Friday, June 16, 2006

180-degree turn on Five Rivers should be substantial enough change to bring project back to council

Friday, June 16 2006 @ 01:34 PM MDTContributed by: admin
Every day it seems we pick up the Oshkosh Northwestern, only to find something new being reported about the Five Rivers development – little of it good, it seems, and most, if not all of it, bringing more questions than answers. With those questions certainly comes more reason than ever to be skeptical of what we’re being told by the parties who have been at the center of the discussions for the past approximately two years.

The first shock came two weeks ago when we learned that in approving a term sheet last fall and an extension of that term sheet in March, the Oshkosh Common Council basically voted away its right to approve a final developer's agreement before groundbreaking – news that surprised most council members as well as many in the community. But according to city staff, the only way the agreement would need council approval would be in the event of a “substantial” change to the basic terms in the term sheet. And guess who gets to decide if there has been a substantial change: that’s right – city staff! Very convenient, and as far as I am concerned, highly inappropriate, especially since city staff members are not elected officials and really only have to answer to citizens through the council.

Then the other day we learned that because C.D. Smith Construction of Fond du Lac intends to finance the construction of this project, as opposed to developer Tom Doig securing traditional financing, meeting the threshold of pre-selling 50 percent of the condo units is no longer a requirement, or even considered important, apparently. One would think that even without traditional financing, C.D. Smith would want the kind of reassurance pre-sales could bring so it doesn’t get stuck holding ownership papers on this project at the end of construction if Doig can’t come up with more permanent financing by then.

We also have recently learned that Doig may be seeking an extension from the September 2006 groundbreaking set forth in the two term sheets and that C.D. Smith has not had any discussions with city staff at all to this point. Since they are the ones providing the construction financing and giving the city its much sought-after “missing link,” one would think that a call to C.D. Smith would have been one of the first steps in the city’s performance of its “due diligence,” wouldn’t you?

Last evening we taped a segment of Eye on Oshkosh with Common Councilman Bryan Bain discussing what the council learned at its Tuesday meeting from community development director Jackson Kinney and where we go from here. The council meeting was intended to help explain where the project was at and shed light on the latest developments. While it answered some questions, it spurred several others, among the public and council members alike. Now there are even more questions. Kudos to those council members – Bain, Paul Esslinger and Dennis McHugh – who continue to believe there are problems with the project and/or developer; that not enough has been done to satisfy the city’s position; and that perhaps the project should either be dropped or at least slowed down to insure the city and its taxpayers are duly protected.

Now this morning we read in the Oshkosh Northwestern that the term sheet rules are supposedly backwards and that “it's not possible to sell the condominium units without a developer's agreement, and without a history of sales, long-term financing is nearly impossible.” I’m sorry but someone is either highly confused about what has been going on for the last two years or we have been lied to, misled and manipulated throughout this ever-unfolding process. After all, have we not been hearing how there is so much interest in this project and how they’re busy taking deposits and reservations for the various units? I understand they perhaps can’t actually close on the deals until there is something more formal in place, but why is this the first we’re hearing about the term sheet being backwards? Why did C.D. Smith Construction just two weeks ago submit a letter of financial commitment but say nothing at that time about the term sheet being "backwards?"

And for someone to suggest that they cannot come up with condominium documents or let interested parties know what a condo association fee might be until a developer's agreement is signed is ridiculous.

What they’re asking us to believe is that they can establish a price for units; they can market the units; they can take reservations and deposits for the units; and they have oodles of interest generated; but they can’t tell people how the association would be run or what their monthly dues would be without putting the city taxpayers on the hook for millions of dollars before-hand. Such a suggestion is both ridiculous and offensive. It also does not seem plausible that there could be so much interest and deposits being made on units without a formal agreement being in place, but suddenly the lack of condo documents and/or lack of knowing what a monthly association fee will be is going to be a deal breaker. In no other city where I’ve reported on economic development projects – large or small – has there ever been this much confusion and almost daily or weekly changes in the rules of the game. Nor has there ever been a developer and his cohorts calling the shots like we have here with Mr. Doig and his supporting cast of players.

My co-host Tony Palmeri has called this a “frightening bait and switch” tactic and I wholeheartedly agree with that analogy. I would again harken back to what I said earlier: If C.D. Smith and the realtors at Re/MAX are right – that there must be a developer's agreement in place before any units can be sold or traditional financing be obtained – why has no one said anything like that before now? Who’s been asleep at the wheel? Or is this just another slick attempt to try duping city leaders and citizens?

Here’s what I think has happened:
Following the council meeting Tuesday night I think some people became scared that there may not be enough council support for this project to make it happen. As a result, the rules of the game are changing in order to force the city’s hand. Something stinks to high heaven in this deal and the aroma becomes a little more pungent every morning when we open our daily paper.
Whether I’m right or wrong about what happened, one thing is for sure: either the city administration was right in crafting the term sheet and proceeding in the order it has (though many of us disagree with their overall methods of disclosure, or lack thereof, to the council) OR the contractor and realtors are right in saying that everything the city put together is backwards. Either way it is a testament of gross incompetence on someone’s part that we are first finding these things out in the 11th hour, or later. And no matter what, with the realtors, C.D. Smith and Doig’s attorney now saying they need a developer's agreement in hand before they can proceed with sales, etc., I think there is certainly a substantial enough change that this project can’t possibly proceed forward without it going back to the council. And that is where the rubber will have to meet the road and the line gets drawn once and for all. It really seems with so much confusion and continued secrecy, the best way for this project to proceed is for no public funding to be part of the plan. We have invested and gambled enough already. If Tom Doig wants to develop it, let him now do it on his own.

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This just in, Doig has whine with cheese
Authored by: DBCooper on Friday, June 16 2006 @ 04:38 PM MDT
The city has just released a letter from Doig that it received yesterday. Check the Northwesterns website for details. A whole bunch of whining by Doig, with some threats of pulling out if the city doesn't act soon. Whaaaa.

This just in, Doig has whine with cheese
Authored by: admin on Friday, June 16 2006 @ 05:24 PM MDT
Thanks for jumping in here, DB. I appreciate it. I was writing my piece at the same time you were posting your comment. Glad to see we're thinking along the same lines here and working together to help get the word out.
- Cheryl

180-degree turn on Five Rivers should be substantial enough change to bring project back to council
Authored by: admin on Friday, June 16 2006 @ 05:17 PM MDT
Now this afternoon we read in the Oshkosh Northwestern that developer Tom Doig has sent a letter to community development director Jackson Kinney, threatening to pull his proposed $60-some million project out of Oshkosh and take it to another community.

In his letter - dated June 14, received by the city yesterday, June 15, and made public earlier this afternoon – Doig says the city has “too many barriers to entry and is not ‘development friendly.’” His letter went on to say that he thinks “it’s a travesty that we’ve all spent too much time, energy and money on this exciting project to have it die on the vine simply because the City of Oshkosh has chosen to approach development in an inconsistent manner with respect to the rest of the banking and development world.”

I have no idea what Mr. Doig actually means by those comments, other than to suggest that by some people asking questions and trying to see that things are done in somewhat of a prudent, judicious and responsible manner, the city or some within the city are somehow out of step with the way things are traditionally done. I can assure him he couldn’t be more wrong. In fact, if anyone has done something in a manner inconsistent with the rest of the banking and development world, would this project of Mr. Doig’s not be a shining example of just that? It certainly looks it from my perspective. I’ve covered economic development issues for a long time in a variety of communities, and I’ve never seen an arrangement quite like this one has been (and continues to be).

Is Mr. Doig actually naïve enough to think that he should be given millions of dollars in TIF and grant money with no questions being asked (and answered) or reasonable assurances being put in place to adequately protect the taxpayers’ investment? Or does he think that this city needs his particular development so badly that we will do anything to get it? By the way, whether we will be those very kinds of guinea pigs or not remains to be seen. Doig has asked for some kind of response by the time he gets back in his office from out of town on June 22. We will see what this city decides to do: Will we proceed judiciously and let him walk if he chooses to walk? Or will we cave in to what I see as tantamount to blackmail and Mr. Doig throwing a $60 million tantrum because he wasn’t given the keys to the city without a fair amount of questions being asked by various individuals in the community, those of us in the media included. Let’s hope this city makes the right decision and not cave in to the pressure and unreasonable demands of a developer who is asking for millions of dollars in public financing while giving us little to nothing in return. The clock is ticking.

180-degree turn on Five Rivers should be substantial enough change to bring project back to council
Authored by: DBCooper on Friday, June 16 2006 @ 07:44 PM MDT
We may not like a few things about Five Rivers, we may not even like a lot of things about Five Rivers, but you have to admit that there WAS a chance this would have continued to move forward to completion. We're fairly sure we know who is against it, who is for it, and save for the calculation of the butter burger factor, it was going to go.If you were Tom Doig, why would you write a letter like that this far into the process? There's a good chance that anybody that was on your side now isn't. Because we are trying to be responsible with OUR money (tif), not to mention what this might or might not do to our city long term, we're not "development friendly"? Don't let the door hit you on the way out, Tom!We should just hand over money and keys to the city to a guy who1) Got tossed out of Gladstone, Michigan with this project already,2) Requires members of the city council to sign non-disclosure agreements before he will meet with them (don't even get me started on the ones that did that!)3) Doesn't have the decency to even show up for city council meetings. With what was discussed last week at the city council meeting, wouldn't it have been nice for him to at least show up? Doesn't matter if he wasn't scheduled or even authorized to speak. Be there in case anybody has any questions, at least ACT like you're interested. Oh yeah, he doesn't have to do that, he has Jackson Kinney to do his bidding for him!4) Is running on a such a low budget, he can't even afford Five Rivers letterhead stationary. Think about it. Look at the letter in question. If this project was so fantastic, couldn't the guy spring the lousy $50 to have a quick printer print a ream of professional looking stationary for him? How about a bad do it yourself ink-jet job?Does anybody remember "The Fourdrinier Club" in Appleton, about 25 years ago? A fourdrinier (named after it's inventor) is the machine that makes paper in a continuous roll instead of a single sheet at a time. About 1980 or so, before the Fox River Mall was built, a group of developers got together in Appleton. Their idea was to build "The Fourdrinier Club". TFC was going to be nothing like had ever been seen before in northeast Wisconsin. It was going to be a hotel/motel/time share/condo, etc, etc, before anybody even knew what to call them. Besides just rooms to stay in, it was going to have movie theaters, workout rooms, bars, the finest restaurants, etc, etc. I can remember the ads running on the Green Bay tv stations, for some sum of money, you got "in" on this dramatic/staggering/sure to be wildly successful (to use some of Doigs words) investment opportunity. With your investment, you even got a big gold plated skeleton key to show off. I saw one on ebay awhile back. It was quite the big deal.The hotel portion of this development was actually completed. Maybe one other building also? (Just the structures, not finished out). Not one single guest ever stayed in that hotel. The investors never came, the financing fell apart, as I remember a lot of people that did invest never got their money back, etc, etc. What it amounts to is the principals took a bunch of money from people without having to put a gun to their heads. The hotel sat empty for years afterwards.Today, the Fourdriniers Club former hotel is now the Holiday Inn on Hwy 41 in Grand Chute. It's the oval shaped building, maybe 8 stories tall, just south of the Outback restaurant.FOURdrinier? FIVE Rivers? Ohh, the irony...

180-degree turn on Five Rivers should be substantial enough change to bring project back to council
Authored by: admin on Friday, June 16 2006 @ 11:15 PM MDT
I think Mr. Doig sensed the problems were mounting and that there was less support now than before. And your comments about his coming before the public are 110-percent correct. I, too have said this all along. I even told Mr. Doig months ago that if he wanted public buy-in and respect from the public who was being asked to help finance his project, he needed to step forward and start talking to the other partners in this public-private partnership. That is how things have successfully worked in other communities. While he kept acknowledging my words, he also kept telling me it was Jackson Kinney who would not let him speak. If that was the case, I think it was inappropriate for Mr. Kinney to tell a developer not to be forthcoming with information, especially if he truly wanted to be. But still, it was Mr. Doig's project and he had the ability - and pull - at any point to step up to the podium and talk. Instead he hid in the shadows and the confines of closed session meetings and behind emails and phone calls protected by confidentiality.

After having been booked for at least two months, he canceled his appearance on Eye on Oshkosh, coincidentally one day after Tony and I were at City Hall looking at records under an Open Records request. Instead he said he'd come on after he had things more lined up - an offer which I politely turned down, telling him I was not going to have the show be a 60-minute public relations piece or infomercial for him. What about now, Mr. Doig? Care to discuss things and answer questions now? And why was the letter from his attorney Chuck Hertl not made public? Are they considering a lawsuit? I certainly hope not, especially given the fact that they have missed deadline after deadline and seem to have never quite hit the mark in meeting all of the city's demands. And now, they are the ones threatening a pull out. So if a lawsuit is even remotely in the picture, I would hope a judge would laugh them right out of court. I also found it interesting that Mr. Doig did not like the consultant the city selected, and even suggested the city perhaps consider working with someone of Five Rivers' own choosing. This man has gall like we've rarely seen and clearly does not seem to understand the basics of how local government works.

When we interviewed Bryan Bain last night I asked him if it was possible to get Mr. Doig at a council meeting where the council could ask him questions in public. He said he would try to do that. It looks like it won't be necessary now. Or will it? I understand from a very reliable source who must remain anonymous that when Jackson Kinnney got Doig's letter, he was frantically trying to get in contact with city manager Dick Wollangk, who was out of town on business. That leads me to wonder what kind of strategizing is taking place this weekend or will be yet to come in the next few days? Will the city find some way to entice this developer and his project to stick around? Or will they do the smart thing by calling his bluff and letting him take the project somewhere else - maybe to a place where there actually are "five rivers." At this juncture, it seems THAT would be doing the true "due diligence."
- Cheryl

180-degree turn on Five Rivers should be substantial enough change to bring project back to council
Authored by: admin on Sunday, June 18 2006 @ 11:28 AM MDT
This morning's editorial in the Oshkosh Northwestern charges the city's Common Council with being weak when it came to the Five Rivers Resort project. The editorial claimed the council has displayed a "lackadaisical approach" toward the redevelopment proposal. The editorial went on to say that "The council has some deep operational issues. This council cannot handle tough projects and has turned its decision-making responsibility over to the hired hands. This council doesn't ask tough questions, doesn't demand accountability." I would agree with this to a point.

Few questions were asked in the early stages of this project. Councilman Paul Esslinger asked the most questions and has remained steadfast in his opposition to the way this project has been handled. As time went on, Bryan Bain began doubting the project and/or developer and, as a result, has been asking a lot of questions.

In fact, he, along with Esslinger, voted against extending the term sheet in March. And at the June 13 council meeting, more questions were asked by most of the council. We really only heard no substantive questions from Mayor Bill Castle and councilor Shirley Mattox. Councilor Meredith Scheuermann was not present at the meeting, but had asked questions of Jackson Kinney which I posed to her about recent developments and how they impacted the project and council's decisions overall.

This project has been shrouded in secrecy from day one, despite pleas from many in the public, including myself, to have things be done in the open. This openness was especially important for two reasons: One, there clearly was no other competition for this land or project. There still isn't even as we speak. And two, the way to get public support for something is to include them in the process, especially when you're asking them to open up their wallets and be your partner.

Even the Northwestern's editorial said "Public support for any redevelopment project is critical and that public support is built, largely, on confidence in elected official." I agree it's built largely on confidence. But it's also built on openess, honesty and competence, something I don't believe we've seen much of during the course of the last two years with the Five Rivers project.

My disappointment with the city council is in (a) not asking enough tough questions early on (and doing so in public where the public can hear councilors doing their due diligence as well as the answers), and (b) the council reposing too much trust and responsibility in the hired help. I understand staff is fulltime and supposedly the professionals, but they are not responsbile to the taxpayers; the council is. The council is the body entrusted to watch out for our wallets. Let's hope before this is said and done, they will.

- Cheryl

180-degree turn on Five Rivers should be substantial enough change to bring project back to council
Authored by: DRR on Monday, June 19 2006 @ 11:45 AM MDT
Many on this council have TRIED to ask tough questions of city staff on many issues. Asking questions and getting answers are two different things. Repeatedly we have heard city staff dance around issues, deflect, avoid, and generally mislead, all in an effort to NOT answer the councilors question. Bain and Scheuermann both ran on campaign slogans using the term accountability. It is time they hold staff accountable.

180-degree turn on Five Rivers should be substantial enough change to bring project back to council
Authored by: mjs on Tuesday, June 20 2006 @ 10:43 AM MDT
I couldn't agree more.It is clear Mr. Kinney wants to maintain a professional sounding response...but it becomes problematic when "business speak" and jargon become a tool to smoke and mask true answers. Forget the retoric and just inform us in clear plain language please Mr. Kinney.