THE $205,000 LUNCH
THE STORY’S BACKGROUND: MPRB’s General Manager Don Siggelkow is attempting to divert $150,000 of the proceeds from the Park Board’s Bohemian Flats’ lease with Flatiron-Manson to the owner of SkipperLiner Industries, Inc. for the benefit of its excursion-charter boat business, which is operated by Paradise Charters and uses Park Board property to board and dock their two boats. The Park Board receives 5% of gross for this arrangement which has never been very lucrative for the Park Board.
Siggelkow has been working on this (sweetheart?) deal since February of this year, but the only time it has been mentioned to the commissioners and the public was in an untelevised Park Board study session on October 20, 2008, at the Wirth Chalet.
Here is the story as revealed in a series of Park Board e-mails and other documents obtained by Park Watch from the Park Board through the data practices act.
The story begins on FEBRUARY 7, 2008, with an e-mail to Flatiron from Park Board staff. Flatiron-Manson is attempting to lease Bohemian Flats, which it needed for the 35W Bridge reconstruction. The first mention of SkipperLiner appears in this e-mail: “The docks that are attached to the wall on the river are part of our boat-cruise vendor’s operation and belong to them. They have not been able to operate as expected since the bridge came down and have lost revenue. They are looking to be made whole.”
On MARCH 15, Flatiron sends an e-mail to Park Board staff protesting an inflated fee of $153,340 that Park Board staff is pressuring Flatiron to pay for the four months that Flatiron needs the land: “I do not think Flatiron Manson JV should be paying for MnDot / Park Board agreements that do not have any value.”
Park Board staff replies to Flatiron: “The permit fee is also based on additional costs associated with the Skipper Line (sic) lease.”
And Flatiron shoots back: “I understand the hope to compensate the Skipper Line (sic), but we are the ones that are making it (the bridge) possible not the ones to pay extra to help them as it should be MnDot not FMJV.”
On MARCH 21, Park Board staff acknowledges the Flatiron e-mail and accuses Flatiron of trespassing: “I have observed that Flatiron Manson has equipment and personnel located on Bohemian Flats Park. We do not have a signed agreement with you at this point in time.
“This email is official notice to you to vacate the premises immediately. Remove all equipment and personnel. Your actions of placing equipment and personnel prior to our negotiated agreement may affect the standing with your existing Limited Use Permit for 1900 Bluff Street.
“This email is copied to our Chief of Police.”
On MARCH 25, 2008, Flatiron, needing to move forward with the bridge reconstruction, capitulates and the Park Board lease is signed for $153,340. But not until after park policemen pay Flatiron a visit. In a September 13, 2007, Star Tribune article about the 35W Bridge construction, a Flatiron official was quoted as saying “park police arrived on the property and informed Flatiron ‘about stopping all work and moving away from the site.’ ”
On APRIL 8, 2008, Don Siggelkow and Superintendent Jon Gurban sign a second lease. (The second lease is identical to the first lease with the exception of one clause.)
Also on APRIL 8, 2008, Don Siggelkow, with Park Board employee Steve Buchal, has lunch with Dan Nelson from SkipperLiner and Dave Lawrence from Paradise Charter Cruises. According to a memo of understanding to Siggelkow and Steve Buchal from SkipperLiner recapping the meeting, a $205,000 promise to SkipperLiner was made over lunch by Don Siggelkow.
Here is the first relevant paragraph from the memo: “Understanding that the Park Board secured a check in the amount of $150,000 from the Flat Iron Company, the Parkboard has agreed to utilize those funds for repairs and enhancements to our Boom Island office and dockage facility. In addition, the Parkboard agreed to contact a tent vendor and install the tent at our dockage site – see Dave Lawrence for location. Any improvements, repairs, or tent requirements and expenses are the sole responsibility of the Minneapolis Parkboard.”
Here is the second relevant paragraph from the memo: “Minneapolis parkboard indicated that there is an approximate past due balance in the amount of $20,000 that is due for dockage considerations. In addition, our 2008 dockage cost will be $35,000. Don has agreed to waive these two fees via permission from the Minneapolis Parkboard. This consideration offsets expenses that Dave Lawrence has accrued since the bridge accident.”
It is important to note that Siggelkow was not authorized by the Park Board to make the promises that he did.
The representation about the Park Board having agreed “to utilize those funds for repairs and enhancements to our Boom Island office and dockage facility” is not correct.
On APRIL 18, Siggelkow, with Park Board employee Nick Eoloff, meets again for lunch with Dan Nelson and Dave Lawrence. According to a follow-up memo from SkipperLiner to the Park Board, there was a conversation about a “dredging issue.” And in conclusion, Dan Nelson expresses his gratitude for Siggelkow’s $205,000 worth of promises. He is quoted as saying, “Don, you are the king!”
On JULY 16, an e-mail from Nick Eoloff to Siggelkow states that the dredging of Boom Island for the charter boat’s move to Boom Island “will cost upwards of $100,000.”
Five minutes later Siggelkow shoots off a memo to Dave Lawrence: “Dave, just so you know how much this is going to take out of the proceeds from Flatiron. Let me know if you have concerns.”
And what about the concerns of the taxpayers? If SkipperLiner wants to permanently relocate its charter boat from Bohemian Flats to Boom Island, the Park Board and the taxpayer should not be footing the bill for the costs associated with the move.
What is curious about all of this is that Siggelkow has not, in all of these months, brought the two Flatiron contracts or his $205,000 SkipperLiner promise to a Planning Committee meeting for Board consideration and authorization. Both of these matters–the contracts and the promise–occurred out of the boardroom, off-camera, under the radar and without direction of the commissioners. Siggelkow exceeded his authority and violated Park Board procedures when he promised SkipperLiner Park Board gifts totalling $205,000.
FOLLOW THE MONEY. Park Watch first learned of the controversial Bohemian Flats lease in June and since then has been watching the story evolve. On JULY 23, Park Watch submitted a request to the Park Board for information which would document any proof of claims for losses by SkipperLiner or Paradise Charter Cruises as a result of the bridge collapse. Park Watch wanted to see the evidence supporting the Park Board staff’s stated efforts to “make SkipperLiner whole.”
On AUGUST 1, the Park Board responded: “There is no data responsive to Data Practices Request AAA158 – All data (correspondence, etc.) regarding Paradise Charter Cruises’ losses incurred as a result of the I-35 Bridge collapse, and any subsequent claims made by Paradise Charter Cruises as a result of the bridge collapse.” So Park Board staff had no basis for the claims it was making to Flatiron about SkipperLiner’s losses.
However, in an OCTOBER 16 memo to the commissioners titled “Excursion Boat Operator Agreement,” Siggelkow briefly refers to “discussions” with SkipperLiner about amending their agreement and reducing their payments to the Park Board as “investments at Boom Island.” It has been six months since Siggelkow’s $205,000 luncheon promise to SkipperLiner and this is the first time SkipperLiner is mentioned at a Park Board meeting.
At a time when the cash-strapped Park Board needs every penny it can get just to maintain what it already has, at a time when it is cutting back on stump removal and on all park maintenance, Siggelkow wants not only to use the $150,000 from Flatiron’s Bohemian Flats’ lease to benefit a private charter boat business, but also to waive the $55,000 that the company owes the Park Board.
He concludes the memo with: “We would like to settle the amendment without litigation. We will be providing the Board with a proposed amendment to the agreement in conjunction with the 2009 budget adoption.”
The threat of litigation is nonsense. There is no basis for litigation. There has been no proof of claims for losses submitted to the Park Board because there are none.
If any losses had been sustained, they should have been covered by business interruption insurance which is a standard business practice–and not the Park Board or Flatiron.
The Park Board and the taxpayer should not be subsidizing a private business. And certainly not with the Flatiron proceeds, which–as the result of such a tragic accident–should be used for something significantly more meaningful than private subsidies.