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$6 million Indy jail fail

July 1, 2015

The city of Indianapolis spent more than $6 million on a justice center proposal that died last month on the floor of the City-County Council. Law firms collected nearly 80 percent of the total.

California-based Nossaman LLP was paid $2.7 million, while Indianapolis firms Bingham Greenebaum Doll LLP and Bose McKinney & Evans LLP received $1.9 million and $200,000, respectively, from the city.

Meanwhile, animosity has boiled over between representatives of Indianapolis Mayor Greg Ballard and the council. Both sides point fingers over who’s to blame for a year-and-a-half-long process that scrapped an ambitious $1.75 billion, 35-year public-private partnership plan to combine criminal courts, jails and related offices on the site of the former General Motors stamping plant west of downtown.

On June 9, the council voted against considering a pared-back proposal that reduced overall cost and the number of jail beds from 3,000 to a little more than 2,500. Doing so, however, cost the support of Democratic Marion County Sheriff John Layton.

center-factboxMore than a week after the council’s rejection, the administration still hadn’t thrown in the towel on the justice center. But it wasn’t extending olive branches to the council, either.

“Council leadership sustained a six-month coordinated effort to block this project from public vetting, while simultaneously attacking the administration for a lack of transparency,” said David Rosenberg, deputy chief of staff for the administration and Ballard’s point person on the justice center. “Of course, we would welcome the opportunity to discuss the justice center proposal in a constructive, public setting. But that opportunity has yet to materialize with the council.”

Ballard’s Communications Director Jen Pittman said the council vote was politically motivated and warned, “It is something for which they need to be held accountable now.”

Ballard, a Republican, is not seeking a third term as Indianapolis mayor, and several council members have said that’s a reason not to saddle a project of this magnitude on a future administration that had no input on it. Some councilors also criticized the process as lacking community input and council involvement in determining whether a public-private partnership should be preferred over traditional public-infrastructure financing options.

“The administration made that decision unilaterally,” council CFO Bart Brown told the P3 trade journal Infrastructure Investor.

As the proposal neared council consideration, key stakeholders backed off their initial support. Democratic Prosecutor Terry Curry noted a promised office building housing his staff and that of the Marion County Public Defender Agency and other court-related services was no longer in the proposal. He said building a jail and courts complex remote from those offices would create a logistical nightmare.

A few days after the council rejected the justice center plan, Council President Maggie Lewis, a Democrat, announced a new effort to evaluate a justice center through the council’s Criminal Justice Planning Committee.

“That new process must promote complete transparency, community engagement, and the inclusion of all city-county stakeholders from the outset,” Lewis said in a statement. “Given the significant public safety challenges we face, we can ill afford to spend even one additional minute debating a proposal that’s time has passed.”

Lewis did not respond to messages seeking comment.

Rosenberg, though, said Lewis’ proposal would “needlessly start from square one and waste even more public resources.” He said the developer the city chose to build and operate the justice center, WMB Heartland Justice Partners, continues to be engaged in discussions.

An official with WMB, who spoke to Indiana Lawyer on the condition he not be named, said the multinational consortium remains involved and committed to a justice center development in Indianapolis. But WMB has adopted the posture, “Let us know if you need anything.”

“Indianapolis is a great place, and this project would be extremely innovative for the city and be something nationally that would be pointed to,” the official said. The official noted that even critical City-County Council analysis of the proposal projected hundreds of millions of dollars in savings for taxpayers over the 35-year project span.

“The infrastructure development industry nationally is scratching their heads,” the official said. “The industry has never been part of a process that unraveled as quickly as this one.

“Infrastructure development usually stays above the political fray given the job creation elements, long-term societal benefits and local community improvements,” the official said. “Here, unfortunately, it doesn’t seem like that was the case.”

The official said hundreds of meetings with stakeholders appeared to generate widespread initial stakeholder buy-in for the proposal.

“What we can control is the validity of our proposal,” the official said. “The political process has effectively killed this project unless there is a critical mass of decision-makers that decide otherwise in the coming months.”

The City-County Council could have reviewed the proposal in committee in early 2015, the official said, but consideration of the proposal by council committees didn’t begin until April.

“The can got kicked down the road for reasons I don’t understand in an interest-rate environment that has never been so competitive and is very likely to rise.”

The timing of the project ahead of a municipal election season in which Ballard won’t seek a third term was a key factor in its demise, the official said.

“If a new administration wants to tackle this problem, it will be in a different form, thereby wasting a tremendous amount of time and effort” stakeholders and developers put into the justice center plans. “Tackling this project under a new administration would restart the process from the beginning. That process includes land acquisition, environmental assessment, ... competitive vendor selection, and financing. That will likely take years.”

Republican Councilor Jeff Miller represents the district where the justice center was going to be located, and he championed the proposal. He said there’s wide agreement that the city needs to do something about its aging jail. “How do you get there from here? I don’t know,” he said. “You’ve got to have a political will to say everybody’s not going to be happy.”

“What I think may end up happening is we may build a smaller facility,” Miller said. “Several locations that have been ruled out may come back into play.”•

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