Archive for February 19th, 2009

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Rio Nuevo boss has cloudy past

Questions arose on performance in Milwaukee
By Joe Burchell
 
ARIZONA DAILY STAR

Tucson, Arizona | Published: 05.02.2004

 
In the last two years, new Rio Nuevo chief Greg Shelko’s Milwaukee department was buffeted by questions about insider deals, and most of its top brass quit or got fired in a transition between mayors.

One of his city council bosses also went to prison for a fraudulent land purchase from his department. Two more council members and the mayor also left office prematurely because of unrelated problems, adding to the turmoil.

At that rate you might think coming to Tucson is as much an escape as a career move.
But Shelko, who arrives in Tucson on June 1 after 27 years in Milwaukee, said none of that was a factor in his decision to take the Rio Nuevo post, where he’ll make $112,500 a year to oversee a $360 million-plus Downtown redevelopment plan.
He now makes $98,000 as real-estate-services manager and assistant executive director of Milwaukee’s redevelopment authority, where his accomplishments include helping develop a riverwalk similar to Tucson’s Rio Nuevo plans.

Shelko said his only motivation was a new challenge in Tucson, and “an opportunity to be part of a team that has done very good things to this point, and is poised to do great things.”

He said the upheaval that was widely reported in the Milwaukee press was a distraction, but it wasn’t as disruptive as it might appear to an outsider.
Tucson City Manager James Keene, who hired Shelko, said he was only vaguely familiar with Milwaukee’s problems, and they were never a consideration in his selecting Shelko from among 120 applicants.

Those problems are a typical consequence of Milwaukee’s strong-mayor form of government, where politicians instead of career administrators rule, he said, which made them beyond Shelko’s control.

“Here he’ll be working for me. That’s not the kind of system we have,” Keene said, adding that the fact he’s worked in “a complex urban environment that has a lot of politics involved” should serve him well on Rio Nuevo.

Critics, including some members of the Tucson City Council, complain Rio Nuevo has shown little progress in the four-plus years since voters approved it.
“The only thing they’ve put on the ground is the Fox Theatre, and that’s ’cause it was already there,” said David Tang, a member of the Rio Nuevo Citizens Advisory Committee.
If there’s a concern about the project moving slowly, said Julie Penman, Shelko’s former boss, “you ought to like the person you’ve hired because he’s done it. The guy is very action-oriented.”

She said she’s not surprised Shelko joined the development-office exodus in Milwaukee, considering the nose dive in morale in the waning days of the old mayor’s tenure and the reign of the acting mayor who took over.

Even a cursory look at redevelopment conflicts in Milwaukee is enough to make complaints about Tucson’s lack of progress on Rio Nuevo and the city’s deviation from what was approved by voters seem placid.

The biggest flap stemmed from the sale of two city properties to a nonprofit organization formed by former Milwaukee Alderwoman (City Councilwoman) Rosa Cameron, who was later convicted of fraud.

The first sale, of a duplex for $200 to be used as a foster home, predated Cameron’s election. The organization then sold the duplex to her for $200. After she was elected, she moved and rented it out for $1,100 a month.

After she took office, Cameron asked Shelko’s department to sell a six-unit apartment building, valued at $30,000, for $5,000, without revealing the buyer was her daughter.
Shelko vetoed that deal. But at Cameron’s request, his department later agreed to sell the building for $500 to her nonprofit organization, which was being run by another of her daughters, supposedly for use as a family support center.
The second sale was called off after the relationship between Cameron and the organization was reported in the Milwaukee Journal-Sentinel.
 
Although the department had had past dealings with her organization, Shelko said workers had no way of knowing the council member was involved in the deal. Her daughter has a different last name, and she didn’t check a box on the purchase application requiring buyers to reveal if they or a relative work for the city.

Penman, Shelko’s former boss, agreed there was no way for city workers to recognize Cameron’s involvement.
It’s common for Milwaukee council members to refer people who want to buy city property to the department, so that wasn’t out of the ordinary, she said.
Plus, she said, the city forecloses on hundreds of small properties each year for back taxes and sells them, as a way to combat neighborhood decline.

“When you look at the number of properties sold every year, and the turnover in the real-estate department … we don’t typically investigate every sale.”
But Tang said that oversight doesn’t bode well for Tucson.
“They should have seen the link,” he said. “What’s going to happen here? He doesn’t know any of the players.”

Cameron was one of three council members convicted of federal crimes and removed from office in the last two years.
Former Milwaukee Mayor John Norquist also stepped down in December after agreeing to pay a $375,000 sexual harassment settlement to a former employee.
Four top managers resigned or retired the day before the acting mayor replacing Norquist took office, and Penman, who was campaigning for a challenger to the acting mayor, was fired shortly after that.

Shelko, who made a $1,000 contribution to the challenger’s campaign, couldn’t be fired because the mayor only has the authority to fire department heads, Penman said.
In the past 18 months Shelko had to deal with at least three complaints about insider deals that made the Milwaukee press.
In one, a former redevelopment authority employee, who also sits on the Police and Fire Commission, won the right to develop 37 condos on a city parcel, although she had limited development experience.

Four years later she had only built four models. Another developer complained the city should take the land back after so little progress was made.
The city declined.
Shelko said the woman was awarded the project because “she submitted the most competitive bid at the time,” and not because she’d worked for his department or sat on the commission.
He said the problems weren’t entirely her fault. She was slow getting her models built, and by the time she did, competing projects started up that took her market away.
He said the woman is a minority contractor, which the city tries to promote, and the city lost nothing by giving her more time and letting her change her plans.
In another case, the authority agreed to sell property to a member of the Plan Commission without advertising for bids, even though another potential bidder notified it that he was interested.

Two years earlier the authority had agreed to sell property to someone with no city ties without going out for bids but then insisted it was legally required to solicit bids when another potential buyer surfaced.

Shelko said the two cases are different because the plan commissioner already owns several developed parcels next to the lot she’s buying.

The city normally lets landowners buy adjacent surplus city property because combining properties offers the opportunity to do a bigger project, which results in greater tax benefit to the city.

He said the sale has been put on hold while the city ethics board reviews it.
In the third case, a builder won the right to put housing on three city lots. Four years later, one of the sites remained untouched, and Shelko started talking to a second developer about taking it over.

A council member, to whom the first developer had made campaign contributions, intervened and the property stayed with the original developer.
Shelko said the original builder had a successful history with the city, and the three lots were always supposed to be developed in stages.

“I wasn’t sure where we were headed with New Land (the original developer),” he said, explaining his discussions with the second builder. “After looking into the status, I felt more comfortable they were making reasonable progress.”
Like Rio Nuevo, much of Milwaukee’s downtown redevelopment is publicly subsidized with tax increment financing, which allows taxes generated by new development to be used to pay for that development.

Unlike Tucson, which has only one such district, Milwaukee has created nearly 50 of them, at least three of which have failed to generate enough taxes to pay for themselves.
Shelko said the shortfall resulted from bad estimates of what the projects would cost.
The $7 million needed to cover the shortfall came from other, more profitable districts, not from city funds used to provide public services, he said.

A similar situation is unlikely in Tucson, he said, because Milwaukee was using the money for items with unpredictable costs like land acquisition, relocation and environmental cleanups. Tucson isn’t expected to have many of those expenses.

 

Came across this article and was fascinated by Mr. Shelko’s background.  When  I saw  he was “action-oriented” I almost spit up my morning oatmeal.  The questions to you, our readers; is he really action-oriented?  Has he been handcuffed by Biker Mike and the geniuses at the City Council?  Why hasn’t he be run out on a rail? (or a trolley rail?)