Wednesday, March 24, 2010

Lake Placid CEO flip-flops interest in new RFP; City administration dragging its feet; Nasser financial commitment seems murky, halfhearted

Manlio Marescotti, Karim Nasser, and Michael Lobsinger,
in council chambers Mar. 22, 2010
(Photo by Richard Marjan, SP)

‘Developers tout plan; River Landing Village could be ready for 2013, Lobsinger says’ was the headline in the StarPhoenix on March 23, 2010. What it should have said, though, was ‘Developers seek special treatment; Lobsinger, Nasser say no to new RFP, want council to ignore previous decision.’

The River Landing Parcel “Y” soap opera was back at city council on March 22, 2010. Participating in the latest embarrassing installment was Lake Placid Developments CEO Michael Lobsinger, Karim Nasser, a director of Victory Majors Investments Corporation, and Manlio Marescotti, vice-president of lodging development for Marriott Canada, a potential anchor tenant.

Lobsinger and Nasser, according to the StarPhoenix, have “signed a partnership” to build the riverfront hotel-condo-office-retail project “contingent on city hall reviving” Lake Placid’s sales agreement that expired October 30, 2009.

“We could complete (this project) in its entirety within 36 to 38 months,” said Lobsinger.

Both parties told reporters after the meeting they are not interested in participating with other developers in a request for proposals, which city administration was working to get in front of councillors on April 19, the StarPhoenix said.

“Am I interested in another (request for proposals)?” Lobsinger said. “No I am not. The process that it took me to get approval was 30 months. . . . We’re ready to get going literally in May. We can start now instead of two years from now.”

Lobsinger appears to be flip-flopping from what he told the city’s executive committee on November 23, 2009.

The StarPhoenix reported at the time that Lobsinger “indicated he would enter another bid if another request is sent out by the city.”

“Would I come back? Absolutely. I’ve spent 32 months on this project.” [Lake Placid finds some support (StarPhoenix, November 24, 2009)]

Why is Lobsinger now backing away from participating in another RFP? Perhaps it’s because Nasser wants no part of one.

Chris Carr of NewsTalk 980 radio reported Nasser saying he’s not interested in going through a request for proposals process, if that is the route city council decides to take.

“I think it’s wonderful to be able to proceed with it. If we want to go beyond that, it takes a long time, and I don’t know whether I am interested myself to start something new like that,” said Nasser. [Hope Revived (NewsTalk 980, March 18, 2010)]

So Nasser’s interest seems to be halfhearted and is basically saying that it’s his way or the highway.

Furthermore, the level of Nasser’s financial commitment to the project seems to be a little murky.

Nasser recently told CBC News he is prepared to write Saskatoon a cheque for $5 million, to keep the project moving.

“We would be very happy to pay them the money that they need right away,” Nasser said. “And we will proceed and complete the project within a certain period of time.” [New investor attached to River Landing development (CBC News, March 19, 2010)]

Nasser’s cheque would cover the outstanding balance owing on Parcel “Y” and the adjacent lane, but what about the $250 million needed for the project? Is Nasser prepared to guarantee that? Someone has to since Lobsinger doesn’t appear to have the financing.

On November 23, Lobsinger told the executive committee he was “one signature away” from transferring the funds necessary to complete the project. In other words, he still didn’t have the money. This was one month after the October deadline.

According to the StarPhoenix nothing has changed since then. When asked on March 23 “about the elusive signature” the developer said it was “not an issue for the public.”

“Nothing has happened, I’m one signature away,” he said. [Developers tout plan (StarPhoenix, March 23, 2010)]

And then there is city administration who seem to be dragging their feet getting the updated RFP into council’s hands.

At its November 23 meeting, the executive committee considered a report by city manager Murray Totland recommending: “that the Executive Committee recommend to City Council that the Administration be authorized to consolidate Parcel “Y” with the land adjacent to Parcel “Y” and proceed to issue a Request for Proposals (RFP) with a fixed purchase price based on an updated appraisal value.”

The committee resolved: “that the matter be referred back to the Administration for a report regarding the current appraised value of the land, together with possible alterations to the RFP and to the DCD1 Guidelines.”

City officials said the process “will likely take three months.” [Lake Placid finds some support (StarPhoenix, November 24, 2009)]

It appears the new RFP should have been ready by February 22 and is nearly two months late. It won’t get to council until April 19. Why the delay?

On March 22, city council directed administration to report back on April 12 on the financials of the Lake Placid and Victory Majors deal – conveniently one week before the RFP is tabled. Council is expected to decide at the meeting whether to enter into negotiations with the developers.

Councillors Dubois, Heidt, Hill, Lorje, Neault, Paulsen, Pringle, and Wyant voted in favour of the motion, while Councillor Clark voted against. Councillor Penner, who was absent from the meeting, has stated in the past that he supports reopening negotiations with Lake Placid.

Forgotten in all this is council’s August 19, 2009, resolution that there would be no more chances for Lake Placid. In a recorded vote, Mayor Don Atchison and Councillors Dubois, Heidt, Neault, Penner, Pringle, and Wyant voted in favour of the following motion:

1) that the Amending Agreement to the Memorandum of Agreement for the sale of Parcel Y, River Landing, and the Sale Agreement for the Lane Adjacent to Parcel Y, which provides for extension of the Construction Requirement to June 30, 2010, be further amended to:

a) extend the time for payment of the balance of the Purchase Price for each of Parcel Y and the Lane to 5:00 p.m., October 30, 2009, provided that all interest accrued under both Agreements, totalling $214,197.19, is paid on August 31, 2009; and

b) provide for termination of each Agreement in the event that either payment referred to in a) is not received.

On October 30, 2009, just two days after the civic election, Atchison issued a news release reaffirming council’s August 19 decision. By mid-November, however, the mayor and several councillors were publicly declaring their support for reopening negotiations with Lake Placid.

Not only has city council disgraced itself and made a mockery of the process, so have city administrators.

After all, it was administration that recommended the firm deadline in the first place. In a report to council on August 19 the city manager said: “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 a further resolution of Council.”

However, in the StarPhoenix that same day, city manager Murray Totland said he was “hopeful” that Lake Placid would get its finances in order.

“I think it’s in our best interest for the city for this deal to proceed.” [City meets with Lake Placid (StarPhoenix, August 19, 2009)]

Then, on November 15, 2009, the day before Lobsinger was scheduled to address council, Totland said “it would be a pleasant circumstance” if Lobsinger were to come to council with funding in place.

“We’ve supported their development and we still believe a Lake Placid-like development would be a good one for River Landing,” he said. [Lake Placid comes back (StarPhoenix, November 16, 2009)]

On November 20, 2009, the StarPhoenix confirmed that “the city’s administration would support” selling the land directly to the developer “to avoid a potential funding shortfall and mill rate hit for the year-to-year operation” of the River Landing project. [Open bids recommended for River Landing site (StarPhoenix, November 20, 2009)]

From Day One city council and administration have bent over backwards to accommodate the developer, showing nothing but favouritism. It’s no surprise that the mayor and the majority of council are willing to sell out even further by betraying their August 19 decision. Council, you see, has nothing left to lose. It bankrupted itself long ago of any integrity or credibility on the River Landing file.


Recent River Landing posts

November 25, 2009:
River Landing farce continues as city committee gives Lake Placid ‘unofficial’ extension; Coun. Glen Penner set to betray Aug. 19 vote on deadline

November 19, 2009:
Mayor Don Atchison should explain nature of relationship with Lake Placid CEO Michael Lobsinger; City administration flip-flops on Parcel “Y”

September 28, 2009:
River Landing cost hits $135-million; Mayor Don Atchison’s comments insulting to Mendel family; public misled on new art gallery being “shovel ready”


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