consultants are sandburs

Friday, February 01, 2013

RAMSEY, not brokers? What's a "development team" then, if not hired to push to real estate closings? How else is that $300,000,000 that Flaherty's man in Ramsey discussed to become any reality?

The link that this morning's Google Alert gave was to Paul Levy writing for Strib, with the report headlined (and subheadlined),

City of Ramsey to investigate its own deal

At issue are payments made to a real estate consulting firm it hired.

Article by: PAUL LEVY , Star Tribune
Updated: January 31, 2013 - 9:01 PM

No excerpt or quotes posted here.

Read it online. This link, for as long as Strib keeps it online.

I always wondered about all that. No closings, no bucks to the city, so why all those bucks going out that way? It has to somehow hang together. Pages from city minutes for one of my favorite Ramsey City Council meetings (calling itself HRA, see the footer, but same individuals only back then not televised). And if that LaserFiche link does not work, track the footer from here, to access the item. Also, look for the full agenda for that meeting, for amusement at what you will find.

In this untelevised April 7, 2010, meeting a boosted agenda was handed out and "credentials" produced which I cannot find online anywhere at the city site. Two pages from the session's minutes, (annotation in red added), you decide if any "doth protest too much" notion applies:

Favorite line in the thing, "City Administrator Ulrich noted that he is audio recording the meeting for those not present." Hey, I was not present. At a guess some of the subsequently elected council members might not have been present. so the City Administrator should dust off that audio tape and play it for all of us, on TV, sometime soon. In between meeting broadcasts and rebroadcasts on QCTV, instead of the background elevator music, replay that hummer.

Second favorite meeting quote, a paragraph, "Mr Cronk stated that on a typical development project you will have a tier of people. He talked about the different tiers and talked further about the distinction between brokers and the Development Team's role as a developer. They were hired to create value and to execute the vision. This has zero value today - $300,000,000 down the road."

Anyway, regarding what's a broker vs a non-broker, and if a non-broker brokers without a license, what consequences attach, we readers can only guess and follow the reporting of the story by the newspapers. An interesting Ramsey Charter provision,

Section 2.8
Investigation of City Affairs.
The council may make investigations into the affairs of the city and the conduct of any city department, office or agency and for this purpose may subpoena witnesses, administer oaths, take testimony, and require the production of evidence. The council shall provide for an audit of the city’s accounts at least once a year by the state department in charge of such work or by a certified public accountant. At any time, the council may provide for an examination or audit of the city accounts of any city officer or agency, and it may provide for any survey or research study of any subject of municipal concern.

It does explicitly say "subpoena witnesses" and taking testimony under oath (under penalty of perjury). Any such investigation would, of course, be subject to constitutional safeguards of actual or potential witnesses, such as the Fifth Amendment protection against self incrimination.

Perhaps I make an understatement, but this is an interesting development.

This screen capture - most read, North Metro, 10:00 am, Feb. 1:

__________FURTHER UPDATE___________
Another HRA item, an agenda page screen capture

What do you make of that? Not that it is or is not a brokerage function, where licensed brokers are not at the table, but it appears the consultancy had a key role in pricing the product, including legal dimensions of assessments and incurred interest dimensions; whether anything is waived or not; and it seems that brokerage contracts do involve setting pricing early in the process before a property is listed.

Exactly how this mighty "dashboard" phenomenon fits into the questions now being voiced is part of what will be evidence toward a resolution which may be settlement as likely, or more likely, than litigation.

We wait and see. Ben, you and I, with time, will learn the score.

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