This from Strib online [italics emphasis added]:
Ramsey Town Center was to be a lively urban jewel - until questionable financial dealings put it on hold.
By CHRIS SERRES and JENNIFER BJORHUS - update: April 22, 2009 - 9:54 PM
The near-implosion of the Ramsey Town Center, considered one of the biggest residential real estate debacles in recent Twin Cities history, may have been an inside job.
According to a 29-count federal indictment handed up in Minneapolis on Wednesday, millions of dollars in loans that lenders thought were going to fund the project -- once considered the future crown jewel of the north metro suburbs -- went instead to a handful of bank executives who diverted the money for their own use and then mislead [sic] other banks and federal regulators to cover it up.
To Bob Ramsey, mayor of Ramsey, the federal charges add fuel to the widely held view among residents in his city that it was shady financial dealings -- and not the faltering economy or the tanking housing market -- that nearly destroyed the 322-acre project.
"There's been speculation all throughout this city that there might've been some funny things going on," Ramsey said Wednesday after the indictment was made public.
The conspiracy charges illustrate just how big a role bankers might have played in the project's near demise. City officials had hoped Ramsey Town Center would transform the mostly rural area of Anoka County -- about 30 miles north of Minneapolis -- into a bustling suburban mecca, with 2,800 housing units, shops, 25 acres of parkland and a transit station connected to the future Northstar Commuter Rail.
I see it as dumb to sink more money into it, which is what seems to be happening, in city decision making.
With a new morgue there, have a pathologist on staff pronounce the thing dead.
Cut the losses instead of spiraling them onward and upward.
I only posted a few lead paragraphs from Strib. Read the entire article for a fuller picture beyond this admittedly opinionated digression. Read the indictment.
What are the bankers up to now? An anonymous comment to Crabgrass that I have left for now in moderation said, "CNB sold the North Branch office to a bank in Mora, but continue to operate out of offices in Lino Lakes and Vadnais Heights." I invite detail from the author about the several things he/she commented on, and they can be emailed or given anonymously by comment or otherwise.
So, presume the comment data correct. New faces in North Branch. Same faces surviving in Lino Lakes and Vadnais Heights. What is that surviving bank doing now, to its depositors and borrowers out of the Lino Lakes and/or Vadnais Heights locations, in terms of loan security and customer treatment?
I think the feds should look deeply into that kind of question also. Are mortgage or business loans being defaulted on technicalities, with security snapped up and questionably handled? If so, why? Who gains or loses if during this "credit crunch" banks are hasty and severe? Are the little folks suffering? Who is Jerome Peterson in this, his role, his avoiding indictment? What's his track record? Who is he now, in Lino Lakes - Vadnais Heights customer treatment activities and decisions? What does he stand to gain, and what did he stand to gain and actually gain in the past? Hello, feds. Have a look. I do not know whether there is anything there, under the rocks, but more importantly, I do not know how such follow-up thoughts and things have been vetted, by lifting more than a few of the rocks to have a look.
A sow's ear synopsis. Blaming the Town Center failure on things beyond BAD IDEA FROM THE START seems to me to be dissembling or myopia. I think Bob Ramsey's got myopia. Bob, the widely held view among the citizens I know and talk with is bad results follow from bad initial thinking and getting aboard the glory train of those who would lead you to believe you can push on a string effectively.
This Ramsey Town Center history proves decisively that you can sell a bag of speculation as a chain of solid thought.
Upside rosy thinking about how great we are, how greater we will be, predominated while suggestions that downside reality be factored into planning were simply and forcefully ignored and mocked. Some even suggested there was more likelihood of success if the planning were west of Armstrong, but those voices did not hold sway.
I doubt that would have mattered. Why move to Ramsey to get urban density when you can stay in the Twin Cities and get it with a little ambience mixed in? (And closer to where you are more likely to find a good job.)
A sow's ear never will be a silk purse. The thing is so far steeped in shabiness, with a palace of a city hall, a solid Coburn store, a who-the-hell-uses-it mega-ramp, and a field of weeds. Will a shabby tramp of a thing ever gain respect? Perhaps. But what are the likelihoods?
Stop the bleeding. Let it sit. Wait and see. But don't expect much beyond further bad spending decisions.
At least Coburn so far is staying open, and will get a Bank of Elk River outlet in the store soon.
Some progress, despite Ramsey being Ramsey.
Land promoters painted that "crown jewel of the north metro suburbs - bustling suburban mecca" silliness. I would not buy a used car from any one of them.
Yet what really ruined Ramsey more than the botched but bad-from-the-start Ramsey Town Center was the avarice of crossing Sunfish Lake Boulevard at the Alpine Woods site to route sewer-water to the gun club and northwards. Town Center was like a contained cancer. That sewer-water extension step was it matastisizing. Redacting the wetlands and tree protection measures is cutting out the remaining healthy tissue so the cancer can more readily advance and predominate.
As to who is at fault: Yo, Strib, hello folks ----- that "City officials had hoped ..." bit --- have you reporters ever heard of the Metropolitan Council?
If there's to be falling on swords, go to the heart of the problem, please. No dissembling.
Smart growth is not all that super. Proof is in the pudding, not in the koolaid.
______UPDATE_______
ABC Newspapers reports online, here. Same report, here. KARE 11, here, adds little, as does this blog.
Dave Orrick of PiPress, with a helpful timeline, reports here:
RAMSEY TOWN CENTER: A HISTORY
1998: Idea of a "Town Center" surfaces in Ramsey and is rejected.
2000: Plan is resurrected in hopes of luring a commuter rail station.
2001: Bruce Nedegaard begins buying land and forms Ramsey Town Center LLC.
Sept. 17, 2003: Nedegaard enters into pact with city of Ramsey.
Sept. 18, 2003: Community National Bank leads a $35 million loan to RTC; 20 banks participate, including Minnwest Corp.
Oct. 3, 2003: Community National executives William Sandison and Ross Sandison lend $990,000 to RTC and allegedly do not tell other banks.
Oct. 9, 2003: Community National lends $2.8 million to RTC and allegedly does not tell other banks.
Spring 2004: Work begins on $1.3 billion Town Center.
July 26, 2004: Nedegaard pleads guilty to bank fraud in a separate land deal.
August 2004: Sandisons and Curt Martinson, a Community National vice president, allegedly form Pentagon Credit LLC, to lend RTC $6 million.
October 2003-September 2004: The Sandisons and Martinson allegedly "misrepresent" how troubled RTC is doing, say outlook is favorable.
November 2004: Homebuilder pulls back on Town Center.
December 2004-October 2005: $990,000 and $6 million loans allegedly repaid ahead of contractors and the multi-bank $35 million loan.
Fall 2005: Nedegaard defaults on multi-bank loan.
Feb. 1, 2006: Minnwest takes over as lead on multi-bank loan.
Nov. 28, 2006: Minnwest files petition for involuntary bankruptcy against Nedegaard.
Nov. 30, 2006: Nedegaard dies.
June 18, 2007: Federal investigators search Community National offices.
July 2007: Foreclosure sheriff's auction sale on about half the Town Center project is postponed.
Nov. 19, 2007: Minnwest sues Community National.
June 2008: Regulators order dismissal of Sandisons from Community National.
March 2009: City of Ramsey agrees to pay $6.75 million for part of Town Center.
Read it and weep.
It certainly is helpful that PiPress constructed this timeline for us. I would not have taken the time. The direction of each published report differs in details and wording even with the same basic facts reported consistently. Have a look.
Every person in Ramsey could probably write a highlight or two in the list differently, by naming names or actions differently. I could. I would have put in the Aug. 12, 2003 council meeting, and the split vote in that meeting on Town Center preliminary plat approval, as well as the minutes from the Aug. 12, 2003 work session that preceeded the televised meeting. If the minority vote Aug. 12, 2003 had prevailed, the development agreement would have had to be done before changes occured contingent on the preliminary plat approval, and things might have evolved differently - although that is speculative. I would have included the Jan. 8, 2002 council meeting, and perhaps something from Dec. 2001. Other people might have differing views of what were key events and situations. I would have included formation and activities of the Ramsey Town Center Task Force as having propaganda value, if nothing else. I would have included a few charter amendment events; such as the "Citizens for Ramsey Town Center Design" 2001 propagandizing and charter mischief.
I would include this:
_____FURTHER UPDATE______
I would add the date the appraiser, Renne, hanged himself in a closet in his home leaving a note. He is an appraiser Tinklenberg Group used with regard to Ramsey buying up Highway 10 properties with RALF money, two of which involved Jim Deal and Bruce Nedegaard and his LLC. I believe there were some appraisal adjustments he was requested to do along the way, regarding at least one of those properties.
Orrick of PiPress wrote of that in his indictment report:
The problems of Nedegaard and the Town Center began spiraling downward in 2004. Major homebuilders pulled out, and contractors stopped getting paid.
The $35 million loan eventually went into default.
In 2006, Minnwest forced Nedegaard into bankruptcy; he died two days later of natural causes, and the entire project unraveled. Contractors, who had installed water lines and excavated, and the other banks behind the $35 million loan were left holding the bag.
An investigation by the U.S. Postal Service and IRS was well under way by 2007 but was tripped up when the Town Center's original appraiser, J. Scott Renne, hanged himself in a bedroom closet five days before he was to testify before a grand jury. Renne had earlier told investigators he and Ross Sandison engaged in a kickback scheme that involved inflating his appraisal fees, including his work on the Town Center, according to public records.
But the investigation continued, ensnaring James Heisel, chief financial officer of Ramsey Town Center LLC for lying to investigators about a Columbia Heights project that also involved Nedegaard and Community National, as well as Luther Hochradel, the former owner of Windsor Landscaping in Maplewood, who did work on the homes of a number of wealthy Twin Cities executives, including the Sandisons', and admitted helping other clients evade taxes. Both men pleaded guilty in federal court.
The Sandisons and Martinson had known they were targets of the probe since late 2007, records show. On Wednesday, their lawyers proclaimed their innocence.
I believe there was one point in time where Michael Vick was denying involvement in dog fighting.
The history of the Columbia Heights project, as much as I know of it, also is interesting.