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D.G. Martin | Editor's Desk | Editorials | Guest Columns | Letters | My View | Roses & Raspberries


Published: Oct 11, 2009 02:00 AM
Modified: Oct 09, 2009 06:48 PM

Town out of touch with economic reality
 
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As the election for a mayor and Town Council members nears, Chapel Hill voters must be realistic about economic conditions. In addition to a slow national recovery, our new leaders must cope with the town's own unique economic problems, compounded by council decisions and mistakes over the past eight years. Let's look at the record of the incumbents.

Because of governmental obstacles to business development, our commercial property tax base has remained very low. Retail sales have moved to neighboring shopping centers outside Chapel Hill. Our tax burden has fallen on residential property taxes, some of which have doubled in eight years.

Meanwhile, the council voted itself lifetime health-care benefits, reversing itself only after a public outcry and submission of petitions with over 500 signatures. Only council member Matt Czajkowski voted against this blatant misuse of public funds.

The council awarded a no-bid contract for $50,000 to the former campaign treasurer of the mayor pro tem and a $50,000 no-bid contract for an exiting town employee. While the law may not require competitive bids for contracts for services, these two contracts do appear to be inside arrangements. We need transparent government.

The council pushed through the public-private RAM project at140 West Franklin St. (on parking Lot 5), raising serious questions about whether they understood the Washington, D.C., consultant's market demand analysis. I believe that this 2004 study did not provide sufficient evidence for moving ahead on this project. (See it on the web at bit.ly/3DaZNB.)

This pivotal study had a number of shortcomings:

Extensive tables of out-of-date data were never linked to an estimate of units

Potential customers were not interviewed to find what would bring them to shop downtown

Data projections were based on poor and inaccurate assumptions

Relevance of case description of what other towns did in the 1980s was never explained.

Before continuing with 140 West Franklin, an updated market demand study is needed to reflect changes since 2004, such as construction of other competing upscale condominium units. A new financial analysis must reflect the fact that this fall Ram Development lowered prices 30 percent, delaying achievement of a positive cash flow. Town taxes will be needed to fill in the gap for years.

After reviewing these council decisions, I conclude that Chapel Hill needs new leadership that is able to understand economic reality without relying on out-of-town consultants. Our future leaders must act positively on the complex economic problems facing the town, while letting go of past mistakes.

David Hughes retired from UNC as a chaired professor of business administration.
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