In April 1998, Bloomington was hit by its biggest single economic shock to-date, the announced closing of the RCA/Thomson television plant located just south of downtown. The plant, which consisted of several buildings of various ages and conditions, was sited on approximately 200 acres of prime urban real estate. Thomson, the multinational corporation that bought RCA from General Electric, began fielding offers for the real estate. However, even before it was sold, there were published concerns about the viability of several of the on-site structures -- especially regarding asbestos remediation.

Indeed, one of several plans being floated that April, as reported in the Herald-Times, included the possibility of demolishing the older, obsolete structures and replacing them with new so-called "flex" buildings. Finally, Gov. Frank O'Bannon declared the site a "community revitalization enhancement district" (CREED), which allowed the city to use future state and local revenues to help redevelop the property. At the same time, the quasi-public Bloomington Economic Development Corp. (BEDC), funded with over a hundred thousand dollars of tax money a year, began to aggressively market this piece of very private property.

In January 1999, a group of investors bought the Thomson property for a reported $12 million. The investors included local businessmen such as John Bender of Bender Lumber, prominent local attorney Skip Harrell of Andrews, Harrell, Mann, Carmin & Parker, and developers Tim Mitchell and Peter Dvorak. By way of illustrating the interdependencies of the urban growth machine, let us point out that Dvorak had developed, among other things, the Johnson Creamery building, which houses both the BEDC and the Bloomington Chamber of Commerce, as well as the Lockerbie Courts luxury condominium complex on North Walnut Street, which received a generous tax abatement granted by the Bloomington City Council. Angela Parker, of Andrews, Harrell, Mann, Carmin & Parker, has acted as the Bloomington Chamber of Commerce's point-person on the city's Growth Policies Plan.

The purchasers, of course, performed their pre-purchase due diligence on the property and were well aware - now nine months after the property went on the market - of any special issues it might have. In particular, they were well aware of the conditions of the buildings and the possibility, raised earlier, that some of them were economically unviable. In other words, the $12 million paid (just $65,000 per acre of prime urban real estate) was accurately reflective of the true market value of the property and appropriately discounted for the possibility that one or more of the buildings would need to be demolished before redevelopment could occur.

Attesting to the business acumen of the initial investors is the fact that they were able to almost immediately flip the majority of the property, at what one assumes was a decent profit, to the now-bankrupt Baptist Foundation of Arizona (BFA) - an organization that subsequently defrauded thousands of small investors out of their life savings. Who introduced and/or brokered the sale from the original "local" investors to the greasy BFA is still a subject of some mystery, not to mention controversy.

At the time of this private transaction involving private property, realtor Jim Regester, who was also president of the BEDC, stated that the BEDC was "looking forward to helping the investors market the site to potential tenants," according to the H-T. Remember, we're talking about private property and private real-estate transactions, not economic development per se. The reason for Mr. Regester's enthusiasm? Nothing more than his past experience helping Bender and Mitchell develop the empty fields west of Curry Pike into the Northwest Park industrial area (at great public expense).

And Regester wasn't the only one crowing. Tim Wininger, of Wininger/Stolberg developers and a past president of the BEDC, also waxed enthusiastic about the project's possibilities. After all, he knew that what would be good for Bender, Harrell, Mitchell, and Dvorak would also come his way later in the form of over $1 million in publicly-funded development of his own little pied a terre off of SR37 (known as Bloomington Technology Park).

In April 2000, just a year after the initial investors purchased Thomson's property, Randy Lloyd, Mayor Fernandez's executive assistant for economic development and a key figure on the public side of marketing the private Thomson site, left City Hall and what he called in the H-T "the best job I have had to date in my life." Why did he quit? To take a position with the owners of that part of the Thomson property which included Building One -- a group now calling itself First Capital Management. We'll ask again: Why did he quit the best job he had ever had? We don't know because as, when Tim Mitchell was asked what Mr. Lloyd's responsibilities would be, Mr. Mitchell responded in the H-T that those details hadn't yet been "worked out," even though Mr. Lloyd was joining the firm as a partner.

A year later, in April 2001, First Capital apparently decided what everyone knew all along, namely that "it would be too expensive and economically impractical to renovate" their Building One. They then turned back to the Mayor's office, from which some of them had come and with which they maintained close personal and patronage ties, to secure what the Herald Times termed "creative financing."

In other words, the private owners turned to the public sector for the funds to accomplish the renovations that were deemed likely necessary three years prior, even before they had bought the property. Want an analogy? Then imagine buying a house from a seller who told you that the roof was likely to fail soon and then, three years after buying the house, getting the city to buy you a new one. The public cost of fixing this piece of private property? Currently $1 million and climbing.

What's the status of the First Capital's property today? Take a drive past it on Rogers and you'll see. Despite all the talk of a high-tech office park, despite all the public investment in private property, despite everything, it is nothing more than a giant parking lot awaiting subdivision and sale as prime urban land to the highest bidder. And because the city came up with the money to remove the existing buildings, its property tax valuation is much lower than it would have been with the hulking, empty, Building One still standing on it.

The net result? The private owners were able to buy a prime piece of urban real estate at a discounted value, which reflected the condition of the existing buildings. Then they were able to get the public - meaning taxpayers - to clean off the existing impediments to development (the obsolete buildings), while simultaneously dropping the cost of holding onto the land into the future until the right buyer could be found. Meanwhile, the BEDC continues to aggressively market the land at taxpayer expense.

And that is the Urban Growth Machine in operation. In the five-year history of this story, there has been no economic development on the site -- unless you count a few crummy warehouse jobs. In the meantime, the taxpayer has marketed the property, allowing the original investors to divest most of it to the criminal BFA, while directly investing well over a million dollars in the remaining private real estate and increasing its value well above what the owners paid for it. Simultaneously the public has reduced the property tax burden, allowing the owners the luxury of holding out for the highest bidder and highest private return.

It would be easy to write off this specific example as just an isolated example of public/private political incest and to even lay it at the feet of the current Democratic administration, but that would be far too facile. The Urban Growth Machine is entirely nonpartisan. The same names and organizations that you saw mentioned here today will be found actively contributing to the coffers of both political parties, and next week's Civitas will focus on some of those donations. And although it's always disappointing to discover the left behaving as we expect from the right, it should nonetheless not surprise, as opportunism knows no ideology except that of opportunity itself.

This column is an excerpt from CIVITAS, a weekly column written by Gregory Travis that focuses on the economic and civic dimensions of local issues. It takes its name from a similar format column written by James Howard Kunstler.