Taxpayers Eat Rosebud Pollution Cleanup Cost in Madison

As expected, the City of Madison has sold the old Rosebud property at a 66% loss. The non-profit Inter-Lakes Community Action Program gets a whole half-block of downtown Madison for $135,000 (plus up to a $10,000 share of clean-up costs). That's down from the $400,000 the city paid the LAIC after the economic development corporation paid former owner Rosebud Manufacturing $500,000 to vacate the premises.

As an eager reader noted, the city is playing quite a shell game but not creating any new shells.

Chuck Clement's on-the-spot report from last night's city commission meeting notes that the old Rosebud site has some EPA-rousing lead concentrations greater than 400 parts per million. Mayor Hexom assures us those lead concentrations are in (Clement's words) "two relatively small locations." And we're getting a nice brownfields restoration grant from Uncle Sam via the state DENR to help cover cleanup costs.

What strikes me is that the newspaper and the mayor make no mention of Rosebud's responsibility for this contamination. The city knew this was an industrial site with potential pollution and cleanup costs. Did we taxpayers really buy this property and let Rosebud go away free and clear? Was it really so important to us to shunt those grungy blue-collar workers away from our pretty little Main Street and replace them with shiny happy white-collar ICAP employees that we would let Rosebud split without assuming even a portion of the cost of cleaning up their own mess?

Conceivably, the pollution could predate Rosebud's occupancy of the block. But Rosebud operated there for forty years. It owned any problems on that land. The city should have been more diligent in holding Rosebud responsible for lead contamination and other problems that would make the land hard to redevelop.

But this is how Madison works. Let your grass grow taller than six inches, and Mayor Hexom will be on your case like flies on poop. Try to start a business the city finds objectionable, and the powers that be will stop you cold. Contaminate the ground with lead but play along with the city's shell game, and the taxpayers will bail you out.

City Sells Rosebud Lot to ICAP at 66% Loss

Roadmap for Saving the Masonic Temple?

After holding a twice extended option for a year and a half, Inter-Lakes Community Action Program is finally laying down the cash to buy the old Rosebud property and put up its own building. Saturday's MDL (not online yet) gives a cheer for this economic development. I'm happy for ICAP... but Madison is losing big.

Let's check the numbers:

• On February 15, 2008, the Lake Area Imrpvoement Corporation bought Rosebud's downtown properties for $500,000 as part of its land shell game to lever Rosebud's undesirable manufacturing out of downtown and out to the edge of town to refill the shuttered Arctic Cat plant. (The LAIC has since sold a couple of the smaller Rosebud plots for $35,000 and $500.)
• On February 15, 2008, the City of Madison bought the main half block of the Rosebud property, across the street from City Hall, for $400,000.
• In December, 2008, the City of Madison approved a deal arranged by LAIC for ICAP to purchase the Rosebud half-block from the city for $350,000.
  
• ICAP didn't buy right away. ICAP paid $5000 for a six-month exclusive purchase option. ICAP extended that option twice, $5000 each time. Total paid so far: $15,000.
  
• The city commission will consider a purchase agreement Tuesday night that gives the land to ICAP for $135,000. Minus the option payments, the actual cash to change hands is $120,000.
• ICAP will kick in up to $10,000 for remediation costs—i.e., removing lead-impacted soil. If I'm reading the agreement correctly, ICAP will also share up to $5000 of the cost of soil testing done since this year March 31.
  
• The city will approve Tuesday a brownfields grant agreement with the state Department of Environment and Natural Resources that should put another $50,000 of federal money toward removing and replacing about 400 cubic yards of lead-impacted soil.
• The city still bears the cost of demolishing the Rosebud buildings. I don't see a cost estimate on that aspect of the project in the city agenda, but I image we could lower that cost with a Crazy Days sledgehammer contest....
  

Looking at just the property purchase costs, the LAIC and City of Madison thus appear to have arranged a $265,000 handout to ICAP, 66% of the original purchase price.

I thought LAIC exec Dwaine Chapel once told me that the LAIC doesn't believe in handouts. I am at least pleased that they have changed their tune to benefit an organization that does good work like ICAP.

But subsidizing the community work of ICAP is the only justification our city fathers can offer for this project. The land swap and sweet deal certainly aren't economic development: we've only moved players around, not added any new ones. We're not increasing the tax rolls: ICAP is a non-profit. The only stretch by which we might offer an economic justification for this fire sale is that maybe, just maybe, ICAP was saying they were going to leave town if they didn't get this property cheap, and the LAIC and city thus acted to keep Madison from losing jobs.

Given this math from the city, we have a proposal. There is another derelict property in downtown Madison, the Masonic Temple, just crying for development. My wife and I and some friends are prepared to form a non-profit organization to acquire, renovate, and preserve the Masonic temple as a non-profit community cultural center hosting a wide variety of education, entertainment, tourism, and economic development projects.

The last purchase price for this architectural landmark was $46,000. If the LAIC and City of Madison would buy out the owner for that amount, then sell it to our non-profit group at a 66% loss... well, that's less than $16,000. I could line up that funding by the end of the month.

Arrange this Masonic temple buyout and transfer, city leaders, and you don't just keep jobs: you add cultural and economic activity where there currently is none. Essentially, arranging a deal analogous to the Rosebud-ICAP deal for the Masonic temple is a $30,000 investment that creates new economic activity. What say you, commissioners?

ICAP Move to Rosebud: Cause for Celebration?

And in unsurprising news, Jon Hunter and I disagree.

Wednesday I questioned whether Madison's sale of the old Rosebud property to Inter-Lakes Community Action Partnership (ICAP) was really the best use the city and the Lake Area Improvement Corporation could come up with. Chief of the civic cheer section (not to mention former LAIC president and board member) Jon Hunter thinks the city and LAIC did a heckuva job, Brownie, in striking this deal:

The ICAP board of directors decided it should own its own facility after leasing for the last 44 years. ICAP intends to build an environmentally-friendly, efficient structure.

The new structure will be great for ICAP in that it will better meet its needs and not have to move far. The new facility will dramatically boost the value of the property and keep the 40 or so workers within walking distance of downtown restaurants, stores and services. Everybody wins [Jon Hunter, "ICAP Investment Is Terrific for Madison and Downtown," Madison Daily Leader, 2008.12.03].

That's funny: When the city and LAIC wanted to push Rosebud out to the industrial park, I didn't hear our man Hunter saying it was "terrific" to keep Rosebud's 67 employees within walking distance of downtown restaurants, stores, and services.

ICAP's move isn't so much a situation where everybody wins as one where nobody loses... except maybe for whoever is currently collecting rent from ICAP. We're replacing an old building with a new one (plans for which remain to be seen), but we're not adding any jobs, not adding any new customers, and not adding any new retail to downtown. Stopping a loss doesn't merit quite the same rah-rah sis-boom-bah as scoring a win.

Rosebud Mfg. Adapts to New Energy Economy

Originally posted at RealMadison.org:

Buried at the bottom of Elisa Sand's front page story on Rosebud Manufacturing's move to the Lakeview Industrial Park is the most interesting part of the story: the changes Rosebud is making to adapt to rising energy prices:

In response to higher fuel prices, the company has also made some changes.

[Rosebud owner Don] Grayson said that last week was the first week employees worked four 10-hour days as a way to give those who commute one less day of driving.

The company plans to install a wood-burning stove this fall. Grayson said scrap wood that typically would be thrown away will now be burned and used to heat the building [Elisa Sand, "Rosebud Owners Happy with Move to Industrial Park," Madison Daily Leader, 2008.08.26].

Making use of every scrap of wood -- good thinking, Don! Of course, we'll have to say what the EPA says about the increased airborne particulate matter... ;-)