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30–693 PDF 2006

MONITORING OUR NATION’S PULSE: A LOOK AT

EXISTING FEDERAL, STATE AND LOCAL ECONOMIC DEVELOPMENT TOOLS AND WHETHER

THEY ARE ADEQUATE IN ATTRACTING AND

KEEPING BUSINESSES IN AMERICA’S HEARTLAND CITIES

HEARING

BEFORE THE

SUBCOMMITTEE ON FEDERALISM

AND THE CENSUS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 21, 2006

Serial No. 109–195

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCHMIDT, Ohio

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

DAVID MARIN, Staff Director

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON FEDERALISM AND THE CENSUS

MICHAEL R. TURNER, Ohio, Chairman

CHARLES W. DENT, Pennsylvania

CHRISTOPHER SHAYS, Connecticut

VIRGINIA FOXX, North Carolina

——— ———

WM. LACY CLAY, Missouri

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

JOHN CUADERES, Staff Director

JON HEROUX, Counsel

JULIANA FRENCH, Clerk

(III)

C O N T E N T S

Page

Hearing held on March 21, 2006 ............................................................................ 1

Statement of:

Carlson, Tom, mayor, city of Springfield, MO; Diane May, executive director, Southwest Missouri Council of Governments; Clint Thompson, director of planning and community development, city of St. Joseph,

MO; Jeff Sanford, president, Memphis Center City Commission; and

Jim Cloar, president and CEO, Downtown St. Louis Partnership, Inc. ... 7

Carlson, Tom .............................................................................................. 7

Cloar, Jim .................................................................................................. 66

May, Diane ................................................................................................. 15

Sanford, Jeff ............................................................................................... 58

Thompson, Clint ........................................................................................ 23

Letters, statements, etc., submitted for the record by:

Carlson, Tom, mayor, city of Springfield, MO, prepared statement of ........ 10

Cloar, Jim, president and CEO, Downtown St. Louis Partnership, Inc.,

prepared statement of ................................................................................... 69

May, Diane, executive director, Southwest Missouri Council of Governments, prepared statement of ...................................................................... 18

Sanford, Jeff, president, Memphis Center City Commission, prepared

statement of ................................................................................................... 60

Thompson, Clint, director of planning and community development, city

of St. Joseph, MO, prepared statement of .................................................. 25

Turner, Hon. Michael R., a Representative in Congress from the State

of Ohio, prepared statement of .................................................................... 5

(1)

MONITORING OUR NATION’S PULSE: A LOOK

AT EXISTING FEDERAL, STATE AND LOCAL

ECONOMIC DEVELOPMENT TOOLS AND

WHETHER THEY ARE ADEQUATE IN ATTRACTING AND KEEPING BUSINESSES IN

AMERICA’S HEARTLAND CITIES

TUESDAY, MARCH 21, 2006

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON FEDERALISM AND THE CENSUS,

COMMITTEE ON GOVERNMENT REFORM,

Springfield, MO.

The subcommittee met, pursuant to notice, at 1 p.m., in the

Springfield City Council Chambers, Springfield City Hall, 830

Boonville Avenue, Springfield, MO, Hon. Michael R. Turner (chairman of the subcommittee) presiding.

Present: Representatives Turner and Blunt.

Staff present: John Cuaderes, staff director; Jon Heroux, counsel;

and Juliana French, clerk.

Mr. TURNER. A quorum being present, the Subcommittee on Federalism and the Census will come to order.

I want to welcome everyone to the subcommittee’s field hearing

entitled, ‘‘Monitoring Our Nation’s Pulse: A Look at Existing Federal, State and Local Economic Development Tools and Whether

They are Adequate in Attracting and Keeping Businesses in America’s Heartland Cities.’’

I want to thank Congressman Roy Blunt for asking the subcommittee to come here today and hear the wonderful examples of

what has been accomplished in the city of Springfield. As you

know, Congressman Blunt has been a leader in ensuring the vitality of the Federal programs that we heard about today in Springfield that have been utilized in accomplishing the economic development and revitalization. And it is certainly important that on the

national level, we have his love for urban cores and for economic

development and job creation. So many of the projects that we

heard about today included Congressman Blunt’s leadership and

participation and it is excellent that your community has pulled together in such a great way, it is a phenomenal team.

And, Mayor Carlson, I want to thank you for having us and I

want to thank you for conceding this chair for us to be able to have

the hearing.

Mayor CARLSON. It is a great honor to have you sitting there.

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Mr. TURNER. I will not get too comfortable here, but I must tell

you that as a former mayor, I do appreciate everything that you

do and the fact that you have allowed us to come here today to

hear about ways that you have used Federal programs to benefit

your community.

The role of the Nation’s economic development initiatives and

programs is to create jobs, help retain existing jobs and stimulate

industrial and commercial growth in economically distressed areas

of the United States.

They are also important in helping local communities create

more affordable housing. Over the years, Congress has created a

wide variety of Federal economic and community development programs and incentives to help rural and urban communities overcome periods of severe economic distress.

Before becoming a Member of Congress, I served as mayor for

the city of Dayton for two terms, 8 years, and I can tell you that

we could not have had the kind of success our community saw in

its revitalization and redevelopment without the many different

programs available to us on the Federal level at that time.

Some of these programs on the Federal level are at risk and others need to be improved. That is why our subcommittee is here

today. We want to hear how these programs have impacted other

heartland communities like Springfield, St. Louis, St. Joseph or

Memphis. We want to learn how these programs have helped and

where they have fallen short. We hope that our witnesses today

will provide us with a fresh perspective on how they are using the

Nation’s economic and community development portfolio and

whether Congress can improve these programs to better meet the

needs of heartland communities. I am sure our witnesses will provide us with better insight into these programs.

Before we begin with our witness testimony, I do want to thank

the city of Springfield and Mayor Carlson for hosting us today and

for facilitating a very interesting bus tour today. We saw some of

the great examples of the community pulling together in privatepublic partnerships to achieve revitalization.

And I want to again thank Representative Roy Blunt for having

us here and also for his leadership on the national level that has

assisted both your community and mine as we have made certain

that there have been economic development tools available for our

communities.

With that, I want to recognize Mr. Blunt for any opening comments he might have.

Mr. BLUNT. Thank you, Chairman Turner. I am pleased that you

would come here and have this hearing. I know you are going to

make all of the questions, the answers, the testimony available to

your committee. I am particularly pleased that you have had a

chance to see what is going on here in Springfield, in the center

city of Springfield, and you and I are going to be able to hear more

about that from Mayor Carlson and from Diane May and hear

about what is going on in other cities that are well represented

here today.

I think the purpose of this hearing is clear and the chairman’s

vision for it. Clearly, as a former mayor, he brings incredible insight to his job as chairman of this subcommittee. We have a handVerDate 11-MAY-2000 12:01 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 D:\DOCS\30693.TXT HGOVREF1 PsN: HGOVREF1
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ful of mayors in the Congress and they make real differences in the

discussions we have about issues like eminent domain and Federal

programs that we are going to be discussing today.

You know, any insight we can get on how these programs are

working, which of the programs could be better, what programs are

not doing what they need to do and what programs are doing everything they need to do and need to be encouraged to be expanded

even further. As you all know, one of the big debates in the last

Congress—at least it appeared it was going to be a big debate—

was whether or not we would adopt the administration’s proposals

to significantly change, many said eliminate, the community development block grant program. But individuals like the five of you

all came forward from all over the country and explained how that

program was used. Now I am sure the program was not used in

the best way in every community and we hope that we can find

ways to ensure that it is, but, you know, giving communities the

flexibility to try things that work, to share things with other communities—uniquely in our system, the States and the communities

within the States all can serve as laboratories for change. And any

time we develop strait jackets that do not allow those laboratories

to function that way, we have really failed to take advantage of one

of the great, unique aspects of the way our structure is set up.

And so I am certainly glad you are here. I am glad to be in the

Springfield City Council Chambers. I do not think I have ever sat

here before. In fact, most of the time I have ever spent in this room

was years ago when I was the chief elections authority for Greene

County, and we would frequently have election worker training sessions in this room. And the closest I ever got to sitting here was

standing right down there and going through the process of what

would happen on election day in the 101 precincts we had in

Greene County at that time and I think there are more now.

But I am delighted to be here and again, I am particularly grateful that Congressman Turner, also clearly in his heart and his experience, Mayor Turner, is here wanting to make these programs

work in the best way possible. He has already talked to me in the

last few hours we have been together here about a couple of ideas

he has legislatively in the brownfield area and other areas that I

know I am going to take a closer look at, as I do almost everything

that Mike Turner brings to my attention that impacts what we can

do to make our cities better. And chairman, thank you for letting

me join you here at the table today.

Mr. TURNER. Thank you, Roy, and I appreciate the tour that you

organized of the successes that you have had in economic development. We have had a great conversation all day about the Federal

programs and the successes that have occurred here in Springfield.

And I wanted to raise that issue to tell you that even though it

has been a very exciting and fruitful discussion, the importance of

this discussion is that we will now be able to get your comments,

your enthusiasm, your successes on the record, as part of the Federalism and Census Subcommittee. So your testimony and your

comments today, both in answers to our questions and in what you

are about to say will enter the Federal record as we look to preserving these programs and hopefully reforming them in ways that

are useful to you.

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We will now start with our witnesses. Today, we will hear from

Mayor Tom Carlson of Springfield; Diane May, executive director

of the Southwest Missouri Council of Governments; Clint Thompson, director of planning and community development for the city

of St. Joseph, MO; Jeff Sanford, president of the Memphis Center

City Commission; and Jim Cloar, president and CEO of Downtown

St. Louis Partnership.

I want to thank all of you for being here today. I want to thank

you for the time that you have taken in preparing for this testimony and for the time that you are giving us today. Each witness

has kindly prepared written testimony, which will be included in

the record of this hearing. Witnesses will notice that there is a

timer light at the witness table. The green light indicates that you

should begin your prepared remarks and the red light indicates

that your time has expired. The yellow light will indicate when you

have 1 minute left in which to conclude your remarks. And we will

be lenient with the time, because we do want to make certain that

we get your testimony today.

It is the policy of this committee that all witnesses be sworn in

before they testify. So if you would please rise and raise your right

hands.

[The prepared statement of Hon. Michael R. Turner follows:]

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[Witnesses sworn.]

Mr. TURNER. Please let the record show that all the witnesses

have responded in the affirmative. And with that, we will begin.

Mayor Carlson.

STATEMENTS OF TOM CARLSON, MAYOR, CITY OF SPRINGFIELD, MO; DIANE MAY, EXECUTIVE DIRECTOR, SOUTHWEST

MISSOURI COUNCIL OF GOVERNMENTS; CLINT THOMPSON,

DIRECTOR OF PLANNING AND COMMUNITY DEVELOPMENT,

CITY OF ST. JOSEPH, MO; JEFF SANFORD, PRESIDENT, MEMPHIS CENTER CITY COMMISSION; AND JIM CLOAR, PRESIDENT AND CEO, DOWNTOWN ST. LOUIS PARTNERSHIP, INC.

STATEMENT OF TOM CARLSON

Mayor CARLSON. I hope that does not prevent me from a little

puffing—[laughter]—about our community.

Welcome. We want to thank you for being here today. This is a

historic day in our community. I do not think we have ever had a

congressional field hearing here, that I know of in the 20-some

years I have been here. And to have it in City Chambers, it will

definitely go in our local history books. So we want to thank you

for that.

What I would like you to think of in terms of our community is

thinking of it as a home. And in a home, there are a lot of people

that go into building a home and you have to have tools to do it.

We here in Springfield created a city where 3 percent of the population lives, but 25 percent of the new jobs in the State were created in this area last year. It is not an accident, it is a result of

that team working together. And here, that consists of public-private partnerships and public-public partnerships. It runs the

gamut. We work well with the county, we work well with the

school system, we work well with the local university, and we work

particularly well with the private sector. And as a consequence of

that, we have built a community that is known throughout the

State as the economic engine for the State.

But as I say, we need tools to do that. And I like the definition

of collaboration that I have used from time to time, and it is essentially this: Collaboration is what can be done together that could

not be done separately. Those tools that we need and the people

on the team that we need to make it happen is the Federal Government. And I want to just detail briefly some of the tools that we

have used here in this community to create that economic engine

and to create a downtown that in the last 10 years has seen over

$200 million in investment.

Let me start with the community development block grant program. We have been the recipient of that for a long time. Approximately 20 years ago, we decided rather than using the money for

administration or building a sidewalk, to put it into revolving loan

programs. That fund has now grown into over $25 million and has

been a big part of what we have been able to do in the downtown

area, by using it for gap financing with banks, with soft seconds,

that sort of thing, facade loans. We created, I think we can attribute over 375 new jobs, $25 million in investment in the downtown area, just because of that.

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Second, the Section 108 program and the brownfield economic development initiative, we used that at the Universal Paint building

that you have seen today and that is the anchor for what is going

to be our West Meadows development. It would not have been possible to have done that without those funds, and with the flexibility

that we have as a consequence of that.

We have also taken advantage of the economic development initiative [EDI] grants. Those have made possible the 900-space car

park that we have here. I think it is one of the nicest looking car

parks you could find anywhere. It is great to see at night and it

overlooks the best minor league baseball stadium, according to the

minor league baseball teams, in the country, that we have been

able to do, again with using Federal dollars and the ability to use

judiciously eminent domain.

Let us talk about the Federal historic tax credits. I am a developer, I do use those myself, and because of the complexities and the

expense in rehabbing old buildings, what you have seen this morning and last night in going downtown would not have been possible

without the historic tax credit. I can tell you that is absolutely the

case. It would be a disaster for cities throughout the country to see

that program cut back.

Any community has more dollars in its infrastructure in the

downtown area than anywhere else. You have the roads, you have

the storm sewers, you have the electric plants. It makes no sense

to let the area degenerate and then have to be building new on the

periphery, because the issue in the downtown area is not going

away. That has been a program that has worked with the private

sector, that has done a tremendous job.

Brownfield grants—through Congressman Blunt’s help, we acquired what was an eyesore and something we did not know what

to do with, which was a white elephant downtown, an old feed mill,

what was called MFA Feed Mill. We used a brownfield grant to

clean up the environmental issues, and then we conveyed it to the

University for a dollar. And then with that, the University, through

a very entrepreneurial approach with its Center of Applied Science

and Engineering, is building a nano-technology center that is

bringing $80,000 a year jobs into our community. These are jobs for

the future. These are jobs for the 21st century. Those things would

not have been possible if we had not been able to leverage these

Federal dollars and to work in partnership.

The thing that I would like to tell you and to tell the community

is that we have been good stewards with the taxpayers’ dollars. But

we at the local level, just by definition, have a better idea of what

can work and what is needed than people that are removed from

it in Washington, DC. So there has to be a degree of flexibility. We

always leverage these funds and if they came with so many strings

attached that they were not available to us, the things that we

have been able to accomplish here in our community would not be

possible.

So this is a message—I am also on the board for the National

League of Cities. The CDBG is the No. 1 issue for the National

League of Cities this year, and preservation of that and what it can

mean to our local community. Most of our money is earmarked, it

is dedicated and if the community development block grant funds

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were curtailed, it would leave a much bigger gap than what you

might think in our economic tool set.

So in closing, I would just like to say, thank you, Chairman

Turner; thank you, Roy Blunt, for bringing your field hearing here

and allowing us to present this issue to you at our local level. You

do great honor to our community.

Mr. TURNER. Thank you, Mayor; thank you for hosting us.

Ms. May.

[The prepared statement of Mayor Carlson follows:]

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STATEMENT OF DIANE MAY

Ms. MAY. Congressman Turner, Congressman Blunt, I appreciate

the opportunity to testify before you today. My name is Diane May

and I am the executive director of the Southwest Missouri Council

of Governments.

SMCOG is one of Missouri’s 19 regional planning commissions

and we serve the counties of Barry, Christian, Dade, Dallas,

Greene, Lawrence, Polk, Stone, Taney and Webster Counties and

the municipal governments within those counties. Our region’s

2004 population was estimated at over 542,000.

Today, I would like to talk to you from the perspective of the

smaller communities within our region. Mayor Carlson has already,

I think quite appropriately, addressed issues from the metro perspective, but our smaller communities in our region are also part

of our local and regional economy and very important to the success of Springfield as is Springfield’s success important to them.

From the perspective of our smaller communities, many of the

programs we work with in promoting economic development, which

is basically an improving quality of life issue, are related in many

cases to the very basic programs that are available in that economic development toolbox.

For example, infrastructure programs that provide for basic

water, sewer, road improvement as well as technological improvements are still absolutely essential in our smaller communities, for

them to be able to thrive and create an environment for private investment and business development and job creation.

Just to give you an example, we have worked with some very

small communities over in Polk County and also in Webster County that just now are getting their very first centralized sewer system. These communities could not survive, they have no hope for

the future without having that basic essential infrastructure and

they are getting that through combinations of CDBG funds and

other State programs.

Also, other things that are really important I think throughout

our region is continued investment in work force development. This

is essential both at the State and Federal level. It is just critical

to our success both as a region and as a State. To give you an example I think of a successful initiative directed toward work force

development, this comes from the Economic Development Administration, we worked with the Monett School District to achieve a

grant from EDA, an approximately $1.25 million infrastructure development grant from EDA for the construction of a new Southwest

Missouri Area Career Center. This career center serves 14 public

school districts and over 15 communities within that area. The

$1.25 million EDA investment is matched with a local bond issue

and other resources for the construction of an approximately $7.3

million state-of-the-art facility that will enhance both secondary

and post-secondary educational and vocational training, and also

will be providing customized training programs that have already

been requested by businesses and industries in that area that those

programs cannot be provided at the present time. So this was a

very important investment in work force development within our

region in our smaller communities.

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Another item I would address that maybe you do not think of,

but disaster recovery, and I think CDBG is a good example of this.

We had very severe tornadoes that hit our area in May 2003 and

in fact caused catastrophic damages in a couple of our small communities, including Pierce City. The flexibility of the CDBG program enabled the Missouri Department of Economic Development

to work with our Federal partners and come in and use existing

CDBG funding to fund essential projects for recovery that are most

definitely tied to the economic recovery of those communities. And

in fact, Pierce City’s local sales tax revenues are, within 2 years

after the disaster, higher than they were before. So their recovery

efforts have been very successful and it continues to be important

to the area.

I would also have some suggestions regarding how we might improve upon some programs, things that maybe we do not have right

now. One might be cost reimbursement, and I would use Springfield as an example. The city of Springfield has successfully

partnered with the Missouri Department of Transportation to put

up the front money for certain transportation improvements that

were scheduled at longer term. And so they have been able to put

those improvements in and then be reimbursed by MODOT at a

later date. Perhaps we may find a way to enable cost reimbursement in some of our economic development programs that would

allow our communities to move forward more quickly, because time

is of the essence when you are dealing with private investment and

business development.

Also another area that perhaps we could consider is more programs for land acquisition. Many of our smaller communities may

have the resources or infrastructure resources, but they do not

have the land to put in such things as business parks. We need to

find a way to make this happen. Land costs are continuing to go

higher in our communities and that might be one option that we

could be taking a look at.

In terms of general comments, I would say overall, regardless of

the program, we need to find a way to deal with the timing, the

regulations, the numbers, the variations in the different programs.

It is very, very confusing and many people do not know. I, even

dealing with programs, could not begin to tell you the myriad of

rules and requirements of all the various programs. When you are

dealing in the smaller communities, they do not have a clue. So we

have to find a way to make things more timely, more flexible, more

easily understood.

Also, I would recommend that we need to find ways that we can

make the application processes for our programs more consistent.

We should be able to use consistent data sets for putting together

applications. That information should be readily available and not

be as confusing as it is for many of our programs.

And I would conclude with saying that I very strongly go along

with Tom Carlson’s recommendations on the issues of regional cooperation and coordination. I think it is really essential that we leverage all the resources that we have and that we be able to work

together. So any efforts that can be made to encourage approaching

this from regional planning issues, working together so that all the

partners can come together and best use the resources to leverage

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to assist all of our communities in improving quality of life is very

essential.

Thank you.

Mr. TURNER. Mr. Thompson.

[The prepared statement of Ms. May follows:]

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STATEMENT OF CLINT THOMPSON

Mr. THOMPSON. Chairman Turner, Congressman Blunt, members

of the subcommittee, thank you for the opportunity to appear before you today to discuss St. Joseph’s efforts toward brownfield redevelopment and how proposed changes being considered regarding

the use of eminent domain could affect brownfield projects. My

name is Clint Thompson, I am the director of planning and economic development for the city of St. Joseph, MO.

Development of our brownfield areas is key to the success of revitalizing our downtown in St. Joseph. In 2000, we were awarded an

EPA brownfield assessment grant to help redevelop 244 acres

south of our downtown on the Missouri River. The city’s ultimate

goal for this area is to create new jobs and remove blight.

EPA’s brownfield grants have significantly helped cities clean up

brownfield properties. Through the assistance of EPA, we were able

to use these grant funds to perform environmental assessments on

properties owned by Burlington Northern-Santa Fe Railroad, to

help identify environmental constraints that were holding this

property back from redevelopment.

Since environmental contamination on a property is the responsibility of the property owner, this fear created a major disincentive

for BNSF to proceed with the city’s desire to redevelop this land.

BNSF’s fear of having an environmental assessment performed on

property they had no intention to sell resulted in a stalemate. To

move discussions forward, one tool the city used to help spur negotiations of the land sale was the city’s consideration of eminent domain for economic development purposes.

Prior to this project, eminent domain actions undertaken by the

city had only been for the purpose of constructing public infrastructure. The city of St. Joseph has never before engaged in the use

of eminent domain to acquire private property for economic development purposes. However, without this tool, the city would not

have been able to proceed with the redevelopment of this

brownfields area.

As a local government, we are concerned with the proposed

changes regarding the use of eminent domain and hope that proposed restrictions on the use of eminent domain as an economic development tool, because of abuses real or perceived, will not prohibit brownfield redevelopment efforts across the country.

One concern that we have with the use of eminent domain is the

definition of blight. The city of St. Joseph believes that communities should be allowed to make that determination of blight in accordance with existing State laws that best serve the community.

Allowing local governments to make determination of the definition

of blight would provide an additional safeguard to those concerned

with abuse of this definition.

In working to redevelop this brownfield site, we found that rail

companies are motivated by the market. Creating a situation that

rewards these companies to work with local governments for redevelopment efforts is critical in enticing rail companies to participate in the process of brownfields redevelopment.

Since rail companies are not interested in working with local,

State and Federal agencies on redeveloping former rail properties,

ultimately a property transaction must be beneficial to the rail

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company. Local governments should use available incentives to ensure that property transactions and redevelopment plans succeed.

Tax incentives are a good tool to entice development of brownfield

sites. The government also needs to develop a tax credit program

that allows rail companies to donate their vacant land to benefit

economic development efforts throughout the country. Providing incentives to rail companies to dispose of property they no longer utilize for rail service would significantly help redevelopment of

brownfield properties throughout the Nation. Increasing the options for communities to negotiate with rail companies when developing brownfield sites will help to redevelop brownfield areas

quicker.

The city of St. Joseph is excited to hear about your recent proposal to create tax credit incentives for brownfields cleanup and redevelopment efforts. This type of program will help stimulate private investment in brownfield areas.

St. Joseph has used a variety of economic tools to help jumpstart

development in our brownfields area. Through the use of economic

development tools, the city recently secured a company to locate a

biodiesel plant on this former brownfield site. This biodiesel plant

will not only create new jobs for the city, but more importantly,

will redevelop 30 acres of formerly vacant, under-utilized contaminated property.

Without the support of the Federal Government to provide incentives to encourage the development of brownfields, communities

across the country will be faced with the challenge of redeveloping

vacant, under-utilized, contaminated property with no tools in their

toolbox.

Thank you for the opportunity to speak today on efforts regarding brownfields redevelopment.

Mr. TURNER. Mr. Sanford.

[The prepared statement of Mr. Thompson follows:]

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STATEMENT OF JEFF SANFORD

Mr. SANFORD. Chairman Turner, Congressman Blunt, I am honored by your interest in my opinions on a subject that I believe is

key to the future of our country: re-establishing the economic and

social viability of central cities, and the adequacy of Federal, State

and local economic incentives in support of that effort. I have devoted the last 8 years of my career to the task of revitalizing downtown Memphis because I am convinced my community, like communities across the Nation, cannot afford the cost of unbridled

urban sprawl.

I am president of the Memphis Center City Commission, a public-private partnership charged with responsibility of coordinating

the redevelopment of downtown Memphis. As we define it, downtown is a 6.5 square-mile area hard up against the banks and

bluffs of the mighty Mississippi. It includes a traditional business

district core and a mixed-use neighborhood adjacent to it. Within

downtown’s boundaries, we have more than $3 billion in projects

underway. I think it is significant to note that of that total, privately developed projects account for the lion’s share, about $2.5

billion.

Numbers tell our story. There are approximately 27,000 residents in downtown Memphis. We have close to 70,000 people working downtown. Downtown has become the sports and entertainment and cultural center of its region visited now annually by millions of people.

Add to this the nearly perfect new 2,100-seat Performing Arts

Center, home of the Memphis Symphony, the moving Civil Rights

Museum, the Orpheum Theater, which we call the Broadway touring capital of the South, a vibrant arts district—all of this, not to

mention the crown jewel of downtown, our magnificent riverfront,

which itself is in the midst of an exciting long-range enhancement

plan. A plan that we hope will include the project recently announced by Springfield’s own Bass Pro, to create a destination

mega store and outdoor experience in what was formerly a 22,000-

seat public sports and concert arena.

But there is an even bigger story and the one I came to tell you

today. While Bass Pro and ballparks and new condos by the basketful surely signal the reversal of our downtown’s fortunes, I believe the real legacy will be in our city’s decision to tackle the poverty-stricken, rundown neighborhoods that lie adjacent to downtown’s core. And by replacing stereotypical public housing with lowrise, mixed-income housing, we are not just changing the face of

another downtown neighborhood, we are changing people’s lives.

A case in point, and a poster child for Federal economic development funding is the Uptown Project in the neighborhoods just

north of downtown’s core. Fueled by a $37 million Hope VI grant,

the city and private developers have replaced two old dead-end

public housing projects with low-rise, mixed-income apartments

and new single-family homes built on hundreds of vacant lots in

the area. The beauty of it is, it is working. We literally have doctors and lawyers living next door to residents who were formerly

in public housing.

And based on the success of this uptown project, and after having recently won additional Hope VI funding, the city, through its

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Memphis Housing Authority, has started two similar projects in

other neighborhoods within downtown’s ring. We now believe, subject to the availability of Federal funding that makes these projects

possible, that Memphis—not just downtown Memphis, but Memphis—can be free of public housing projects within the next 5

years.

So far, I am proud of downtown Memphis and its redevelopment

story, but I must give credit where credit is due. Virtually none of

it would have happened without the financial assistance of local,

State and Federal programs. Inner city development is costly, and

time and again, public initiatives have spelled the difference between projects happening and not happening.

The footprints of Federal economic development assistance programs are all over the downtown Memphis renaissance. Strategic

use of Federal historic tax credits, CDBG, the Section 108 loan program, BEDI grants, Renewable Community Tax Credits, New Market Tax Credits, all of these, including outright congressional appropriations, have been essential to the redevelopment of downtown.

Yes, every government program is attached to reams of red tape

and true, the Federal bureaucracy can be painfully slow and confusing. But, as downtown Memphis, downtown Springfield, downtown Dayton and downtowns across America are coming back, my

concern is not so much with the complexities of the programs, as

it is with the continued availability and predictability of Federal

economic development support in the future.

I am understanding and sympathetic to the budgetary implications of wars and hurricanes, but I am also keenly aware of the

consequences of failing to rebuild our inner cities. We have made

a good start in Memphis, but we have only done in Memphis about

40 percent of what needs to be done.

Thank you as Members of Congress for all that you have contributed in support of central city revitalization, but keep in mind, we

still have a long way to go to reverse decades of neglect. Please continue to make the remaking of our town centers a Federal economic

development priority.

Thank you very much.

Mr. TURNER. Thank you. Mr. Cloar.

[The prepared statement of Mr. Sanford follows:]

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STATEMENT OF JIM CLOAR

Mr. CLOAR. Mr. Chairman, Congressman Blunt, thank you very

much for the opportunity to be with you. I am gratified to learn

that a former local official is heading this very important effort. I

am also grateful that I could have the slide on downtown St. Louis

up here and appreciate that since I have Turbo Tax on my laptop,

my 1040 isn’t showing up here for the entire room. [Laughter.]

That has been known to happen.

The Downtown St. Louis Partnership is a privately funded, notfor-profit organization supported by member dues and sponsorships. On behalf of that private sector, we act as an advocate, a

catalyst and a facilitator for downtown and center city revitalization. In that role, we also act as managers for a $2.6 million assessment district that is funded by property owners within a 160-block

portion of St. Louis’s downtown area.

Through that district, we provide enhanced management services

over and above those offered by local government with programs

including security, maintenance and economic development. And it

is particularly economic development that I wanted to address

today.

We heard a great story this morning about the efforts of the community here in Springfield, people coming together to create a

downtown plan. In 1999, the citizens of St. Louis came together

and developed a plan that was funded by the private sector; namely, the Danforth Foundation and Bank of America. The other unusual thing about that plan was that it emphasized action. And it

has paid off. In the years since that was adopted, we have had $3.3 billion of

new public and private investment in our downtown area and we

have another $1 billion that is underway. The turnaround has been

remarkable. National columnist Neal Pierce has referred to it as

one of the most remarkable turnarounds he has seen anywhere in

the country. And just 2 weeks ago, a number of us from the community were in Washington, DC, to receive a national award from

Partners for Livable Communities.

Many of those projects have been big ones, like restoration and

expansion of a convention center hotel, one of the original Statler’s

that had been empty for many, many years. Just a week ago, we

rededicated the old post office right in the center of downtown. If

it looks familiar, it is similar to the old Executive Office Building

in Washington, DC. So it has more than just local significance, it

has national significance. By the way, this used a whole myriad of

tax credit programs, including one of the first to use the New Markets Tax Credit program.

Being here in Springfield and with my colleague from Memphis

on the right, I have to talk about the St. Louis Cardinals. In a couple of weeks, we will have a ribbon-cutting for our new baseball

stadium and, just as importantly, the six-block area just to the

north that was a former site of old Busch stadium will become

Ballpark Village, a mixed-use project with office, residential and

entertainment uses.

Here’s the way that this has broken out in downtown, and I

think what is particularly telling is in the upper right hand corner,

almost 25 percent of the investment in our downtown area has

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been for residential projects. Today in downtown St. Louis, we have

about 9,700 residents. Now that is less than you heard in Memphis, but again, we have a smaller geographic area that we consider to be downtown. But we are really pleased with what has

happened there, particularly since the year 2000. Since the year

2000, about a quarter of our residents are new to the downtown

area—2500 of them in 1,700 units. The occupancy rate is very good,

91 percent of those units have been open over 1 year. And we track

it on that basis, so that there is time for lease up and for sales.

Projected, it will be even stronger. Projects that we conservatively

expect to start within this next year and be completed by the year

2008 will give us another 8,000 residents in our downtown area.

In turn, that has led to our developing a targeted retail strategy

where we have a merchandising plan. We have developed meaningful incentives, not just incentives that are easy to give, but meaningful incentives, and hired a retail coordinator. And since the year

2004 when we started pursuing this strategy, we have opened 26

new restaurants, 23 new retail establishments and about an equal

number of both of those we expect to open within this next year

and a half. Just a shot of some of those, which is kind of interesting.

Now the reason that is so important and what it has to do with

economic development is people who are responsible for bringing

jobs back to downtown say you are starting in the right place. Instead of working so hard on office tenants, if you will start with

housing, that leads to retail and restaurants, that puts life on the

street and it suddenly makes downtown more attractive as a place

to do business.

Here are the keys to our success. I mentioned before that the

plan was action oriented, it did not just quit when we adopted the

recommendations. We said that is the starting point, not the quitting point. We have been blessed with a very supportive city administration and we are very pleased that we have had innovative

local developers.

Tax credits have played an important role in it. And I want to

emphasize the historic preservation tax credits, for a very significant reason. St. Louis is an old city. Many people say it is the western most eastern city. Seventy-two percent of the buildings in

downtown St. Louis are over 50 years old and 31 percent of them

are over 100 years old. That can be a problem, as the Mayor pointed out, but it can also be an asset, because it makes us unique, we

have beautiful architecture.

The State’s historic tax credit program here is a model throughout the country, with 25 percent of the eligible costs being available

to the developer. Look at the last line, it can also be used for ownership as well as for rental. The impact is that 80 percent of our

historic buildings are now back in productive use. We need to keep

that going.

Now here is the contrast and the only thing I want to emphasize

in terms of programs today is with the Federal historic tax credits.

You see that 20 percent of the eligible credits are available to the

developer, and quite often those are leveraged so the developer can

get 45 percent of the eligible costs. But if you look at the second

line, the Federal program is limited only to income-producing or

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rental projects. That means that it skews the market. Many of the

developers who are doing housing in downtown St. Louis are going

for apartments when there is a market demand for ownership,

which we want to encourage. As a result, they have designed many

of them so that the idea is within 5 years, they will be converted

to condominiums. The only thing I would really stress is if we could

do something at the Federal level to get rid of this aspect that

skews the local market.

And I thank you very much for your time today.

[The prepared statement of Mr. Cloar follows:]

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Mr. TURNER. Thank you so much. Thank you for this great, compelling testimony of what is needed in the communities and what

you are accomplishing in your communities.

I want to emphasize again, many of you have spent time with us

today as we toured the community. It is very important that

through this period as we are in this hearing, that we get the full

opportunity of hearing your comments because these are the comments that will go into the Federal record. So many of the things

I might be asking you, we have already discussed, but I would appreciate your embellishment of your thoughts and issues on that.

Mayor, you told us of the 20/20 process that your community

went through, a visioning process where you enlisted not only the

business community, your institutions, but also the people in the

community. Could you tell us about the importance of that process

and going through that?

Mayor CARLSON. Yes, thank you.

It was interesting, one of the rules we had, Congressman, Mr.

Chairman, was that no elected people could serve on the visioning,

because too many of us, me included, tend to be a control freak.

And we were a little worried about what will happen when people

really are let go to think about what they want to do.

But what we did, we had about 20,000 hours spent, over 300 people, as you noted, just talking about what they would like their

community to be. There were no real restrictions about—it was sort

of a charette in a way. But we worked it through and then we

would have some staff people, you know, bring them down to reality a little bit. But what was really extraordinary about that was

when that plan was finally completed, it formed a template for how

we would develop our community. And it also, because there was

so much of an endorsement on the community for the thing, it did

not matter who was on council and who was the mayor, and what

ideas those people would come up with, the general template for

where we wanted to go as a community was set. So you did not

have the start and stop sort of thing you might see with the

changes in turnover in elected people at election.

So it became much more of a process of how do we implement

the long-term vision for this community. And it kept the wheel out

of the ditch and it kept the car on the road. The first referendum

on it was this Jordan Valley Park that you saw, and whether we

should increase the hotel-motel tax by 2 cents to start the ice rink.

That proposal, because of the process that we had undergone,

passed in every precinct in our community by close to 80 percent.

And because of that, there was a buy-in with the community to

proceed. And what I like to say and my city manager has indoctrinated into me until I really believe it, is process determines outcome. And if you have an inclusive process that was, it will dictate

a good outcome.

Mr. TURNER. One of the things that you and I discussed about

the importance of the CDBG program is the funding flexibility that

is there, that you have invested so much time going through a

visioning process so that you and this community know what your

priorities are, you know what your needs are and that they certainly would be different than every other community in the country in ways that you would be able to garner your resources and

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address them. The flexibility of that program is also one of its

Achilles’ heels because it is one of the ways in which it has been

criticized as being a program where there is not consistency in how

the funds have been used.

Could you speak for a moment as to how, once you completed the

20/20 process, how the CDBG flexibility might have been important?

Mayor CARLSON. Well, clearly Diane May talked about this. If

the CDBG program came with too many strings attached, we would

be constantly trying to shoehorn in the CDBG program to meet a

need that we have here in the community that would then hamper

its effectiveness. By having the program coming to us with more

flexibility, it works so much better.

Now I would agree 100 percent with this whole notion of federalism and Congressman Blunt spoke eloquently about this in the

sense that what you want to do is have 50 States with 50 laboratories that are doing things and seeing what works. And so my notion would be if you find that there are certain programs that do

not work, then say OK, you cannot take 40 percent of your budget,

as some cities might, and spend it on administration. So rather

than trying to predict ahead of time what might not work, you

know, maybe do it in a way that you say as long as—do not prejudge something, let them see if it is working. You know, there are

certain benchmarks you can do. There are outcomes, those kinds of

things, but once you have restricted it so much, then it loses effectiveness.

And just quickly, one thing I would like to just say, from my perspective as Mayor of this community, I think that earmarks get a

bum rap. The thing about earmarks is it allows a Congressman or

a Senator who knows about a particular need in a community to

set aside a small amount of money to meet that. And, you know,

that is what we would much rather see here than trying to tailor

our request so that we have an effective grant writing technique.

What earmarks have done for our community—I wish they would

bring another congressional hearing here and see what it has done,

it has been a great boon for our community. We do not have anything to be embarrassed about here in southwest Missouri.

Mr. TURNER. That is excellent, that is great that you make that

point because it does allow your congressional representative, as

we saw today when we drove by many of these projects where Congressman Blunt has provided and directed Federal funding, where

there may not be a specific grant program that would have been

able to assist you, it is accomplished through the earmark process.

Mr. Thompson, you talked about brownfields and brownfield redevelopment. As you and I discussed, I have a bill, House Bill

4480, that would provide a tax credit for environmental remediation. It is 50 percent of the environmental remediation and demolition costs, including petroleum remediation for a site. It would be

stackable with what you have here in Missouri with the tax credit

that is there, and largely would respond to the issue that some of

these sites, the cost of cleanup and building demolition exceed the

value of the land.

Would you find a program like that to be helpful in your processes of brownfields?

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Mr. THOMPSON. Yes, sir, I think any program or incentive tool

that we can utilize for redevelopment of brownfields will help. The

key to developing these sites is providing enough layering of incentives to bring down the cost of the overall redevelopment project.

When you are talking about brownfield sites, you have sites that

can typically have high contamination levels and so the cleanup of

that property can sometimes be expensive. So anything that can

limit the cost of that cleanup that allows that property to become

more marketable to a private user, is going to turn that property

quicker. And these incentives and programs that you have been

working on I think are a great tool to help spur economic development on these sites and encourage private investment to come back

into these sites at an affordable price.

Mr. TURNER. Mr. Sanford, Mr. Cloar, you both talked about the

importance of housing in downtown revitalization and we certainly

saw on our tour today the loft housing and other types of housing

that is here. You made a couple of points that I would like to revisit and would like you to talk about.

One, you talked about the importance of housing in the area that

attracts then retail and restaurants and other vitality. If you would

speak about that for a moment.

And also, the second aspect of the Missouri Historic Tax Credit,

providing the opportunity for ownership and not just rental. There

is a bill pending that would open up the historic tax credit that

would permit it to be used for ownership projects. And if you would

talk for a moment how that might assist the type of project that

you see in your communities.

Mr. Sanford.

Mr. SANFORD. Chairman Turner, let me say, first of all, that the

whole phenomenon of downtown housing, if we stop to think about

it in the historical perspective and at least to the level that we are

seeing it today, is really toward—my belief is the first job is to redefine our inner cities and then to redevelop the center cities. The

downtowns will not be what they were in the past, life has

changed. And housing, downtown as a residential neighborhood is

really somewhat of a new phenomenon. It is finding new value and

purpose in the inner city and in downtowns. Retail follows rooftops,

it is said. And a certain service economy and jobs are created in

support of residential neighborhoods. But I think it is a very, very

important phenomenon that we are all in support of.

Mr. TURNER. Mr. Cloar.

Mr. CLOAR. Two aspects particularly the second one, as I mentioned earlier, we have seen developers that come into our office

and they have talked about a project and we have encouraged them

that the market out there is for ownership. Particularly, an economist with the Federal Reserve Bank in St. Louis was on a panel

with me just last week and he talked about in the city of St. Louis

the aspirations that 80 percent of the people want to own their

homes. That is not, from the slides I showed before, the way the

pattern is going in downtown St. Louis. The demand is there for

ownership, but the developers quite often feel like we have to put—

even after talking with us and us showing them what the market

is, several times they go away and they say we are going to start

off with rental. And in 5 years, then we will convert to ownership,

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to condominiums. And we just think that skews the way the situation ought to be.

One of the particular reasons that housing is so important to

downtown, as I mentioned before, leading to life on the street, but

there is an even more direct impact, where the young technology

companies and the knowledge companies that are moving into

downtown. Younger people like a 24/7 environment, they like the

vitality that comes from an urban lifestyle, and they like the fact

that they can live in downtown also. We talked with one recently

that I think Forbes magazine had listed as one of the 100 fastest

growing in the country, they have 65 people right now, they expect

to be at 100 by the end of this year, and they said that 40 percent

of their people live within four blocks of where the workplace is.

So that is our real growth in downtown, from an employment

standpoint, is getting these knowledge companies back in.

Mr. TURNER. I just want to make a note before I ask a question

of Ms. May. Many of you had mentioned the issue of eminent domain and as we have the important national discussion and many

times at the State and local level discussion of how we are going

to approach eminent domain, I think it is always important for us

to note that so many of the symbols of America, those things that

we see that we think of as symbols of our cities or symbols of our

country, were accomplished with the use of eminent domain. And

Mr. Cloar, you are probably aware that the St. Louis Arch was

built with eminent domain.

Mr. CLOAR. Right.

Mr. TURNER. Ms. May, I have a question for you. You had indicated that one of the reforms that you would like to see among

Federal agencies is a unification of the application process. I

thought you might be able to share just a little bit more of your

frustration in that respect with us for the record, that would capture what that opportunity would be.

Ms. MAY. Well, you know, I would have to say because of privacy

issues that you are not always able to share information and data.

But working with Federal and State agencies, many times we need

to use multiple funding sources to, you know, package a project to

make it workable, that the requirements for data are different, the

application periods are different. I am not just focusing on one specific particular agency, but I think anything that we can do to have

more consistency in the process where possible. You know, it certainly would not hurt to have some of our Federal agencies actually

have applications that can be filled out, I mean actually in Word

version, and you do not have to use a typewriter. You know, we are

still dealing with that.

So I think we need very simple things that can be done to make

the process easier for our communities and for those organizations

or agencies that are assisting them. Consistency of data as well as

consistency of review, you know, and assessment on programs.

Mr. TURNER. Great. Thank you so much.

Mr. Blunt.

Mr. BLUNT. Thank you. Ms. May, recently the chairman of the

full committee, Tom Davis, talked about another issue and said we

had an analog government in a digital world. And the government

is way behind the private sector in so many ways, right down to

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how you fill out the forms, which you just reminded me that you

had to—some of these forms, you have to find a typewriter somewhere and get the form filled out that way. And way behind where

the private sector is and has been for some time now.

One thing I think I am very much in agreement with. I believe

I am summarizing your views right and generally the views of the

Mayor also on this topic, but your point is that in the applications

and the information, do much more to encourage consistency there

and then do the maximum to encourage flexibility with how you

propose to use the money that is available to you.

Ms. MAY. I would agree with that.

Mr. BLUNT. I think that is an important concept that we ought

to think about. As we are also talking about the infrastructure that

is available, the concentration of that infrastructure in center cities.

I do not know, Mr. Thompson, in St. Joseph—I am very familiar

with your downtown, as you know, but I do not know whether you

had a lot of residential population where you are working now or

not. Just kind of my sense of this, turning to Mr. Cloar, what was

the population of the area in St. Louis you are working in now,

that is now 10,000, that you hope to be—what was the high population number there?

Mr. CLOAR. It was not much higher than that at any one point.

Mr. BLUNT. Because this was always more of a industrial, commercial sort of area?

Mr. CLOAR. Yes, sir.

Mr. BLUNT. The city population is dramatically different than it

was 50 years ago, right?

Mr. CLOAR. The city population is about half what it was 50

years ago. It has now stabilized and coming back a little bit stronger. And I think downtown and strong inner city neighborhoods, just

as Jeff Sanford referred to, are important to the city as a whole too.

And they all kind of feed off each other, those older neighborhoods

feeding off of downtown and vice versa.

Mr. BLUNT. Would that be the same case, Mr. Sanford, in Memphis? Where you are working to bring people now, did a lot of people ever live there or was this largely a commercial, manufacturing

area that you are trying to bring back because those buildings survived?

Mr. SANFORD. It is, as I said, Representative Blunt, the redefinition of a neighborhood into a residential neighborhood. Downtown

was business, downtown was commercial. On its outer edges, it

was railroad repair yard. Yes, the answer is this is new.

Mr. BLUNT. Mr. Thompson, are you doing the same thing essentially?

Mr. THOMPSON. With the help of Mayor Carlson, yes. Tom has

been a huge advocate for bringing back residential population to

downtown St. Joseph, and what we found in St. Joseph is the fact

that to bring back this urban core, you have to create a neighborhood and residential housing does that. You have to create a population base that wants to bring in the retail and the other components, just as was stated earlier that retail follows rooftops, so in

the case of downtown, whatever business is looking to locate is

going to look to see where the center of population is. And St. JoVerDate 11-MAY-2000 12:01 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00114 Fmt 6633 Sfmt 6633 D:\DOCS\30693.TXT HGOVREF1 PsN: HGOVREF1
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seph has had success with using tax credits, State Historic Tax

Credits, to rehab our wealth of historic structures in downtown.

And Senator Bond recently was able to secure us $1 million in Federal funding to demolish an old hospital in our downtown area.

And from the success of the money we were able to secure to demolish that hospital, it is going to be market rate condos.

So one thing that we have seen in our community is the fact that

you have to start at some point with residential housing, typically

it is low to moderate use, and then market rate will follow. But

generating that population base then drives the rest of the success

for all of downtown.

Mr. BLUNT. And Mayor, since Mr. Thompson mentioned you were

doing some work in St. Joseph, I know that the city here has benefited from some of your personal business development, I know

Joplin has as well. I do sense some concern in southwest Missouri

that you are doing too much work other places. [Laughter.]

And good work. I wonder if you would talk a little bit about the

historic tax credits. Both the city and then if you want to expand

beyond that in the other communities you have worked in, what do

they do to make these projects possible and do the Missouri Tax

Credits in the historic area make a stackable—do they make an

important difference in whether you are able to do what you are

able to do?

Mayor CARLSON. Certainly. As Mr. Cloar outlined, the Federal

historic credit is a 20 percent credit and it can only be used for

commercial purposes. However, the Missouri Historic Credit is a 25

percent credit against State taxes and it can be used for both commercial and residential purposes. Because in Missouri, we have

both of them, it has the effect of coming close to cutting in half the

cost of the reconstruction efforts.

Clearly, what has occurred in the St. Louis area, more so than

anywhere in the State, to a lesser degree in Kansas City; you

know, that renovation, that resurgence in those downtown communities would not be possible.

When you go into an older area and are going to redo a building,

all the new building codes kick in and it is frankly a lot cheaper

to build new than it would be to renovate old. And without these

historic credits, you just would not see it happening. The downtown, Congressman, would look like it did 20 years ago, where we

had transients camping out on upper floors and building little fires

to stay warm. That would clearly be the case.

So what you have nowadays on these programs is that any program has a learning curve. Mr. Cloar and Mr. Sanford talked about

the New Market Tax Credits, those rolled out I think 4 or 5 years

ago and the tax lawyers cannot figure out just exactly how they

have to work and they start working into them and they start

using them, and what happens is if there is not predictability in

the Tax Code and with the programs, people think it’s too much

brain damage to try to learn the program.

On the State level, what you have with the State credits too is

the same sort of thing and the credits frequently are sold. I am

going to build a building, I sell the credits to an investor, take the

money and build the building. And what you have to have is some

stability because a 100 percent credit may go for 60 or 70 cents on

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the dollar the first year or two until the banks and financial institutions get used to them and comfortable with them, and then they

start ramping up and the Treasury is getting more bang for its

buck with it. We have seen that with the State Low Income Housing Tax Credit, for example, which has been really active for about

5 or 6 years, which was originally going for 20, 25 cents on the dollar. That is modeled after the Federal low income housing credit,

by the way. That is now up to 40 cents, so it has come close to 70

or 80 percent increase in value, but people have to get used to

them.

The same way with these other programs that we look at. When

we go in and try to look at doing a project and we have to layer

it with this program, is there some CDBG money that the city may

have to put into it, and what any developer has is he has a limited

quantum of expertise and he has to decide whether he is going to

learn your new program and take advantage of it. And if you feel

like well, it is not going to be there for awhile and the rules are

getting changed, they are just going to take a buy with it. And

what you want it to do is not going to happen. So what I am trying

to say is it is great to tweak things but they need to be there and

it needs to be predictable. Or, you know, Diane May, I am sure can

tell you about a lot of programs out there. Cities, smaller communities in particular do not have the staff for them and if the program did not change very much and they could learn it, then

Boliver, MO could learn how to use it and then the next thing you

know, Monett is. But if it is changing all the time, they just hold

up their hands and they are not going to go there.

I hope that is responsive to your question.

Mr. BLUNT. It is.

Diane May, talking about again back to the analog/digital, the

slow time process in making decisions. I think you suggest in your

testimony that the government is way behind the private sector in

its ability to evaluate an application and decide and move forward.

How big an obstacle do you see that in the whole area of using

these government programs?

Ms. MAY. I think that on some programs, I am seeing an improvement, but I think it is still difficult, particularly if we are trying to marry different types—funding from different types of programs together. Missouri has made significant strides, particularly

in dealing with infrastructure development through their joint committees with USDA Rural Development, Missouri Department of

Natural Resources and DED on CDBG funding for infrastructure

developments. They now have a pre-application process, which they

have had for the past several years. That has increased—or reduced, shall we say, reduced timing significantly on packaging programs for communities. But I still think that there is always room

for improvement.

I think it may be more, not so much just in the timing but also

in the rules and regulations and all the requirements that go along,

all the red tape, is where can we streamline that as much as possible, to improve upon, because developers, they need to move forward. Time is money for them and there are communities we have

worked with where there has been development interest, but they

just, as Mayor Carlson just said, they do not want to jump into it,

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it is too difficult. And particularly working with very small communities, as Mr. Carlson said, many of them do not have the staff

available to walk potential private investors through the process.

They do not have it, so it does not happen.

Mr. BLUNT. Anybody else have any experience with that where

the private investor is just—the decisionmaking process, the Federal Government costs you the project because the private investor

just loses—any particular thing you want to say, Jeff?

Mr. SANFORD. Congressman, I would simply say that speaking to

the complexities, speaking to the timeliness or lack thereof, the

New Market Tax Credit program, which I wholeheartedly support

and we are making considerable use of now in Memphis, is an example though. It is not for the faint of heart and in fact, I would

say it takes money to make money. I am looking here, and you

know, I want to be careful, I do not want to indict the program.

But I am looking at the U.S. Department of the Treasury’s overview of the program. And if I were to read to you the three paragraphs, I would conclude that you need to hire a Washington lawyer to make this work. It is just not for the faint hearted and we

have seen evidence in our community that only those private sector

developers with the bank accounts and the wherewithal really can

come to understand this well enough through the attorneys and

others they hire, to make it work. Here it is.

Mr. CLOAR. That is a program I point to most also. As the Mayor

said, it has been out there for several years, but even until a year

ago—I am involved with several national organizations, the Urban

Land Institute, I am incoming chairman of their Public/Private

Partnership Council, and we have tried to have briefings on it and

they have said as soon as somebody understands it—and these are

experts—they said as soon as somebody understands it, then we

will convey it out there.

But it is complex and I think the other speakers today have

talked about there are tradeoffs in all these things. I would mention the Urban Land Institute recently published a document called

the ‘‘Ten Principles of Public/Private Partnerships,’’ although it is

mostly focused on local government, how you work together, each

understanding the other’s sides, I think many of those same principles also apply to the Federal Government in the way that these

programs are administered—with the best of intent, sometimes

that gets in the way of what the ultimate goal is.

Mr. BLUNT. Mayor, did you have something to add?

Mayor CARLSON. Yes, one thing I can think of in particular that

we have had difficulty with is the conflict between the ADA, Americans with Disabilities Act, and the Federal historic credit. What

you will have is you will go in and redo a hotel or something and

to get the Federal historic credits, they say you have to keep these

windows just like they are or the doorways just like this. But then

the ADA people say oh, no, it has to be changed. And you know,

as a developer, you say you guys get on the same page, tell me

which way to hop and we will do it. But this is really frustrating

and it creates a big expense for us from time to time.

Mr. BLUNT. Let us talk about eminent domain just a little bit.

I guess the question is, the Kelo decision got the Congress upset,

got a lot of Governors and legislators upset. I think I am safe in

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saying it was a new judicial view that eminent domain is served

by a better taxpayer. In fact, Sandra Day O’Connor wrote a great

dissenting opinion I thought about how anybody is subject to a better taxpayer of some kind, every retail establishment could be replaced by a mall, every home could be replaced by a factory, you

know.

What kind of advice would you give the Congress as we look at

that decision, the concerns about that better taxpayer point of

view, but also the understanding that there is a greater public good

served by the use of eminent domain and how do you balance the

American belief in private property rights and the American belief

in the greater good. And anybody can—we can start at either end

or in the middle or wherever you want to start. Do you want to

start, Jim?

Mr. CLOAR. Yes, sir. Yeah, I think there has understandably

been a large over-reaction to the Supreme Court decision or essentially a non-decision, because they did not really change anything,

but it did shine the spotlight on the fact that eminent domain has

currently been abused in many, many cases. And I think it is not

so much eminent domain itself, as the process and the way it has

been applied.

Much of my history, I have lived in other States where there was

a State prohibition against using eminent domain for private reuse. That just meant that quite often they were more clever about

defining what was a public re-use.

Certainly your heart goes out to those people who have lost their

homes, particularly those who are in poor financial situation and

it is wrenching to their lives, if it is going for a mall or something

like that. But there are numerous cases where eminent domain has

been used for clearly the greater public good and quite often it may

be an out-of-state, out-of-town landowner who is clearly blocking

the way toward revitalization that would benefit the people in the

local community. And they hold onto it, knowing that they have almost got local government over a barrel, that they will have to pay

their price. And that is not quite fair either, that is not fair to the

local taxpayers.

So I just hope we do not throw the baby out with the bathwater.

Clearly, there needs to be some tweaking, some fine-tuning, and

certainly some protection for the rights of folks if their property is

taken for eminent domain. But I think the concept itself still is appropriate.

Mr. SANFORD. I would agree with Mr. Cloar. We could not have

undertaken the projects I described earlier where we are replacing

the stereotypical public housing with these new mixed income

neighborhoods if we did not have in the toolbox the power of eminent domain. I do think it should be difficult, but it should not be

impossible.

Maybe my perspective is a local one, but even in light of the new

decision, so long as the ultimate decision rests with local legislative

bodies, at least in my community, I am not too worried about people’s property being taken unfairly or for illegitimate purposes.

Mr. BLUNT. Mr. Thompson.

Mr. THOMPSON. With I guess the recent discussion on eminent

domain, I think one thing that St. Joseph has looked at or considVerDate 11-MAY-2000 12:01 Dec 15, 2006 Jkt 000000 PO 00000 Frm 00118 Fmt 6633 Sfmt 6633 D:\DOCS\30693.TXT HGOVREF1 PsN: HGOVREF1
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ered, as far as eminent domain and how it is used, is kind of on

a conservative basis. When we are doing public infrastructure

projects using eminent domain, there is a clear public benefit in

how the city has utilized its power in that capacity, but in our example with our brownfields redevelopment, you have a railroad

company that sometimes can be more difficult than working with

the Federal Government. And that is not a knock on the Federal

Government, but the railroad has been around longer I think than

the Federal Government sometimes, for some reason. But with an

entity such as that, whether it be a railroad company or any private ownership, when they have no intent to move on a piece of

property for the benefit of the public and the overall community

and the community clearly lays out a vision and intent for that

property for the benefit of a public use, and in this instance it was

to create jobs and to revitalize a whole area south of our downtown,

I think on the local level, if city policymakers clearly demonstrate

their use of eminent domain and each local entity has the ability

to control how eminent domain can be used, eminent domain can

be a good tool in our toolbox.

Mr. BLUNT. Did you feel like, dealing with the railroad, they had

some liability concerns though?

Mr. THOMPSON. Yes. And actually just getting onto their property

to perform an assessment to determine what that liability was, was

difficult. Clearly when you are using Federal funds and EPA, you

are really bound by the liability that is attached once you start

using Federal funds on a piece of property, and so I understand

their concern of not wanting to know what is on there, because

once they know, they are responsible. And actually, through the

State’s voluntary cleanup process, there is a good program that is

out there that limits the liability exposure by the property owner,

and really it is an educational process that, in this case, the city

had to educate the railroad that private ownership was willing to

take over that liability if we could just exchange transfer of ownership. And that was really a common ground that we met. Their

property, as it sat, was a liability, but it could be viewed as an

asset by a private entity if the city had funding to help clean up

that process.

Mr. BLUNT. You want to talk about eminent domain a little bit,

Diane?

Ms. MAY. Well, that is a difficult one representing a myriad of

communities throughout the region. So I would have to say in the

discussions our board has had, we do not have—they do not express one opinion on this, but I think overall, there is concern that

I have heard from the communities we represent that the process

may need to be fixed, whether we are talking Federal or State. And

the State of Missouri, of course, is looking at this, but to ensure

that there is opportunity for the affected property owner to participate in that process, to be able to make their concerns known at

the beginning of the process, and that there be adequate compensation in terms of relocation assistance, because many that may be

involved in that process of eminent domain, they may not be able

to move or relocate to a new location, even if they are paid fair

market value. So those are the concerns that I have heard from our

communities. I do not think that any of them are saying we want

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to throw the whole process out. Obviously they recognize the public

benefit and when we talk about using it for economic development

benefits, nobody is really clearly saying no, but they feel improvements are needed in protecting property owners’ participation in

that process and in just compensation.

Mr. BLUNT. Mayor Carlson.

Mayor CARLSON. Thank you, Mr. Blunt.

One of the issues that I have not heard anybody talk about on

this eminent domain issue is this—in Missouri right now, we are

talking, in fact I talked to two or three legislators at lunch about

where the eminent domain legislation is, and from a lawyer’s

standpoint, one of the concerns is that they are going to totally rewrite the definition of fair market value. And let me tell you what

that does. And the same thing would happen to Congress. If they

come through and rewrite the definition, that stops economic development in the State for the next 3 years, because nobody is going

to buy anything through an eminent domain process, knowing that

it can be challenged. So that means that you are going to have to

go all the way to the Supreme Court and have these legal questions

decided, and however many cases that takes. If that happens in

Missouri, we have just driven economic development into Nebraska, into Illinois, into Tennessee, into Kansas, until 100 years

of case law is redone. The same thing would happen at the Federal

level. It is one thing to take fair market value and stick with whatever that is, and if you want to do an add-on like legacy value; if

the guy has been on the farm for 100 years, he needs to get an

extra 10 percent, whatever it is, that is one thing. But you have

to be darn careful that you do not rewrite the laws so now the

courts have to redo 100 years of case law and slow it down.

The second thing I would tell you is, as an elected official, I have

a severe aversion to pain. We are not going to condemn somebody’s

property unless the community is really in favor of it. It just does

not work that way. You all are getting a lot of pressure and phone

calls from people because of the whole notion of property rights.

Well, believe me, when I hear about it—I got it at the shoe repair

shop today, you know. I hear it and feel it all the time. We are not

going to abuse that process. What you do see sometimes is sort of

a shell game, in the sense that we have in the State, for example—

and there are more than one—but we have what they call Section

353 corporations, that you can delegate the ability to condemn

property and then the elected official can back off and say it was

not me.

So if you at the Congress level are saying well, we want some

more accountability, well on those issues where Federal funds are

involved, then say an elected person needs to call the shot. That

will keep some accountability in the process, but you will not be

throwing out the baby with the bathwater.

Mr. BLUNT. Mr. Thompson.

Mr. THOMPSON. If I could piggyback on the Mayor’s comments.

The city, as I mentioned before, we have a former hospital downtown, and part of that is involved in a Tift project and part of it

is involved in a Chapter 353 redevelopment corporation, as the

Mayor said. It allows that entity the power of eminent domain in

certain situations.

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But when you are talking about the use of eminent domain, we

look at it from the perspective of property rights, but the fact that

if an individual who has a house within this area that the 353 has

established in this particular project, has put their time and money

into their house to rehab it and make it to the historic stature that

it once was, and then you have a dilapidated, vacant house next

door that the individual is not maintaining, not paying taxes—in

this particular case, what we call Uptown Redevelopment Project,

we look at the benefit of eminent domain to go in and protect the

property right of that person who has actually invested in their

property, to protect their property rights from having an eyesore

and a liability right next door. In this case, the 353 allows condemnation power by that redevelopment corporation to protect

property rights of individuals who actually are reinvesting in the

neighborhood and to encourage private investment. So I think it is

important—property rights has two different angles. The city has

to protect both sides of the fence, but I think the side that we look

at more or less is on the property rights of those individuals who

actually are paying their taxes and reinvesting in their neighborhoods, how can we help their neighborhood grow and in that case

acquire land for the benefit of the public by allowing a private

owner who wants to come in and do something on that particular

property.

Mr. BLUNT. There is at least one State legislator here and he has

been listening very closely to this part of this discussion.

Chairman, I have one other brief line of questions, but I think

I will go to you for awhile and then if you do not cover it, come

back to me.

Mr. TURNER. Thank you. I only have two real quick questions.

Mayor Carlson, we spoke about this before on the issue of eminent domain. That is the issue of the tool of eminent domain permitting a willing acquisition of property by a willing seller, and a

willing buyer being the government. When we went—on the Federal level when the discussion began on the Kelo decision, my staff

began to look at good examples of eminent domain and bad examples of eminent domain. And one of the things that was evident to

us is that when we look at issues of good eminent domain, some

of the developments that might have included eminent domain resolve themselves before the actual eminent domain litigation has to

occur. Because eminent domain was available as a tool, the parties

come to the table and you have a reasonable transaction.

Could you talk for a second about, have you had the experience

that eminent domain as a tool has made it possible for you to undertake transactions that do not require the actual litigation?

Mayor CARLSON. Well, that is exactly the case, Mr. Chairman. I

would imagine—I can think of all the development that we have

done in downtown Springfield, I think there has been maybe one

or two cases where it has actually been contested, but it was a

mechanism, as you outline, to bring everybody to the table. And

typically it is good news when the city comes knocking on your door

and saying we would like to acquire your property—it is good news.

Without that tool, we would not be able to assemble the property

to do a redevelopment. Most of what you saw in Jordan Valley

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Park would not have occurred if we had not had that mechanism

to bring everything together so that we can prepare the property.

A second point I would make is we will frequently have the

owner of the property ask us to condemn it, and it is for tax reasons. If you said you cannot condemn the property, then when we

acquire the property, it now becomes a taxable transaction, so you

have a guy that has a printing company that wants to move from

the Jordan Valley Park area out into an industrial park. If you say

that we cannot go through the condemnation process, he has to

send one-third of the proceeds, of his profit, to the Federal and

State government, which means when he starts in again, he’s got

a bigger bank loan and we just unwittingly jeopardized the operation of his business. But if it’s through a condemnation process,

all that money, so long as it is reinvested in the next—I do not

know what the years, I think it is 2 years, is non-taxable. So you

have kept people at work, you have kept a business going.

Finally, without the eminent domain process, we would not be

able to get clear title to property. Occasionally, particularly with

distressed property, nobody cares about it, the title is all fouled up,

and only through this process are we able to value the property,

take it, put the proceeds in the court and let whoever is going to

claim it, figure it out. But without that, we could not go forward

and acquire a critical piece of the property, so the whole development process would fail.

The main thing that I hope that Congress and the State does is

preserve eminent domain for purposes of slum and blight. If you

do that, you have saved 80 percent of it. Everybody is worried

about the Kelo decision where the people have their houses and

they are kicked out to put in nicer houses or whatever. That is not

what we are doing and we use it in terms of slum and blight. And

if you preserve that, you have gone a long way toward ensuring the

economic vitality of our downtowns.

Mr. TURNER. There was a GAO study of EPA brownfields grant

programs and assistance programs, and through that GAO study,

it indicated that the assessment funds, the grant funds that are

provided for communities that are going to take environmental remediation assessment processes, that most of the conclusions that

are drawn, once those are complete, is that the property is not as

contaminated as people had expected it to be. And I would like to

know from Mr. Thompson and the Mayor if that has been your experience in utilizing the assessment funds, if the studies have

seemed to indicate that the properties are not as contaminated as

you would have expected.

Mayor CARLSON. I think that is generally true. Probably the city

manager could speak more intelligently about that, but yes, that is

true. The problem is just what Clint was laying out a little earlier,

is nobody will let you get on their property because they are

afraid—you know, let sleeping dogs lie—if we let you guys come on

there and the word gets out and then the EPA is on our backs, and

so just stay away. Those are the issues that we run into frequently.

Mr. TURNER. Mr. Thompson.

Mr. THOMPSON. I think the fear of the unknown is what keeps

some of these properties from being redeveloped. And in our particular case, when you had a piece of property that had always

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been for railroad use for as long as history dates on the property,

you know there is some sort of contamination on that site. And

after we actually were able to get onto the property to perform an

assessment, it turned out to be that the required remediation steps

were much smaller, less significant than originally was anticipated.

And when you have particular properties—this was approximately

30 acres—and the cleanup is less than $300,000, we felt that was

pretty minimal based on the infrastructure that is on that site, and

the fact that there was rail access on that site made the property

very valuable. That was one of the selling points, is if you do have

the money and funds through EPA or different mechanisms to actually clean up the property, you can turn these properties to private ownership for below market value of what greenfield sites are

going. And ultimately the idea behind brownfields is to calm the

urban sprawl when you have a development in your inner city that

already has the infrastructure in place and nearby housing to support the job creation.

But to answer your question, in our particular case, the unknown

fear was what really held this property back, and then once we

made the determination of what existed on the property as far as

cleanup, it was probably less than what was originally thought.

Mr. TURNER. Thank you. Mr. Blunt.

Mr. BLUNT. On the topic of community development block grants,

I know that the chairman believes and that I believe that the flexibility of those is a good thing. Members of Congress were generally

very reactive to the idea that those would be abolished.

I wanted you for the record, Mayor Carlson, to talk about the

program that the city has implemented here to use that block grant

money.

And then the other question I have is if there are any negatives

to even the short-term possibility that those block grants would not

be extended. I know like the Section 108 program, you use future

community development block grants to secure current loans. Talk

about both of those topics, if you would like to, and then anybody

else. And that will be my last question.

Mayor CARLSON. Well, what we have done with the community

development block grant program over the last 20 years is take a

large portion of it and put it into revolving loan programs. We have

also done it with the HOME money that we get from the Federal

Government. We have used it for sewer extensions to subsidize people that could not afford the $3,000 that it took to hook up for a

sewer and it was creating a health hazard. So we would give them

financing for 15 years, that sort of thing.

We have used it with a lot of downtown facade loans. We would

use it in inner city neighborhoods to fix up properties. Depending

on a person’s ability to repay, they might pay a market rate of interest, usually it is a little bit less than that. Or they may pay no

interest at all until they sell or die and then the home is sold.

But we have a lot of program income by putting that money back

in so that now that figure is over—I think it is in the neighborhood

of about $25 million. When you look at something that we have

that has ranged from about a million and a half to $2 million over

that period of time, it is pretty remarkable.

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And then what we were able to do on some things, and I believe

we used it on the Universal Paint program, is we took that portfolio and then we securitized it and borrowed money against it to

put into other things. And so that money has gone back over and

over again into the community.

All the time, Congressman and Chairman Turner, what we have

is a bank somebody will come in and he will work with the historic

credits and he says I want to do a restaurant downtown Springfield

or a new business and I need $1 million. And through the historic

credits and the bank loan, I qualify for $900,000 of that. By using

this CDBG money as the gap for that, we make a project possible

that would not have been possible otherwise.

If that drops off, that whole program—and again, it gets right

back to what I was saying earlier about the importance of predictability. We have the staff, we know how to work the program, we

are getting better and better at it, and you cut it back, then we

have to make strategic decisions about, well, is Congress going to

change in the future on this, are they going to do something else?

Do we redirect our staff? And then if it is changed 2 or 3 years

from now, we have to ramp up all over again. There is always that

lead time and that is the whole thing, once you get the ball rolling,

you need to be able to depend on the predictability of all these

issues to plan. It is a complex process. And the Federal Government with the CDBG is such an important part of that, to pull the

rug out from under us really has very deleterious consequences.

And I understand you all have a lot of important decisions to make.

I could just talk about the effects it has on our community.

Mr. BLUNT. I would not expect the rug to be pulled out, but

clearly when somebody reaches down and takes ahold of the rug,

you have to wonder what is going to happen to the rug. I understand that as well.

Anybody else want to talk about that?

[No response.]

Mr. BLUNT. And then I did have one other question I remembered. That reminded me. The Hope VI, Mr. Sanford, talk a little

bit to me about that program. Some of your testimony indicated

really that it seemed to be a process that took more time than it

should, that the requirements were onerous.

Mr. SANFORD. No, I was saying Federal assistance programs in

general, that it could be argued that they are historically too complex, too difficult to access. However, I would put up with that in

exchange for, as the Mayor said and I said earlier, more predictability. Development is a long-term process and it takes a long time

to turn around decades of decline in our cities. And I would exchange all of the notions of inaccessibility or complexity for the predictability of some of these programs.

Hope VI is a centerpiece program in the redevelopment of our

downtown, used quite honestly to do away with, get rid of,

stereotypical public housing. We are changing people’s lives with

that program. The expense of doing that is far too great for our

local community to take on without Hope VI type of assistance.

Call the program what you will, but see in Memphis, see in other

cities around the country how it is changing the paradigm in terms

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of low income housing, moving people into a higher station in their

communities.

Mr. BLUNT. Anybody have anything you want to add, a question

we failed to ask or a thing that has come to your mind in this discussion you want to be sure and get on the record here today?

[No response.]

Mr. BLUNT. Well, Chairman Turner, I want to thank you particularly for taking time to come to Springfield today and to hold this

hearing and make it available to your whole committee and to add

it to your vast amount of knowledge on these topics. It means a lot

to me that you would be here and I am grateful to you.

Mr. TURNER. Thank you, Congressman Blunt. I greatly appreciate you inviting us and having this subcommittee here. We all

know of Congressman Blunt’s effectiveness in his leadership position, being third in leadership in the House and being able to preserve an advocate for the important community and economic development programs.

And now I personally know, from being in the community and

seeing the successes that you have had in your community, the reason why you are such an effective advocate for CDBG and these

other programs, because your community is highly organized and

highly successful in a partnership with you as the leadership has

come together to revitalize the community here. A lot of great, exciting things going on here. And these stories will help us as we

take them back to the committee to tell how these Federal programs are being successful and working.

And Mayor, I want to thank you again for all your time and the

time of your staff and the tours that you have given us of what you

have been accomplishing.

And I do want to comment on one thing I think is probably in

part a symbol to the success that you have. And I note that at the

seat of every council member and of yours, there is a copy of the

mission statement of your community, which begins with the sentence, ‘‘The people of our community are the only reason we are

here.’’ And certainly from all of the leadership of the community

that I have met and certainly from your Congressman, I have seen

that your community lives up to that mission statement.

With that, I want to thank you and we will be adjourned.

[Whereupon, at 2:40 p.m., the subcommittee was adjourned.]

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