Intellectual inconsistency? Among these jeenyuses? Heavens forfend! The fool’s porringer runneth o’er!
Archive for October, 2005
Wilder smacks around T-D editorial page
Monday, October 31st, 2005Part 2…
Monday, October 31st, 2005…of Drew McManus’ piece on Save Richmond’s role in the Virginia Performing Arts Foundation mess is up today at Adaptistration. Eagle Eyes forever!
The winter of her disconnect
Saturday, October 29th, 2005Bett’ring thy loss makes the bad causer worse.
Revolving this will teach thee how to curse.
House-cleaning continues. Whoever replaces Stephanie Micas as president of the Arts Council of Richmond, maybe, just maybe, it’ll be someone with a working knowledge of art. True story: When we met her, Micas told us she’d just been to see Richard III. “I had no idea it was so bloody!” she said.
VAPAF spinning in its grave
Friday, October 28th, 2005I’ve been busy painting our bathroom, so I haven’t had much time to address the week’s events, though I sure hope Bill Pantele’s smart enough to think twice before trying to outmaneuver Wilder again.
ANYWAY, there’s a piece about Save Richmond on Drew McManus’ arts blog, Adaptistration, called The Mouse That Roared, about us, and we’re honored to have been so treated. It’s a follow up to an interview with the Richmond Symphony’s David Fisk, and more installments will follow in the next few days.
In today’s piece, Philip Davidson takes a very Brad Armstrong-circa-2004 tone, tut-tutting Don and I for “having a problem of not being able to separate [our] two jobs”–gosh, do you think he brings up such concerns during VAPAF executive board meetings when he’s sitting across from city councilmembers?
A Letter to the Governor
Tuesday, October 25th, 2005Following up on the proposal unveiled last night at city council, Mayor Wilder sent Governor Mark Warner a letter today:
October 25, 2005
The Honorable Mark A. Warner
Governor of Virginia
1111 E. Broad Street
Richmond, VA 23219Dear Governor Warner:
It was a pleasure to talk with you personally about the number one issue on the minds of Virginians generally, and Richmonders specifically, the raising cost of energy that is becoming an increasing burden on working families, especially single mothers working and raising young children and, of course, the elderly on fixed incomes.
As you know, the City Council, at my urging earlier this year, expressed a concern to you and the General Assembly relative to the many millions of dollars that was being included in the state budget for the Arts Center.
In regards to the concern expressed by the City Council and myself through a Council resolution sent to the General Assembly, we asked that some provision be made in the state budget relative to allowing those millions to be spent on public needs if and when it was clear that the promises of the Virginia Performing Arts Center were subject to question.
Last night, both the Council and I, despite our disagreements, joined in recognizing that some of the monies given to the Arts Center are more rightly used, at this crisis moment, for public needs as opposed to going to the private needs of a special interest group.
Thus, conceptually, both the Council and I realized that public monies being given to the Virginia Performing Arts Foundation should instead be given to a public purpose, not a private group.
This, then, brings me to the 8.5 million in the state budget being given to the Virginia Performing Arts Foundation based on promises that they have admitted they may no longer be able to keep. Unfortunately, some of this money has already been given to them. But most has not.
Accordingly, while you deliberate about what to do about the energy crisis, I am requesting that you use your executive authority to hold up the remaining funds until the General Assembly returns in January and can decide whether some or all of this money is better allocated to the City for real public needs associated with heating assistance.
Since all this money is already allocated to Richmond, albeit indirectly through the Virginia Performing Arts Foundation, it will not require taking any money from any other locality or state program and redirecting it to Richmond.
Additionally, it will not require any special treatment for Richmond relative to the spending of the state surplus.
Additionally, it will not require another raise in taxes on top of what was asked of the working families of Richmond last year.
Last night, the City Council thought approximately 2 million might be necessary to help resolve the energy crisis affecting family budgets and the city budget. My proposal involved a redirection of the Meals Tax which brings in 2.6 million annually.
Accordingly, I am requesting that at least $2.5 million of the $8.5 in the state budget for the Virginia Performing Arts Foundation be targeted for helping with the energy crisis here in Richmond, the implementation of this I leave to your administrators and the General Assembly.
Again, it was pleasurable to converse with you.
Sincerely,
L. Douglas Wilder
Mayor
Tonight, tonight
Monday, October 24th, 2005None of us are able to go to tonight’s council meeting–I’m still sulking about Eagle Eyes’ crack about my chrome dome, and Don has a B.J. and the Bear enthusiasts’ rally to plan for. EE, of course, never leaves the widow’s walk of the Markel building.
On the agenda tonight:
- Pantele, Graziano and Loupassi attempt to outdo one another in expressing continuing support for the performing arts foundation, by taxing everything in the city except Brad Armstrong’s Florsheims
- Marty Jewell rediscovers his spine
- Just guessing here, but this guy may show up
- And it sounds like the mayor may have a surprise or two up his denim sleeves
So go on down and enjoy the show: 900 E. Broad, 2nd Floor, 6 p.m. Get there early and count the number of times Councilman Combover flashes that winning grin at Jim Ukrop, who’ll be sitting in the back, looking over his half-moon spectacles and making mysterious checkmarks in his notebook (why does Loupassi’s name have three stars next to it?).
Today’s papers
Monday, October 24th, 2005Councilman Combover seems to think he can play ball against the mayor; we suspect the 49ers had similar hopes yesterday morning. Don’t bring a knife to a gunfight, Bill.
Also, Jim Ukrop wakes up and smells the coffee–well, sort of. He finally realized the joe at his markets tastes like Carolyn Cuthrell’s press releases and agreed to let Starbucks into the temple. This pragmatism does not seem to extend to the investment he and fellow VAPAF boardmember Booty Armstrong share in the Berry-Burk building, which is clinging to the fiction that residents of its new condos will be around the corner from a performing arts center. Better make sure those babies have granite countertops!
“Rascals” Try to Pass $2 Million Bad Check?
Saturday, October 22nd, 2005“You take my money and use it to buy my land? How lucky you are, you lucky rascal.”- Mayor L. Douglas Wilder, Style Weekly, October 19 [emphasis added]
With all due respect to the Mayor (and, for the record, he had me at “hello”), it’s probably not his money that the Foundation is trying to use to secure clear title to the Thalhimer’s block - as part of the Richmond Redevelopment and Housing Authority’s 2004 agreement to gift the property to the VAPAF, ownership would revert back to the City unless the Foundation obtained a building permit or ponied up a cool $2 million by August 2007. Two weeks ago the VAPAF attempted to deliver just such a check to the RRHA, but was turned back at Hizzoner’s direction.
Unfortunately, all of the Mayor’s money was spent by Brad and Michele and Jim long ago. Mostly, his money went to balding (sorry Andrew) architects, fat consultants, and for oh-so necessary items like a $5,000 “partnering” drum session, and sculptures from an arts school up in Boston (apparently VCU isn’t good enough for them). Feel better yet?
No, the money that the VAPAF is trying to use to hold the hole in the ground that is the 600 block of East Broad St. hostage for the next decade likely came from the current Governor of our Commonwealth, Mark Warner. However, trying to use the State’s money in this way could mean a major legal headache for Brad and Jim, and a boon for the Mayor’s argument not to accept the Foundation’s payment.
You see, while the Foundation was busy putting up goose eggs in new fundraising over the last several months, they actually did receive some cash from the Commonwealth. In the first two weeks of September, Brad & Jim, Inc. received almost $1.6 million in sweet-smelling State greenbacks. This money did not appear as additions to fundraising totals in the VAPAF’s monthly progress reports to the City because Foundation officials had already booked the entire amount of the State’s $8.5 million appropriation as revenue several months before. They had also booked the full $27.8 million of City money, and the full amounts of most of their other pledges even though the pledges were either restricted or had contingencies attached to them.
(As a sidelight, booking the full amount of a contract upfront, without being certain of its eventual value, is a big accounting no-no, and one that has landed several well known companies in hot water. City Auditor Lance Kronzer found that the VAPAF had been accounting for pledges incorrectly, and reduced the amount of their true “binding commitments” from $71 to a wee $17.7 million.)
Anyhow, the problem for the Foundation in trying to use the State’s money to buyout the Thalhimer’s block is that, once again, it may be using public funds in an unauthorized way. The State, unlike the City Council under Rudy or Manoli, is a stickler when it comes to monitoring how its funds are spent - and the Foundation’s grant is not a blank check. Not only did the Foundation have to show actual cash from other donors in order to get State matching funds (thank you Carpenter Center endowment!), it also had to fill out a detailed application specifying how such funds would be spent.
The VAPAF’s application states that all of the Commonwealth’s money that it might receive would be used for capital expenses (and not one single, solitary penny for salaries or other operating expenses) that it describes as the “renovation and construction of performing arts center in downtown Richmond.” The Foundation then spends several pages going over the contractors and subs they hope to pay with this money. Nowhere in the application does the VAPAF mention land acquisition. In fact, the application required the Foundation to submit a budget for the period July 1, 2005 through June 30, 2007 that would “include information on all receipts and expenditures for the project.” The VAPAF-submitted budget specified that expenses for “property and equipment” for both FY2006 and FY2007 (the only years included) would come in at exactly $0.00.
So, is the Foundation once again playing fast and loose with public money? Unless it recently received another large infusion from a different donor, it appears that the cash-poor VAPAF’s $2 million check would have drawn on a significant portion of State funds. And, if the Foundation was not authorized to use the State money for land acquisition, then the $2 million check was technically no good - and Mayor Wilder was merely protecting the City from a bad check by turning it away.
Certainly there will be much more action in the future, both legal and otherwise, regarding the ownership of this central, downtown block. The Foundation’s new, hirsute, $375 per hour lawyer may have more work to do than he bargained for - especially if the VAPAF is not careful and this guy, or these guys, end up getting involved (we aren’t insinuating that they will). The legal bills could really put a strain on the Foundation’s already tenuous hold on solvency. As an alternative, we would humbly suggest that Brad and Jim could save a few shekels, and even upgrade in looks, by instead hiring this Adonis. Heck, he’s already driving their train anyhow.
Not a Penny… honest!
Saturday, October 22nd, 2005So let me see if I can get this straight. One week after the Virginia Performing Arts Foundation implodes, this little ordinance shows up on the docket for this Monday’s City Council meeting, as sponsored by councilpeople Pantele, Loupassi and Graziano (we’ll call them‘The Three Amigos’):
Ordinance 2005-265
To provide for the continuation of the 1% increase in the City’s meals tax as set forth in City Code § 98-362 to support the development of performing arts facilities in the city by the Virginia Performing Arts Foundation and of the interim financing undertaken pursuant to Ord. No. 2003-268-239, adopted Jul. 28, 2003 and for direct payments in support of such development of performing arts facilities by the Foundation, all upon certain terms and conditions.
“Certain terms and conditions”? Wasn’t it independent city auditor Lance Kronzer who pointed out in his audit of the Foundation that the 2003 ordinance was badly constructed, making it hard to determine what were allowable expenses and practices by the Foundation? Hadn’t the audit disproved the Foundation’s constant claims that “not a penny” of public money was being spent on salaries? Didn’t the auditor rule that the Foundation was never in compliance with reporting their finances properly in the first place?
With all that we know now about the project, with all of the objections that the Mayor has raised — and the Foundation has all but admitted — what can you call the Three Amigos’ proposed policy paper but outright stoogery? At best, it’s a deluded unwillingness to see things as they are — or perhaps it’s a hope that Richmond isn’t really paying attention.
But there’s another paper being introduced on Monday night, by councilman Jewell. It’s the first sign that anyone on council — past or present — is willing to exercise any form of responsible oversight over the hole they helped to dig. The proposal is sure to fail.
The kids call it “Ordinance 2005-247.”
To amend and reordain Ord. No. 2005-136-79, adopted May 23, 2005, which amended §§ 5 & 6 of Ord. No. 2003-268-239, adopted Jul. 28, 2003, concerning a 1% increase in the City’s meals tax to support the Virginia Performing Arts Foundation’s development of performing arts facilities in the city, to further condition the extension of the original Jul. 1, 2005 fundraising deadline to Dec. 31, 2006, upon the Foundation (i) demonstrating the receipt of ‘cash or investments’ instead of ‘binding commitments,’ (ii) demonstrating that any cash or investments received do not require the pledge of real assets as collateral, (iii) agreeing to transfer the real property assets of the Foundation to the City if the Foundation fails to meet the new Dec. 31, 2006 fundraising deadline and (iv) providing additional financial information to the City on a monthly basis.
This is, of course, far too late. But as one Save Richmonder points out, it does show some teeth… finally. It’s only what city council should have done earlier in the summer — “hold the Foundation’s feet to the fire.” Too bad it couldn’t have been top priority before the $375 an hour lawyers with quote-laden nicknames showed up. And it’s really too bad that this kind of oversight was in such short supply back in 2003 when council crafted their deal to raise public taxes under the guidance of the “private” Foundation.
You remember 2003, don’t you? Those long-ago days when Manoli Loupassi was publicly praising Calvin Jamison for being a “great city manager.”
Style Weekly: At a press conference Oct.11, [Mayor Wilder] blamed the “sweetheart deal” for the Thalhimers block on former City Manager Calvin Jamison. Wilder also said that the foundation’s leadership helped put Jamison in that position (Jamison was widely criticized for having no government-management experience).
“Of course they wanted someone like Jamison in there to give the store away,” said Wilder, who vowed to “stand resolutely at the door” to prevent the foundation from taking any more tax dollars.
There’s a long legal struggle ahead. But don’t worry about those high-priced lawyers, arts donors of Richmond. Your money is being well taken-care-of over at the VAPAF. You’ve got Brad Armstrong’s word on that.
Times Dispatch: Foundation President Brad Armstrong said any legal costs incurred would be paid from money donated specifically for that purpose. “Not a penny of donor money toward our project would be used.”
“If we indeed end up having to incur legal fees,” he said, “it is only as a last resort to protect our interest in this terribly unfortunate and damaging conflict with city administration.”
Doin’ it our way
Friday, October 21st, 2005I think it’s sad that Don feels like he has to ask the mayor questions under an assumed name. Yeah, yeah, we get it–change one letter and it’s the creator of Laverne and Shirley. Just ’cause you do a fansite, doesn’t mean it relates to everything, big guy.
“This Scenario”
Thursday, October 20th, 2005Over at Richmond.com, downtown resident Gerry Marshall asks the mayor:
“I have a concern regarding the meals tax. As a single person, I eat out a lot here in the city. That means that, against my wishes, I have contributed to a fund for a performing arts center that I never wanted. Where did all of that money go now that their plans are being scaled back? I like living downtown, but at this point, I’m seeing the West End as a cheaper and friendlier option.”
Mayor Wilder: “There has never been in recorded history any public tax being handed over to a private entity to spend exclusively as it saw fit so to do. City Council did this and did not consider that it was a total waste of money and priority for public spending. The City’s auditor found hundreds of thousands of dollars of waste after I had insisted on an accounting. There are three Council persons, namely Mr. Loupassi, Mr. Pantele and Mrs. Graziano, who now want to continue this scenario for the Arts Foundation, despite revelations of waste and profligacy.”
Our Own Private Refco?
Friday, October 14th, 2005It is understood that, in the highly unlikely event that sufficient funds cannot be raised to build out the entire City block…the VAPAF will, as its first priority, renovate and expand the existing Carpenter Center, expand its stagehouse, expand the lobbies with audience amenities, and update the CCPA technological capabilities with a targeted completion date of no later than September 1, 2007, all in accordance with and using the funds designated therefore described in that certain letter to Martin J. Rust, President, Carpenter Center for the Performing Arts, from Michele Walter, Chief Operating Officer of VAPAF, dated January 25,2005, a copy of which is attached hereto as Exhibit C and by this reference made a part hereof (the “Letter”). VAPAF hereby acknowledges, understands and agrees that the statements of VAPAF in the Letter and the provisions of this Paragraph 2 are material inducements to CCPA to enter into this Agreement.
- VAPAF/Carpenter Center Merger Agreement, February 2, 2005, [emphasis added]
So, in summary, even in an unrealistic, worst case scenario where we get zero of the $30MM sought from the Assembly, zero of the $12MM sought through the TOT, zero of the remaining $15.8MM portion of City funding, and zero from ongoing private or public fundraising, we still have $23MM in cash, pledges and tax credits to cover $21MM in remaining hard costs.
- Exhibit C of Agreement [emphasis added]
While I am not a lawyer (praise be!), I think it would be interesting to know what Foundation officials thought of their own finances last February as VAPAF COO Michele Walter and Carpenter Center President Martin Rust inked the ill-fated deal that shut down the Carpenter Center and transferred its assets (including more than $3 million in endowment cash) to the Virginia Performing Arts Foundation. At issue is whether the VAPAF was operating in good faith, and gave adequate disclosure, when it provided this sunny portrait of its financial condition as “material inducement” for Martin Rust to hand over the Carpenter Center’s keys and check book to Brad and Jim, Inc.
We do know that just twelve days later, on St. Valentine’s day, the Foundation filed its 2003-2004 IRS form 990 - and the picture presented in this audited, official filing was much, much bleaker. Why didn’t the Foundation include an audited financial statement as part of this agreement? Why was the Carpenter Center board willing to gamble its future on a crummy letter with handwritten corrections and unverifiable statements? While the answer is probably unknowable, if it was a recipe, it would probably start out something like, “one part gross incompetence, two parts total trust in Jim Ukrop.” Still, the curiosity kills me. Did Rust and the CCPA board have an idea of the true state of the Foundation’s finances? If they had, would they have still gone through with the merger?
To be sure, few of the many promises the Foundation made to the Carpenter Center have been kept. The $3 million endowment has been blown (along with $7.6 million from the city) with no perceptible work done to the old Loews. The VAPAF now has almost zero unrestricted cash left - a harsh reality that forced the events of the past week (and not some kind of well-sprung soul searching). The prospects for finding new donors is worse than the that of poor Harriet Miers’s Supreme Court nomination. Who would give these guys any serious money?
And, the increasingly unsightly game of obfuscation continues. The February 2005 agreement stipulated that the Foundation would keep $23 million available to pay for a Carpenter Center renovation job tagged at $21 million. So, our city fathers must have lived up to their contractual obligations - right? They have the $23 million in hand, more than enough money to fix it - right? As mentioned above, the worst kept secret in Richmond is that they really have close to $0 million left. Yet yesterday the Foundation said that they had, indeed, raised $23 million for the Carpenter Center, but, get this, would now have to raise $20 million more! What a howler.
How in the world did the total cost of the Carpenter Center job jump to $43 million from $21 million? And where the heck is the $23 million they claim to have raised? After all, if there is one thing that everyone from Mayor Wilder to Jim Ukrop to Manoli Loupassi can agree on it is the urgency to get the Carpenter Center back on its feet - so lets spend that $23 mill and get moving. Problem is, as with everything else the Foundation is involved in, there’s no there there. The money simply doesn’t exist. Because, if this money really did exist, and was either in hand or soon to be on its way, we wouldn’t have seen the layoffs, resignations and half-apologies of the last week. The new music hall would still be front burner, and Brad would be telling the Mayor to kiss his patootie.
As best the SaveRichmond forensic accounting dept. can tell (and it’s difficult with so little to go by), it looks like the Foundation now assigns to the Carpenter Center the total amount of money raised and received to date for both the new music hall and the Carpenter Center. What’s really lame is that just about every cent of this $23 million has already been spent - and almost none of it on the Carpenter Center (check out the dust bunnies and cobwebs in the lobby next time you walk by).
If we are on the mark, this accounting gimmick could allow the Foundation to claim that it has technically satisfied its obligation under the merger agreement - albeit in a potentially misleading way. Whether such machinations would hold up under the scrutiny of the courts or a real audit is an open question. We do know that law enforcement officials are losing patience with high-level financial impropriety. Bernie Ebbers, D-Koz and now the guy from Refco have all experienced the special care law enforcement officials take to make sure they don’t bump their head when getting into the back of a car wearing handcuffs.
Please know that we certainly aren’t implying that anyone has done anything wrong or that the same fate awaits anyone in our fair burg. However, we would humbly suggest to some intrepid CCPA board member: take a look at this merger agreement just to see if all parties have lived up to their obligations. And, if the CCPA ends up feeling slighted, they could always look for some capable legal counsel - preferably one that’s open 24hrs.