1059 Willamette, Gift of 6.8 Million to the Submitter of Only Proposal

Corruption or Ignorance in Eugene City Council?

RE: 1059 Willamette

Dear City Council,

Let’s first recognize that I am not paid through City Tax dollars or by any industry for the time I’m currently taking in writing to you. Taking my time to write to you is a painful financial loss for me as I struggle to raise my family in this community and during this worldwide pandemic. I do expect your thanks.

My reason for writing is that I wish to raise my children in a moral and equitable community.

I have tried to address the shortcomings of our City Government, now, many times. I was first alerted to the Manager’s Office corrupt practices in the writing, presentation, and passage of the Road Bond in 2016. Later, while downtown, I was affronted by our then City Manager, Jon Ruiz, personally intimidating kids sitting in Kesey Square, calling a private downtown security team to yell at them, and then texting police, who dutifully came to harass these children. Those children were only a few years older than my own children.

I have satirized your immoral behaviors in regard to the unhoused and their pets, and your current, and apparent quiescence in regard to 1059 Willamette. I’ve tried to educate you to the connection between violent policing and the willful inflation of real estate values to the benefit of private interests.

I’ve even, repeatedly, tried to educate you to the corrupt practices that are built into a City Manager System of government. I tried to help you understand how your own City Manager’s office manipulates you with techniques of “persuasion” taught to all aspiring bureaucrats and lobbyists and other media professionals through what are called “communications courses.” It seems to be to no avail, as my mother used to say.

I don’t know if you are willfully corrupt, simply ignorant, or perhaps ignorant of your ethical responsibilities, meaning you are ignorant of what it means to be corrupt. You might feel that just because you spend time with industry lobbyists and enjoy their company, but are not taking cash in some some back alley, that you are beyond reproach. I’ll suggest to you that this is not the case.

Here, I am trying once again, and this time in regard to the 1059 Willamette Proposal by Miksis/deChase. I’m just going to give you two facts so that you don’t become confused. Maybe then you might understand what I’m talking about, both in regard to the 1059 project and corruption in the City Manager’s office.

  1. The current Proposal for 1059 by Miksis and deChase will achieve a negative loss for the city of 30%. Because we will be making a $10 Million dollar investment, around $8 Million up front with another $2 Million over 10 years (through MUPTE), yet the purported public benefit for that $10M investment is subsidized rental rates, but the subsidy only equates to $7M worth of rent suppression. (Here’s the math on that: the total rent suppression That means you will be contracting with Miksis and deChase for a $3Million loss.
  2. You are being presented with only one proposal for development for 1059 Willamette by your City Staff.

#1 A Lawsuit

I will suggest to you that contracting for a known loss of $3 Million dollars is very potentially an actionable offense. I mean that the people of Eugene could bring a class action lawsuit against the city for mismanagement.

I believe the case will be a strong one, for this reason: no ethical financial advisor on earth would suggest their client make an investment for a capital loss. The purpose of “investment” is for gain. I do not think this should require explanation for any of you. You all have invested for gain. You all, in your personal lives, would never invest for a known loss.

However, that is the decision before you. You are giving to Miksis/deChase a capital gain of $3 Million, without any recompense at all. We can get into the weeds of whether a contract for 35 years of affordable housing in exchange for $7 Million up front is an equitable exchange (it isn’t); however, that is not necessary. In front of us, is a $3 Million known loss. And, as you know of it now, you cannot claim ignorance.

What you face, then, is a conflict. Not a single one of you would make such an investment for yourself personally; and yet, you are on the brink of making such a contract for all the people of Eugene.

The question will be, what explains your choice?

Signing such a contract, I feel, is criminal and at the least criminally negligent. I think there are a number of people who would agree. And while I know you won’t be held personally responsible, and a lawsuit only means more of my tax dollars going to lawyers and consultants, I’ll suggest this is really a question of conscience.

I’ll return to my premise: is it ignorance or corruption?

#2 The Corruption of One Proposal

The City Manager’s office has constructed this event for you. This is where the real corruption lies. I will point out that apparently not a single member of the City Staff has “run the numbers” for you on the 1059 Proposal, “done the math” and presented you with alternative investment strategies. That is a serious omission.

Most damning, however, is that City Staff constructed a presentation of only one proposal. When you only have one proposal, you have nothing to debate and no way to come to an understanding of the issues. Through debate you might see the merits or faults with each and every proposal you have before you. You would see, for example, that Miksis/deChase offer the City a $3 Million capital loss. You would weigh that against other proposals that might suggest capital loss or gain. You would begin to understand your choices. Failing finding desirable outcomes, you might call for more proposals.

In fact, suggesting “debate” through choice is often used to support the idea of “free market” capitalism. It is through choice and selection that the consumer exercises control. Please notice how that is stripped from you (and the people of Eugene) in this instance. The City Staff have constructed for you a consumer event in which you “must buy what they are selling.” The City Manager’s office and staff have constructed a monopoly in which we apparently have no choice.

It is true that having multiple proposals is not in itself a solution to corruption if only the same select group are approached to make proposals within a specified frame. Such is the case with City Contracts where the same contractors make bids that seem to conveniently “spread” the wealth. However, we needn’t even go to that consideration here.

Sarah Medary and City Staff provided you with only one proposal. The narrative this suggests is that they “reached out” and we might presume, “widely,” and that “no one is interested in this development project.” The story then is that there is “no alternative” to accepting this single proposal.

This is classic salesmanship. The “city” is put on the “supply side,” and the illusion created is that there is “no demand.” What you — we, all of Eugene — have is “undesirable,” and Miksis/deChase are thankfully “willing” to take it off our hands. That narrative, that salesmanship, is manipulation designed by City Staff through a restricted process that produces only one proposal.

Failing to find other proposals, accredited financial advisors should be tasked with exploring investment opportunities for city assets and capital. The fact is that the City of Eugene would be better off simple selling this property on the open market, taking the capital and investing it. In comparision to the Miksis/deChase proposal, that is already a net gain of $3 Million dollars.

If Council should choose to invest the capital from the the sale of 1059 on the open market, in “affordable housing” then Council can make that choice by purchase of vouchers from a wide source of housing providers rather than lock into this contract. I do not believe Council would see investing in Urban lofts for single professionals as our community’s greatest need — but at least we would decide.

A Pattern of Corruption

The pattern of “no alternative” in regard to real estate sales begs the question, who are the City Staff working for? I am reminded of a little City land sale I saw at the start of the Covid pandemic to the the “Connor Group” for a downtown lot for $92K. The Connors also made a pair of campaign contributions to Mike Clark which could appear as “pay to play.”

It seems the SOP for spouses acting in concert to misspell their names.

I was unaware of any community outreach for proposals there, in a City in sore need of a community center or Indigenous Cultural Center. The “land transfer” from public to private was assisted by the work of City Staff who work to “sell” the legitimacy of insider trading.

City Staff’s corruption ranges from recommended MUPTE grants, proposing CET caps, and of course the “City Hall Lot.” City Staff work in concert with lobbyists and against the City who are manipulated as consumers under caveat emptor. We see the deep corruption of the City Manager’s office front and center with the 1059 Development Proposal that will net the City of Eugene a realized loss of $3 Million. The very offices which are intended to protect our interests, sells us out.

What I see from my vantage is a pattern of corruption in the City Manager’s office. It is a “sticks and carrots” system, where the vast majority of people in the Eugene Community get “sticks” designed, put forward, and implemented by City Staff and a few insiders get carrots. After Kesey Square and the Steam Plant give way, The Miksis/deChase group certainly seem to be the City Manager’s office preferred consumers.

Steam Plant Developers. We see John Rowell, Mark Miksis, John Rowell again along with local business men and lobbyists. All white men, honoring a rich history that included and continues to include genocide.

The City Manager system of government rose up in the early 1900’s as a way to thwart rising democratic political power. Then, as now, the push back against democracy was fueled by xenophobia and racism. The City Manager system was designed to create a bureaucratic class of managers who then manipulated public officials through exactly the types of devices we see here in Eugene Oregon, and with 1059 Willamette specifically, producing single “no-alternative” proposals.

Solutions

The solutions are manifold, but the first and largest is to make City Council’s aware of this corruption. It is not to say, there is not always money changing hands. There is some of that, sure, and other benefits. But there are other more persuasive and less obvious techniques, as the “the no alternative” 1059 proposal shows. Becoming familiar with the way professional communicators and managers manipulate you might be a start in your education. The City Manger’s office, as they’ve done here with the 1059 proposal, will purposely confuse you, “set the clock,” and present you with “no alternatives.” And it’s exceptionally hard to see this when within your group of eight councilors, some of you are willing patsies, and you accept that that as your role — and that is corrupt.

And, yes, there is a lot of “guilt by association,” meaning the corrupt workings of our local government, of which you are a willing part, are ones of association and a result of human emotional wiring. We like glad-handing and flattery. We like being treated well and hanging out with people who seem to enjoy us. And yes, all the better when like minded people contribute to our campaigns too.

Here’s a start at solutions:

  1. To end Council’s singular dependency on City Staff, Council Members must receive full time salaries and have funded staff.
  2. To address the corruption of influence, lobbyists must be registered. The City of Seattle has lobbyist registration.
  3. Lobbyists should be disallowed on committees and/or citizens should be paid. The current “stacking” of committees must end.
  4. We can have campaign finance reform and reject empty words and gestures.
  5. We can rewrite the Charter and should, adopting a “strong mayor” system. While there is a lot that is undemocratic about democracy, democracy still offers a small semblance of accountability whereas the City Manager system does not.
  6. You must begin an investigation of corruption in the City Manager’s office. I do not know how you do that — since you have no tools. But I suggest you try to find them.

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Stegner Fellow, Stanford University; Spivey and Chancellor Fellow, University of Tennessee. PhD, MFA www.storytheory.org

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Otis Haschemeyer

Otis Haschemeyer

Stegner Fellow, Stanford University; Spivey and Chancellor Fellow, University of Tennessee. PhD, MFA www.storytheory.org

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