Mike Wampold is flat out one of the most influential and important developers who calls Baton Rouge home. His talents, vision and willingness to take significant financial risks have given us a local landscape dotted with some pretty remarkable—and iconic—projects.
His II City Plaza, finished in 2009, was downtown’s first spec Class A office building in generations. The Watermark Baton Rouge hotel downtown brought the historic Louisiana National Bank building back to commercial life. He’s remaking the old and increasingly vacant Bank One North Tower into a forward-thinking, mixed-use edifice. Shaw Plaza, the former corporate headquarters of the now defunct Shaw Group, dominates the Essen Lane skyline. The Crescent at University Lakes gave us high-end condo living with stunning views of the LSU campus. And he turned the blight that was the empty Jimmy Swaggart Bible College dorm on Bluebonnet Boulevard into the Renaissance Hotel, which along with the Watermark are this town’s only 4-Diamond hotels
Pretty remarkable for a guy who, as an upstart in the mid-1980s, was teetering on the verge of being knocked out of business until landing a federal contract to build military housing at Fort Polk.
Wampold’s latest grand vision is Harveston, a mixed-use hamlet of a TND that’s dissected by S. Bluebonnet Boulevard and will cover a large swath of undeveloped land running along Nicholson Drive to the west, the back end of the Gardere neighborhood to the north, his under-development residential projects—The Preserve at Harveston and The Lakes at Harveston—to the east and, to the south, land that winds around another residential development before running into the University Club.
In other words, it’s a supersized village that, when complete, will include office and medical facilities, a retail center, a grocery store, a charter school, at least one church, a sheriff’s department substation, a fire station, apartments, single-family houses, a retirement community, 30 acres of green space, biking and walking trails, and a navigable waterway, presumably filled with canoes and kayaks, with its banks lined with restaurants, drinking establishments and mom-and-pop shops.
It all sounds glorious.
Yet as truly spectacular as I’m sure it will be, that shouldn’t mean Wampold gets to play by incredibly generous rules that are different from every other developer in town. And, as we’ll get to in a bit, it’s just plain wrong for the Metro Council or anyone else to negotiate a sweetheart deal that has the added bonus of delivering supersized and vindictive “eat it” to the prospective city of St. George.
To be clear, it’s one thing for a unanimous Metro Council to earlier this month approve the creation of the Harveston Economic Development District; not so kosher is allowing Wampold to use the undedicated 2% parishwide sales tax generated within the district as incremental financing to offset a portion of the development’s expected $56.9 million in infrastructure costs.
Economic Development Districts, or EDDs, generate public dollars to cover development costs in one of two ways: 1) assessing a new, district-specific tax or 2) redirecting an incremental portion of an existing tax to the developer. The TIF option was the norm years ago—and it’s what Wampold is doing with his Watermark and Renaissance projects—but the current, almost universal trend is for districts to levy a new tax.
For example, the Bass Pro development in Livingston Parish is one of the last—prior to Harveston—to be granted incremental financing. The EDD just down I-12 at Juban Crossing, on the other hand, levies a district-specific 1% sales tax—on top of existing state and local sales taxes—to generate funding.
Worth noting, the state no longer allows its tax dollars to go toward incremental financing on retail projects—meaning Baton Rouge is an outlier.
Wampold says any blowback is unwarranted because he’ll be providing public safety and “needed” retail, grocery and health care services to an “area that’s underserved.” He adds Gardere, one of the poorest and most crime-ridden neighborhoods, will benefit as will those at University Club and other nearby developments.
“If you draw a one-mile circle from Harveston there’s no grocery or retail services,” he says.
Technically, Wampold is correct. Depending on where you start, the nearest grocery stores (a Walmart Supercenter and an Albertson’s), restaurants and other retailers are between 1.3 and 2.5 miles away.
No doubt, fire service is a challenge, but there’s an existing sheriff’s station just 0.6 miles from the Gardere neighborhood.
Moreover, according to the council’s rubber-stamped-ordinance, Harveston will create numerous jobs for people in the area and across the parish. Sure, the vast majority will be of the lower-wage retail variety, but I guess jobs are jobs in the eyes of this council.
Wampold says the 20-year amortized infrastructure note—not including walking and biking trails—will be some $4.5 million per year and he’ll use the TIF, expected to generate roughly $2 million annually, to cover almost half the cost. Great, but find a developer who doesn’t pay for a development’s infrastructure before turning it over to the city-parish, where taxpayers then become responsible for future maintenance and repair costs?
Under this council’s logic, every developer in town should be lining up for a public subsidy, particularly those responsible for Rouzan, The Grove, Long Farm Village and Materra—all significant mixed-use projects that either are or will be generating new sales and property tax dollars as well as jobs. Seriously, how many jobs does the council think developer Richard Carmouche is creating with The Grove, which includes the Ochsner Medical Center?
There’s nothing wrong with creating EDDs for these or other projects. But the requirement must be that such districts 1) levy new taxes for revenue, 2) generally state what the money will cover and 3) have an end date when the tax expires.
Shockingly, based on what the council passed, Harveston meets exactly zero of those criteria. Maybe something will be spelled out down the road, but, as of today, the TIF never expires.
“Give me a couple of years,” Wampold told me, “and look at what I’ve been able to do with the TIF, then decide if it’s been worth it.”
No one should get too cranky at Wampold or any other developer asking for taxpayer assistance to reduce costs and increase profits. The frustration—and questions—must rightly be directed at a Metro Council that allegedly exists to protect the interests of all taxpayers, not just the more influential ones. What happened to that “greater good” we’ve been hearing so much about?
Again, few can seriously doubt Harveston, once finished, won’t be an exceptional development. That, however, is not the point. What matters when it comes to handing out TIFs is what’s known as the “but for” test: But for the TIF subsidy the development would not happen. Given there’s development going on all around the Harveston EDD, does anyone believe Wampold can’t—or won’t—do the project without a taxpayer subsidy?
Call me a cynic, but I suspect this generous deal was expedited because Harveston falls within the borders of the prospective city of St. George. Should it become a reality, that city will be funded from the very 2% sales tax Harveston will use for its incremental financing. Translation, this council just took tax dollars that may soon flow to St. George and, under the current terms, will keep them forever flowing to the Harveston EDD.
If St. George survives its legal challenges, will that city take some legal action of its own, seeking to reverse or alter the deal? It’s a possibility Wampold readily acknowledges.
In the meantime, if this council wants to give away existing tax dollars perhaps it should first demand such developments be located within the boundaries of Baton Rouge. There’s nothing stopping Wampold from filing for Harveston to be annexed into the city.
Well … nothing but higher taxes.