Last week we sat down to chat with Bob Dreessen, a civil engineer and life-long Nebraskan. Bob has a wide range of experience including work with zoning, soils, paving, sewerage, water, drainage, city engineering, and activities associated with the conversion of agricultural land to urban use. Bob grew up in Millard before moving south and east into Sarpy County, where he still lives today. He has lived and worked on the front lines of Omaha rapid expansion into the surrounding landscape.
We were interested in further exploring Sanitary Improvement Districts (SIDs) and wanted to know what Mr. Dreessen thought about SIDs as a method of regulating urban expansion. We asked him if he was a proponent of this kind of development, and the question was a perfect start to our conversation.
We began by talking about the benefits of placing developmental control in the hands of SIDs, and particularly about the incentive investors have to succeed. When a developer has a vested interest in the success of a project by risking his own personal wealth through his investment of time and money, that developer will be better positioned to make the right calls for the developing community. "At first glance it seems like development has been cut loose when control is placed in the hands of the private sector, but that's not the case," says Dreessen. SIDs are generally managed by experienced developers, and municipalities still enjoy a degree of regulatory oversight. We suggested that it might be better if politicians and municipalities played a limited role in development, as they are often distracted by competing interests. The biggest advantage of SIDs, it seems, is that they provide a mechanism by which cities can "grow systematically and contiguously" without municipal manipulation of funds.
We asked what can be made of the large number of SID bankruptcies that have occurred over the years. Mr Dreessen explained to us that the main cause of SID failure is never a technical problem, but rather a timing problem. Will an SID earn enough money fast enough to pay off it's bond? Sometimes, a development does not receive the influx of new homeowners it had anticipated and is therefore in need of debt-restructuring. As a psuedo-public entity, an SID is entitled to file for Chapter 9 Bankruptcy, and through the bankruptcy process, an SID can receive more time to pay back debts at lower interest rates.
"Sanitary Improvement Districts are one of the most progressive means by which urban development can be funded," he began. Those who invest in SIDs are "ready, willing, and able to shoulder the risk. Ultimately, they are the ones who receive what the development can pay." Placing the financial burden and risk of private investors is definitely good for tax payers and municipalities, but we wonder what incentive would private developers have to build projects that benefit the community, but do not make them money. Parks for instance take up space that could be used for more housing, and more revenue. How do investors balance the needs of the community with the health of their own financial portfolios? We weren't able to ask Mr. Dreessen this question, but we hope to address it in a follow-up interview if we get a chance. So stay tuned...
Dreessen also mentioned Papillion's recent appearance in Money Magazine's 2013 Top 50 Places to Live, which we both found interesting having both lived in Sarpy County for the majority of our lives... Papillion ranked #8.
We were interested in further exploring Sanitary Improvement Districts (SIDs) and wanted to know what Mr. Dreessen thought about SIDs as a method of regulating urban expansion. We asked him if he was a proponent of this kind of development, and the question was a perfect start to our conversation.
We began by talking about the benefits of placing developmental control in the hands of SIDs, and particularly about the incentive investors have to succeed. When a developer has a vested interest in the success of a project by risking his own personal wealth through his investment of time and money, that developer will be better positioned to make the right calls for the developing community. "At first glance it seems like development has been cut loose when control is placed in the hands of the private sector, but that's not the case," says Dreessen. SIDs are generally managed by experienced developers, and municipalities still enjoy a degree of regulatory oversight. We suggested that it might be better if politicians and municipalities played a limited role in development, as they are often distracted by competing interests. The biggest advantage of SIDs, it seems, is that they provide a mechanism by which cities can "grow systematically and contiguously" without municipal manipulation of funds.
We asked what can be made of the large number of SID bankruptcies that have occurred over the years. Mr Dreessen explained to us that the main cause of SID failure is never a technical problem, but rather a timing problem. Will an SID earn enough money fast enough to pay off it's bond? Sometimes, a development does not receive the influx of new homeowners it had anticipated and is therefore in need of debt-restructuring. As a psuedo-public entity, an SID is entitled to file for Chapter 9 Bankruptcy, and through the bankruptcy process, an SID can receive more time to pay back debts at lower interest rates.
"Sanitary Improvement Districts are one of the most progressive means by which urban development can be funded," he began. Those who invest in SIDs are "ready, willing, and able to shoulder the risk. Ultimately, they are the ones who receive what the development can pay." Placing the financial burden and risk of private investors is definitely good for tax payers and municipalities, but we wonder what incentive would private developers have to build projects that benefit the community, but do not make them money. Parks for instance take up space that could be used for more housing, and more revenue. How do investors balance the needs of the community with the health of their own financial portfolios? We weren't able to ask Mr. Dreessen this question, but we hope to address it in a follow-up interview if we get a chance. So stay tuned...
Dreessen also mentioned Papillion's recent appearance in Money Magazine's 2013 Top 50 Places to Live, which we both found interesting having both lived in Sarpy County for the majority of our lives... Papillion ranked #8.
No comments:
Post a Comment