[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
 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



                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
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_____________________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (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        WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut       PAUL E. KANJORSKI, Pennsylvania
VIRGINIA FOXX, North Carolina        CAROLYN B. MALONEY, New York
------ ------

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     John Cuaderes, Staff Director
                          Jon Heroux, Counsel
                         Juliana French, Clerk


                            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


 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.
    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 private-public 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 handful 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.
    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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    [GRAPHIC] [TIFF OMITTED] T0693.002
    
    [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.
    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 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.
    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 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 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 low-rise, 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 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, 
not-for-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 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 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 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?
    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, 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 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. Joseph 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 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, 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 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 re-use. 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 
considered, 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 
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.
    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 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 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.
    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 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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