I was thinking today that as city officials try to move the needle forward on the River City Renaissance Project, they might be asking themselves: How do you throw away a boomerang?
The boomerang, in this case, is G8 Development of San Diego, the original developer for the project that was found in default by the city a couple of years ago for failing to meet requirements for starting construction.
The city then sought another developer and decided to go with Gatehouse Capital of Dallas. G8 then sued the city for breach of contract. A glitch in negotiations with Gatehouse caused the city to have to rebid the project. G8 submitted a bid that undercut Gatehouse’s. G8 also agreed to drop its suit against the city if it was awarded the contract. The City Council awarded the contract to G8.
But once again, the city found G8 in default and cut off business with them. Gatehouse then re-entered the picture and is the proposed developer – although no final contracts have been signed.
So last week G8 once again filed suit against the city, once again claiming breach of contract. This time G8 is claiming the city dropped them because they did not meet deadlines the city set up in accordance with its application for funds for about $10 million from the Iowa Economic Development Authority. G8 claims it had no deal with the IEDA so the city had no right to cut ties with G8.
Although the suit is dated in November 2018, it apparently was not filed until last week.
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The courts will have to decide who’s right and who’s wrong, but the scenario is similar to a suit G8 filed against the city of Vista, California, for breach of contract a few years ago. That claim is still in litigation.
In the whirlwind of activities, despite rumors to the contrary, G8’s is the only lawsuit pending against the city for its River City Renaissance Project.
I came across the lawsuit as I tried to find answers to many questions the public has been asking about the project. Here are some of those answers.
• Although the city does not own the former JC Penney building on which it broke ground last week for the ice arena, it has a lease agreement with the mall owner that covers the demolition. By having the mall own the property, the city will be able to receive tax revenue from it.
• Though a development agreement has not yet been signed with Gatehouse Capital (the biggest wobble in the “house of cards”), the IEDA required that some work begin on the project to keep it eligible for the state funds. City officials are confident the development agreement will be in place soon.
• Operating expenses, salaries, insurance and related costs for the multipurpose center/ice arena are to be paid by the city through taxes and revenue generated from the arena for events held there.
City Administrator Aaron Burnett said he understands the frustrations many in the public have about the project but says big projects always have big hurdles. He is confident the completed work will be a transforming event for Mason City.
Frustrations? Yes – and a boomerang.
John Skipper retired from the Globe Gazette in February 2018 after 52 years in newspapers, most of that in Mason City covering North Iowa government and politics.