Loveland  -  July 18, 2007

The proposed amendments to the Master Financing Agreement (MFA) by the
McWhinneys was not voted on by the Loveland City Council at their July 17, 2007
meeting.  Instead, the Council tabled the issue until their August 7, meeting.

While most people are now familiar with the trolley system proposed in the changes to the
MFA, there is more to the amendment than just the purchase of a trolley system.  
Objections voiced primarily by Mayor Larry Walsh and Councilman Skowron centered on
the fundamental shift this amendment represents away from the original agreement.  Below
are the three main areas of concern either expressed by the City Council or in the
community after the proposed amendments were released:

1. The amendments invite "co-mingling" of public and private dollars or resources by
allowing the same contractor to be responsible for both public and private improvements
(this is contrary to Exhibit L of the current MFA).  This is a fundamental shift away from an
important part of the MFA intended, in part, to serve as a safe-guard against the potential
for abuse where private developments benefit directly from tax dollars intended only for a
public purpose.

Below is the language change proposed by McWhinney to eliminate this safeguard?

6.3.4 Exemption for Grand Station General Contractor. It is expected by the
Parties that the developer of Grand Station will select a general contractor, with
special expertise in connection with the construction of large mixed-use projects,
to design, construct and/or install all of the Private Improvements and Public
Improvements within Grand Station. The selection of such general contractor
shall not be subject to the contract procurement processes described on Exhibit
A provided however that all subcontractors of such general contractor who
construct and/or install any of the Public Improvements within Grand Station,
shall be subject to such processes.

2. Opens the door to private multi-level parking structures over already improved "public
parking" areas constructed using tax dollars.  The agreement contemplates allowing the
developer to provide alternative "public" parking in-lieu of financial reimbursement to the
improvement district when building private parking structures over public parking areas.

The reimbursement contemplated by this Section 6.3.5 may be satisfied by the
provision of replacement parking to the Service District of equal or greater value
to the non-depreciated value of the asset being replaced.

3. The trolley system isn't well defined (could be motorized rubber-tire based system) and
appears to be exclusively for the benefit of Centerra retailers instead of the public.  The
City Council and public are provided pictures of a rail system when the concept is being
pitch even though that isn’t the only option the amendment allows.

Chad McWhinney and his lobbyists described the ambiance, value and attraction a rail
trolley system will provide Grand Station, however, the amendments to the MFA actually
allow for the funds to be spent on a “motorized rubber-tire based system or rail.  If past
by Council, the amendment will allow the subsidy of nothing more than a shopper's shuttle
exclusively between McWhinney retails tenants and no one else if that is how they choose
to proceed.

Here is the specific language of the proposal;

5.8 Establishment, Maintenance, and Operation of Transportation System.
Pursuant to Section 32-1-1004(5), C.R.S., the Service District and the City hereby
agree that the Service District shall be authorized to establish, maintain, and
operate a trolley system, which may be a rail-based or motorized rubber-tire based
system, for purposes of transporting the public within Grand Station. The Service
District shall also be authorized to expand such transportation system to provide
shuttle service throughout Centerra.

Another clause indicates the ongoing costs of the system may likely become the City of
Loveland's responsibility if the McWhiney tax scheme is unable to raise the dollars
required later to operate the system;

……nothing herein shall prohibit the City and the Service District from
entering into future intergovernmental agreements related to the operation of the
trolley system in coordination with the City's transit system.

An employee of McWhinney Enterprises, Rich Shannon, told the City Council he would
not be available to answer questions or present additional information at their next
meeting.  Instead, he offered to meet with the Council members privately to present the
information and answer any questions.  The City Council is expected to vote on the
proposed changes to the MFA at their August 7, 2007 regular meeting.
McWhinney Proposed MFA Changes
Not Just About A Trolley
Changes proposed by
McWhinney to Agreement
with City of Loveland
"The selection of such general contractor
shall not be subject to the contract
procurement processes described on
Exhibit L."
"The reimbursement contemplated by this
section 6.3.5 may be satisfied by the
provision of replacement parking.."
Mayor Larry Walsh expressed
concern at the July 17, Council meeting
over the changes being proposed to
the MFA.
"shall be authorized to establish,
maintain, and operate a trolley system,
which may be a rail-based or motorized
rubber tire...."