City lawsuit against Ganther over 100 Block settles
The Oshkosh Northwestern is reporting that the city’s lawsuit against Ben Ganther over the 100 Block development has been settled and the Oshkosh Common Council on Tuesday approved the settlement in a closed door session.
Details of the settlement are in the newspaper’s article, but in essence the settlement represents just a little under one-half of the $320,000 Ganther and his business partner Robert Niebauer currently owe the city “based on personal guarantees to cover the difference between taxes generated by the property and the amount needed to cover city debt payments on the complex. The city contributed $2.2 million, or 25 percent of construction costs, through a developer’s assistance grant.”
State law does not allow a municipality to sue for projected shortfalls – only what is currently owed. “City tax dollars will now have to cover the total $2.6 million in interest and principal payments anticipated over the life of the bonds issued for the building,” the article says. And the settlement assures Ganther that the city will not pursue any of those future shortfalls in subsequent litigation.
There is mixed reaction from the council over this settlement; and rightfully so. On the one hand, it is a very small amount of what Ganther and his partner owe us for this development gone bad. On the other hand, it is the opinion of the mediator that if a settlement could not be reached, Ganther would file bankruptcy and, as a result, the city would recover nothing. That is, after all, exactly what his partner, Niebauer, is doing. So, it appears something is better than nothing whether we’re happy about it or not. Wisdom often comes with a price tag – surely that is true in the city’s dealing with Mr. Ganther.
Steep as the price is, here is what I believe we’ve learned: Do all TIFs with a pay-as-you-go philosophy or if something better comes along in time, consider that approach to doing TIF agreements; ask a lot of questions concerning TIF agreements and don’t just swallow what staff or developers say hook, line and sinker; look closely at a developer’s track record, including the track record of their partners; and refrain from doing business with Ben Ganther or other developers who either have poor track records or who are unwilling or express reluctance to put a reasonable amount of their own money where their mouth is. In the long run, this kind of wisdom could indeed be priceless.
Details of the settlement are in the newspaper’s article, but in essence the settlement represents just a little under one-half of the $320,000 Ganther and his business partner Robert Niebauer currently owe the city “based on personal guarantees to cover the difference between taxes generated by the property and the amount needed to cover city debt payments on the complex. The city contributed $2.2 million, or 25 percent of construction costs, through a developer’s assistance grant.”
State law does not allow a municipality to sue for projected shortfalls – only what is currently owed. “City tax dollars will now have to cover the total $2.6 million in interest and principal payments anticipated over the life of the bonds issued for the building,” the article says. And the settlement assures Ganther that the city will not pursue any of those future shortfalls in subsequent litigation.
There is mixed reaction from the council over this settlement; and rightfully so. On the one hand, it is a very small amount of what Ganther and his partner owe us for this development gone bad. On the other hand, it is the opinion of the mediator that if a settlement could not be reached, Ganther would file bankruptcy and, as a result, the city would recover nothing. That is, after all, exactly what his partner, Niebauer, is doing. So, it appears something is better than nothing whether we’re happy about it or not. Wisdom often comes with a price tag – surely that is true in the city’s dealing with Mr. Ganther.
Steep as the price is, here is what I believe we’ve learned: Do all TIFs with a pay-as-you-go philosophy or if something better comes along in time, consider that approach to doing TIF agreements; ask a lot of questions concerning TIF agreements and don’t just swallow what staff or developers say hook, line and sinker; look closely at a developer’s track record, including the track record of their partners; and refrain from doing business with Ben Ganther or other developers who either have poor track records or who are unwilling or express reluctance to put a reasonable amount of their own money where their mouth is. In the long run, this kind of wisdom could indeed be priceless.
posted by Cheryl Hentz at 7:20 PM
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