Red tape and many other problems slow progress on ambitious project to a crawl.
Like many of his neighbors, Chad has watched the rollout of an ambitious, environmentally friendly urban renewal project in the zone. New curbs and sidewalks, designed for walkers and bikers. Houses sealed against the winter chill and the summer scorch. Kansas City Power & Light even installed a “smart” electric meter on Williams’ house this summer, free of charge, so he could watch his energy use more closely and save money.
“I love this neighborhood, and most of the people in it are very pleased to see this kind of thing starting to happen around here,” he says.
But it has taken far longer than anyone expected for visible progress in the zone. Indeed, almost three years after the ambitious program was launched, millions of dollars remain unspent, promised jobs have not materialized, and many neighborhoods remain unimproved.
The Kansas City Star found that since U.S. Rep. Emanuel Cleaver first proposed the Green Impact Zone in April 2009:
• Federal and local governments pledged more than $85 million for five major improvement projects in and around the zone. Of that amount, just $25 million had actually been spent or bid by the end of September 2011.
• The major projects are deemed “responsible” for fewer than 150 jobs, according to figures provided to the government. Cleaver had expected 1,000 by now.
• A special program to weatherize homes was canceled after spending $1.7 million in federal stimulus money to weatherize 150 homes, an average of more than $11,000 per home.
• The smart electric meters installed in the zone, worth at least $2.8 million, were built in Mexico by a company with links to a former Obama administration official in the U.S. Energy Department.
Supporters of the Green Impact Zone, however, said the problems and delays didn’t tell the whole story. They maintain that the zone’s infusion of money, training and expertise into one of the city’s most troubled areas has brought enthusiasm and hope, and has started bringing better homes and good-paying jobs to residents who’ve been ignored for almost half a century.
“For 40 years this has been sliding,” said Anita Maltbia, director of Green Impact Zone’s administrative office. “In two years are you going to turn all that around? No.”
Cleaver, a Missouri Democrat, also says the projects are beginning to yield important improvements to the city and the region. In fact, additional federal money may be announced soon.
But he admits frustration with the red tape and regulatory tangles that have slowed progress on some of the zone’s most important projects.
“The president miscalculated, as did I and everyone else,” Cleaver said. “I’m not happy about it.”
The first outline of the Green Impact Zone project was made public a few months after the American Recovery and Reinvestment Act — the $800 billion federal stimulus — became law.
Cleaver’s plan: Use federal tax dollars in a focused effort to rebuild the city’s most challenged homes and businesses with 21st-century energy technology. Up to $200 million in taxpayer money might be available, he said, to revitalize old neighborhoods and put people to work.
The model was Greensburg, Kan., which rebuilt itself as an environmentally conscious community after a devastating tornado.
“We are investing federal money wisely and building an inclusive green economy strong enough to create jobs for residents,” Cleaver said when plans for the zone were announced.
Slowly, parts of the zone are starting to resemble the new Greensburg. Homes are being torn down. Streets are being repaired. Furnaces are being replaced.
But some Kansas Citians who shared Cleaver’s initial enthusiasm now acknowledge that they’re disappointed with the pace of progress.
Josh Hamm owns property in the zone and toured Greensburg with Cleaver.
“I had all these neat ideas that could be accomplished, maybe, in the Green Impact Zone,” Hamm said. “And I sensed Cleaver was on board with the same ideas. … But the reality is not the dream.”
Nick Loris, an analyst with the conservative Heritage Foundation, said a slow rollout of stimulus-funded green projects had been typical nationwide.
“Regulatory hurdles, some labor hurdles,” Loris said. “And it takes a long time for construction projects to get off the ground.”
Cleaver called the zone’s job creation record most disappointing.
“At this point, I thought we would have a thousand or more jobs,” he said. “I am frustrated that the job creation has not surfaced as fast as we wanted.”
But others insisted job creation isn’t the only goal, or even the most important goal, of the zone. The projects, they said, will create a vibrant livable community that will eventually bring private jobs and savings for residents.
“We firmly believe that we’re going to see continued positive change over the coming year,” said Marlene Nagel of the Mid-America Regional Council, which has played a key role in overseeing work in the zone. “And in the long term, it’s going to make a real difference, for not only that neighborhood but the whole community.”
Here’s a look at the progress in four major project areas in the Green Impact Zone:
The smart grid
In late 2009, the U.S. Energy Department awarded Kansas City Power & Light almost $24 million to build what it called a “Smart Grid regional and energy storage demonstration project” in Kansas City.
KCP&L promised to match the stimulus grant with $24 million of its own. The idea: Upgrade the central city’s electrical system with new meters, thermostats, relays, transformers and wiring to improve energy efficiency and help customers save money. “Smart” electric meters would be linked with the utility by computer, allowing homeowners and businesses to more closely monitor their energy use, cutting back when necessary to save on their bills.
Rep. Emanuel Cleaver called the grant “transformative.”
But it would take months for the transformation to begin. The final smart-grid grant agreement wasn’t signed until September 2010, nine months after it was announced and 17 months after Cleaver unveiled the zone project. Actual installation of the meters, using KCP&L crews, started only in October 2010.
“We had to go through the process of filling out every last form, defining the project in incredible detail,” said KCP&L spokesman Chuck Caisley.
The meters weren’t cheap. KCP&L paid Atlanta company Landis+Gyr more than $2.8 million for 14,000 smart meters, roughly $200 each.
But almost none of that stimulus money went to American workers or created new American jobs.
A spokesman for Landis+Gyr confirmed the smart meters were built at a company plant in Reynosa, Mexico — in fact, Landis+Gyr, which is now owned by the Japanese company Toshiba, has no major domestic manufacturing facilities.
KCP&L said no American company made smart electric meters. The stimulus bill included so-called “buy American” requirements, but they applied only to material used for projects on public buildings like firehouses and city halls.
Other questions have been raised about connections between at least one former Obama administration official and Landis+Gyr.
In April 2010, McClatchy Newspapers reported that Cathy Zoi, then a top official in the Energy Department, owned between $250,000 and $500,000 in Landis+Gyr stock. Critics said Zoi stood to benefit from the federal investment in green projects such as the zone.
At the time, an Energy Department spokeswoman denied any conflict of interest, maintaining that Zoi had not taken part in any decisions affecting Landis+Gyr and had disclosed her holdings at Senate confirmation hearings.
Zoi no longer works for the government.
The cost for the smart meters appears to be competitive. In Europe, where smart meters are more common, the devices can cost between $75 and $100, but in the United States most utilities are paying between $150 and $250 installed, according to a July report from the Edison Foundation’s Institute for Electric Efficiency.
The 14,000 smart meters are now in place, Caisley said. By the end of this summer, the company had spent $8.6 million of its federal stimulus grant, about one-third of the full amount.
He could not estimate how much of that $8.6 million was actually spent inside the zone. The grant was made to KCP&L and does not have to be spent inside the Green Impact Zone, which is an arbitrary designation and not the legal focus of virtually any of the grant awards.
“We don’t look at our project as a Green Zone project,” Caisley said. “We look at it as a smart-grid demonstration project that happens to encompass the Green Zone.”
Indeed, not all of the taxpayers’ money is going to the zone. In fact, more than half of the project is being built in what KCP&L now calls the Blue Zone, homes and businesses in neighborhoods surrounding the 150-block Green Impact Zone. Only about 4,000 of the smart meters went to homes and businesses in the Green Impact Zone, according to rough estimates.
KCP&L has told the government the project is responsible for about 70 jobs since July 2010. The White House once referred to those jobs as “created or saved,” but the government’s oversight website dropped those terms in 2010. The number could refer to jobs that existed before the stimulus — and after it.
But supporters contend that the value of the smart-grid project should not be measured just in the jobs it directly creates. Instead, they argue, a smarter electrical system will save homeowners and businesses millions of dollars while helping the city’s utility more completely understand 21st-century energy use and avoid building additional power plants.
Homeowners, however, aren’t sure yet whether the new meters are making a difference. Chad Williams says he has watched his bills closely and thinks they’ve gone down “a little.”
The TIGER grant
Kansas City officials thought they had a way to save energy, time and money in the Green Impact Zone: Spend $4 million in stimulus money to upgrade and interconnect hundreds of traffic signals.
The improved system would allow motorists and mass transit vehicles to move through the streets more quickly, saving gasoline and reducing stress on streets and neighborhoods.
It’s still a great idea, according to officials at the Kansas City Area Transportation Authority, which got a $26.2 million federal stimulus grant (known as TIGER) for various projects in the Green Impact Zone, including the signal upgrades.
In fact, the bad economy has pushed down construction bids — the traffic signal improvements may now cost just $2.4 million.
The bad news? Construction isn’t expected to start until February. And the upgrades won’t be finished until December 2012, almost four full years after the stimulus passed into law.
“It’s certainly longer than we would like,” said Dick Jarrold, the senior director of development and engineering with the ATA.
U.S. Transportation Secretary Ray LaHood announced the TIGER grant for the Kansas City region in February 2010. Some of the money would go for transportation projects in Kansas, he said, but the rest would go for infrastructure improvements in the zone, including better stoplights.
Almost immediately, though, the federal government began to bicker over which of its agencies would have primary jurisdiction over Green Impact Zone-TIGER projects.
The decision was important: Different agencies have different rules for contract compliance. The law required the ATA to “buy American” for the traffic signal project, but two agencies — the Federal Transit Administration and the Federal Highway Administration — disagreed over how to interpret that law.
“It took them until June (of this year) before they came back and gave us a written reply that said, ‘Yes, the way you’re planning to buy the traffic signals for the Green Impact Zone is compliant with Buy America,’ ” Jarrold said.
ATA officials, like many recipients of stimulus money, said they wanted to make absolutely sure the rules were followed. If the government decided later that a recipient had misspent taxpayer money, that recipient could be forced to repay it — costing the local agency or group millions of dollars.
There also were delays in paving and sidewalk repair projects in the zone. Some projects were postponed until the traffic signal project was finalized to avoid digging up repaired pavement to lay electric lines for the signals.
But critics are worried some of the work may be wasted money.
“I see money being thrown away for no real reason,” said Josh Hamm, a Green Impact Zone property owner. “The goals I thought were being set for the Green Impact Zone just seem to be less focused than they should be.”
Jarrold disagreed.
“There’s actually a lot of work now getting done,” he said. “You can just get a sense of how much of an improvement it is just to have good streets, curbs and sidewalks, and good access to bus transit.”
Indeed, crews were hard at work in mid-November pouring concrete up and down Troost Avenue and in nearby neighborhoods. So far, the ATA has awarded $5.8 million in contracts, about 22 percent of the federal TIGER grant.
Not all of the $26.2 million earmarked for the Green Impact Zone is going for newer traffic signals or better sidewalks. A new pedestrian bridge on Troost will cost $2 million and should be open in January 2013. The city has already spent $5.8 million in stimulus funds for work on the bridge, although planning for replacement of the aging structure began before the Green Impact Zone was conceived.
Partly as a result of the slower-than-expected rollout, direct job creation from the TIGER grant has been minimal. In fact, the ATA thinks, the TIGER grant for the Green Impact Zone had generated fewer than 30 jobs through the end of summer — although hundreds of private construction jobs are being “saved” now because of the just-started work and could show up in later reports.
In September, the ATA said 140 people were working on Green Impact Zone projects, primarily sidewalk repair.
Weatherization
It took Green Impact Zone resident Elizabeth Bejan a couple of tries before her Troostwood home could be weatherized — insulation, caulk around the ductwork, a tighter attic and crawl space.
“I had to request a different contractor,” she said. “I didn’t feel the first contractor respected my time.”
The second contractor, she said, did just fine.
But her months-long delay is symptomatic of problems that plagued the stimulus-supported weatherization program almost from the start. There were arguments over wages and contractors’ qualifications. Some clients found the qualification guidelines confusing. (Homes weatherized after 1994, for example, are not eligible.) Training enough workers was a challenge, and small businesses couldn’t ramp up quickly enough to do the work.
“You don’t create a whole industry overnight,” said Clyde McQueen, head of the Full Employment Council, which has received stimulus money for training and hiring workers in the Green Impact Zone.
The Mid-America Regional Council received $4.5 million in a special stimulus grant to weatherize hundreds of homes in the zone, only to watch the state pull $2.8 million back because the agency moved too slowly. Some of that money was given to the city’s weatherization program, and some may end up paying for similar programs in other Missouri cities.
In the end, MARC said it weatherized just 150 of the 2,600 homes in the zone.
Other cities and states have had similar problems. West Virginia, Mississippi, Michigan, Washington, Illinois and Missouri have seen delays, substandard work and improper record-keeping, according to outside reports and audits.
The stimulus bill allocated $5 billion for weatherization programs nationwide. The money must be spent by March.
In Kansas City, MARC’s loss of weatherization responsibilities prompted a scramble to pick up the slack in the zone. Kansas City’s municipal weatherization program got some of the stimulus funds to finish work on homes started by MARC contractors, and used other stimulus money for weatherization projects inside and outside the zone.
Administration
The Kansas City Council agreed to set aside $2.5 million in city money to fund the Green Impact Zone’s administrative costs for two years. At the end of September, about $2.3 million had been spent or bid, and the balance is expected to be gone by the end of the year.
The money went through the Mid-America Regional Council, which paid for most of the zone’s office expenses. Anita Maltbia and her staff, now six employees, try to reach and educate residents about the zone’s projects now under way.
“You have to have people like us getting up every day, working about 50 or 60 hours a week, to try and make things happen,” Maltbia said. “There are things we facilitate happening, things we coordinate happening, and there are things we manage.”
Among the administrative expenses:
• $96,886 annual salary for zone director Maltbia, plus health insurance and retirement benefits.
• Base rent and expenses of $40,000 annually for 2,600 square feet of space at 4600 the Paseo, paid to the building’s owner, the Public School Retirement System of the Kansas City School District.
• $36,031 for meeting expenses (food, signs, supplies).
• $9,695 for radio and TV advertising about the project.
• $45,000 to provide video documentation of the zone’s activities, posted primarily on the Green Impact Zone’s website.
Maltbia said all the outreach efforts were critical to the success of the zone.
“People are not going to sit and read your three-ring, 3-inch-thick notebook of what happened in the Green Impact Zone,” she said. “But you can convey that in a 20-minute documentary with such impact and great accuracy.”
The zone and MARC also have used city money to pay several neighborhood groups for training and employment. In 2009, MARC signed a $186,000 contract with the Ivanhoe Neighborhood Council for “community improvements and job training opportunities,” according to MARC documents.
Ivanhoe used the funds to develop a stormwater diversion project, designed to help zone residents with flooded basements and high water on their properties. The money paid for training 27 people, Ivanhoe director Margaret May said in an email. Of those, 15 were eventually hired for “part-time/seasonal” work.
Seven of those employees lived in the Green Impact Zone.
The program involved repairs to 87 homes, May said. It ended in August when the funds ran out, but she considered it a success.
Rep. Emanuel Cleaver said stimulus spending in the zone brought some 700 summer jobs to the area in 2010, although the money came from a grant that extended the program to the entire 5th Congressional District he represents.
Ivanhoe also is a partner with EnergyWorks KC — another federal grant recipient — in an effort to demolish seven homes in the zone. That city-funded contract, for more than $125,000, includes hiring 14 people trained to deconstruct homes and will be finished by the end of this year.
EnergyWorks received a $20 million federal grant to provide energy improvements in seven neighborhoods, including but not limited to the Green Impact Zone. The city recently began accepting applications for some of those stimulus funds, but has spent only about 5 percent of the available money to date.
MARC said it has reached an agreement with Kansas City to extend city funding for the Green Impact Zone office by $750,000. The City Council is expected to consider the contract before the end of the year.
Maltbia thinks the Green Impact Zone office should be made permanent.
“It’s not Jack-and-the-beanstalk seeds,” she said. “You don’t just throw it out there. You have to get out there and plow the ground and plant the seeds and water and fertilize.”
To reach Dave Helling call 816-234-4656 or email to dhelling@kcstar.com.
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