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Town home agreement deadline extended to Jan. 3

Chambers overflowed with city residents in favor of finalizing a deal

Marshall Helmberger
Posted 12/21/18

TOWER— A short special meeting agenda yielded one of the longest Tower City Council meetings in years on Wednesday, Dec. 19, as councilors wrestled for the third straight meeting with how to …

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Town home agreement deadline extended to Jan. 3

Chambers overflowed with city residents in favor of finalizing a deal

Posted

TOWER— A short special meeting agenda yielded one of the longest Tower City Council meetings in years on Wednesday, Dec. 19, as councilors wrestled for the third straight meeting with how to proceed on the proposed town home project at the harbor. And this time they had plenty of company as the council chambers were filled to overflowing with city residents, many of whom spoke out in favor of finalizing a deal for the town home development.

On Dec. 10, the council had given representatives of Tower Harbor Shores (THS) until Dec. 14 to sign a new revision to a development agreement for the project, but that deadline came and went without a signature.

A Dec. 19 email from Kelly Klun, the attorney for THS, indicated that the developers needed to see some changes in the wording to portions of the agreement, particularly timelines for phasing and wording surrounding the assignability of dock space.

“It’s up to us what we want to do,” said Mayor Josh Carlson, who noted the council could walk away from the project and seek a new developer or continue to try to reach an agreement with THS.

Councilors expressed ambivalence about the project. “A lot of work has gone into this,” said Councilor Lance Dougherty. “I don’t think we can give up on it at this point.” Yet Dougherty also expressed concern that eight questions that City Clerk Linda Keith had submitted to the developers had not been answered.

“I’m 50-50 on it,” said Councilor Kevin Fitton, “but how many deadlines have to go by before we do something?” Fitton also questioned if THS could meet the April deadline for greenlighting the project for 2019 construction given the delays over the development agreement.

Councilors also wanted to know the developers’ position on the latest tax abatement proposal, that the city had adopted on Dec. 10.

Michael Wood, one of the investors in the THS project, said he shared the council’s frustration with the project delays. “Delays cost money,” he said, and he urged the council to contact the project’s general manager, Jeremy Schoenfelder, to find out what still needs to be done. “I don’t understand the phasing. Jeremy could explain those things if you wanted.”

Steve Altenburg said the city erred in not issuing a new Request for Proposals after the original development agreement expired in 2017.

Dougherty questioned whether there was much interest in development at the harbor. “In the past five years, how many developers have come forward?” he asked.

Keith said three other developers had inquired about the project, although she provided no details.

“I’ve never heard about that,” responded Dougherty.

The council continued to discuss the issue for considerable time, without much resolution. Several in the audience urged the council to give the project more time. Longtime city maintenance director Randy Johnson said the council had little to lose and noted that the city had shown patience in the past on other portions of the overall harbor development. “If we have a little glimmer of hope, we need to give it time to work,” he said.

Local resident Steve Wilson agreed. “As a taxpayer, this thing may ultimately fail, but if the plug gets pulled now, when will construction begin? You’re talking years, if ever.”

Wilson and others urged the council to call Schoenfelder, something the council had refused to do at their Dec. 10 meeting.

“Jeremy really knows this stuff,” said Wood. “I guess I don’t know why you won’t get him on the phone. He is available tonight.”

Tom Mesojedec, who owns the Marjo Motel property, pressed the issue as well. “Why isn’t Jeremy being brought on the phone?

After just over an hour of unproductive discussion, the council finally agreed to call Schoenfelder, using one of the councilor’s cell phones. Once on the line, Schoenfelder quickly clarified the concerns over the details in the agreement as presented. He noted that he had received the revised development agreement late on Dec. 13, one day before the city’s imposed deadline to sign. The version he received still listed Tower Vision 2025 as the developer, rather than Tower Harbor Shores, which was an issue that Keith said she had quickly fixed. But Schoenfelder said some of the smaller details had been overlooked by both sides as larger issues, such as a city demand for a letter of credit and tax abatement, took center stage in the discussions.

Schoenfelder indicated that THS is prepared to accept the latest tax abatement plan the city had proposed on Dec. 10, even though it falls short of the reimbursement that he had earlier indicated would be necessary.

Schoenfelder, in an interview the following day, said he opted to accept the terms in the end to prevent the city from doing something to end the project. He also indicated that he’s aware of recent discussions with funding agencies that suggest there might be more funding available to help pay for the public infrastructure, which would reduce the amount of private dollars that THS would need to expend for streets and utilities. “I’m not sure they’ve been approached as aggressively as they could be to this point,” he added.

As for the questions that Keith had submitted, Schoenfelder said he could answer some, while others were irrelevant to the project. In one question, Keith had asked who from THS had indicated to Timberjay Publisher Marshall Helmberger that a lawsuit was a possibility. “I’m frankly a little gun-shy when I’m getting these questions that have no relevance to what we’re trying to accomplish,” he said.

Schoenfelder also questioned a claim by Keith that she needed $250,000 in receipts to meet city guidelines on the developer’s funding match. Schoenfelder said he saw nothing in the loan agreement requiring that, but added that the project will generate far more than $250,000 in qualified expenses.

When asked if the changes to the development agreement could be completed by the end of the year, Schoenfelder hedged, saying that would be up to attorneys for both sides. He noted that Klun was planning a trip to China in the near future, which could affect her availability.

The council then discussed whether to set a deadline or leave the issue to the next council. Dougherty said he had intention of coming back to another meeting, which would have to be held in early January, before the new council takes over on Jan. 7.

But Fitton motioned to set a deadline of Jan. 3, and the council indicated they would come back for one last meeting at that time to either give final approval of the deal or take some other action.

TEDA loan

With the development agreement apparently still in play, the council took up the TEDA loan, which is being transferred to Tower Harbor Shores. Attorney Klun had raised questions about how the new loan was being presented. In a Dec. 19 email to the city, Klun said her clients had expected the loan would be written as an addendum to the existing loan with both Tower Vision 2025 and THS. “We can sign this new loan agreement, but we would need to update the dates of first payment and execution,” Klun wrote. “If that is the case, I’m assuming the previous loan with Tower Vision would then be cancelled, but am wondering how that would be memorialized. We can’t speak for Tower Vision, but would assume they would want some sort of documentation.”

Keith asked the council what criteria should be used in reissuing the loan to THS, suggesting that the new loan would be subject to requirements that had not been part of the original loan.

Keith and Carlson repeated earlier complaints about the handling of the loan, in which TEDA served as a pass-through for IRRRB funds that went to the town home project.

In the end, however, the council repeated their earlier decision to convert the loan solely to THS.

“This loan has been the bane of my existence,” said Carlson. “If they’re willing to sign the loan, let them.”

City officials, as they have at every meeting since installing a video camera in the council chambers, then launched into another extended criticism of Helmberger.

Keith began the assault with an angry presentation, accusing Helmberger of misrepresenting the guidelines surrounding the loan in an email to Councilor Fitton. In an email on a different topic, Helmberger had noted that the purported TEDA guidelines that Keith had put in the council packet earlier in the month were not the ones that TEDA had approved, at least not in 2017 while he was president of TEDA.

Keith challenged that claim, angrily tossing more than a dozen emails, agendas, and other documents onto the council table, which she claimed show the guidelines she presented were the ones approved by TEDA.

Helmberger did not respond at the meeting, but indicated following that meeting that he will have a documented response to Keith’s outburst, and that response will appear in a future edition of the Timberjay. Early holiday deadlines made it impossible to address the issue immediately.

Ambulance

Councilor Fitton then offered a presentation on ambulance funding that took issue with some of Helmberger’s comments on the subject during recent public input. At the Dec. 10 council meeting, Helmberger had asked Fitton to examine the accuracy of claims by Ambulance Director Steve Altenburg, who accused Helmberger, on Nov. 26, of lying about call run data and of misquoting him from a November council meeting. Shortly after that meeting, Helmberger provided councilors with an excerpt of his digital recording, showing that he had accurately quoted Altenburg.

Altenburg had also taken issue with financial projections that Helmberger had produced in March. On Dec. 10, Helmberger provided the council with data that Altenburg had provided to him at the time, from which he derived his projections.

Fitton’s presentation did not address Altenburg’s claim that he had been misquoted nor the earlier financial projection that had appeared in the Timberjay in March. And Fitton did not challenge the call run numbers that appeared in a Timberjay story earlier this fall, but he did take issue with the claim that emergency runs have seen little growth in recent years. He had to go back 10-15 years to demonstrate a growth trend, however, since emergency runs have been essentially flat for the past five years, as the Timberjay documented in a Dec. 21 story on the issue.

Altenburg presented a new chart to go with Fitton’s presentation, that went back to 2004 and which showed gradual growth in emergency calls from 2004-2013, before leveling off in more recent years. Altenburg’s chart showed the department responded to 336 medical calls in 2013 and had responded to 339 such calls in 2018 with just over ten days remaining in the year. Actual run reports from the city of Tower show 340 medical calls in 2013. While the number of emergency calls peaked at 361 in 2016, the numbers have declined the past two years and are likely to end 2018 below 350.

Fitton’s presentation also failed to address the inaccuracy of Altenburg’s claim at the Nov. 26 council meeting, stating that the department’s call volume had experienced “five years in a row that went up 20 percent.” Fitton indicated that Altenburg’s claim was subject to interpretation and suggested that he might have meant to claim a 20-percent increase over a five-year period.

Fitton claimed there had been an 18-percent increase over the last four years, but Fitton’s selection of 2014 as a starting point appeared cherry-picked, since it had the lowest number of runs in the past several years. An actual five-year comparison, starting at 2013, puts the increase at just 15 percent, and the increase is due almost entirely to the department’s decision to accept more non-emergency, inter-hospital transfers. Emergency runs have been virtually flat over the five-year period.

Fitton did address a concern raised by Helmberger about whether the cost of the paid on-call program could make it more difficult to fund ambulance purchases in the future. Fitton said it did not appear to be the case, although he came to that conclusion by assuming that the ambulance service will now replace rigs on a 14-year rotation, rather than the previous goal of replacement every five years. Helmberger, in raising his concerns, had assumed an average of a seven-year replacement schedule.