Todd Donati

From Gearbox to Madjax – history tells a story

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Muncie City Seal copy
City of Muncie Government Seal

Sometimes the best way to see the future is to dig up the past.

Larry Riley predicted the outcome of Gearbox now Madjax.  His column appeared in the local paper on January 30, 2016.  One community member claimed Riley was biased in this column, although Riley did provide compelling arguments.

the organization has no revenue stream, no signed tenants, no record of accomplishment Source: Gearbox vs Greenspace Muncie Star Press 1-30-16

Sustainable Muncie hasn’t been around as an organization long enough yet to file its first required annual financial report, having been organized only in December of 2014. Source: Gearbox vs Greenspace Muncie Star Press 1-30-16

Another minus to Gearbox is the cost: $1 million, now guaranteed by the city (if Sustainable Muncie can’t make existing or future loan payments this year, then the city’s money kicks in, but the organization is to pay back the city by the end of this year … how?) Source: Gearbox vs Greenspace Muncie Star Press 1-30-16

So involved was Mayor Dennis Tyler no other ideas could be considered.  In fact, he was silent about another proposal,  Tom Bracken’s greenspace.  Which makes one wonder why he dismissed other ideas and put Gearbox to the feasibility test.  Or Bracken’s proposal for that matter.   Mayor Tyler brought only one idea to the public.

And that’s the end of that.

Let’s look at what has transpired since Riley’s column.  At the time, City council passed an ordinance backing $1 million to be paid back by the end of 2016.

Tyler told The Star Press he wanted to loan $1 million in EDIT revenue to the group rather than just give it to Sustainable Muncie to create an obligation to be repaid. The loan is supposed to be repaid by the end of 2016.

http://www.thestarpress.com/story/news/local/2016/01/04/city-council-split-1m-gearbox-loan/78135796/

We know for a fact the money was not paid back.

“The city has not issued any money as it related to this line of credit,” officials replied through city human resources director Sarah Beach last week. Donati, who is also a Sustainable Muncie board member, told TheStar Press that the board was “trying to decide what direction we want to go with” the funding for Madjax, including the original $1 million line of credit. “Eventually, something will have to be done with it. … It’s totally Sustainable Muncie’s responsibility to pay that back and they’re looking at how to get that done.”   Source: Star Press June 6, 2017

After resignations, Madjax plans the way forward

Two months after this article appeared in the paper, the citizens of Muncie were looking at a $4.5 million dollar bond.    The bond was passed with the promise of no property taxes and a training program.  But, in June, Donati and Tyler were already considering bonding for this project, we just didn’t know about it.

Interesting to note:  The City Council had little financial information in 2016 and just a smidgeon more in 2017 yet, they still voted a big fat YES in both instances.

Let’s recap:

  • January 2016 Muncie City Council voted to loan Gearbox $1 million with no financial information
  • December 2016 Loan not paid
  • June 2017 Donati said it was Sustainable Muncie’s responsibility to pay back the money
  • August 2017 Notice for public hearing on $4.5 million bond published
  • August 2017 Muncie City Council learned of Sustainable Muncie’s debt
  • August 2017 Donati said $200,000 has been set aside by Muncie Redevelopment Commission & others  for $348,000 annual bond debt repayment (Muncie Redevelopment Commission & others)
  • August 2017 Muncie City Council voted to introduce the ordinance
  • September 2017 Public Hearing for Madjax – Sustainable Muncie
  • September 2017 Muncie City Council voted to approve the bond

Madjax was not able to pay the interest-free loan in 2016 or make any payments in 2017.  Muncie Redevelopment has set aside $200,000 to guarantee the 2018 bond payment.

This is the transparent government of Mayor Dennis Tyler.  But I digress…

 

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Updated: Muncie Debt & TIF

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Muncie, INYou may be interested in looking at the City of Muncie’s total debt as of 9-29-17.  For your reading pleasure see links below on the TIF obligations.  As you can see, TIF revenues (property tax dollars) hold a large share of the debt repayment.

Recently Muncie City Council added $4.5 million in debt and Mayor Dennis Tyler is wanting to bond another $3.5 million for Muncie Community Schools.  $8 million additional debt in less than one month.  Chew on it, baby.

The sad part is the TIF revenue is real property tax dollars.  The reason why TIF districts are so popular amongst government units is simple.  The money collected in the districts can be spent any which way.  Even a $4.5 million bond claiming it is for training purposes for a cash-strapped start-up company.  One in which the mayor and his appointed president of the Redevelopment Commission (MRC) sit on the board.  Go figure.

That’s all, folks!  See y’all soon.

Muncie City Total Debt 9-29-17

TIF Debt 9-28-17

City has another lawsuit

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MC900439169

Bracken sues city over $4.5-million

Bracken emphasizes the lack of transparency on this project.  This administration has been anything but transparent.

Not the end

 

MC900439169

Update on Madjax – City Council to vote Monday

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Muncie City Seal copy
City of Muncie Government Seal

Three quotes from the newspaper best explain the public’s complaint against the Muncie Redevelopment Commission and the City of Muncie’s request for $4.5 million dollars in financial support of Madjax.

“These much-needed revenues, which should be used for essential city services, will be diverted to subsidize this project that is not for the public utility and benefit.” Tom Bracken (remonstrance)

Gregory said this week that the project was “a non-profit that has too little history to make it viable for the 23 years of the bond’s life.”

Ridenour said that Tyler is “within his scope” to use EDIT funds for the building. “The project has some merit but I would prefer to see it occur over time so that it is self-supporting.” Remonstrance, question Muncie Star Press 9-8-17

Indeed, our tax dollars should go to provide essential city services.   The city is at the highest tax levy we have ever seen.  Mayor Tyler and Muncie City Council passed LOIT and increased EDIT tax in 2015 at the highest percentages.    Currently, the city is paying attorney fees and we have no idea of the financial cost.    Yet, according to a previous article, Madjax will use a portion of this bond to pay off their debt liabilities.

According to a previous article, Madjax will use a portion of the bond to pay off their debt liabilities.  Should Madjax fail to have enough revenue, then city tax dollars will pick up the shortage.  Certainly, this is not a financially sound move for the city tax payers.

Nora Powell resigned from the board because it is a conflict of interest.  Last we heard, Todd Donati sits on the board of Sustainable Muncie and is the Economic Development Director.  Would this not be a conflict of interest?

A remonstrance has been filed

Nora Powell Muncie City Council resigned from Madjax board citing conflict of interest

Linda Gregory Muncie City Council cited lack of requested information

Madjax assets $2.4 million (includes building at $2.4 million)

Madjax debt $1.7 million

Revenue for 2017 $168,817

In 2016 the City of Muncie earmarked a loan for $1 million for what then was known as Gearbox.   Tyler told The Star Press he wanted to loan $1 million in EDIT revenue to the group rather than just give it to Sustainable Muncie to create an obligation to be repaid. The loan is supposed to be repaid by the end of 2016. City council split on Gearbox loan

Interested in Muncie and MSD end of year debt? Got it!

When Madjax first came on the scene it sounded pretty cool.  This was before board members resigned, and the city offered to support with tax dollars.

Just a reminder, the City of Muncie passed an increase in taxes EDIT and LOIT in 2015, effective January 1, 2016.

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Stop gambling with our money.

 

Muncie City Council Meeting

Muncie City Hall

Monday September 11th

7:30 PM

 

Public Hearing for Madjax 9-7-17

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todd donatiTodd Donati – Muncie Redevelopment Commission, President

When:  Thursday 9-7-17

Time: 4:00 PM

Where: City Hall Mayor’s Conference Room

A public hearing on $4.5 million dollar bond for Madjax.    The repayment is from leases and should they fall short?  You guessed it….tax dollars will make the payment.

The bond money will help to pay off some of the $1.762 million in debt Madjax owes.  Seems similar to a consolidation loan where you borrow money to pay off your debts and have one payment.  You still owe, though.

In this case, if Madjax pays off their debt, but fails to make the bond issuance payment, the taxpayers will pick up the slack.

Sweet!

Since when did the Muncie Redevelopment Commission become a bank?  We’re talking about $4.5 million dollar loan.  Surely, if MRC has that kind of dough to throw around perhaps MRC should instead loosen up their purse strings and return $4.5 million back to the taxing entities.

Mayor Tyler claims he wants to help the schools, how about restructuring TIF districts? Instead, we’ll take even more money for the cash-cow call TIF districts.

Most everyone liked the idea of a Maker’s Place until we found out the city is dishing out money right and left.  You have to wonder about the adverse reaction Bracken’s proposal created.  There’s some money to be had or someone is going to benefit.  Won’t be the taxpayers, guaranteed.

Some time has passed since council members showed some reluctance on this bond.  Let’s see how they vote after their private meetings.  Afterall, going against Mayor Tyler and his appointed friend Todd Donati might cost them Democrat Headquarters support come next election.

Madjax Debt

Madjax oublic notice 8-25-17

Wilson school 4-Sale and other stuff

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Discernment is woefully lacking. We prefer having our ears tickled and being told what we want to hear. Anything outside of this is considered evil. We don’t dare examine the past and be on the alert for warning signs.

You know, we sold the best school for pennies on the dollar. It was suspect from the beginning when the request for bid was written so only one company could bid. It would have been to MCS advantage to have competitive bidding. Who at MCS was overseeing this sale and what was told to the board?

Today, that building is up for sale and several people have lost their jobs. Donati washes his hands “We didn’t give them a tax abatement.” Yes, but he authored the sale.

So, when the mayor and city council show up with concern on their faces, you might want to ask why the MRC did not write the bid specifications to allow for competitive bidding? Oh, Mayor Tyler just appointed Donati, he doesn’t manage the MRC. Right.

This is akin to the Craig Nichols receiving bid work  Or VAT which cost us a cool million or two.

Wilson Middle School up for sale

The MRC had to open up the bidding for the Wilson property to anyone, but the requirements were narrowly written to make it most likely that ASONS would be the only bidder.

During Thursday’s MRC building, the only bid was opened and it was from ASONS

Source: Former Wilson school changing hans Muncie Star Press May 7, 2015

Wilson Middle School sold (2015)

 

 

 

Construction halted on Muncie’s Love canal

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IDEM has shut down construction on the former Indiana Wire & Steel property pending further investigation.

Some highlights from the newspaper article:

  • Under a variety of agreements and plans for the site, prohibitions against disturbing the surface of the property, including concrete pads, have long been in place. The prohibitions were even referred to during a March 2016 public presentation when a designer for the site said an elevated grassy area would be created “because we can never dig down … that’s our history.”
  • That history — and those prohibitions — were apparently forgotten or disregarded recently, however.
  • “If you drive past, you’ll see things starting to move around and get busy out there,” Tyler said in touting the project. “Construction has started and when it’s complete, it will revitalize the eastern corridor into the city.”
  • That work ran contrary to IDEM’s instructions, however

Read the full article here.

Is Muncie the new Love Canal? (Video)