NWI Federation of Interfaith Organizations: Development vs. Displacement: The Maiaco Story

October 4, 2016

AN OPEN LETTER to The Honorable Mayor Karen-Freeman-Wilson, City of Gary, Gary Common Council, the Gary Redevelopment Commission & the Citizens of Gary
Development vs. Displacement: The MaiaCo Story

First, let’s clearly state that we, the members of the NWI Interfaith Federation, are not opposed to development. As a matter of fact, we embrace, encourage and urge development in Gary. MaiaCo, a consortium of investors, has been granted a great opportunity to develop 3,500 plots in Gary. Since the plan has involved little to no public participation or voice, we are concerned that current residents are being excluded from opportunities to benefit from the MaiaCo development initiatives.

When we vote for city officials, we do not give up our rights to influence or oppose city policies and practices. Voting should be only one of many ways we engage in governance. According to our understanding of government, we have a representative form of democratic government, which means we get to elect our representatives. Our Common Council members then pass laws and ordinances, provide oversight, approve budgets and hear citizens’ complaints. We then can influence, support or oppose these public policies or practices.

In the case of urban development in the City of Gary, the voice of the people has been totally silenced through the creation of the Gary Redevelopment Commission (GRC). This Commission is appointed and not elected. As a result, the GRC cannot be held accountable by the people or the Common Council. Its jurisdiction is as follows:

The Commission is responsible for the acquisition, disposition, and conveyance of property in the City of Gary, pursuant to IC 36-7-14. The Commission’s powers are prescribed under state statute and further dictated by Gary Redevelopment Commission By-Laws. As primary custodian of land in the City of Gary, the Commission is empowered to pilot economic development, remediate blighted or environmentally hazardous conditions, and utilize public financing mechanisms to redevelop underutilized areas in the City of Gary.

That is a lot of power over public resources without any specified public oversight. It appeared that the Gary City Council had almost no information about the deal with MaiaCo until after everything had been negotiated. The terms of the contract, moreover, did not fairly represent Gary’s interests.

In the negotiations on the Gary-“Chicago” Airport AFCO contract, in addition, Chicago seemed already to be in the driver’s seat. How else can you explain the contract’s language, describing the Airport as a “reliever” for O’Hare and Midway airports? The contract states that the

Manager intends to develop the Airport primarily as a general aviation, MRO, research and development –oriented airport with limited scheduled passenger service, which acts as a reliever (both emergency and potentially for integrated long-term planning) for Chicago O’Hare and Chicago Midway Airports.” (AFCO Contract, Recitals, section H, p. 2.)

Why would Gary have agreed to that limitation, when passenger service would create more jobs and convenience? After all, our Gary Airport is closer to downtown Chicago than either of the Chicago airports.

By the time that former mayor Richard Daley and his MaiaCo team went to Delaware in the Spring of 2016 to incorporate MaiaCo, the contract had already been worked out and set in motion. The purpose for MaiaCo’s existence is to take over and decide how to develop some of the best land in Gary. [“MaiaCo was selected to assist the GRC with economic and revitalization development efforts, including development of real estate in the City.” Agreement, Recitals, (c)] Would former mayor Daley incorporate a business to do work without first knowing what the terms would be? Unlikely.

The first public forum sponsored by the Gary Redevelopment Commission was held Wednesday July 27th under duress. This session was forced by a public outcry, following the leak of a video posted by architect Peter Ellis that informed people of the MaiaCo plan “to tear Gary down.” Clearly there had been no transparency, back-room deals, and substandard negotiating! Just 1 ½ days later, on Friday July 29th, without alerting the participants at Wednesday’s session, the GRC unanimously passed the contract, denying anyone the right to speak until after the vote. At both open events, the Executive Director took questions, but answered almost none.

Now MaiaCo is a done deal, but we still know very little about the Company or its plans, even though we can read the contract. We do know that MaiaCo will NOT abide by any local hiring ordinance in Gary. We do know that the City will pay for demolition, already well under way. But do we know how many Gary residents have been employed to do this work? We have no idea. How many local residents will have to be hired by the contractors MaiaCo selects? There is NO requirement, just a phrase encouraging MaiaCo to ask the contractors to consider local hiring.

MaiaCo will be expected to take those commercially reasonable actions. . . in assisting and encouraging third party developers to achieving participation of Local businesses and residents as well as disadvantaged, minority, women and veteran-owned business enterprises. Section 7(a), p. 12.

When demands for local hiring have been raised, the GRC response has been: “How can you ask a company to come in and do work and tell them who to hire??” The fact is, cities across the country are undertaking major development projects with Community Benefits Agreements which require local hiring and set aside funding for training and education. Why isn’t the City of Gary enforcing its Local Hiring Ordinance? We should not be surprised, then, to learn that most of the contractors hired so far for the demolition work are not Gary-based.

In response to complaints about Gary’s share of the pie, members of the RDC have argued that “we had nothing to bargain with; we had to take what was put on the table.” Really? What about our glorious lakefront, national and state parks, dunes, and marshes, with incredible biodiversity? What about our University, hospital, health centers, Airport and our residents, many of whom are skilled and ready to work? Yes there is blight too, but as a result we have vacant land for expansion; Chicago does not.

How could the GRC settle for the humiliating percentage of funds returned to the city? MaiaCo gets back everything it spends, first. Then they get 65% of all proceeds; Gary gets 35%. Gary gives away the land, does the demolition work, and MaiaCo gets rich.

We the people do not know who the investors are in MaiaCo, who stands to benefit from this lopsided division of proceeds. We do know because of MaiaCo’s “right to first refusal” of all land held by the GRC, that other investors have been turned away, such as 18th Street Brewery. Why don’t we know more? Because that information is being withheld.

Yet the City of Gary is turning more and more land over to the GRC for use, which privileges MaiaCo at the expense of local investors. In the past year, we have been told, 90 acres of prime land near Gary’s lakefront was also turned over to the GRC. Ten acres sit at the foot of Lake St. in the Miller neighborhood, the former site of a charter school. The vast acreage, 80 acres, includes all the dune area west of Lake Street. Is this area not one of the most valuable natural resources in Gary? Why would we give it away for a corporation to develop as it sees fit? A land casino in the dunes, perhaps?

Right now the City has no one in charge of monitoring MaiaCo. The Gary Common Council has been sidelined. MaiaCo has yet to pick a Gary-based representative “to serve as a key contact person to meet regularly and on a scheduled basis discuss community initiatives underway.”(Section 7(b), p. 13)

The GRC Executive Director said he did not know much about who is doing the demolition work and where they live. Yet recently we acquired a list of contractors selected for demolition, most in 2014 and 2015. Very few are based in Gary. The City is using federal dollars from the Hardest Hit Federal Funds for the demolition. We commend Mayor Karen Freeman-Wilson, City of Gary and GRC for obtaining these funds ($6.6 million) and beginning the removal of blight from existing neighborhoods. Mayor Freeman-Wilson pointed out that, “we felt it made sense to identify structures that are in the footprints where development is already being planned.” (Press Release, May 27, 2014) Does that mean MaiaCo in 2014? The areas specified are, indeed, those covered in the MaiaCo contract.

In the same press release, the Mayor stressed that “the contractors will be required to hire a percentage of Gary residents.” Did that happen? Also, federal funds come with requirements, quotas, for hiring women and workers of color. Has any of the contractors met that quota requirement? We request numbers on Gary residents hired as workers on the demolition.

Whatever MaiaCo does with the land, removing blighted structures will automatically increase the value of Gary real estate. New parks or condos will raise tax rates even higher. That will be great for the people who will be able to pay increased property taxes. What about families on fixed income? Unemployed? Under-employed? People who work part-time and temporary jobs? We look to Philadelphia, for example, whose Long-term Owner Occupancy Program (LOOP) will protect residents from sky-rocketing real estate values that come with gentrification.

There must be special consideration for the impact of increased taxes on our residents with economic challenges, seniors and retirees. Shouldn’t there be some kind of tax relief –for example red-circling current property taxes—for those long-term residents who have stood the test of time, waiting for revitalization because they believe in Gary? If Philadelphia figured out a way to share benefits with long-term residents, Gary can as well.

People who have lived in Gary most of their lives will probably not get a paycheck out of MaiaCo, and this is a 20-year contract. Residents cannot wait for accountability, until poor families are displaced and Gary becomes another Chicago suburb. We want sustainable development and not just displacement.

We believe in Gary. We believe in the people of Gary. We also believe that the Gary Common Council, our locally-elected officials, must have the ability to provide oversight, impose regulations, and prevent the displacement of current residents. Current residents must get benefits out of MaiaCo’s development projects, which will require a Community Benefits Agreement. Finally, all the hidden backroom deals must be brought into the public light and evaluated by the City Council and the people of Gary.

We welcome other organizations and individuals to sign on to this open letter and join us in our fight for transparency and accountability, development and not displacement.


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