Archive for March, 2011

Documents On ACE/CAMT Project

Tuesday, March 29th, 2011

We have now posted on our kickback story of the LovelandPolitics news website the following documents:

1. The City of Loveland “Minimum Requirements” sent to bidders on the ACE project

2. The City of Loveland Request For Proposal sent to potential bidders

3. Two letters from the City of Loveland rejecting two bidders

The documents are now available for the public to examine on our webpage so we invite you to explore each and provide us your own independent analysis or opinion.

The minimum requirements document states,

“The property is proposed to be transferred to CAMT (or its designated affiliated entity), for the ACE Project without any direct expense to CAMT. The ACE Project will involve the City of Loveland, CAMT or its affiliated entity, and a private developer. The Business Terms outline the roles of each of the parties. The relationship is designed to provide a continuing cash flow income to CAMT from the ACE Campus property; to motivate each of the parties to collaborate in the success of the project; to maximize benefits; and to provide a reasonable return on developer investment.”

If CAMT is not contributing financially to the project and NASA’s agreement clearly states they are not contributing financially to ACE it leaves only the City of Loveland to fund the project with whatever the private developer is willing to also invest. It certainly appears as though the City of Loveland should be conducting an exhaustive due diligence effort into this opportunity.

One correction we should make is that we misunderstood the purpose of what some on council and staff reported to us was the “McWhinney” clause. The McWhinney clause is in the conflict of interest section of the RFP and states:

“Developers who are associated with proposals of other “Existing Building” sites being considered for the ACE Project are deemed to have a conflict of interest, and will not be able to propose for this project. Proposers are required to certify that they are not associated with other proposals for Existing Buildings. Developers who are associated with “Greenfield Sites” being proposed for ACE, however, may propose for this project.”

Curiously, the city failed to provide any common conflict of interest language prohibiting bids from anyone colluding with those involved in the source selection process (CAMT for instance) which we believe would have likely disqualified Don Marostica’s Loveland Commercial.

We learned the Mayor of another city marketed by CAMT decided not to bid for the following reason; he reports showing a property to a CAMT representative but was concerned CAMT wanted the city to pay for everything and the city would get nothing more than a maybe that CAMT can help bring jobs. We heard second hand the mayor said it wasn’t a good deal for his city or any municipality for that matter when asked.

There are some on Loveland’s council and city staff who believe the ACE/CAMT project is Loveland’s best opportunity to develop a property the city otherwise may have to redevelop anyway with city monies to maintain the same type of use. Otherwise, they argue, the community may not like what a private buyer of the property ultimately decides to do with it. Either way, we believe the city’s process should be transparent, informed and absent the misleading comments about NASA choosing to bring thousands of jobs to Loveland. In fact, it is Loveland taxpayers who are being asked to fill CAMT’s rice bowl simply for choosing Loveland regardless of whether or not they actually bring jobs to the city. If CAMT were more confident in the credibity of their own projections about ACE bringing 7,000 to 10,000 jobs to Loveland than a results oriented compensation agreement with the developer shouldn’t be an issue.

May 31, Update -

Tune into KFKA of Greeley (1310 AM dial) radio to hear the Amy Oliver Show discuss LovelandPolitics and the proposed deal for Loveland to subsidize the redevelopment of the Agilent Campus this morning beginning at 9:00 AM.

Posted in ACE-Loveland | 14 Comments »

10% Kickback Problem For ACE Bidders

Thursday, March 24th, 2011

A four page document titled, “Minimum Requirements for Bidders” sent as a supplement to the Agilent redevelopment project RFP last February summarizes the extent to which Loveland’s City Council is attempting to capture the ACE project proposed by the Colorado Association for Manufacturing and Technology (CAMT). Loveland is requiring bidders subsidized by the city to redevelop the Agilent campus and than send 10% of gross sales over to CAMT if Loveland is selected to host their project. read story

Old Vine/Zing! of Ft. Collins tried to weasel out of this nasty obligation by proposing“If the Agilent Campus is chosen for ACE, we would be happy to negotiate an agreement with CAMT that includes profit sharing with them, commensurate with the economic value that they bring to the project and risk they are willing to take.”

An out of town developer who took a similar position was shown the door. Clearly CAMT has been promised by Loveland 10% of the gross sales right off the top of the Loveland City Taxpayer subsidized redevelopment of the old Agilent Campus off Taft Ave if they choose Loveland.

We agree with Old Vine/Zing! and believe their approach is the more prudent one for the city to take.

Loveland thought they were selling our city as a viable location to locate a new NASA center but instead were being sold on subsidizing CAMT’s unfunded vision to create their own NASA business incubator with no federal money. Instead of headlines saying “NASA looking to locate new center in Colorado” they should have more accurately reported, “Colorado Industry Association looking for money to create business incubator.”

Loveland should be evaluating CAMT’s business proposal instead of CAMT evaluating Loveland’s.


“I have come to the conclusion that politics are too serious a matter to be left to the politicians.”
Charles De Gaulle

Posted in ACE-Loveland | 31 Comments »

McWhinney MFA Amendment Document Released

Friday, March 18th, 2011

The City of Loveland accepted our appeal of their decision not to release the underlying document used to brief the City Council March 1, 2011 regarding a proposed amendment to the MFA (Master Financing Agreement) between the city and McWhinney.

We have posted the story along with the document for your review. What it doesn’t reveal is what other uses the funds are being requested as for the current MFA already allows Centerra proceeds to be used on vaguely defined “public improvements.” McWhinney has a history of abusing that definition to fund private type uses and even trying to amend the agreement in the past to include a trolley for shoppers. The council did agree to allow $80 million of Centerra proceeds for a private parking garage that was never built when they failed to launch Grand Station as planned.

If you can help complete the puzzle by trying to fill-in the missing data please go right ahead. We would love the help!

Posted in McWhinney | 9 Comments »

Setting the Record Straight On McWhinney’s Proposed MFA Amendment

Wednesday, March 16th, 2011

LovelandPolitics has confirmed McWhinney’s secret request for the City of Loveland to amend the 2004 MFA (Master Financing Agreement) with the city involves a project unrelated to their bid to participate in a redevelopment of the Agilent property for ACE. see latest story

We understand the MFA amendment request briefed to council on March 1, 2011 in a closed session meeting involves a new development McWhinney is seeking to subsidize with Centerra funds. In recent correspondence with the city we were denied access to the relevant document involving McWhinney’s request but understand consideration of releasing a redacted version of that document is now underway by the city attorney’s office.

In addition, the city has begun releasing more details regarding the bid process for redevelopment of the Agilent property while acknowledging Loveland intends to redevelop the property whether CAMT selects it as the site for their ACE project or not. Inappropriate contacts between city staff (specifically Betsy Hale) and Don Marostica (Partner of Loveland Commercial) have been alleged that presumably would have tainted the selection process when choosing a partner for the city on ACE. Whether the other bidders will protest when Loveland Commercial wins is unknown at this time.

Despite the fact the City of Loveland signed a letter of intent to purchase the Agilent property for $5.5 million, several other offers that pre-date the city’s are under consideration for more money to purchase the same property. LovelandPolitics has been told the council’s preference is to have a private bidder purchase the property instead of the City of Loveland.

In addition, Loveland sees the cost of the property as greater than the cost to subsidize ACE as much of the property acquired will go towards preserving natural areas between the Agilent campus buildings and Loveland’s bike trail. A vote on whether or not the city will indeed purchase the old Agilent campus off Taft Ave. in Loveland has yet to be taken by the City Council in public.

Mayor Cecil Gutierrez will address the public this evening on the city business development efforts while trying to sell the jobs incentive program as a success. After losing the vNet investment, not getting the electrical automobile manufacturing facility and other failures along with blooming new controversies about secret meetings on ACE and the MFA we suggest a different approach.

Our recommendation is the Mayor stop putting lipstick on a pig. Better to recommit himself to the issues that got him elected in the first place – greater transparency by Loveland’s government and putting an end to back room subsidy deals for insiders like McWhinney and Marostica.

Posted in Uncategorized | 11 Comments »

Gutierrez Abandons Campaign Promise

Tuesday, March 8th, 2011

When he was elected Mayor in 2009, Cecil Gutierrez was the feisty one-term councilman who was willing to fight the issues people in this community cared about. Chief among those concerns was the lack of true competition for developers and the unseemly exclusive and secret relationship the McWhinney’s developed with council and our mayor.

Especially upsetting to Gutierrez’s two most serious opponents was the “McWhinney Scale” published by LovelandPolitics (click here to see) as it indicated both Mayor Pro Tem Dave Clark and Councilman Walt Skowron had histories of supporting one-sided amendments to the MFA (Master Finance Agreement) between McWhinney and the city coordinated through secret meetings.

What a difference two years make. Last Tuesday Gutierrez cast the deciding vote to discuss in secret a proposal by McWhinney to once again amend the MFA (Master Financing Agreement) with the City of Loveland. Councilors Kent Solt, Cathleen McEwen and Joan Shaffer all stood by their campaign promises to keep such discussions public and therefore voted against the inappropriate secret council session.

Like a scene out of the Music Man, our kind but vulnerable Mayor defended his vote by claiming “great things” are happening for the city. LovelandPolitics has learned McWhinney is again looking to amend the MFA (Master Financing Agreement) to expand the definition once again of “public purpose” allowing them to divert even more future tax revenues from public Centerra projects into another private use.

McWhinney and Poag & McEwen borrowed $116,000,000 from a consortium of banks lead by Bank One and Banc One Real Estate Investment Corporation in 2005 to build Promenade Shops at Centerra. The group included KeyBank, Cosmopolitan Bank, LaSalle Bank, Bank of Scotland, National City Bank, and First Tennessee Bank. This was in addition to the $112 million in municipal bond debt taken out by Centerra in 2008 and 2004 to help build the Promenade Shops and the rest of Centerra.

The Promenade Shops at Centerra was foreclosed last year when McWhinney’s subsidiary company could not pay the note and the property built with over $200 million of private and taxpayer investments was sold for only $75.5 million. Those banks listed above lost over $40 million in private funds and some are seeking taxpayer bailouts from the Fed. It is no wonder McWhinney is looking at the Centerra Metro District and now Loveland’s kind mayor as their best option to get credit again.

One rumor is McWhinney (unable to borrow the funds in the private market) will look to the Centerra Metro District to fund their proposed participation in ACE to refurbish the old Agilent property. Unfortunately, Loveland is now facing an annual $3 million deficit as the result of the MFA diverting hundreds of millions already to McWhinney over the next 20 years. Add to that the plus $3 million in CEF (Capital Expansion Fee Waivers) given this year and last to McWhinney for the luxury apartments and commercial pads at Van der Water.

Add to the mix the former State House Representative Don Marostica who recently changed his voter registration from Republican to “independent” after his short time in the legislature exposed his true intentions of using politics to promote his Loveland development company Loveland Commercial.

Mayor Gutierrez and the rest of the City Council need to begin using public RFP’s (request for proposals) to find potential partners for the city in private projects instead of backroom deals. The very emphasis on secrecy alone should tell the council there is something rotten in River City.

Posted in Uncategorized | 14 Comments »

GOP Chairman Resigns For Financial Mismanagement

Friday, March 4th, 2011

The Larimer County GOP is facing what is being called the biggest campaign finance disclosure fine in history topping $100,000 (read our story).

Unfortunately, Republican party regulars who attended the February 12, Central Committee meeting were unaware of the party’s growing financial crisis and re-elected Larry Carillo as Chairman of the Larimer County Republican Party. Gary Marison, Devon Lentz, Arlene Shiffman, Debbie Healy and Rudy Zitti (all members of the Executive Committee) failed to disclose to the hundreds of Central Committee members assembled at the meeting the growing financial and regulatory crises in their party organization apparently to allow for a smooth re-election of Carillo and to avoid any bad press.

Devon Lentz, who ascended to Carillo’s position during a February 28, Executive Committee meeting and has continued to downplay the significance of what Carillo and now past party Treasurer Terri Fassi did.

Lentz’s attempts to downplay the significance of events and hide them from party regulars will certainly hurt her chances of becoming the permanent GOP Chair of Larimer County. According to party rules, the Central Committee (consisting of Precinct Captains and other party officials) must convene a meeting within 30 days to elect a new Chairman if the elected Chairman (Larry Carillo) resigns.

Carillo’s financial mismanagement extended beyond the campaign finance debacle. Rent went unpaid for months on their offices in Ft. Collins last year and other bills allowed to go unpaid since 2008. Now questions of impropriety have been raised necessitating a full audit of just what happened to all the funds raised by the Larimer GOP since 2008. The previous practice of providing funds directly to candidate campaigns also stopped around the same time begging the question — What happened to the money especially since none of the required disclosures were being provided to the state?

We recommend a clean sweep of new Executive Committee members so the party will be able to raise the funds necessary to pay its debts and restore its credibility.

The Executive Committee will find raising the funds necessary to fix the problem difficult until a full accounting is made of what happened to previous donations and a plan is in place to ensure this never happens again. Retaining an independent accounting firm to make the filings and manage the future cash flow would be a good first step. Otherwise, rumors of mishandled petty cash and trips to the ATM by the Chairman or others will continue to undermine the ability of the party to raise money.

Gross incompetence isn’t remedied by a single replacement at the top. We believe the Executive Committee owes Larimer County Republicans a complete investigation, disclosure of what is found and a credible plan to raise the money in the next 6 months to fix the problem. Maybe also an explanation as to why they failed to disclose the problems of Carillo’s financial mismanagement.

If they cannot accomplish this they should all resign and allow more competent people an opportunity to serve their party.

Posted in Larimer County Republican Party | 24 Comments »