Can you put a price tag on nostalgia?

It might depend on who you ask and who is making the purchase.

Click this to read Matthew Siegmann's History of Heer's Department Store

Click here to listen to Petula Clark perform "Downtown" on The Ed Sullivan Show

Ahhh, who doesn't love nostalgia?

~~~~~~~~~~~~~~~~~~~~~~

Springfield City Council: All the Blame, Little Credit, and Tacos for Lunch

The buck stops at the City Council but the City Council gets no bucks

I had to miss last Tuesday's City Council luncheon so, after today's luncheon, I went to the Clerk's office and picked up the materials Internal Auditor April Lathrom passed out at last week's meeting.

Lathrom had reported, of the 53 recommendations made by the State Auditor, all but two have been addressed.

In her letter to the "Honorable Mayor and Members of the City Council," Lathrom wrote:

"The only two items that require further follow-up action are the recommendations related to the economic development policy on incentives offered to developers and improving the funding status of the Police and Fire Pension Fund. The City is in the process of developing a comprehensive economic development policy, and as you all know, the City continues to explore ways to improve the funding status of the Police and Fire Pension Fund."

The State's Audit Report of the City of Springfield had recommended:

"City Council should refrain from pledging taxpayer funds to assist developers in obtaining financing for projects. In addition, proposals should be solicited for services provided by developers, and agreements should be clear with regard to the use of restricted city funds. Further, City Council should review future development projects to limit the city's financial exposure."

The response from the Director of Economic Development Mary Lily Smith came last Tuesday (March 24, 2008). Smith said an economic development policy was being developed that would address the circumstances under which certain incentives should be used. The report issued by Lathrom also said the policy would be used to evaluate private developer's requests for public assistance.

In addition, The Chamber of Commerce and the Springfield Business and Development Corporation are working with the City to provide a "SWOT" (strengths, weaknesses, opportunities, and threats) analysis of the Springfield market from a "site locator perspective." The SWOT analysis is planned to assist the finalized policy currently being developed by the City.

Several issues were noted under the "Downtown Development" section of the State Audit Report, dated December 2007. Among them were some interesting facts about historical and current events on the Heer's deal.

> "The city pledged $1.5 million in public funds to assist a developer (Vaughn Prost) in obtaining private financing to purchase the Heer's Tower and subsequently paid approximately $3.3 million to purchase the developer's loan and foreclose on the property."

> "In the agreement with the second developer (Kevin McGowan)...if requested by the developer and approved by the Convention and Visitors Bureau (CVB), the city agreed to consider pledging a portion of the city's hotel/motel tax. Since city code requires the hotel/motel tax monies to be spent solely to promote tourism, it is unclear how the city intends to ensure compliance with city code if these funds are pledged to one developer."

The auditee's (City's) response to the 2007 State Auditor's recommendation included the following statements:

"The Heer's Tower was a glaring blight on downtown and its continued presence in that condition was an impediment to additional private reinvestment.

The pledge of City collateral accelerated millions of dollars of work being completed on the building and was made only after a third-party legal opinion stated unequivocally that the City had full legal authority. The City also ensured it had adequate security against the loss of the pledged collateral, including the right to ownership of the building....

...The City...made the decision after multiple opportunities for public comment and approval in open session...."

As noted in the September 12, 2007, issue of the "Community Free Press," the night the City Council approved the City's purchase of the bank loan and foreclosure on the Heer's building, there were 5 speakers. All of the speakers were opposed to the City Council's approval of the purchase of the bank loan and foreclosure.

On another note, the millions of dollars of work, done on the building due to City assistance in obtaining financing for Vaughn Prost for the project, may all be lost today. The Heer's building is not currently being renovated and has lost much of the window covering (mostly plywood and plastic) which once kept the rain and the wind out of the building, allowing the elements to erode any improvements Prost may have made to the building years ago.

In short, just as it was in 2006, 2007, and 2008, the Heer's Tower continues to be "a glaring blight on downtown." Does its continued presence in that condition continue to be an impediment to additional private reinvestment? Who knows? Currently, "the City" isn't talking out of that side of its economically developing mouth.

A recent "Springfield News-Leader" article made clear the sentiments of Director of Economic Development Mary Lily Smith today, and they have not changed much since the response included in the audit report. From the News-Leader article:

"If Springfield wants to compete with other cities for jobs, it must be able to offer some incentives, she said.

"Cities small to large offer basic incentives, like tax incentives and enterprise zones," Smith said.

She said the new economic development policy makes clear that the City Council has discretion in offering incentives.

"It's up to the council to say 'yes' if the project is of great benefit to the city or if the project wouldn't happen without the city's participation."

Smith is right. It is up to the City Council to say yes or no to "incentivizing" economic development.

Such incentives seem to have worked well for Heer's building redevelopment, after all.

But, let's examine our City Council's responsibility.

To use a Manleyism, "the experts," such as the Director of Economic Development, and other City staff, recommend for approval the projects they feel are "of great benefit." How convenient is it for the "expert" to then lay total responsibility for failure (or success?) at the feet of the City Council to whom the "experts" sold the project?

Clearly, if the buck stops at the desk of our all volunteer City Council, because they approve or deny the "expert" recommendations of City staff, with all their "expert" resources and prepared presentations, they are long overdue for a raise or, at the very least, prime rib rather than tacos.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Force Majeure in the Heer's agreement: Who knew?

"...

"SHPO's ruling last month that the square was eligible for historic listing could fall under the Force Majeure provision, said City Attorney Dan Wichmer....

"...if it went to court, it's possible that we would invoke Force Majeure. If he tried to give it back to us, we'd say 'No, Kevin, we don't think the agreement's been breached.'

"Wichmer said he considered SHPO's ruling "an act of government beyond our control.""* - Springfield News-Leader

Well, my duck! (the duck thing's for Pastor Charles, now he knows I'm listening :) City Attorney Dan Wichmer was at the same City Council luncheon at Fire Station 12 on June 3 that I attended (and excuse me, but Wes Johnson of the News-Leader attended it, too) when Economic Development Director Mary Lilly Smith referred to the August 1, 2008 deadline and the City Council was assured that the City ought to be able to meet that deadline:

"We will also engage Butler Rosenbury to prepare the construction documents for it (Phase II, perimeter of square) so that we could be in a position to bid and we would be, I don't have a date for bidding yet, but we feel like we have just enough time to get everything underway so that we could start construction by August 1st." - Economic Development Director Mary Lilly Smith, June 3, 2008

Either the City Attorney and the Economic Development Director didn't know what was in that Agreement between city and Heer's Building LLC (thanks, News-Leader) or they didn't think it was important to inform the Council about Article VI. Either way, one has to ask why.

Why didn't the City Attorney and/or the Economic Development Director know of the "Force Majeure" clause?

OR

Why didn't the City Attorney and/or the Economic Development Director think it was important to share that information with the Council, as a whole, during the course of that discussion or within earshot of the press?

It's no wonder Mayor Carlson recently complained:

"It's not like it used to be, there's not the depth, there's not the scope, there's not the understanding on the part of the media, on the topics that they're covering."

...and he thinks bloggers and anonymous commentators make it very difficult to get the city's message out?

Maybe, next time, while city staff is recommending approval of this Council Bill or that Council Bill, and the City Attorney and Economic Development Director who are, one assumes, aware of contractual details, could share those pertinent in depth, within the scope of the topic, details with the media and the rest of the community so that people could gain a better understanding?

Or was that little "Force Majeure" detail just not important enough to note?

Wichmer was there June 3, when Mary Lilly Smith was discussing the issue, when Councilwoman Mary Collette asked about the timeline on Phase II construction of the square. Neither Wichmer nor Smith bothered to mention Force Majeure that day.

I attended the City Council Committee of the Whole and a Finance and Administration meeting at the Busch Municipal building today, after I dashed off the above rantings and emailed them to myself to ponder upon.

Councilwoman Collette and I met, she on her way up the stairs and I punching the elevator button and then arrived on the 4th floor at the same time. I asked her if she was told about the "Force Majeure" clause, she said, "No, not specifically," but she was also quick to point out that she, and one could assume, all of the Council, had a copy of the contract herself. In other words, it was somewhat the responsibility of Council to be aware of Force Majeure.

The media wasn't given a copy of the final approved agreement between the City and Heer's Building LLC. I could have requested it before today and should have, but I didn't. So, we can go back to Carlson's charge, which I took seriously, by the way, that:

"... there's not the depth, there's not the scope, there's not the understanding on the part of the media, on the topics that they're covering."

Again, I will reiterate, reporters and the media can certainly take their share of the blame but the city can take a bit of the share, as well. Somewhere along the way it looks like someone could have mentioned Force Majeure, and when it wasn't mentioned people like me want to know why it wasn't mentioned.

For weeks, if not months, it seems like the city (and some members of the press) have been unnecessarily causing fear on the part of the public that the city may have to buy back the Heer's Tower, for what? Why?

I'm to blame, you're to blame, and yes, the staff of the city of Springfield, who has the most credibility to lose, is to blame. We can all take our share. That includes the Mayor, who has trouble getting the city's message out, he had the agreement too. We all need to be asking, are we going to expect our, yes, ALL-VOLUNTEER Council to actually read the materials they are voting on? How can we expect that? How can we hold those selfless, unpaid volunteers accountable? Do we look to them? And, if we look to them, should we be looking to them to make our City Manager's office accountable for not sharing this vitally important, pertinent information with them or do we expect them to read every 50 page agreement that the City places in their Council folder?

Internal Auditor, we're ready and we hope you are, too. There is more to this city that needs looking into than the Council can do alone and the communication aspect between city staff, the City Manager's Office and the City Council leaves a lot to be desired. For the rest of us superficial press and media types, who do not have the lack of an internal auditor to blame, good luck, brothers and sisters, it appears we've got our work cut out for us.

*emphasis mine

McGowan Delays Start of Heer's Tower Renovation as City Officials Consider Park Central Square Issue

His interest in downtown is not waning

Developer puts brakes on Heer's Tower lofts, Springfield News-Leader

"On Tuesday, he (Kevin McGowan) met with the owner of the McDaniel and Woodruff buildings -- downtown -- and indicated an interest in other buildings in Springfield.

"We are looking at more than the McDaniel and Woodruff buildings," he said. "I've said before that if we came to Springfield we weren't interested in doing just one building. I don't find the recent issues involving the square to detract from that.""*

Shop owner: Heer's delay 'frustrating' , Springfield News-Leader

I can't help but wonder if the News-Leader's Mr. Bridges told the shop owners that McGowan is interested in purchasing other properties on the square and that he doesn't find the controversy over Park Central Square's Eligibility for the National Register of Historic Places to be a detraction from those plans. I'd think other invested downtown property owners would find that anything but 'frustrating.'

Further, Springfield's Economic Development Director fully anticipates beginning "Phase II" of square renovations by the deadline of August 1, which will meet the contractual obligation with Kevin McGowan under their agreement, isn't that what she said?:

"I don't have a date for bidding yet, but we feel like we have just enough time to get everything underway so that we could start construction by August 1st.

"If we need to, we can break the canopy out as a separate contract. We already know what we need to do in order to take that down and that would absolutely be the start of construction on repair of the sidewalks, and we've been working with Kevin McGowan, he thinks that this is a really good solution. He obviously wants the sidewalks in front of his building repaired." - Economic Development Director Mary Lilly Smith, June 3, 2008

Why does it seem that some people are trying to make this out to be more of a problem than it really is, unnecessarily worrying the public that the city will end up buying back the Heer's Tower? Is that productive?

Yes, McGowan has a "put option" under the agreement with the city of Springfield that he can force them to buy back the Heer's Tower if they don't begin construction on the redevelopment of the square by August 1.

Yes, the city has double insurance on meeting that deadline. According to Smith, the city will be able to mark the beginning of construction on "Phase II" by starting the process of removing the canopy:

"...that would absolutely be the start of construction on repair of the sidewalks...." - Smith

So, there you go.

We can have our cake and eat it too. We can begin construction of Phase II, by the August 1 deadline, by removing the Halprin canopy, thus taking away the threat of McGowan exercising his "put option" and forcing the city to buy back the Heer's building, and the city will be in a postion to more carefully and fully weigh the decision concerning how best to renovate the Halprin designed portion of the square.

McGowan seems like a smart business man. He takes his time and is methodical about how he proceeds. Usually, less mistakes are made by a person who takes their time and doesn't rush into the decision making process than when one gets in a hurry to make something happen.

Kevin McGowan impresses me more and more all the time. :)

*emphasis mine

Update: Background: McGowan gung-ho about Heer's, April 23, 2008:

"McGowan doesn't seem the least bit concerned.

"That issue (Park Central Square design) is going to be resolved," he said. "The Heer's project is going to get done -- I promise you that.""