Cornerstone

I am opposed to the September 26, 2018, Litchfield Park rezoning proposal as well as GPA 18-02 because I do not believe the city’s best interests will be served by granting the requested concessions to JDM.

The city of Litchfield Park exists to promote the general welfare of its citizens for the long term. Money is required to make the government function; this money is generally obtained by tax revenues. The requested change to the city’s general plan as well as to its zoning will adversely affect the long-term tax revenue of Litchfield Park. Consequently, I believe it is in the best interest of the city to deny both requests in their entirety.

JDM is an economic entity whose reason for being is financial profit; it works with and helps the city only to benefit JDM’s bottom line. The city does receive benefits, but they exist only to the extent that the benefits support or contribute to JDM’s making a profit. This observation is not a condemnation, just recognition of reality. This is capitalism in action, and I support it.

JDM is entitled to the highest and best use of their property, consistent with the city of Litchfield Park’s existing general plan and zoning. When the parcel in question was purchased it was zoned commercial. At that time, JDM must have seen value in the property that exceeded its price or else they would not have purchased it. In 2014, the city provided concessions for this parcel that further enhanced its value. Today, JDM seeks additional concessions – page 2 of the GPA 18-02 narrative requests that the city of Litchfield Park waive all of the commercial requirements:

“Specifically, JDM is seeking to eliminate or reduce the requirement that at least 75,000 square feet of commercial floor area be developed on Parcel B before or concurrently with any residential development on Parcel B.”

I believe the existing commercial requirements on Parcel B were created by the city after careful deliberation and that the requirements are necessary for the long-term health of our community.

Given JDM’s current request, their multiple requests of 2014, the fact that they make money as a property developer, and their public statements (e.g. West Valley View, March 3, 2014, “City receives general plan amendment proposals”), I believe that JDM’s long game is to dismantle significant portions of The Wigwam’s golf courses and develop them into housing units. They are developers and this thought is consistent with their business, their actions and their profits. They are trying to eat an elephant one small bite at a time and if they are successful the city will have increased expenses without an adequate long-term cash flow to provide the needed services.

Schedule C of the 2019 city budget shows that in 2018 the city obtained about 60 percent of its actual revenue from city sales use and bed taxes. It is not clear what percentage of that tax is attributable to The Wigwam; however, given JDM’s 2014 statements (ref. West Valley View, April 2014, “JDM Partners discuss general plan amendment”) that the Wigwam is an “underperforming” asset and that it “doesn’t make money,” I believe the city needs to consider and plan for the unthinkable – that The Wigwam resort along with its tax contribution might disappear. In this scenario the city is reliant upon sales taxes to fund its budget but there would be no Wigwam Bed Tax. In the financial arena it is an axiom that diversity lowers risk. Having 75,000 square feet of commercial business as well as the apartments on the parcel under consideration (as is currently required) is a more diverse income stream for the city. This diversity provides financial security.

I would like to believe that no member of the Litchfield City Council can look 30 years into the future and with a clear conscience say that the city of Litchfield Park does not need any commercial property in this Cornerstone development, or that a reduced commercial footprint of perhaps 13,000 square feet is adequate.

JDM’s intents and promises can only last until they divest themselves of their properties within Litchfield Park. They currently promise to have an ownership interest in the Cornerstone development only through the development of this property, not for an extended period (ref. rezoning application Project Narrative, page 2, last paragraph). This does not indicate that they have a long-term interest.

In 2014, JDM was committed to a minimum of 50,000 square feet of retail development on this parcel (ref. West Valley View, April 2014, “JDM Partners discuss general plan amendment”). Today they seek to eliminate the commercial requirement in its entirety. Things change, perhaps to the city’s detriment.

I am skeptical that JDM’s proposal works in the best interest of the city of Litchfield Park. For the city to relinquish future commercial revenue as requested by GPA 18-02 is foolhardy. Once a piece of property is developed, the likelihood of its land use changing is vanishingly small. Any forgone income is, in effect, lost forever and is therefore a threat to the long-term security of the city.

Because JDM is in the business of developing high-quality properties, I believe that they have both the proficiency and capability to find appropriate commercial enterprises for the Cornerstone development that will both serve their residents and will compliment the proposed City Center development.

A 30-year economic planning horizon seems reasonable for our city. Therefore, I suggest an alternative “win-win” concept that should be revenue neutral to the city of Litchfield Park for that time period.

If the city were to estimate the present value of 30 years’ worth of lost commercial revenue between the property’s currently zoned income potential and JDM’s requested rezoning of no commercial, that dollar value could be assessed against the property such that it is paid prior to development of the parcel. Litchfield Park could then invest the money and be made whole for the next 30 years. If this idea represents a cost that JDM considers too substantial, they do not have to proceed with development of this parcel and neither the city nor JDM is harmed. If Parcel B remains undeveloped and the proposed Litchfield Park City Center becomes a reality, the value of the parcel will increase, much to the benefit of JDM as well as to the city of Litchfield Park.

The city has no duty to further mitigate JDM’s risk or improve their profit. Granting the requested zoning change and/or GPA 18-02 is not in the best interest of Litchfield Park.