Mayor Don Atchison should explain nature of relationship with Lake Placid CEO Michael Lobsinger; City administration flip-flops on Parcel “Y”

On November 9, 2009, the city clerk’s office received an email from Lake Placid Developments CEO Michael Lobsinger requesting permission to address city council at its November 16, 2009, meeting regarding River Landing Parcel “Y” in Saskatoon.

Coincidentally, November 9 was the date the city’s executive committee met for the first time since the civic election. The meeting was held in-camera.

The recipients of the email included Janice Mann and Joanne Sproule (Clerks), Murray Totland (City Manager), and Jack Manning (Solicitors). No problems so far. That is, until you get to the last name on the list: Don Atchison.

On the surface, it may seem insignificant, but when you consider what’s at stake it becomes important.

When Lake Placid submitted its request for proposals in September 2007 the projected cost of the project was $125-million. On November 17, 2009, the StarPhoenix reported that the cost is now $250-million. Yes, that’s right. One quarter of a billion dollars. A massive 100 per cent increase in just over two years.

A day earlier the newspaper described Parcel “Y” as a “prime piece of city-owned riverfront land.” [Lake Placid comes back (StarPhoenix, November 16, 2009)]

It appears Lobsinger sent the email to Atchison’s home – not city hall.

Unlike the city manager, city clerk and city solicitor, Atchison’s title does not appear in the email. This may indicate not only a business relationship but a personal one as well.

The word “Home” appears beside Atchison’s name. This would seem to suggest that the developer keeps the mayor’s contact information in an address book. If that’s the case it seems reasonable to assume that this wasn’t the first email sent to the mayor’s residence.

This could be perceived by some as inappropriate and perhaps even unethical. It also raises a few questions that deserve answers.

Who gave the developer Atchison’s home email address? Was it the mayor himself? If the answer is yes, when did he give it to him?

Do Atchison and the developer correspond? If the answer is yes, how long has it been going on and what is being discussed?

Do any other developers have the mayor’s home email address? If so, who are they and do they correspond with him?

Something else that needs to be considered is that if Atchison is exchanging emails with developers – or anyone else for that matter – from his home and city business is involved, then that correspondence is likely not subject to the province’s freedom of information legislation and therefore would be free from public scrutiny and accountability. This is unacceptable.

For the sake of openness and transparency Atchison should explain the nature of his relationship, if any, with Lobsinger and disclose copies of any emails they may have exchanged since June 2007 when Lake Placid submitted its expressions of interest for Parcel “Y”.

Unfortunately, the concerns don’t end there.

On October 30, 2009, the mayor issued a news release stating that the city “did not receive payment from Lake Placid Developments for the purchase price of Parcel Y.”

Atchison also noted: “At the August 19, 2009 Council meeting, City Council passed a resolution indicating that if full balances owing were not received by 5:00 p.m. on October 30, 2009, then both the Parcel Y and the adjacent lane agreement would be terminated without further resolution of Council.”

With this in mind an email was sent to city manager Murray Totland on November 4, 2009, asking him how long the developer would be allowed to keep its trailer and two billboards on Parcel “Y”.

Totland responded later that day stating: “Now that our agreement with Lake Placid has ended, we will be writing to them to request they remove their property from the site.”

The city manager’s response was absolutely the right thing to say. The city’s agreement with Lake Placid was over. In the mayor’s own words at the August 19, 2009, city council meeting if Lobsinger didn’t “come up with the money for the land” by the deadline then the agreement would be “terminated.”

“There’s no more chances,” the mayor said. [Lake Placid gets time (StarPhoenix, August 20, 2009)]

Something obviously happened in the days that followed because more than a week later Lake Placid’s property was still on the site.

A follow-up email was sent to Totland and the city’s special projects manager, Sandi Schultz, on November 13, 2009, asking them when the letter was going to be sent to Lake Placid. There was no reply until November 17, 2009, the day after city council’s meeting where Lobsinger spoke.

In her email Schultz said: “The Executive Committee at their meeting of November 23 will be considering, in their public agenda, River Landing, Parcel “Y” options. City Council at their November 16 meeting invited Mr Lobsinger to make a presentation to the Executive Committee meeting at the time they are discussing River Landing Parcel “Y”. A letter will be sent to Lake Placid Holdings Inc. following a decision on the Parcel “Y”.”

By this point Totland and Atchison seemed to be singing a different tune as well.

If Lobsinger comes to council with funding in place for the site “it would be a pleasant circumstance,” Totland told the StarPhoenix.

“We’ve supported their development and we still believe a Lake Placid-like development would be a good one for River Landing,” he said.

Atchison said, “I hope that he has the money and would like to enter into discussions with us.” [Lake Placid comes back (StarPhoenix, November 16, 2009)]

This is completely contrary to what council resolved on August 19, 2009, and what Atchison and some councillors said at the meeting.

To date Lake Placid’s property remains on Parcel “Y”.

It’s beginning to look as if the table is being set for the wholesale sell-out and betrayal of council’s August 19 resolution.

Council is already bankrupt of any integrity or credibility as a result of its ongoing disgraceful conduct concerning the Mendel Art Gallery. If councillors break their word on Parcel “Y” how will the public ever be able trust them again?

UPDATE: According to a city manager’s report posted to the city’s website late on November 19, 2009, the administration “is recommending that Parcel “Y” and the land adjacent to Parcel “Y” be consolidated. A Request for Proposals (RFP) similar to the previous document is to be developed that requires proponents to agree to a fixed purchase price. An appraisal will be undertaken to determine the current land value for the consolidated parcel.”

However, in the article Open bids recommended for River Landing site (StarPhoenix, November 20, 2009) the StarPhoenix confirms that administration is willing to ignore that recommendation if Lobsinger shows up at the November 23, 2009, executive committee meeting with the financing in place.

“If he comes to the table ready to build, city council has the option to sell the land directly to the developer, an option the city’s administration would support to avoid a potential funding shortfall and mill rate hit for the year-to-year operation of the $82.1-million River Landing project, which will be completed by 2012, officials say,” reporter David Hutton said.

What Hutton fails to say, though, is that nowhere does administration say this in its three-page report to the executive committee. The newspaper does not explain why the information was omitted. Furthermore, the StarPhoenix is neglecting to tell readers that administration’s support of a direct sale would be a complete reversal from what the city manager told city council at its August 19, 2009, meeting:

“Administration is prepared to recommend an extension of the time for payment to 5:00 p.m., October 30, 2009, (October 31 is a Saturday). The extension would be conditional upon Lake Placid paying the accrued interest noted above by 5:00 p.m., August 31, 2009. In the event that this payment is not received, both sale agreements would be at an end and Lake Placid would forfeit the deposits paid under the Parcel Y agreement. This would occur without further resolution of Council. Similarly, if payment of the full balances owing under each agreement is not received by 5:00 p.m. on October 30, 2009, both agreements would also be at an end without further resolution of Council,” the report said.

Lake Placid made the August 31 deadline but missed the one for October 30. The agreement is terminated, but administration is now prepared to betray its own words and overlook it.