Comments on: Potential Changes to the RFP Process http://urbanmilwaukee.com/2008/11/28/potential-changes-to-the-rfp-process/ Championing Urban Life In The Cream City Thu, 09 Feb 2012 06:02:21 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Jeramey Jannene http://urbanmilwaukee.com/2008/11/28/potential-changes-to-the-rfp-process/comment-page-1/#comment-12298 Jeramey Jannene Sat, 29 Nov 2008 17:26:15 +0000 http://urbanmilwaukee.com/?p=775#comment-12298 @MilwaukeeD Good note on the Beerline, that's a good example of how small lot sizes and multiple available parcels in an area encouraged a healthy number of proposals. Menomonee Valley has also been turning out quite well, because it's well managed. Both examples of having talented people design lots that would be attractive from the get-go. My concern is that it's going to be too hard for other levels of government to judge the best proposal and they have an incentive to want to maximize their money. What I am proposing is a way that allows other forms of government to continue to accept the highest price, give the city control though zoning, and ultimately allow the private market to bail out any stalled or nearly stalled plans (like some of the proposals in the Park East are). Basically to get all public land to act as private land as fast as possible so that there isn't a huge amount of undeveloped public land in Milwaukee (which there is now). By eliminating the proposal process where a developer faces an all-or-nothing risk, I think you would also encourage more developers to enter the market. @Jesse Yes, I didn't mean the City of Milwaukee is failing at the moment. Would I say the original deal with the Park East wasn't as good as it should have been (in terms of moving the land to city control)? Yes. I meant the RFP process is general is difficult and slow in a lot of its implementations, especially when it doesn't involve corridors (like the new state land won't). You would ensure there couldn't be parking lots with the zoning code applied to the land. I also don't think the prices for land would be raised. You would bid on what yearly rate you would pay for the land and what would the closing cost to transfer ownership would be. There would be substantial risk in that if the land was not developed you could not buy it, so you're paying annually on money you will never get back once you've paid annual amounts equal to the closing cost of the land (say you're fully vested after 5 years, but not developed, you're losing money in year 6 as you're being forced to overpay for the land or stop paying and give it up, which would quickly drive the land cost down as you tried to sell). I'm proposing lessening the amount of red tape to build something by allowing the land to act more like private land. You can sell parts of your land and there isn't a costly proposal process. @Jesse,MilwaukeeD I have no doubt that if the City were to manage all of the public lands, things like the Park East and the coming Marquette Interchange would function a lot better. The Department of City Development has proven to be quite competent. But the issue is getting control of that land, which is costly in the short-run for the city, and may force our leaders to burn political capital they don't need to. If we could get other levels of government a revenue stream quickly with a sale to a speculator, and the city could regulate the land through zoning as if it were private land (and knowing there is an incentive so it doesn't stay empty forever), I think Milwaukee would have a solution that works for everyone without much hassle. @MilwaukeeD
Good note on the Beerline, that’s a good example of how small lot sizes and multiple available parcels in an area encouraged a healthy number of proposals. Menomonee Valley has also been turning out quite well, because it’s well managed. Both examples of having talented people design lots that would be attractive from the get-go.

My concern is that it’s going to be too hard for other levels of government to judge the best proposal and they have an incentive to want to maximize their money.

What I am proposing is a way that allows other forms of government to continue to accept the highest price, give the city control though zoning, and ultimately allow the private market to bail out any stalled or nearly stalled plans (like some of the proposals in the Park East are). Basically to get all public land to act as private land as fast as possible so that there isn’t a huge amount of undeveloped public land in Milwaukee (which there is now).

By eliminating the proposal process where a developer faces an all-or-nothing risk, I think you would also encourage more developers to enter the market.

@Jesse
Yes, I didn’t mean the City of Milwaukee is failing at the moment. Would I say the original deal with the Park East wasn’t as good as it should have been (in terms of moving the land to city control)? Yes. I meant the RFP process is general is difficult and slow in a lot of its implementations, especially when it doesn’t involve corridors (like the new state land won’t).

You would ensure there couldn’t be parking lots with the zoning code applied to the land.

I also don’t think the prices for land would be raised. You would bid on what yearly rate you would pay for the land and what would the closing cost to transfer ownership would be. There would be substantial risk in that if the land was not developed you could not buy it, so you’re paying annually on money you will never get back once you’ve paid annual amounts equal to the closing cost of the land (say you’re fully vested after 5 years, but not developed, you’re losing money in year 6 as you’re being forced to overpay for the land or stop paying and give it up, which would quickly drive the land cost down as you tried to sell).

I’m proposing lessening the amount of red tape to build something by allowing the land to act more like private land. You can sell parts of your land and there isn’t a costly proposal process.

@Jesse,MilwaukeeD
I have no doubt that if the City were to manage all of the public lands, things like the Park East and the coming Marquette Interchange would function a lot better. The Department of City Development has proven to be quite competent. But the issue is getting control of that land, which is costly in the short-run for the city, and may force our leaders to burn political capital they don’t need to.

If we could get other levels of government a revenue stream quickly with a sale to a speculator, and the city could regulate the land through zoning as if it were private land (and knowing there is an incentive so it doesn’t stay empty forever), I think Milwaukee would have a solution that works for everyone without much hassle.

]]> By: Jesse http://urbanmilwaukee.com/2008/11/28/potential-changes-to-the-rfp-process/comment-page-1/#comment-12295 Jesse Sat, 29 Nov 2008 16:28:05 +0000 http://urbanmilwaukee.com/?p=775#comment-12295 You state that the system in broken in 'Milwaukee', yet you only talk about the failures of the county government to market their land in the Park East corridor. We don't see the City of Milwaukee holding much land in the PE, because their regulations and experience have ensured a quick buildout. It is foolish to think that if we allow speculators to bid up prices on land, we'll get anything other than parking lots. With these parcels' location near prime entertainment areas and the absense of a land value tax, there is little incentive for more than a parking lot unless a huge scale project is in the works. (see large parking lot bordering water st. and juneau) The solution to the problem isn't more convoluted regulations that could actually harm the corridor and the city. The solution is for the county to sell the land to the city of Milwaukee, an entity with a proven track record and the resources to successfully and quickly get the job done. You state that the system in broken in ‘Milwaukee’, yet you only talk about the failures of the county government to market their land in the Park East corridor. We don’t see the City of Milwaukee holding much land in the PE, because their regulations and experience have ensured a quick buildout.

It is foolish to think that if we allow speculators to bid up prices on land, we’ll get anything other than parking lots. With these parcels’ location near prime entertainment areas and the absense of a land value tax, there is little incentive for more than a parking lot unless a huge scale project is in the works. (see large parking lot bordering water st. and juneau)

The solution to the problem isn’t more convoluted regulations that could actually harm the corridor and the city. The solution is for the county to sell the land to the city of Milwaukee, an entity with a proven track record and the resources to successfully and quickly get the job done.

]]> By: MilwaukeeD http://urbanmilwaukee.com/2008/11/28/potential-changes-to-the-rfp-process/comment-page-1/#comment-12291 MilwaukeeD Sat, 29 Nov 2008 14:48:46 +0000 http://urbanmilwaukee.com/?p=775#comment-12291 I am assuming that you are mostly referring to the County's RFP process, as the City has done a fairly good job with their RFP's. For instance, they split the Beerline into many small parcels like you are suggesting...and are doing a similar thing in the Menomonee Valley, although not using an RFP process there. While I see what you are getting at, the real problem with the RFP process is when a unit of government (ie, the County or the State) issues an RFP, and then accepts the proposal with the highest purchase price...giving no thought to how that proposal might fit into the neighborhood, meet zoning codes or if they have the ability to obtain financing. If you really want to change the public RFP process, you would make sure that the purchase price isn't the number one criteria...as the benefit to the community really comes later through increased tax base, jobs, etc. The City has been willing to negotiate on land sale prices in order to get a quality development because they treat the sale proceeds as extra money, whereas the County includes it as a line item in their budget. I am assuming that you are mostly referring to the County’s RFP process, as the City has done a fairly good job with their RFP’s. For instance, they split the Beerline into many small parcels like you are suggesting…and are doing a similar thing in the Menomonee Valley, although not using an RFP process there.

While I see what you are getting at, the real problem with the RFP process is when a unit of government (ie, the County or the State) issues an RFP, and then accepts the proposal with the highest purchase price…giving no thought to how that proposal might fit into the neighborhood, meet zoning codes or if they have the ability to obtain financing.

If you really want to change the public RFP process, you would make sure that the purchase price isn’t the number one criteria…as the benefit to the community really comes later through increased tax base, jobs, etc. The City has been willing to negotiate on land sale prices in order to get a quality development because they treat the sale proceeds as extra money, whereas the County includes it as a line item in their budget.

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