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Wednesday, October 24, 2007

City of New Brighton to Enter Litigation over NWQ!

A bombshell was dropped relatively quietly last night at the New Brighton City Council meeting when it came out that the city would enter into breach of contract litigation against Rottlund homes for the NWQ project.

The details are sketchy as the meeting was temporarily adjourned while Council deliberated in closed session with legal counsel before coming back into public session to authorize entering into the litigation. It will be interesting to examine the particulars once the city releases them to the public.

This is the sort of risk that those of us critical of the project since its inception have been concerned about. Now the already over budget project is going to run up additional legal fees and, at the very least, push the completion date for the critical housing portion of the project even further out depending on the nature and the result of the litigation. Just remember who pays the price for all of these mis-steps.

More is sure to come as details become public...

Hang on, and keep that PMA!

Oh, yeah. There is also an election in less than two weeks...

[Update: 10/26/07] City of New Brighton has issued an official press release (and spin):

PRESS RELEASE October 25, 2007

City of New Brighton • 803 Old Hwy 8 NW • New Brighton, MN 55112

FOR MORE INFORMATION CONTACT: Dean Lotter, City Manager • 651/638-2041 • Fax 651/638-2044 • dean.lotter@newbrightonmn.gov


New Brighton Responds to Housing Developer Pull Out
Of Northwest Quadrant Redevelopment Project

This week Rottlund Homes has provided the City of New Brighton with notice that they are terminating its contract with the City to develop housing in the Northwest Quadrant. The City is disappointed with this news given the significant investment in time and resources that have been extended to this developer. During the course of the contract, the City has tried to accommodate everything that Rottlund has requested to make this partnership successful especially in light of the soft housing markets in the Twin Cities area. The City has brought suit against Rottlund to protect the integrity of the project, recoup the investments the City has made, and move forward with the redevelopment project.

The City retains title to the Northwest Quadrant properties that Rottlund was to develop. The City plans to continue to make the improvements necessary to prepare the land for future development and to work with other interested developers.

New Brighton continues to be excited about the progress in the Northwest Quadrant to date. Typical of mixed use projects, different uses develop at different times. The housing market has slowed while commercial and office developments have increased in activity. The City has adapted and refocused on projects that are more economically viable at this time. Presently, the City is working on several commercial development projects in the Quadrant. These projects include construction of two APi Group buildings valued at a cost of approximately $7 million. Transoma is starting soon on a two-story building to house up to 500 employees and its headquarters with an expected project cost of $14 million. The City is reviewing multi-million dollar projects with other developers for properties on the east side that could include a mix of office, hotel and other uses.

Rottlund was chosen as one of two housing developers in the Northwest Quadrant through a competitive process in 2003. The City is focused on continuing to make progress in the 100 acre site and will use this change to consider new opportunities.

Further information is available by contacting Dean Lotter, City Manager, 651-638-2041, dean.lotter@newbrightonmn.gov.



Anonymous Anonymous said...

I AM SO MAD I COULD SPIT! This is unforgivable. Larson and his people on the council have got to go. After coming to the tax payers asking for trust and patience so many times and then not getting an escape proof comitment from Rottlund is beyond belief! I can't believe Rottlund would even try to to walk out of this deal if they didn't believe they have a really good chance of winning in court. What happens to the tax payer's when the bond payments come do? Pretty pictures won't pay our outragious taxes or for our over priced under brained city lawyers. I'm voting for Dahms as mayor and the two guys who weren't part of this incompetancy for council.

10/25/2007 9:29 AM  
Blogger G-Man said...

Just think. All that private property stolen for nothing!

10/26/2007 9:49 AM  
Blogger Right Hook said...

It wasn't for nothing. The taxpayers will be paying for years to come.

10/26/2007 9:52 AM  
Blogger Daria said...

Talk about spin! The city must be hiring people with degrees in creative writing.

If "New Brighton continues to be excited about the progress in the Northwest Quadrant to date" I don't think we could take the mega-euphoria if the project were proceeding on time, on budget, and according to plan.

"Typical of mixed use projects, different uses develop at different times". The NWQ is not a typical project by any stretch of the imagination not altered by controlled substances. The mixed use development at the Apache Plaza site seemed to get completed in a synchronized and orderly fashion while the NWQ has been spinning its wheels in the contaminated peat and burning tax dollars at an alarming rate.

"The housing market has slowed...". All together now, DUH! How many budget directors, lawyers, planning commission members, and elected officials did it take to come up with that breaking news? Nearly two years ago I referred then City Manager Fulton to several on-line and print sources from industry analysts that warned of this trend which, unfortunately, as on a collision course with the NWQ time line. Fulton politely (I have to give him that) told me that my concerns were unfounded as the analysts were basing their conclusions on private sector rather than municipal developments and that the NWQ housing "would sell like hot cakes". Maybe what he meant to say that the project would become a hot potato. Mr. Fulton has got to be the happiest man in New Brighton these days with regard to how and where he currently makes his living.

"The City has adapted and refocused on projects that are more economically viable at this time". In other words the city is in full panic mode and grasping at anything remotely resembling a life line. While Council Member Bauman has long advocated a "Plan B" due to the shaky underpinnings of the housing deal, the Gang of Three that controlled the council chose the "cross that bridge when we come to it" approach with about the same results as when the strategy was implemented by Senator Ted Kennedy. The taxpayers are now scrambling to find an air bubble while the driver is concerned mainly with a face saving extrication from the situation.

Also, a suggestion to the New Brighton city staff: it would probably be a good move to stop running the "Northwest Quadrant" pretty picture reel loop as filler on Channel 16. As I am writing this I am watching the commercial for all of the wonderful things the NWQ, including the picturesque housing development, will be and how construction will begin in late 2006! You're welcome.

10/27/2007 8:32 AM  

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