Will McGowan Carry the City's Heer's Deal Baton?

Darin Bridges of Springfield had a reader letter in the News-Leader today: Relay incident memorable, in which he recounts dropping the baton (he's writing as though to Coach Vaughan, who was recently honored at the dedication at Shumate Stadium):

"It was the All-City Meet. Our (Hillcrest) mile relay team was favored to take the gold or at least the silver. I was your lead-off guy, and during my fourth stride out of the blocks I dropped the baton. It tumbled all the way to the edge of the track. It was awful....

You called us all together in the middle of the field and we could tell you were fuming. You then yelled for the equipment manager, "Let me see that baton!" It scared the poor kid to death. For a moment I was afraid you might beat me with it. Instead you threw it on the ground and stomped on it. Right there in the middle of JFK. You then picked it up, looked at it, and scolded something like, "I never want to see another one of these NEW batons in the hands of one of my track members again! Do you hear me?" Then you yelled at the other coaches, "Look at how light these aluminum batons are! My boys have been practicing with nothing but steel and on the day of the race we put this #$&! in their hands?!"...

Yeah, the baton was new, lighter aluminum, but we all knew that had nothing to do (with) my dropping it. We knew exactly what you were up to, but no one ever brought the subject up again. We simply moved on to the next race. (Emphasis mine)

The strategy and timing of your demonstration was pure genius. You could have "called-me-out" for such a bone-headed move, but you knew that would hurt our team, and I think you knew what it would do to me...."

I have a purpose for bringing up Mr. Bridges' sports story. I want to apply it to the City of Springfield regarding Park Central Square. Wes Johnson's story in the News-Leader seems a bit like grasping at straws to me, I mean, I'm being honest here.

In Back to square one? Johnson puts forth the challenge of whether Lawrence Halprin can be considered the designer of the square when another architect working in Halprin's firm was responsible for the majority of the architectural drawings. Well, that would be akin to saying that an architect hired by Butler Rosenbury to do work for Butler Rosenbury under the Butler Rosenbury stamp and seal isn't really Butler Rosenbury. It's quite a stretch but I appreciate the sentiment.

I noticed Vincent David Jericho was asking if those who wanted to see Halprin's work preserved could be blamed for a Heer's deal bail out by McGowan's exercise of their put option if the square renovation wasn't on schedule (as specified in their contract on the Heer's with the city) due to the question of the historic value of the square. Well, I don't really think so, these matters should have been considered long ago, before the contract with Kevin McGowan included the stipulation that the square would be remodeled by a certain date, actually, it should have been considered more critically whether it was a good decision for the city to take possession of the Heer's Tower way back when, but we are where we are and sometimes the best thing to do is to take our frustrations out on the aluminum baton rather than the player(s) responsible for the fumble.

Sometimes the best thing to do is to build up the team. I don't disagree with that but I also think that honesty, honesty from the start to the finish, is the best policy. The coach facilitated a "face" save for a young high school team player. It'd be nice if Wes Johnson could facilitate a "face" save through his article, or, if Butler Rosenbury, by stretching to suggest that a signed and sealed Lawrence Halprin design wasn't really a Halprin design because someone else in his firm drew the plans, could pull the city out of this mess but let's not forget that the high school boys on the team, including and especially the young man that dropped the baton knew what the coach was really doing. Our collective intelligence demands it.

We all want to be good team players. We all want the best for Springfield, Missouri and we all understand that we cannot afford to own the Heer's Tower anymore but this bed has been made and it'll be played out and City staff and City Council aren't high school age students dropping a baton at a sporting event. Still...the best thing for Springfield is that Kevin McGowan not exercise his put option even if the play turns out to have been made poorly. We'll just have to see how it comes out and hope that it turns out well in the end. A lot of it depends on Mr. McGowan, will he be a team player? Will he stomp on the baton or will he take his ball and go home? I remember McGowan making comment before the City Council at the public hearing of the Heer's deal on August 27, 2007:

"We're committed to this project and we're committed because we've formed some relationships here in Springfield. We're very much looking forward to get going...."

He said he was committed to renovating the Heer's Tower. Now would be the time to hope he meant it.

IRS' Washington branch nosing around in Springfield, Missouri

Why would the IRS' office in Washington be interested in:

"Springfield Missouri hotel/motel tax?"

That's what they googled.

Here's what they read: The Heers Building ~ Council Bill 2007-267

They read 7 other pages, don't know what.

Council Bill 2007-301

Oh, all right. I just haven't been in the mood to post about this but here it is anyway:

Council Bill 2007-301 will extend the MDFB loan on the Heer's building to cover the time frame it'll take for the Heer's building sale to close, actually beyond that time frame.

It still doesn't explain how the sale of $3 million is going to cover a loan of $3,100,000, the almost $260,000 set aside from the general fund back in June and the additional $26,000 the city is going to ask the council to approve to amend the budget to cover additional interest tomorrow night*...but hey, the Springfield News-Leader said the city is going to net $3 million on the Heer's deal so whadda I know?

*Geesh, I meant Monday night, the 24th

The Heers Department Store Speaks?

It seems like an appropriate day to mention Heer's Department Store.

Turn your speakers up and visit Matthew Siegmann, Local Historian's MySpace site.

The deal's done, the jigs up, put on your dancin' shoes. ;)

Heers Building Agreement

Passed unanimously

With a seemingly "straight face"

The News-Leader's Our Voice column says:

"In the end, this deal on Heer's nets the city $3 million..."

The Heers Building ~ Council Bill 2007-267

I note that Vince of KSGF weighed in on the Heers deal here and Jason at Life Of Jason weighed in on the Heers deal here.

I agree on some points each of them made and disagree on others. The primary distinction I would make would be that the time for the City Council to have taken action against the 2.5% kick back from the Convention & Visitor's Bureau (CVB) hotel/motel tax was when Mary Lilly-Smith sweet talked the City Council into leaving it in the list of incentives for negotiation when they approved the term sheet back on July 2, 2007.

Smith explained on July 2 that when the City brings back the redevelopment agreement in the form of an ordinance, that we now know as Council Bill 2007-267, that Council will be voting on the incentives that the city negotiated with McGowan/Walsh as a package. If they didn't realize it would be "all or nothing" then, they should have.

At that meeting, Lilly-Smith said:

"You'll have an opportunity when we bring a redevelopment agreement back to you around August 1 that will say, 'here are the incentives that the City agrees to provide,' and you will take action on that ordinance and then between that time and December 31 we have to put in place those incentives."

Certainly, the City Council could have displayed a bit more backbone on July 2, but we saw what happened when Councilman Burlison complained about the loss of general revenue for the interest payment on the loan on the Heers building. When he expressed:

"a sense of, well, almost a sense of outrage,"

over the city letting

"a quarter million dollars slip though our fingers."

City Manager, Bob Cumley stated that Burlison's concern was well founded, but Mayor Tom Carlson went on a tirade over Burlison's use of the term "outrage." How dare Burlison tell it like it is?

Jason, at Life of Jason blog, quotes Councilman Ralph Manley from the Springfield News-Leader,

"I don’t want to give away the store to get it done.”

But back at the June 18 City Council meeting Manley said:

"Two hundred sixty thousand dollars at this moment will be peanuts...While it may be dealing in several figures here, those figures are peanuts when we talk about the objective this total thing is going to meet."

Really?

Granted Manley was talking about the loss in interest payments at the time, but speaking of the "objective this total thing is going to meet," he knew on July 2 what the terms of negotiation for the agreement were. He and the other Council members listened to the representative from the CVB, they listened to other local hotel owners who didn't want to see revenue be taken from the CVB, he and every other Council member had a problem with the city possibly giving up 2.5% of the hotel/motel tax then, why did they allow Smith to push it through with that left in the list of possible incentives? Why didn't they call to amend the term sheet before approving it on July 2?

But...I don't blame the City Council, at least not today's City Council. I blame Mary Lilly-Smith and the City Manager and the City Council that existed when the Heers building deal(s) first began to be negotiated.

I blame a City Manager who, at the July 30 Council meeting, said about the ongoing former "arena site" negotiations:

"This is one of the areas, as Mr. Manley said, that we can have a closed session on because it involves negotiations, which we don't do in public, otherwise we wouldn't have negotiations with anybody if we had to do that. So we will have a closed session on that. Once we get the term sheet...we'll have to lay it out, what's the best deal, here's the reason and that will be public...."

You see, Cumley is basically telling the Council and the citizens of Springfield, Missouri, "trust us," trust us to negotiate a good deal with one of the prospective developers of the former "arena site." Trust us to negotiate in private, bring you a term sheet to approve and get the best deal for Springfield. "Just trust us."

And that's the problem.

The City of Springfield, a past City Council and the Economic Development Director, Mary Lilly-Smith, negotiated away any leverage they had in the Heers building agreement. They HAD no leverage in the McGowan/Walsh deal because they negotiated away every bit of leverage they had, now they are concerned about negotiating privately on the development of the property adjacent to the expo center because they don't want to lose leverage in ongoing negotiations by discussing details in public? Give me a break.

As far as the Heers building deal? Council has no choice but to pass it. If they don't pass it another quarter of a million dollars will be frittered away in interest on the note, the note they successfully negotiated their way into assuming from Vaughn Prost.

Remember how proud we were when, at the passage of the budget for the City on June 4, Councilwoman Cindy Rushefsky made a motion to amend it to place a quarter of a million dollars out of the "rainy day fund" into the police and fire pension fund? We stand to lose twice that amount in interest on the Heers building note if the Council doesn't pass the emergency ordinance accepting the Heers deal, and it could likely be more than that because the city has likely already negotiated away every other developer who might have, at one time, had an interest in the Heers Tower.

I think one of my commenters, "John Lilly" had it right when he wrote:

"The city wanted a hotel, but the developer has the upper hand. He put in a poison pill (he gets 50% of the guest tax that goes to the CVB). The city punted and left it up to the CVB board to say yes or turn it down. They would be idiots to accept it, thus creating a prescident. So the developer gets his condos with 80 parking spaces in the garage and the ability to build a sky bridge. "

I couldn't have said it better myself, John Lilly. I'm sorry I don't have a box of chocolates to offer you.

E-M-E-R-G-E-N-C-Y Bill

City Council Will Vote to Unload Money Pit August 27, 2007

It's doubtful this is news to anyone but it MUST be included in City Council Items of Interest for the August 27 Agenda.

Section 7 of explanation to Council Bill 2007-267 pretty much sums it up:

That the City Council finds and declares that this ordinance constitutes an emergency because it pertains to the ongoing removal of blight, thereby affecting the immediate preservation of the public health, safety, and welfare. Therefore this ordinance shall be in full force and effect from and after passage.

Of course they left out the part where the city needs to unload the Heers building A.S.A.P. or face paying more in interest on the loan they took over when the Vaughn Prost deal went south.

Jericho tries to "nip it in the bud"

Disclaimer: I should have written this is why I think VDJ might be asking for calls made to certain Council members. Naturally, I cannot speak for HIS reasons. This is my idea of why it is important to call. I have not spoken to Jericho and have no inside information as to why he is charging Springfield citizens with calling these Council members that extends beyond any other listener. ~ Jacke

What is Vincent David Jericho talking about when he asks that citizens of Springfield contact certain City Council members about the City "powers that be" not meeting in secret meetings regarding the negotiating of the development of the property adjacent to the Expo Center?

Let's see if we can get there from here:

I understand that there are some things that went down concerning the Heers Building in the past.

I understand that today, to hear most of the City Council members who were around during early Heers negotiations discuss the history of the Heers Building that it will be said that the developer, Vaughn Prost, couldn't get financing. That Vaughn Prost went broke, though Prost Builders, Inc seems to be continuing in business. It is implied that the Council had no choice but to purchase the Heers Building though I have already posted here that according to this October 16, 2006 City Council meeting... :

"Prost claimed he had two letters of commitment from Bank of America which implies he could have soon paid off the loan. He couldn't have paid off the loan that night but surely he would be able to shortly, that is, if the letters of commitment from Bank of America were reliable. Prost even gave a copy of one of the letters of commitment to the City Clerk that night."

...but at the June 18, 2007 Council meeting (see Heers Building)

"Ralph Manley commented that the City reacquired the property out of necessity to avoid a foreclosure....."

"...Doug Burlison stated that he was not indicating that he was in opposition of the proposed; however, was concerned with the amount of funds that would be expended by the City for interest and other expenses."

Mayor Carlson remarked on the history of the project and stated that the issue had been openly discussed in numerous meetings.

Denny Whayne stated that there was a misconception regarding what was being spent in the downtown area. Mr. Whayne stated that much of the funds were coming from grants and matching funds. Mr. Whayne extended appreciation to the legislators for their assistance."

Though this was all of Whayne's comments included in the June 18 meeting minutes, in fact, Whayne didn't stop there. The City's meeting minutes that are approved don't provide everything that goes on at a meeting, they are summarized. You can watch the Council meeting here by following the archive link to that meeting.

Whayne said:

"...We had a situation that we couldn't control, at the outset. We had a developer we thought was ready to go but couldn't quite get the financing so we almost went into foreclosure so we had to fall in the tub...if we hadn't have purchased the building....When you're dealing with those kind of restoration people we owed them and everything works out but sometimes it doesn't so, you know, we have to try to do the next best thing and I think that's what's happening here..."

Carlson said:

"...like Denny said, the investor that did it went broke and so that the task for this community was to set there and let that thing stop any further development or take a calculated risk that we could lose some money and it was done in open meetings, lots of discussion and we made a calculated risk and there we were, and maybe we need to go back and say, "well, we shoulda left it like it was..."

The only problem Councilman Whayne and Mayor Carlson is that Vaughn Prost had been approved by Great Southern Bank for a loan extension. Bank of America had issued two letters of commitment to Vaughn Prost. At least one of those letters of commitment was for nearly $20 million. The Great Southern Bank loan extension was contingent upon the City of Springfield's approval. The City refused to approve it.

So, why am I going into all of this re-hash of the Heers Building in response to the question of why Vincent David Jericho is asking people to call certain Council members and express that they would like the Council to act in PUBLIC meetings regarding consideration of who will develop the property adjacent to the Expo Center? Here's your answer:

Today there are questions about how we ended up, as Cindy Rushefsky recently put it, "over a barrel" in how the City is able to negotiate the sale of the Heers Building with McGowan-Walsh and the City never mentions their refusal to approve the loan extension that Great Southern Bank had approved contingent upon the City's approval, in fact, in the retelling it seems they try to rewrite history, certain members want citizens to believe that the City had no other choice but to dismiss Vaughn Prost and take over the Heers Building.

Will they, years from now, rewrite history on how the developer was chosen to build on the property adjacent to the Expo Center?

Only if the citizens allow it, only if the citizens don't research it.

So, the answer to "what is Vincent David Jericho talking about when he tells us to contact certain Council members and request these meetings be made in the open?

I think he's trying to solve the next mystery before it becomes the next mystery.

So, Tom Carlson, at the June 18, 2007 meeting you said:

"...but I think, you know, if we're gonna make allegations that things are being mismanaged, uh, then you really need to say "are they?" and if they are we need to know about it...."

Okay, I'll take that challenge.

One of the things I gleaned from the July 2, 2007 City Council meeting was that the City, after they had already climbed between the sheets with Vaughn Prost, realized they didn't have a very good deal (mismanagement) and so they took an opportunity to bail out on that deal when they had the opportunity. They did this by not approving the approved loan extention for Vaughn Prost with Great Southern Bank which would have been covered by the Bank of America loan(s) for which Prost had received letters of committment, then they breathed what they thought was a sigh of relief and pretended that they had no other option because Prost couldn't get the financing for the loan.

When Mary Lilly Smith spoke on the night of July 2, 2007 she referenced the fact that under the Vaughn Prost deal the City had authorized access to more parking spaces in the Heers parking garage than they actually could afford to commit. She compared the deal the City had with Vaughn Prost to the deal the City is negotiating with McGowan-Walsh. Lilly Smith seemed to be trying to make the case that they are negotiating a much better deal with McGowan-Walsh than they had with Vaughn Prost.

Vince is asking you to call certain Council members so that we don't have to look back at the negotiations on the property adjacent to the Expo Center in the future and try to figure out how we got there from here and why.

Is there something wrong with asking that the City Managers and the negotiators fully inform the Council as to how they have made decisions about the "winner" of this prime site?

If YOU are interested in contacting a Council member the numbers are listed at Jericho's Journal

To quote a very famous and transparent City employee:

"Nip it in the bud." ~ Barney Fife, Mayberry.

P.S. The News-Leader does NOT have my permission to publish excerpts of this posting.

Council Bill 2007-217 ~ A resolution accepting the term sheet between the City of Springfield and McGowan-Walsh...

...for the purchase and redevelopment of the Heer's Building, and directing the City Manager to negotiate a Redevelopment Agreement with McGowan-Walsh in substantial conformity with the terms set forth with the term sheet.

First reading bill, not anticipated to be voted on.

UPDATE: Access to the bill is now available by clicking on the hot link of Council Bill 2007-217, found on the Upcoming Council Meeting Agenda

Heers Building: The Money Pit?

I realize that this is all "water under the bridge" now, but I found it very interesting and it never hurts to refresh our collective memories about how the City of Springfield has gotten into the position and circumstance in which they find themselves regarding the Heers Building.

This link takes you to the October 16, 2006 City Council Meeting Minutes.

See under "MDFB loan" how Vaughn Prost had been approved by Great Southern Bank for a loan extension and how Bank of America had issued two letters of commitment to Vaughn Prost. At least one of those letters of commitment was for nearly $20 million. The Great Southern Bank loan extension was contingent upon the City of Springfield's approval. The City refused to approve it.

While Carlson abstained from the vote...:

"Mayor Carlson noted that he would not be voting on the proposed bill, as he had a connection to Great Southern Bank."

...he did not abstain from commenting:

"Mr. Prost responded the amount owed to Great Southern Bank was $2,840,000. Mayor Carlson suggested Mr. Prost could pay the loan, noting that he would then own the building. Mayor Carlson remarked that Mr. Prost had been given two extensions on the project."

I wonder why Carlson was so catty? I mean, look at the summary above...Prost can pay the loan, then he'd own the building? Prost claimed he had two letters of commitment from Bank of America which implies he could have soon paid off the loan. He couldn't have paid off the loan that night but surely he would be able to shortly, that is, if the letters of commitment from Bank of America were reliable. Prost even gave a copy of one of the letters of commitment to the City Clerk that night.

I can't help but think Carlson, or the City "powers that be," wanted this vote to go through that night because he/they didn't want Prost to pay off the loan and become full owner of the building. I suspect Carlson/the City wanted the City to own and control the building. Why?

"Council Bill 2006-371. Special Ordinance 25077 was approved by the following vote: Ayes: Griggs, Jones, Wylie, Manley, Whayne, and Collette. Nays: None. Abstain: Wright and Carlson. Absent: Deaver."

Today, the consensus seems to be that the City was between a rock and a hard place and that they had no other option but to pass Council Bill 2006-371 to keep the Heers Building from going into foreclosure. The minutes from this October 16, 2006 meeting seem to suggest that they had other options but chose not to consider them.

If the City had agreed to the Great Southern Bank's extension of the loan to Vaughn Prost and the letters of commitment issued to him by Bank of America had been honored, Vaughn Prost could have conceivably paid off the Great Southern Bank note, would be the full owner of the Heers Building and would have continued to develop it.

The City's approval of an extension seems like an option that should have been given more consideration than it was given. As Carlson, himself, said, the loan had been extended twice to Vaughn Prost...was there some sort of limit to how many times it could be extended? Doubtful. Apparently the City felt confident enough in Vaughn Prost's ability to pay the loan to associate with him in the first place and to extend the loan twice. Why couldn't they have considered extending it one more time?

Great Southern approved it. The City didn't.