For a few minutes, I thought yesterday’s Baton Rouge Business Daily Report was sounding a bit like the Red Schtick.  I regrouped, and quickly came to my senses when I realized was I was reading was not a joke.  Nevertheless it was a shock to read what was happening. 

Normally, when you put together a tax increase in the form of a bond issue.  Law requires that the voters must decide if the plan and tax are acceptable.  Voters pull the lever, and the tax passes or fails. 

Or not? 

Last year the taxpayers of East Baton Rouge Parish defeated Mayor Kip Holden’s proposal to raise taxes in the form of a bond issue for riverfront development in downtown Red Stick.  The voter’s decided raising taxes was not acceptable in the current financial climate.  Also, another major downtown project was not pleasing to the voters.

There is another way.

By creating economic development districts with the ability to use TIF (tax increment financing) funds, a vote of the people is not required if there are no voters in that particular district.  

SB611 by Senator Yvonne Dorsey is proposing that an economic development district be created along the riverfront of downtown Baton Rouge.  The purpose is to build a river park multi-use development by Pete Clements for approximately $600 million.  It is located next to Hollywood Casino.  Clement’s  development would include a hotel, condominiums, retail and residential construction, office space, 6,000 parking spaces, and an amphitheatre.    

The Advocate also reports that developer Pete Clements declared bankruptcy in 1987, as well as committing tax evasion and lying to the FBI in 1994.  Clements withheld taxes, and purportedly hide money from the Feds.  As result, he was convicted and served over 3 years in a federal prison.  He was released in 1997. 

The Mayor stood by Clements as Holden announced the downtown project at Tuesday’s DDD meeting. 

The economic development district proposed by Dorsey, and endorsed by Holden, allows for the sale of bonds, and the collection of taxes from the district via TIF funds.  TIF funds are any taxes collected that are above and beyond taxes collected the previous year. 

Criticism of TIF funds come for many reasons.  Some feel that private developers reap the benefits of bonds sold along with the possibility that the developer is favored by politicians. 

The new district would create another Commission to make decisions over the economic development district.  A five-members board would be appointed by Mayor-President Kip Holden, and approved by the Metro Council of EBRP. 

Members will have full authority to enter into contracts, acquire land, oversee land development, hire employees, issue general obligation, revenue and special assessment bonds, certificates and notes and to levy taxes within and on behalf of the district.  These taxes will be voted on, but only by those within the district, disallowing other citizens of EBR Parish to vote.  Furthermore, if there are no voters in the economic development district, no election is required.

There is more to the story of developer Pete Clements and the land in question according to The Advocate archives.  In 1994 Clements was tied to Casino Rouge as a stockholder in Capitol Lake Properties, a company that leased land to the casino, now known as Hollywood Casino. 

Louisiana State Police demanded that the casino distance their self from Clements due to the fact that he was a convicted felon and it violated gaming regulations to do business with a felon.  Clements sold his stock, but Judge Frank Polozola reversed the sale and left the stock in Clements name while giving control of the corporation to the Internal Revenue to recover taxes not paid by Clements.

The Louisiana Secretary of State’s Corporate Database indicates that Capitol Lake Properties is owned by Astrid Clements, who resides at the same address as John “Pete” Clements.  The corporation indicates a report was filed by the corporation on February 27, 2010 which keeps it in good standing. 

This entire situation is way over my head; however, something doesn’t set right with me about this potential legislation.  There are too many questions based on the history revealed by The Advocate.  It seems a detailed investigation is called for regarding this plan. 

Is it good business for city-parish and state governments to create a way to raise funds via taxes without a vote of the people?  I find this a slippery slope.

There is no doubt this is a tangled mess.

Until next time,

Red Stick Republican

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