I understand the city is not controlling the RAMSEY3 effort, that it is a private citizen initiated approach but with Patrick Trudgeon a key participant in ways the McKnight funding people like. I was encouraged to see planning and development staff at the weekend session, participating and not managing, and some of the councilmembers. I understand the suggestion was that anyone on staff residing in Ramsey should attend primarily as a resident with personal feelings and beliefs, and not primarily as a representative of city staff. I did not notice either the mayor or Metropolitan Councilmember Steffen at either of the days when I was there. Perhaps they showed up after I left on Saturday or I overlooked them. Olsen, Jeffrey, Look and Strommen were there much of the time, both days. Dehen was there Friday and Elvig showed up briefly. I expected the mayor and Steffen to be there; each resides in Ramsey, in a home on a nice large lot with private well and septic system; not in shared-wall or urban-sized circumstances on city water and Met Council sewer. Interesting.
More on impressions of that weekend in anoter posting. This posting, as follows, is a continuation of staying the course at Town Center.
I sent an email to Councilmember Strommen [who presently heads the City's finance committee] and to City Finance Director Lund, asking the following primarily fiscal question:
I emailed Bill Goodrich about the lein position priorty of the city, and that's his area, not yours. However, the article says $42.3 total owed by the LLC [not distinguishing if taxes and assessments are part of that or not], $35 million to Minnwest Bank [not saying if there's been any partial amortization].
I can see most of that for the land - 315 acres at $95,000 per acre would be $29,925,000 up-front land alone. That leaves over $5 million in balance on the loan proceeds. The article said $13 million is owed beyond that borrowed amount (borrowed apparently mainly for buying the land). I am sure the parties to the bankruptcy are following the money, quite carefully, and that's not my request.
What I am asking: Could you give a quick to the nearest $0.1 million, the present city's assessment and back taxes position against the property [if easier you can break out any taxes owed on unsold units where the LLC's already sold the land and it's been built out, etc. - or give totals, what's easiest for you, but just let me know whether anything's broken out separately or not, as not an RTC LLC
responsibility]?
And the garage and city hall is wholly separate money.
Just the assessment total outstanding, for infrastructure investment the city made up front [keep the Ramsey Blvd and 116 road work separate also if easier, unless that's assessed on the land and easier to include]. Separate State or County leins are not a point of inquiry.
And, is Ramsey paid current, or if not what's the arrearage?
Lund replied:
[Re] the City's assessments on RTC and the foreclosure. The City's assessments are not impacted by the foreclosure.
The amount of outstanding assessments, which totals approximately $6,164,000, needs to be paid in full by February 22, 2008.
First, that fits the article. Beyond the approximately $30 million of borrowed money the LLC appears to have spent purchasing the raw land, there is five million outstanding debt on the lender's committment spent wherever the parties in the bankruptcy proceeding track it down to have gone. Add the $6.1 million owed the city, and that looks to be the $13 million over and above the cost of land, in the $43 million total debt owed by the LLC that the Business Journal news article reported.
Strommen's reply was not regarding the fiscal detail as much as the policy question - here is where it appears we are, where do we go from here?
I was encouraged by her thinking it best to stay the course and not cut any special breaks or special deals to give the lender a windfall opportunity to make more on its foreclosure. It took the risk lending, the deal was cut, and just because the first guy at bat struck out is not cause to change the strike zone or move the pitching mound further away or first base closer. The rules of the game should remain. The original deal for the City, certainly it might have been better - but there's no cause to dwell on that nor to make it worse because the first batter did not hit a home run.
Here's the gist of what Strommen wrote in reply:
I do agree with you 100% that we must be aggressive in asserting the City's financial position as well as patient and prudent with respect to development of the Town Center. To me, a true failure would be to compromise if there are other options. Given that Ramsey Crossings (a more traditional big box) also has been affected by the slow market, I don't see that changing the plan for Town Center offers any magic bullet.
Strommen made the point that this appears to not be her sentiments alone, but rather her beliefs backed up with a continuity in position from the past council to the present:
We passed a resolution to that effect last September or October (I can't recall exactly when), and that sentiment was re-iterated again this year by the majority of the council at at least one worksession.
While I have been critical of council decisionmaking in the past; this time I agree.
But please, please reconsider the change from City Administrator structure to City Manager. The department heads and the interim city administrator seem to be moving better with a less centralized system than was ended Jan. 1, 2007 with the departure of James Norman. That was a blessing, the staff has prospered, and there appears little cause to reinstitute anything even resembling such a tightly centralized regime as his.