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The ‘rolling thunder’ SNAFU of the Traver Hobo Hotel continues: A demolition agreement regarding the Traver Hotel was approved by the city. The approved agreement is with the Lake Geneva Economic Development Corporation.

It contains the following requirements:

  • The Developer needs to purchase the property,
  • The Developer shall demolish and remove the existing building, remove the foundations of the existing building, fill, grade, and seed the property at 323 Broad Street by June 1, 2016.
  • The developer shall construct or caused to be constructed a $500,000 project before January 1, 2021.
  • The city shall provide a cash grant not to exceed $150,000 for the demolition, removal of the foundations, filling, and reseeding of the property
  • To assure the $500,000 development a lien in the final amount of the grant in favor of the city shall be on the property.

The agreement that the city approved is basically a sound agreement, but it is not the agreement that was in the published packet for the meeting. The one published in the city council packet for the Monday Dec. 14th meeting was riddled with errors, blank costs, and exhibits A, B & C were blank or missing. Whereas, the one approved by the city council had been updated on Monday before the meeting and is considerably different.

However, it still contains errors:
Under article 3.1 Exhibit C that is listed as the [Purchase and Sale Agreement] does not exist; whereas, Exhibit B, the “Sale & Purchase Agreement” is blank, and Exhibit A is also blank.

This may be only a technical error, but in either case the document is not there, and it is an important part of the agreement and of the council’s consideration regarding this agreement. The section that was of concern, that was not changed, is as follows: After all the “Whereas” it reads NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City and the Developer agree as follows: What is the meaning and dollar value of the phrase “for other good and valuable consideration” which is being acknowledged?

Sounds like a payment loophole.

  • The estimated costs to demolish and remove the building in 3.6a is left blank.
  • The estimated cost to remove the foundation, and fill grade etc. in 3.6b is left blank.
  • The amount of the cash grant to induce the Developer to undertake and complete the “Project” in 4.1 is left blank. Note: This is not part of the above demolition or removal payment. These are payments to refund the developers for some ($100,000 to $200,000) of his $500,000 project costs (see item #6).
  • Referenced Exhibits A & B are blank pages and Referenced Exhibit C is missing.

The Resolution 15-R55 which was intended to approve the $300,000 spending for the Traver Hotel project, and other TIF projects, did not approve the spending of TIF money because an amendment was added to the resolution when it was passed. The amendment requires the city council to approve each individual item on that list. This has not been done for any of the projects, including the $300,000 Traver hotel Grant. Until it is done, this agreement cannot be signed, approved or authorized.

After all the “Whereas”, it reads NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this agreement, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, and the City and The Developer agree as follows: What is the meaning and estimated dollar value of the phrase “for other good and valuable consideration” that is being acknowledged?

 

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