Councilmember Goodman makes a good point that wasn't in the Strib article: The original Brookfield offer was crap.
The City really had no recourse to reject it and I'm glad they did. I think Friday's vote by the Council was to get Brookfield's attention. I'm pretty sure they did, thus Brookfield's desire to get their side of the story to a respected business reporter. Now that they have Brookfield's attention, I hope the City doesn't blow it by rejecting all deals -- even good ones. Owning a piece of prime downtown real estate on the cheap may be sexy but it probably isn't a role the City should undertake for the long term. I truly hope the City does, as Councilmember Goodman posts: "hire one of the many quality real estate companies in Minneapolis to operate the building on (it's) behalf until an acceptable offer comes along." If the City maintains that it attitude it will have accomplished a win-win situation of protecting tax payer interests while staying out of enterprises that are best left to the private sector. Dean E. Carlson Ward 10, East Harriet ----- Original Message ----- From: "Goodman, Lisa R" > A few important points about the negotiations: > > 1. Nothing prevents Brookfield from continuing to negotiate with MCDA > staff. The reality is the last offer presented to me was an "informal" > offer i.e. not in writing, which would have given Brookfield essentially 12 > or so more years to pay off the loan due on April 15th. There was no offer > of interest on this loan but a 6% increase to account for the present value > of the amount now owed. So while the City would recoup more actual dollars > in the end, that is not interest but the present value calculation of the > $11.375 million in 2014. > > 2. The "informal" offer included a large balloon payment at the end of the > loan - which is what we have now and part of the reason we have this mess in > the first place. > > > 3. Mr. St. Anthony mentions in his article that Brookfield was, "willing to > improve the city's security on the loan". How nice of them. You would > think the City would be accused of malpractice to negotiate for anything > less. > > 4. He also mentions that Brookfield is willing to give the city, "some > future upside on any sale of the Gaviidae complex, which includes Saks and > the adjacent retail parcel." Well given that Brookfield and its shell > corporations which hold the first mortgages on both parcels have admittedly > lost a significant amount of money on the deal and they would be paid first > - what future actual upside potential is there? And if there is a believe > on the part of Brookfield that the parcel will increase in value over time - > why wouldn't the City want to own the Saks parcel now. Or as I have said > many times, the City needs to buy low and sell high! > > 5. Brookfield owes the taxpayers another $17.5 million on the retail > portion on September 15th. A condition of accepting the "deal" on the Saks > parcel would include giving up the City's interest entirely on this loan. > While admittedly the City is an an awful position on the second loan and may > very well take a total loss, giving up our right and I would argue > responsibility to explore future options on the second loan doesn't make > sense as part of the negotiations on the first loan. > > 6. Mr. Brant's comments that the City "doesn't have a plan" may be > correct but Brookfield obviously doesn't have a plan either. Allowing > stores in their properties to close on Sunday's, the dismal situation at > City Center and the lack of retail tenants in both sides of Gaviidae doesn't > give me faith in the direction of their retail strategy either. > > > The Saks parcel that the City will take over has a cash flow in excess of > expenses. In fact, it is the parking ramp not the tenants which generate a > mass majority of the revenue. The Saks lease runs until 2015. We will hire > one of the many quality real estate companies in Minneapolis to operate the > building on our behalf until an acceptable offer comes along. > > What this decision boils down to for me is one simple principle. I do not > believe the City of Minneapolis, on behalf of the taxpayers, should be in > the business of making loans to those who have proven that they will not or > can not make the payment on their existing loans. > > The "informal" offer on the table but not in writing to MCDA staff > essentially involved loaning Brookfield the money they owe the public right > now for 10 or more years, interest free, with another balloon payment. In > return, Brookfield will promise to pay something now ( the amount I saw was > $2 million), secure the loan better and foreclose on the $17.5 million loan > due in September. > > Let me know where I can get in line for that kind of deal. > > > Lisa Goodman, Chair Community Development/ MCDA Operating Committee > Loring Park > _______________________________________ Minneapolis Issues Forum - A Civil City Civic Discussion - Mn E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
