City hires investor as project manager
Firm to get $1.65 million to handle Harrison SquareBy Benjamin Lanka The Journal Gazette
Fort Wayne on Monday hired one of the major Harrison Square investors to coordinate the entire downtown development.
The city’s redevelopment commission unanimously approved hiring Barry Real Estate, of Atlanta, to be project coordinator for the $120 million project.
The real estate firm will be paid $1.65 million, which city officials said was a good price and had been part of the budget from the beginning.
Sounds a little conniving to me. Barry Real Estate is owned by the same people that own Hardball Capital.
Steve Brody, a city consultant for Harrison Square, said the city talked to several firms about the work and determined Barry offered the best price for the service.
Who were the other bids, and how much? Don’t we have someone locally that could do the job?
He said other firms told him the city would benefit by hiring a company already invested in the project.
Ugh, what other firms would that be? Let’s see; Hardball Capital and White Lodging. Barry Real Estate has done deals with White Lodging in the past.
Harrison Square includes a Courtyard by Marriott with parking garage, a retail/condominium building by Barry and a city-owned $30 million baseball stadium.
Brody said he didn’t believe there would be any conflict in hiring one of the developers to coordinate the project and said the hotel developers were contacted but had no interest in the work.
Right! We sent out bids to 50 companies and the only one that responded was White Lodging, bed-buddies of Barry Real Estate.
The agreement with Barry requires the company to develop the project’s master plan, coordinate the different aspects of the project and conduct financial analysis of construction costs, among other duties. Brody said it was important for the city to hire a company to coordinate the project as a whole because of its complexity.
“The city doesn’t have in house anybody to oversee a project like this,” he said.
The commission previously hired Weigand Construction as construction manager for the ballpark, at a cost of $400,000. Brody said combining the two contracts still puts the city’s administrative costs at less than 5 percent of the project’s cost, which he said is the industry standard.
The board also approved selling the land for the condominium building to Barry for $675,000 and the land for the hotel to White Lodging for $17.50. Greg Leatherman, redevelopment director, said providing the hotel land for almost nothing has always been a planned incentive.
$17.50? I thought we were giving it to them? What law are they avoiding by charging seventeen dollars?
Brody also said negotiations regarding the walkway from the Courtyard to the Grand Wayne Center, through the Embassy Theatre building, are progressing. He said the sides are finalizing the agreement, which he hopes will be done “much sooner” than the end of the year. The walkway was a deal-breaking incentive required by the hotel developers to build in downtown Fort Wayne.
Get ready to bend over again folks. My uneducated estimate for the walkway: $2.3 million.
Ouch! - DT
Last 5 posts by AWB
- Pelosi: One-party rule - January 6th, 2009
- Get your condo! - Financing is available for The Harrison - January 5th, 2009
- What does this define? - January 4th, 2009
- An incredible story - January 3rd, 2009
- Letter to the big three - January 2nd, 2009
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My guess is $17.50 covers some darn filing fees or so that they have to pay.
I am not sure anyone in Fort Wayne has the track record of pulling these type of developments off. Think about the money that could have been passed around had it been given to a local company. This is a double edged blade for sure.
I given up on the walkway. The media can not get off their butts and demand to see the letter that is dated and stamped way back when demanding this walkway. If it shows up now it is a fake.
I guess there are only two games left to play. One, is how much is the walkway going to cost? Two, is how much over run will this project see prior to be complete?
My guess on the walkway is $1.74 million. The overrun for the project will be near $12 million. I reserve the right to up the $12 million figure.
Holy cow, we’re in essence giving the land for the hotel to White Lodging in addition to guaranteeing the profits? Dang, where do I sign up for a deal like that? It should be interesting to see how much these entities or their employees donate to Graham Richard’s congressional campaign…
According to the Redevelopment Commission, that’s the appraised value… ?
If so… we definitely need new assessors and appraiser qualifications across the state.
http://downtownfortwaynebaseball.blogspot.com/
Notes from meeting:
“Resolution 2007-85
Approving a responsive bid pursuant to a Public Offering of real estate for the Harrison Square Hotel development project
White Lodging agreed to pay $1, but appraisals came to $17.50, which White Lodging agreed to pay for the real estate for the new hotel.”
All Resolutions passed unanimously
If the walkway is a dealbreaker, does that mean that Hardball will walk away if they don’t get the walkway? Can we get that in writing?
I contacted a couple of civil engineering buddies of mine who work in the public sector and they both told me it’s not unusual for a city to hire a project manager with ties to the developer/designer of a major project.
However, they also both said the city should have somebody assigned full-time specifically to that project as well to ensure that the info they’re getting isn’t complete BS…
Whether it is unusual or not, hiring Barry Real Estate is one more slap in the face of Fort Wayne taxpayers. How many times do we have to ask about conflict of interest before it sinks in?
It is important to keep all transaction managers at arm’s length. Why is that difficult for the city to understand? Would anyone care to guess how many real estate development companies are located within 100 miles of Fort Wayne. I do not know the answer but my guess is quite a few.
Appraisals came to $17.50, what a joke!
Appraisal - definition: 1. valuation: an estimate of how much money something is worth, especially one given by an expert.
So, if this appraisal was correct, then I should have been able to offer the city $18 and become the proud owner of the new Downtown Fort Wayne Landfill.
Let’s see, there’s the originally stated costs of the project. Then there’s the one million-plus for the added walkway. Then there’s the undervaluing of this land. Then there’s the half million for Subway that was probably promised to them behind closed doors to get them to agree to moving without complaint. There was also the overpayment to Bill’s Palace and other businesses to get them out of the way.
Can anyone say BLANK CHECK?
But don’t worry, they’ll tell us everything we need to know. They’ll just wait until it’s been done to tell us. I think, in years to come, Don Schmidt will consider himself lucky to have lost this year. Hindsight will eventually prove that the questions he tried to raise should not have been ignored.
Councilman Pape says they have been very open with this project. I guess he thinks it’s OK that Mike Sylvester had his letters to the city thrown in the trash can. I guess he thinks it’s OK that Jeff Pruitt had to file a FOI form in order to get the Mayor to tell him what deals he was making on his behalf.
Given what we have seen from this project so far, there is reasonable cause to question whether the 1.65 million to Berry Real Estate and the quarter million to McDonalds were not part of some orchestrated bribary scheme. But don’t worry. I expect the Journal Gazette will be looking into this as soon as Tracy Warner gets back from his gambling trip.
Speaking of “foxes in the henhouse”, what do you think about Ben Eisbart of Omnisource heading up the transition team for Tom Henry?
OH, we’re not even scratching the surface on all this crap….
It’s BOUND to get “better” (read more expensive), and that’s I call it COSTAPLENTY SQUARE!
Nice to know this stuff is liable to change (to suit the moment) at any time, isn’t it?
Keep the K-Y and Vaseline handy, people.
(you’re all gonna need it)
B.G.
Phil - Although I agree with you on this give-away, you can’t blame what occured on White Lodging because of the way the request for bids was written up - It stated that any qualifing bid had to include the requirement that the bidder would “build the same or equivalent hotel at or less than the bidder(White et al). So your bid of $20.00 would have won, but you would have to follow the details of the White Lodging bid - build and equip the specified hotel at the price to build it as White’s lone bid in response to the request for proposal back in January. John B. Kalb
The True Test….
In four, if not eight, the true test will the condition in Fort Wayne Community Schools. As an individual who lived in Indianapolis, during graduate school, I saw the absolute horrible condition of Indianapolis Public Schools; the majority of the schools’ students were falling apart of at there seams due to the factor of extreme poverty, lack of parental skills and criminal behavior. The school I was assigned was 100% poverty, and 92% minority. The middle class had fled to the suburbs. If the taxation continues in FW, the middle class will flee to the exurbs, and the FWCS’ high schools will be ‘proudly’ having graduation rates of 50% or below. I can see it now….FWCS the drop-out factory of the nation. Do the research of IPS, its coming for Fort Wayne!
No one seems to be concerned with the sale of the condo land for $675,000.
How much would this land be worth now that a new $30 Million stadium is doing in next to it, a new park area is going in next to it, a new hotel going in next to it and a new parking garage going in near it?
How much will the CoFW have in this specific land (acquistion of 10 properties maybe, demolition of buildings, management, utility work, etc) ~ $4 million or so maybe? A $675,000 on a $4 Million investment is a pretty good return for the CoFW actually.
That is another sweetheart deal that is being paid by the taxpayers on top of everything else.