Blanche Million $ Loan Goes Down 3-2
Next Up: City Manager Johnson's Fall Back Plan
Posted May 22, 2015, 10:25 am*
Commissioner Scarlett Frisina was again the swing vote.
COLUMBIA COUNTY, FL – City Manager Wendell Johnson's Blanche Hotel Redevelopment Project took a hit last night when the County 5 voted 3-2 not to remove $1,000,000 from its reserves and loan/grant Integrity Development Partners (IDP) a million dollars interest-free. A convoluted financial arrangement would have had Lake City make a good faith guarantee of the IDP loan.
The project is not dead. On May 9, City Manager Johnson told the County 5, "The City don't want a loan from the County. I'm sayin' that to ya because we don't need the loan from the County. We got the money to loan ourself..."
A Failure to Communicate
City Manager Johnson, the City Council, and IDP had two weeks to swing one vote to guarantee the million dollars. Decades of dysfunction between the City and the County proved to be the undoing of the project as Mr. Johnson, the County staff, and County Attorney Joel Foreman met in back rooms to try and hammer out a deal while IDP played telephone tag with the County Commissioners.
Commissioner Nash's appeal "Everybody should get in a room and air it out," was flatly ignored.
The 5's Neanderthal Meeting Rules
James Montgomery. His words were lost in the fog.
One of the speakers during the public comment segment of last night's meeting was Columbia County icon, James Montgomery, whose long history of service to the County and Lake City goes back generations and is legendary.
Mr. Montgomery, who was In favor of the Blanche Redevelopment Project, was stymied by The 5's Neanderthal meeting rules, which had him present his comments at the beginning of the meeting, rather than after the debate and before the vote, which occurred an hour after he spoke.
By the time the discussion ended and The 5 was ready to vote, Mr. Montgomery's comments had long ago disappeared into the fog of the evening.
The County 5
Commissioner Scarlett Frisina was again the swing vote.
Commissioner Everett Phillips was concerned about cost overruns and told the County 5 that he was concerned that halfway through the job there wouldn't be enough money to finish the job. "What happens if these people go bankrupt? That's my concern," he said.
City Manager Johnson never provided any financial information about IDP.
County Attorney Joel Foreman, throughout his presentation to the County 5, brought up purported concerns by the County's long time auditor-financial advisor, Richard Powell. During Mr. Foreman's negotiations with the City, Mr. Foreman's need two weeks earlier for a written opinion from Mr. Powell evaporated and the County and the public were left with Mr. Foreman's characterizations of conversations with Mr. Powell.
Commissioner Scarlett Frisina told The 5, "I was elected to do what my constituents asked. I did what I told you I would do since the last meeting. I talked to more folks. Forgiving over $500,000 worth of interest as well as setting a precedent – it becomes unfair – anybody after this could come to the County and ask for $1 million interest-free loan and I don't know what grounds we have to refuse them."
Chairman Rusty DePratter followed, mentioning that he agreed with Commissioner Frisina in that if the Board gave IDP the money, other companies would want the same thing.
The City and IDP financed a single source consultant report, by Fishkind and Associates in December of 2014. Other than making the report available, Mr. Johnson never seemed to rely on the report's data. Aware that the last table in the appendix of the report was incomplete, Mr. Johnson did nothing.
Mr. DePratter pointed out the lack of information received, saying there were no "new jobs agreements saying how many jobs you want to provide; real infrastructure; capital improvements; we haven't been given any idea what kind of jobs this might produce."
He continued, "I like the Blanche, but I'm trying to make sure that my feelings are on one side and my duties to my constituents in my district are on the other side. I still have the problems that I had at the latest meeting. I still feel like we'll be settin' a precedent. I had twice as many people in my district call me, and other districts, makin' sure they knew how they felt... We all sat right here and Mr. Johnson said they had the money. It's not the money."
Commissioner Nash wanted to know if the Board sent a letter of intent for the million dollars, if they were committed to the million dollars?
Mr. Foreman told him it would be.
Nash: I agree with everybody
Mr. Nash continued, "I've heard everybody and I agree with everybody. People call – some of them understand the project, others don't. Give a million dollars – what are you doin' in trades and all that. I think everybody here would like to see the Blanche restored and stuff like that."
Commissioner Nash opined that the County could commit to occupying the second floor of a renovated Blanche and the City commit to "buying" the third floor. At the end of the 7 year period condo it out and we go from there. "That's just an idea off my head," he said.
During and after the meeting Commissioner Nash came up with another scenario, which according to Mr. Nash had been presented to the City Manager and rejected. Mr. Nash said, "You tear the Blanche down, 3 or 4 hundred thousand dollars; do a joint venture with the City; build a new building; the City and the County commit to occupying the building; you make the front look like the Blanche; and you protect the tax dollars."
Mr. Nash was concerned about the parking and mentioned that there were never any conversations about it.
Mr. Nash concluded and told The 5, "I've asked IDP to come to town Tuesday and spend time with me because I don't understand the free market credits."
Mr. Nash claimed that the renovation was going to cost "17 to 20 million dollars." This was 3 million more than had been projected.
Legendary Commissioner Ronald Williams was the last one to address the issue [as spoken]:
I didn't get off the turnip truck this morning, but maybe I did. There is somethin' I don't understand about this whole project. It's a city project along with the private investor. What is bein' asked of us is to loan the company $1 million and forgive [the interest]. The city will reimburse us... that's the only part that the County is obligatin' itself to. The Florida stature [statute] on exhibit give the County the authority to do that... The only risk that we're takin' [is if the city will repay the county]. I would hate this board kill this based on we don't know what it's gonna' cost. We don't know if there's gonna' be overruns. We don't have a thing to do with that. We don't have a dog in that fight...
County Commissioner Williams Makes the Motion
Commissioner Williams: "I so move that we loan the developer a million dollars; forgive the interest through a grant; and draw up a agreement between the City, the County, and the developer where the city pays back the loan in full."
Chairman DePratter asked County Attny. Foreman, "That motion stated the way you want it?"
Mr. Foreman answered, "I think that would be sufficient, Mr. Chair."
The Observer: "Could she [Clerk] read that back so we make sure we get the right motion so that everybody knows what they are voting on."
The Clerk could not read back the motion.
Commissioner Williams attempted the motion one more time [as spoken].
My thoughts about what I said in support of the Blanche – the money portion of what I said, the exhibits 1 to 3, that the County Atty. gave us as what (unintelligible) said to determine whether the County can loan a developer a million dollars to economic development – we meet those criterias. My motion also said that we enter into a agreement; come back with this board be approve between the developer and the city and most notable of that agreement would be no matter what happened to the project, whether it's an overrun or under-run, or just go away, that the city is responsible for payin us back the million dollars. It's just that simple. Do you want it any simpler than that?
The Observer, "Now read it back. Let her read it back."
Mr. Foreman stepped in after the Clerk was unable to read back the motion and gave the Foreman version of the motion, combining Commissioner Williams' first motion and second motion.
The Columbia County/Lake City way of doing its business, in the shadows behind closed doors, led once again to another failure of major proportions.
Commissioner Nash's invitation for a joint sit down with the City fell on deaf ears, but worse than that, members of the City Council were of the belief that City Manager Johnson had made the same public offer, which he didn't. City Manager Johnson's secretive ways, along with those of the County, ultimately spelled the death knell for this phase of the projected project.
After the conclusion of Monday night's City Council meeting, Councilman George Ward said the City had a fall back plan if the County didn't participate.
Columbia County/Lake City is about to find out what that is.
*Photos added at 12:00pm