Monthly Archives: October 2008

Public Comment on Un-Authorized Leases

The following letter to the MPRB Commissioners was read at Open Time at the Park Board’s October 23, 2008, meeting. The discovery of the two unauthorized leases was the result of a Data Practices request:

October 23, 2008

Commissioners:

I would like to bring to your attention an issue that needs to be addressed.

On November 14, 2007, a five-page, 21 point lease agreement between the Park Board and Flatiron-Manson for the sum of $147,398 was signed by Peter Sanderson, Bob Edwards and Jon Gurban for a year’s use of 1900 and 1921 Bluff Street and part of West River Road Parkway during the reconstruction of the I-35 Bridge. This $147,398 was to be paid in three installments.

On April 8, 2008, a second lease agreement between the Park Board and Flatiron-Manson was signed by Bob Edwards, Jon Gurban and Don Siggelkow for the sum of $153,340. This 5-page, 21 point lease agreement was for the use of Bohemian Flats for the months of April, May, June and July of 2008. This $153,340 was to be paid in two installments.

Both of these leases were negotiated and signed without the consent of the Board.

By failing to bring these two leases to the Board for the required committee and full board approvals, Superintendent Gurban and General Manager Siggelkow exceeded their authority and violated Park Board procedures. These are serious violations and they should not be overlooked or ignored. I believe that there should be a review of these violations by Standards and Conduct.

Thank you.

Arlene Fried
Minneapolis
Co-founder of Park Watch

Thurday Night Board Meeting Agenda

Tonight the MPRB will meet on an unusual night to discuss 2 items that should be of public interest in their Administration and Finance Committee.

#1 is the 2009 Superintendent’s Proposed Budget. The presentation is currently not available in electronic format. This will be the first gander anyone gets as to what may be on the chopping block or what NEW creative fundraising scheme will gap the budget hole.

#2 and in that vein… the second presentation is on sponsorship in the parks. Will it change from the Lake Harriet Pavillion to the “Cabela’s” Pavillion. ” Target “Falls at Minnehaha Park? or will it be Starbucks logos on park benches?

Read more here…. Park Board Agenda

A SUMMARY OF CURRENT PARK BOARD TOPICS TO BE DISCUSSED AT THE 10/20/08 MEETING

The following item by Shawne FitzGerald of Powderhorn appeared on the Minneapolis Issues Forum list on October 19. It is an excellent summary of the topics that were on the agenda for the October 20, 2008, Park Board meeting.

A SUMMARY OF CURRENT PARK BOARD TOPICS TO BE DISCUSSED AT THE 10/20/08 MEETING

The Park Board is meeting at Wirth Chalet tomorrow to consider budget and financial issues. This is a Committee of the Whole meeting and will not be televised. Perhaps the Commissioners will refer the agenda to the standing Admin and Finance Committee which is televised – thereby increasing transparency.

The Park Board also failed to post the actual agenda and support documents two days prior to the meeting as is usual. Lots of controversial stuff here – ParkWatch has posted the materials at the ParkWatch Public Library
http://homepage.mac.com/parkwatch

Some highlights:

Dedicated Park Fees – this is the proposal to charge a $2000 fee on each new unit constructed. State law requires that the City and Park Board pass a joint ordinance before this happens and, so far, the City has not signed off. Problems with this source of funds include 1) the fees can only be used for capital costs and 2) there must be a direct relationship, a nexus, between payment of fees and park capital expenditures. The Park Board has yet to provide details on how the funds would be used.

Sale of the 201 Building, Fort Snelling to the Boy Scouts. Sale will be reviewed by District Court on Oct 21st. Not clear: how the proceeds will be used to pay off outstanding City bonds on the sale. Arlene Fried has posted an op-ed piece that includes the history and chronology of this deal. See https://mplsparkwatch.org/node/878.

Skipperliner. This is the contract for the boats on the Mississippi River. I posted on this a few weeks ago after Park Watch discovered an email promising to spend public dollars on improvements for the Skipperliner Boom Island operations as well as forgiving dock fees in 2007 and 2008. Staff is now bringing this and related issues to the Commissioners.

ParkWatch research indicates that the Mississippi River boat operations lose money for the ParkBoard. Possibly, the taxpayers are subsidizing every passenger that rides on the boats. However, Park Watch doesn’t have access to all the data that the Commissioners can access – I urge them to get an accounting of all revenues and expenses, including capital costs.

Nicollet Island Pavilion. Behind the scenes, the State Finance Commissioner has questioned the private use of the Nicollet Island Pavilion. This was because state obligation bond proceeds were used to acquire and rehab the Pavilion and grounds. MPRB staff reports that an asst state finance commissioner has agreed that the State has no authority to ensure public use of a public asset because it was purchased before 1974. Interesting constitutional issue that might merit the attention of the MN ACLU.

Nicollet Island Pavilion. Behind the scenes, the Metropolitan Council has questioned the private use of this building particularly in terms of regional park use. The state obligation bonds used to pay for the Pavilion and grounds were awarded by the Met Council through the regional parks program. Park Board staff asserts that Mintahoe, the private corporation in the Pavilion, only has the right to store items at the site, not to occupy it, and that Park Board staff has verbally told Mintahoe to remove its offices and staff.

This seems disingenuous for the Park Board has been aware that Mintahoe has occupied the Pavilion for several years. This summer, the Park Board supported Mintahoe’s effort to get a 4 am liquor license during the RNC – and that liquor license was awarded to 40 Power Street. Going back to 2003, the Park Board and Mintahoe jointly applied to the HPC for a sign variance – and Mintahoe was listed as tenant. Mintahoe’s status seems to change depending on what it needs to be in government applications.

In park plans submitted to the Metropolitan Council, the Nicollet Island Pavilion was to be a picnic pavilion and interpretive center open to regional park visitors for the majority of the time and rented out for private events for a minority of the time. Hopefully, the MPRB Commissioners will seize this opportunity to restore public access to the Pavilion and its parking lots.

Property Taxes for Businesses Located in Parks. Park staff evidently asked the Park Board attorney to research this. The Park Board is paying property taxes at the Lake Harriet concession stand because its agreement did not include the vendor paying for this. The Park Board attorney’s opinion was not released as public information.

Storm Water Fees. The Park Board pays $400,000 and wants an exemption from City in recognition of the contribution of the parks to the storm water system. This seems reasonable although it would cease to penalize the Park Board for increasing buildings, parking lots, and other impermeable surfaces in the parks.

Non-resident Dog Park Fees in Regional Parks. Regional parks account for about $17.5 million of the MPRB $55 million operating budget and one-eighth of regional park operating funds come from Met Council grants. The Met Council has an equal access policy and suggested that the higher non-resident fees for dog parks at regional parks violates this. Park Board staff responded that access for people is free, the charge only applies to dogs. Hopefully, the Commissioners will look at the net revenues from the non-resident portion of dog park fees and judge whether this is an issue worth haggling over.

Finances. For a budget meeting, there is little on the budget. Park Board staff proposes to increase revenues viawood chip sales, regional parking, administrative tickets, sponsorships for music ad movies in the parks, Midtown ECO energy lease income, and beverage contract income. No dollar amount of projected income is included.

The beverage contract is up for bids about now and this has the potential to be controversial. The Park Board has made a commitment to work to reduce childhood obesity and the presence of pop machines seems in conflict with this goal.

After paying for increases in health care and utility/fuel costs, the Park Board will realize only a $965,000 inrease in property tax revenue. In-house construction is being eliminated and one position cut, other employees transferred. A hiring freeze on 15 vacant positions is proposed until the amount of state funding in 2009 is known.

FYI,
Shawne FitzGeraldPowderhorn
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PARK WATCH ALERT

The Park Board’s upcoming meeting on Monday, October 20, 2008, was advertised as a budget meeting, but the 13-point agenda includes several non-budget issues that Park Watch has been monitoring. The most closely scrutinized issues are the 201 Building, the Twin City Catering lease, the SkipperLiner perks, the Nicollet Island Pavilion and personal property taxes. Two of these items–the 201 Building and Nicollet Island Pavilion–even have secret letters attached. These secret letters are titled “privileged attorney client communication, ” which means that the public is excluded from accessing them.

The 5:00 p.m. meeting is at the Theodore Wirth Chalet and will be completely off-camera. So, unless you can attend the meeting, you (the taxpayer) will not be able to witness General Manager Don Siggelkow as he puts his spin on these important issues.

Arlene Fried
Co-founder of Park Watch
http://www.mplsparkwatch.org

A PARK WATCH COMMENTARY ON THE MPRB's 201 BUILDING FIASCO

On September 25, 2008, the Star Tribune published an article about the Minneapolis Park Board’s 201 Building, but the article did not elaborate on the circumstances that were responsible for the problems that caused it to be an eight-year white elephant. Here’s the story as documented by Park Watch.

The 201 Building at Fort Snelling was acquired by the Minneapolis Park and Recreation Board in 2000 and it has been a series of costly problems ever since. There were problems with the purchase, problems with the lease and problems with the selling of the building. It was called “an enterprise project” which meant that it was supposed to make money for the Park Board. However, it’s never made one cent for the Park Board. It’s not even broken even. During the eight years the Park Board has owned it, it has only racked up huge debts. It has been a monumental failure. And what is appalling is that Superintendent Jon Gurban has never done a cost analysis of the project or attempted to establish any honest understanding of what the problems were.

Park Watch has been monitoring this failed enterprise project since the liens against it were filed in 2004. Last year Commissioner Walt Dziedzic mentioned to me that he was told that when the building is sold the Park Board will make money on it. He was not told the truth. The accrued debt on this building is so great that the best that can be hoped for is that it is a wash.

OUTLINE/OVERVIEW OF THE FAILED ENTERPRISE PROJECT KNOWN AS THE 201 BUILDING

Chapter 1. PURCHASE OF 201 BUILDING. Mistake #1 was MPRB’s General Manager Don Siggelkow’s moving ahead with the purchase of the 201 Building and land in 2000 BEFORE the anticipated contract with the Wild hockey team was signed and sealed. When the deal with the Wild fell through, the Park Board was left with an empty building, no income stream and no recourse.

Chapter 2. RENTING OF 201 BUILDING. Mistake #2 was the drafting of a lease in July of 2002 with The Fort LLC, a company headed by Robert Naegele III, for the creation of an athletic facility, but FAILING TO INCLUDE A PROVISION FOR A CONSTRUCTION BOND. It was Shawne FitzGerald’s research that brought to light the omission of the construction bond.

When Naegele’s company abandoned the project before completion but after significant improvements were made, the Park Board was again left with an empty building, no income stream, unpaid bills, lawsuits for $1.8M and no construction bond. In a later conversation that I had with John Erwin, a former park board commissioner who voted for the skate park, I learned that John voted in favor of the project after he and other commissioners had been assured at the time that there was “no exposure” for the Park Board. They had been misinformed.

Superintendent Jon Gurban never initiated an investigation of this failed project; so there was never any accountability or understanding of why the project that was supposed to make money failed. In a Star Tribune article about the lawsuits in June of 2004, Siggelkow was quoted as saying: “…but there’s nothing the Board could have done to protect the contractors.” Siggelkow was wrong. The construction bond would have saved the Park Board and the contractors a lot of grief. Neglecting to require a construction bond was a serious and costly omission.

Meanwhile, the Park Board was (and still is) paying interest on $2.2M worth of bonds for the 201 Building. The annual payment is $94,500 and that payment is for interest only. The bonds run for 20 years with two balloon payment of $1M each due in 2020 and 2021. Since the bonds were issued by the City of Minneapolis in 2002, the Park Board has paid out approximately $575,000 in interest on the 201 bonds.

At a Park Board meeting in August of 2006, it was estimated that at the time, the 201 Building had so far cost the Park Board $3,075,000. It is important to note that this figure, which included the $945,000 settlement figure, did not take into account the bond interest of $575,611 or escalating legal fees paid to Brian Rice’s law firm. We have just completed reviewing the 201 Building’s legal fees (acquired through the MDGPA) from June of 2004 to July of 2008. The total for this period is $229,152. The 201 Building’s total debt is now approaching $4,000,000, which contradicts the $3,000,000 figure provided by the Park Board for the Star Tribune article. And this $4,000,000 figure does not take into account the building maintenance costs, other miscellaneous costs, the brokers’ fees and the countless hours of staff time spent on this project over the eight years of its existence.

Chapter 3. ATTEMPTING TO SELL THE 201 BUILDING. This chapter is marked by confusion over the brokers’ fees and the actual selling price. On July 21, 2007, the Park Board entered into a brokers’ agreement with Colliers Turley Martin Tucker to sell the 201 Building and adjacent land. In August of 2007, a letter was sent out by the brokers requesting purchase offers for the 201 Building and land. A number of offers were received and the Park Board accepted an offer by the North Star Council of the Boy Scouts of America. This offer by the Boy Scouts was for $2,000,000 for the 201 Building and part of the land with an option to purchase the remainder of the land for an additional $2,000,000, contingent upon a clear title.

But when the purchase agreement was signed on October 31, 2007, it was different from the offer price. The price of the original $2,000,000 option had increased to $2,250,000. So the selling price went from $4,000,000 to $4,250,000.

The October 31 purchase agreement is clear that the $80,000 brokers’ fee is to be deducted from the $2,000,000 purchase price. However, for the option, the exact amount of the brokers’ fees is unclear.

But when we attempted to get more data about the brokers’ fees, we ran into a brick wall. The Park Board ceased providing us with any information in response to our numerous requests under the MGDPA. And oral questions have been ignored. This sale has not been a straight forward sale with a stated selling price and a stated brokers’ fee as one would expect. And Park Watch questions whether the Boy Scouts’ complicated purchase agreement represents the best offer possible for the 201 Building.

What is important to remember about the 201 Building disaster is that it could have been prevented. Had staff waited until AFTER the lease with the Wild was signed to complete the purchase of the building, the Park Board would not have been stuck with a costly empty building. And later on, a requirement for a construction bond in the 2002 lease would have protected the Park Board in the event of a default by The Fort LLC.

Arlene Fried
Co-founder of Park Watch
http://www.mplsparkwatch.org

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MPRB Board Meeting

Minneapolis Park & Recreation Board Commissisoners Meeting Commissioners Walt Dziedzic, Bob Fine, Carol Kummer, Mary Merrill Anderson, Tracy Nordstrom, Jon Olson, Scott Vreeland, Annie Young and President Tom Nordyke. Minneapolis Park & Recreation Board meetings are broadcast live from 5-9 p.m. on the Minneapolis Comcast cable network Channel 14 and online on the City of Minneapolis Government Meeting Channel. Date 11/05/2008 Time: 5:00-8:00 p.m. Type: Regular Location: MPRB Administrative Offices, Board Room Suite 255 Address: 2117 West River Road, Minneapolis

Park Board Agenda

MPRB Board Meeting

Minneapolis Park & Recreation Board Commissisoners Meeting Commissioners Walt Dziedzic, Bob Fine, Carol Kummer, Mary Merrill Anderson, Tracy Nordstrom, Jon Olson, Scott Vreeland, Annie Young and President Tom Nordyke. Minneapolis Park & Recreation Board meetings are broadcast live from 5-9 p.m. on the Minneapolis Comcast cable network Channel 14 and online on the City of Minneapolis Government Meeting Channel. Date 11/05/2008 Time: 5:00-8:00 p.m. Type: Regular Location: MPRB Administrative Offices, Board Room Suite 255 Address: 2117 West River Road, Minneapolis

Park Board Agenda

BUDGET MEETING LAST MINUTE TIME CHANGE

Why is it that the MPRB can move a meeting that conflicts with their
trip to the National Parks and Recreation Association (NRPA) Convention
a month in advance Park Board Agenda but they change the date on a meeting that SHOULD be held at their
headquarters building, and broadcast, regarding the 2009 budget at the
last second?
It is not as if this particular holiday has not been
around for centuries and has been pointed out as a conflict every year.
In fact I had assumed that the reason for the original movement for
the 3rd meeting of the month was due to this holiday until I looked it
up (the NRPA issue was discovered later).

Why is this important? This is the portion of the budget discussion
where the CUTS that can happen to your neighborhood park/ rec program /
fee/ permit cost etc… are sussed out by staff from the
commissioners. This is the part to budgeting that the commissioners
would love to make as opaque as possible. Did my commissioner vote to
increase the fees on the Pride Festival in Loring Park? Well last year
it was a blind e-survey that said it was okay to tinker with the fee
structure for permitted events that led to this happening. Who voted
to tinker with the fees… who knows? In the past it was written
surveys that when requested ( yeah those pesky data requests by the
public) were either tossed in the trash or anonymous.

For Immediate Release

Oct. 8, 2008

Oct. 8 MPRB meeting moved to Oct. 20

In observance of Yom Kippur, the Committee of the Whole meeting of the
Minneapolis Park and Recreation Board scheduled for tonight, Wednesday,
Oct. 8, has been rescheduled to Monday, Oct. 20. The meeting will be
held from 5-7 p.m. at the Wirth Chalet at Theodore Wirth Park, Plymouth
Ave. N and Wirth Parkway, Minneapolis. For more information and the
meeting agenda visit http://www.minneapolisparks.org.

Contacts:

Dawn Sommers
Public Information and Marketing Manager
612-230-6407
dsommers@minneapolisparks.org

Janell Wojtowicz
Communication Specialist
612-230-6414
jwojtowicz@minneapolisparks.org

MPRB Committee of the Whole Meeting At Theo Wirth Chalet

2009 BUDGET DISCUSSION
RESCHEDULED FROM 10-8-2009
Minneapolis Park & Recreation Board Commissioners Meeting – Meeting Reschedule to Monday 10/20

Commissioners Walt Dziedzic, Bob Fine, Carol Kummer, Mary Merrill Anderson, Tracy Nordstrom, Jon Olson, Scott Vreeland, Annie Young and President Tom Nordyke

Date: 10/20/2008
Time: 5:00-7:00 p.m.
Type: Regular
Location: Theodore Wirth Chalet
Address: Plymouth Avenue North at Wirth Parkway

THIS MEETING WILL NOT BE broadcast live from 5-7 p.m. on the Minneapolis Comcast cable network Channel 14 OR online on the City of Minneapolis Government Meeting Channel.

WHY THE MPRB IS HOLDING THIS SERIOUS BUDGET WORKSHOP OFF AIR AND AT A REMOTE LOCATION HAS NOT BEEN ANNOUNCED.

Park Board Agenda