mention MOON since Karl Dean became Mayor: one from August 2008 and one from October 2007. That scant communication constitutes abandonment and benign neglect of neighborhood issues.

Neighborhoods should look at Schrade's report as a wake-up call and should start demanding to follow the pending expiration of letters of credit. Council members should not just be about promoting more developments, but tracking the status of projects to assure that their constituents are not put at greater risk by a government that is either supposed to regulate developers or required to following through with developments that go under.

But ultimately, the buck stops with the Mayor's Office. I cannot help but wonder whether Karl Dean has created a climate of leniency for developers with little or no regard for impact on neighborhoods.

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