TOWER— An apparent attempt by Mayor Josh Carlson and City Clerk-Treasurer Linda Keith to scuttle the long-planned town home project at the city’s harbor failed on a narrow vote of the council on Monday.

Less than two weeks after the council had unanimously agreed to a modified tax abatement plan with the town home developers, Keith told the council that the attorney advising the city on the project had told her that the plan isn’t legal because the investor providing the upfront capital for public infrastructure is seeking 12 percent interest given the element of risk involved. The city had originally promised to back the cost of the public infrastructure but later reneged on that promise citing the potential risk if the project fails to move forward.

Keith said a state statute prohibits cities from paying two percent over the prime interest rate.

But Jeremy Schoenfelder, the master developer for Tower Harbor Shores, the company that is pursuing the development at the city’s behest, told the council that his company’s attorney, who is based in Minnesota and serves as city attorney for larger cities than Tower, could find nothing in statute to confirm Keith’s claim. Schoenfelder asked for both attorneys to talk about the issue so they have a common understanding of what, if anything, the law actually requires.

Schoenfelder and Keith engaged in a back-and-forth over the issue for several minutes, before Councilor Lance Dougherty asked if Keith had anything in writing on the issue. Keith said she had only had a phone conversation with the attorney and that he was traveling and was unable to provide anything in writing.

Dougherty said he didn’t like being asked to make a significant decision without enough information. Councilor Brad Matich suggested that he felt the council was being “railroaded.”

But Carlson said he now has doubts about the project even if the law doesn’t prohibit the interest rate proposed. “I question whether we have a viable project here,” Carlson said that he w.s no longer willing to go along with the interest rate. He also suggested, based on a comment by Keith, that the county would never approve the proposed interest.

Schoenfelder said if the city can find an investor willing to accept a lower interest rate, he would be fully supportive, but questioned whether that would be possible. And he noted that the city would not know the county’s position until it asked.

Councilors Matich and Dougherty objected to the mayor’s suggestion that the city doesn’t have a “viable project,” and said they favored letting the attorneys for both sides try to clarify the issue.

The interest rate had been an issue at the council’s Nov. 13 meeting, but city engineer Matt Bolf had noted that the city could not expect to eliminate its risk, by having an outside investor front the cost of public infrastructure, without expecting to pay more for the benefit.

In the end, the council voted to allow the attorneys to iron out any concerns regarding interest rates. Dougherty, Matich, and Councilor Brooke Anderson voted yes, while Carlson voted no. Councilor Kevin Fitton appeared to be silent on the issue.

Keith and Carlson had clearly anticipated they could convince the council to end the city’s involvement with Tower Harbor Shores, and they quickly tabled a proposal later in the agenda to issue a new Request for Proposals, seeking a new developer or proposal for development for the harbor area.

In other business, Tower Area Ambulance Director Steve Altenburg delivered what was billed on the agenda as an “ambulance director’s report,” but was, in fact, a 46-minute-long harangue against Timberjay Publisher Marshall Helmberger for what he called “lies” and an effort to scare the public about the ambulance department’s shift to paid on-call and more recently about Altenburg’s request for a third ambulance. Altenburg said the staffing costs for the POC program have proven to be less than he originally predicted and less than Helmberger had suggested in previous news stories. Altenburg acknowledged following the meeting that the service has saved money on staffing because it had hired less-experienced Emergency Medical Responders, rather than EMTs. The service is also paying the on-call staff less per hour than Altenburg had originally proposed.

Altenburg, throughout his rambling and disjointed presentation, regularly misrepresented reporting in the Timberjay, pulling sentences or partial sentences from a wide variety of news stories or editorials that had been published over the past ten months without providing context.

Altenburg provided no written report, but offered his comments off-the-cuff, and provided no updated figures on the number of transfers in recent months, although he acknowledged that calls seem to have dropped in recent months, saying it was a trend being experienced by other departments.

At one point, he questioned Helmberger’s business judgment, noting that he had been involved in an effort to establish a state-licensed daycare facility to the community, which had been forced to close when the center was unable to find replacement staff after its director had quit.

“Five months, it went out of business,” he said. Helmberger, along with several others, had undertaken the effort to establish a daycare at the request of Mayor Josh Carlson after a community meeting revealed the lack of daycare services in the community.

He also said that Helmberger had been involved in obtaining a $125,000 grant from the IRRRB to help bridge a funding gap in the early stages of the harbor town home project. He falsely claimed that those funds had been “given to Orlyn [Kringstad],” when in fact the funds had gone to Tower Harbor Shores, a corporation with multiple investors to pay for architectural, engineering, and marketing costs associated with the project. “That is a matching grant fund,” said Altenburg. “After a year and a half later, there’s not a single receipt in matching expenditures. No collaterol,” said Altenburg.

Altenburg’s claim was false, since the money was only allotted to Tower Harbor Shores based on paid invoices and posted checks documenting payment, a fact that both Helmberger and Deputy Clerk Terri Joki-Martin had confirmed in a review of the payments at the time.

Altenburg claimed that the developers had provided no financials showing the potential to repay the loan. In fact, the IRRRB opted to make the grant repayable to the Tower Economic Development Authority because Tower Harbor Shores had provided financials demonstrating the potential for repayment. In other instances, the IRRRB provided similar funds to start-up projects on a purely grant basis, requiring no repayment.

Altenburg’s comments targeting Kringstad came three weeks to the day after Kringstad handily beat Altenburg and a third candidate in the race for Tower mayor.

Altenburg’s comments devolved at times into nit-picking, suggesting that Helmberger had misreported his comments regarding the purchase of an ambulance from Lifeline. He said Helmberger had reported Altenburg as saying he was “looking at going with the Lifeline one,” while Altenburg claimed he said he was “leaning toward Lifeline.” In fact, the digital recording of the meeting confirms that the Timberjay’s reporting was accurate, word-for-word (The Timberjay has posted the relevant portion of the digital recording on its website at timberjay.com along with this story).

Indeed, Altenburg went on at the Nov. 13 meeting to say that he would be finalizing a “contract” for the Lifeline ambulance and bringing it back to the council for final approval. After inquiry from this newspaper about the lack of a competitive bidding process, the city requested formal bids from various suppliers for the ambulance. A bid opening is now planned for early December.

In other action, the council:

 Approved a resolution naming Nov. 14, Herb Lamppa Day in Tower in honor of the former mayor, city councilor, teacher, and businessman who died earlier this month. The resolution highlighted Lamppa’s many achievements for the betterment of Tower, including improvements to city infrastructure and promotion of economic development.

 Received their first look at the city’s proposed 2019 budget, which is set for final approval on Dec. 10. The council offered no questions or discussion.

 Approved an updated quote of $16,220 from GMen for the demolition of two dilapidated residences, one located on S Second and the other on Main Street. The bid was $1,200 higher than the original version, reflecting the discovery of some asbestos in one of the buildings.

 Approved contracts with SEH for the second phase of LCCMR funding for the harbor and riverfront and for repairs to Pine Street near the fire hall. The city received $420,000 from the Local Road Improvement Fund for repairs to the rough portion of street. The project will require a $186,000 local match. Keith said she was not sure where the funds would come from.