Public watchdog or developer lapdog? Capture and Why You Pay
How developer bias captured Shorewood City Hall — and what it costs the people who live here.
Part One in Anatomy of a Captured City — how developer bias captured Shorewood City Hall. Start here for the short version of all of it.
"Agency capture" (also known as regulatory capture): Noun: a form of government failure where a regulatory agency—created to protect the public interest—instead becomes dominated by and serves the commercial, political, or ideological interests of the industry it is supposed to regulate.
Let's start small, because the small thing explains the big thing. We asked Shorewood for the City Engineer's records on the Watten Ponds project. The City said no — apparently because he isn't a City employee, he works for a private engineering firm the City hires.
That isn't even close to the law. Under Minnesota law, if a city hires a contractor to do the city's work, the contractor's records are public, same as an employee's. We said so. The records appeared.
But what if the resident who asked wasn't a lawyer and couldn't afford one? A neighbor without a law license gets no records and goes home — without knowing they were wrongly denied documents they were plainly entitled to.
Tiny, as injustices go. But it's representative, and it begs the question: why did the City try to block residents from information they could use to object to this development? And its corollary: why is the City working so hard to protect this developer and his development?
This website has asked if the Planning Department is in cahoots with developers. After going through the City's own records, our answer is yes. The Department sees these projects the way the developer sees them and gives almost no weight to anything else. Among people who have read the record, that isn't really in dispute.
The question we hear is the next one. Why? What is City staff getting out of this? Or, about the City itself — they want the development because they need the water hookups. The easy answers tend to be nefarious ones.
But those are probably wrong, and they're a problem. They explain the why with something that isn't true, and then nobody takes it any further.
There is a real answer, which isn't nefarious and can be fixed, and it has a name: agency capture.
The bias is the what. Capture is the why.
Agency capture is bias that puts the regulated party's interests — the property developer's, here — above competing interests like those of residents, quality of life or the environment. It happens when a regulator drifts toward the interests of the people it regulates. Not bribes. Drift. Until the regulator and the regulated decide issues the same way, with the same blinders, and the same goal — the developer's goal. You know what it looks like: deep-pocketed developers and businesses always seem to get their way. That's capture.
Capture has been studied since the 1950s. One of the economists who worked on it won a Nobel Prize for it. It turns up in airline safety, food inspection, bank examinations, drug approval — everywhere regulators regulate. It is not a scandal and it doesn't mean anybody is corrupt. It is the default in any regulatory body unless somebody builds something to prevent it.
Shorewood hasn't, and the bias of capture is common here.
And just because it isn't corrupt doesn't make it any less damaging. Wrong decisions still get made — decisions that put developers first and residents, the environment and quality of life last.
Before you decide this is about trees - It isn't.
A planning department that doesn't ask hard questions at the permit stage doesn't just cost you trees. It costs you drainage that doesn't work. Streets and basements that flood. Slopes that fail. And public money spent fixing something a permit condition would have prevented for nothing. We've seen all of these in Shorewood.
By then the developer has moved on. The bill stays here, and we pay it.
And it's also much more
Watten Ponds is the easiest example of capture we have right now, but it's just that — an example. Capture shows up in many Planning Department projects, and in things that have nothing to do with trees, like engineering contracts in Public Works. Watten Ponds is one of many.
What does capture look like?
Not like corruption. The difference shows up in small ways that add up to every decision going in favor of one side.
It asks the wrong question. A department that isn't captured asks what are we trying to accomplish, and what tools do we have? A captured one starts with what does the applicant need, and what is the least we can require? Only one of those has the public interest in it.
It doesn't go get another opinion. When a project raises something outside staff expertise, an uncaptured department brings in somebody who knows. A captured department decides the issue in favor of the applicant and lets it slide.
It hoards decisions. Consequential, discretionary calls get made administratively, in a safe spot where staff control the outcome, and elected officials hear about them afterward, if at all. Not out of defiance. It simply stops being convenient for the Council to be involved.
It hides what it chose not to do. A presentation to the Council saying we considered requiring this and decided against it is a point people can argue with. A presentation that omits everything staff didn't do invites no uncomfortable questions. Over time the Council hears only the arguments for the outcome staff wants, and none of the ones against it, however much they matter.
And residents get handled rather than answered. Ask for the file and you get a reason you can't have it — which is where this post started.
Last November, the City Engineer flagged a problem for this development. Under the City Code as the Zoning Administrator had been reading it for many years — and as the City had applied it, in the Engineer’s words, in previous developments — the wetlands identified on this property had to be placed in outlots. That, he wrote, would significantly impact the size/shape of the lots.
Outlots matter, they provide extra protection to wetlands. There’s a reason they have been used on this very street.
And this isn’t theoretical. The City already owns an outlot over the eastern edge of this same wetland. When a neighbor asked to buy a piece of it so he could make one more lot, the City told him no.
At 8:00 the next Monday morning, the Planning Director replied: he had reviewed the City Code and wanted change — I think I have a different interpretation than the long-serving planning director he had replaced the year before. Change that makes development easier.
At 2:00 that afternoon the City Engineer sent a revised review letter. The outlot requirement was gone. He described what he was sending as materials that will help them advance their design.
Read that again — the Planning Director unilaterally overturning established policy to help the developer advance their design. No record of why the policy was changed, what factors were considered, who was involved. Certainly no record of the Council being included, even though this change has major impacts on protection of natural resources in Shorewood.
Six hours. A reading of the City Code that earlier developers had been held to, reversed over a phone call between two staff members.
To help them advance their design.
We have seen all of those here.
The next three posts are three different matters — the tree file, the environmental review, and the City's own brief on appeal — every one of them going the same way, and together showing one clear pattern. The last post is why this happens to normal people, and the two small things we're asking the City Council to do about it.
If somebody tells you agency capture isn't a real thing, here is where the idea comes from — seventy years of it, including a Nobel Prize.
We live in Shorewood. The records described throughout are public data obtained under the Minnesota Government Data Practices Act.
Anatomy of a Captured City
How developer bias captured Shorewood City Hall.
Public watchdog or developer lapdog? Capture and Why You Pay — The name for what happens when a regulator starts seeing things the way the people it regulates do.
The Amazing Shrinking Environmental Review — An environmental review ordered in February covered one lot by September. Nobody voted. A chronology from the City's own records.
Eleven Tools, Not One Used - a Tree Preservation Policy that Doesn't Preserve Trees — The City's tree policy gave it eleven powers over how these woods come down. There is no record it used one of them.
One and a Half Percent, a Story of a Flood Foretold — The stormwater report left only a 1.5% margin on the largest storm, uphill of homes that have already flooded, without the City's file showing that the assumptions were checked.
Letting the Clock Run Out — The City is defending its own decision on appeal. Read what its brief leaves out.
How It Happens, and What to Do About It — Why this happens to normal people, and the two small things we're asking the City Council to do.
Related posts
Read this with the related posts:
Series overview · The Amazing Shrinking Environmental Review · Eleven Tools, Not One Used - a Tree Preservation Policy that Doesn't Preserve Trees · One and a Half Percent, a Story of a Flood Foretold · Letting the Clock Run Out · How It Happens, and What to Do About It · A Eulogy for Arthur · If Somebody Tells You Agency Capture Isn't a Real Thing
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