This River City Renaissance Project requires the City of Mason City to borrow $26,500,000 in order to fully fund five of the six projects on day one.
There might be some dollar contributions to the city but little or nothing so far.
The sixth project – a hotel via Gatehouse MC, LLC – may be funded in part from a small amount of equity, $1.5 million, and a loan from a private lender if one can believe this Gatehouse party. Remember back. Chodur/G8 made similar claims of their financial capacity to fund a hotel west of City Hall. One such boast, “This hotel will be built” – Chodur. On the front page of the Globe!
The elected officials believed him. They commissioned a full engineering design for a multimillion dollar four story city parking ramp to serve his promised hotel and mixed-use apartment project to be on that gravel city lot at the SE corner of North Federal Ave. and 2nd Street NE. This parking ramp deal with him included giving it to the hotel owner years later. See any of these three going up?
Got a law suit to deal with from this G8 entanglement. Plus a $526,000 expense for engineering plans for this parking ramp along the south side of 2nd Street NW that will never be built.
Now we are into a campaign to sell the citizens on a different hotel
in the parking lot south of Younkers. Another big talker this time from Minnesota who claims to have his millions ready to go. Just needs a little sweetheart $4.2 million loan at zero per cent interest from this $26.5 million pot of city bond money to get it moving. One that comes with no payments for 20 years and never any interest charge to Mr. Rachie of Gatehouse.
The promised lump sum pay back of this loan to the city backed up by who? No answer.
High odds that the LLC will never repay it. Mason City at risk to be stiffed via a foreclosure as the senior lender protects their loan and gets all of a foreclosure sale proceeds.
This whole $26.5 million of new city bond debt has a serious question for all M C taxpayers who are watching this spin about millions being available to the city to retire this massive new bond debt plus over $10,000,000 of interest on it. An interest cost far above the $7 million to be earned from sales tax on the room charges over up to 20 years as of now from this one potential new hotel.
You are receiving a mailer from City Hall and from proponents that is worded so that you believe that this General Obligation Urban Renewal bond debt funding each year for 20 years is not eligible to receive ANY tax levy dollars. This is not a correct claim and is contrary to Iowa law. But there is a way to clear this issue up and set the legal record straight for us. Our city has to follow state law precisely when borrowing money by selling bonds. To do so, the city retains a law firm in Des Moines – Ahlers & Cooney P.C. Law Firm. Opinion from a specialist in bond law called a Bond Counsel. This opinion rules on this subject and has the Bond Counsel’s written assurance to
The investors who buy the bonds and loan the $26.500,000. to the city
That the Iowa laws on such debt issuance have been followed by the city
And lists exactly the tax sources that such bonds will be retired with.
This Opinion will tell the citizens and bond buyers about the full faith and
Credit of the City of Mason City being available when necessary to fund
The retirement of this $26,500,000. Plus millions of interest cost.
This means us via our city’s right and obligation to levy new debt service
Property tax under Iowa law when such GENERAL OBLIGATION or GO
Urban Renewal bonding has been issued and other revenues are insufficient
To fund the 20 year payments.
So let’s ask our Bond Counsel to write this Opinion this week and have the city Release it to the whole community. It will tell all of us taxpayers about the use of the city’s debt service property tax levy to contribute tax dollars for the 20 years of debt retirement on this new bond debt of $26,500,000 if Public Measurers B and C receive a 60 % yes vote from the Nov. 7, 2017 referendums.
End the YES spin incorrect amateur legal advice on this matter this week.
Get the facts and whole truth from the Ahlers and Clooney, P.C. Bond Counsel.
Respect the citizens with accurate, honest, legal truth on this very
Important tax levy authority /usage matter.
Pat McGarvey
Mason City, Iowa
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26 thoughts on “Opinion: City finance director confirms taxpayers truly on the hook for bonds connected to Renaissance Project”
Are these corrupt Farm Boys of Iowa =FBI
Pat McGarvey, Thank you for the time you spent writing this opinion which clearly shows that the citizens/voters in Mason City are not being provided with accurate information. The decision to be dishonest shows a lack of integrity on the part of the politicians, staff, and citizens involved and is disrespectful to all of the people of this community. Unfortunately, once trust is lost it is difficult to earn it back.
TIF never stops – worth county $21,000,000 in debt thanks to TIF and loans taken out to cover the costs – Now the supervisors want $26,000,000 more for a corporate gas pipeline – these TIF loans need about 20 years before any income (if any) is realized and now they want another one – Geez ! I did not know I was that rich or probably that brainwashed by the kool aid,
Yea worth county has the highest taxes per capita (residents) and TIF = borrowing money for these corporate moguls – the old liberal democrat says it all FREE enough times the sheeple will fall for it – TIF was concocked to build public works NOT to donate millions to corporations and elected officals getting rich off corporate kickbacks – if the truth hurts then go to your safe space . Ponzi scheme at best. Worth county supervisors are experts at this and old councilman regan from Manly put the city $460,000 in debt with his brilliant idea and famous parrot speech = Not so Sterling Acres- T I F won’t cost you anything = BULLSHIT !
another problem I have with this deal is all the money we have already spent and the more we are going to give to a company to build a private Hotel. In fairness to Robin Anderson in her statement in the globe article, she is correct, all the major hotels are full for Tuesday night, I called them all. But we didn’t spend a dime to help them, why would we spend money to bring in a new hotel when the market is here for one? If the market is there, and apparently it is, someone will eventually build another hotel on their own without help from the city.
The Hampton Inn and Holiday Inn both received Financial incentives from the city.
I wonder this…if a component of this new hotel was a water park rather than the small museum, would there be more support in this community for the project?
Is a half-truth a lie? I believe it is. NIT opinion articles typically only highlight those issues supporting a negative bias. This article discusses possibility verses probability. The complete funding and revenue structure is not discussed. The author and commentators are mind blinded to a successful outcome. Property tax usage is the last defense. When the complete project is understood with an open mind, the probability shifts to no property tax usage. There are other revenue sources to be utilized before a property tax solution is needed. Exaggerated fears and half-truths from NIT Opinion pieces represent the worst Mason City can offer. NIT’s credibility is what it has always been, Twisted Truth. Twisted until the real truth is no longer recognizable. Good for driving “click thru” and building cash flow perhaps. But, very bad for moving Mason City into a more prosperous future. How does negative thinking lead to prosperity? NITT, ” North Iowa’s Twisted Truth” will have no one to blame for it’s downfall, but itself.
I talked a person who is supporting this project and plans to vote Yes. She said our taxes will go up if the project is voted in. So that means all these Yes people already know the city will be on the hook for! Good people of MC vote NO!
The largest employer in Northern Iowa recently endorsed this project citing it as critical to their retention and recruitment efforts.
It really comes down to whether you want to see this town grow or whether your happy watching this town continue to die a slow, painful death.
Pat is a good man and tells the truth. He was good for Mason City and did a good job in Austin. What he is saying is the truth, we need to vote no on this deal. Hell, the mall isn’t paying any taxes now, we have a tax lien on the property. So we are going to build them a new arena, give it to them and lease it back from them? In turn their property taxes will be higher, which they won’t pay and a tax sale will be made again with the city on the hook again by this stupid mall.
So you string together some disjointed facts, but what are you really saying? It is all what ifs. Did you read the article in the Sunday Globe, how do your comments square with that?
Unless you can make and prove a claim that that article is false you have said nothing. What you present here is proof of nothing.
No one with any intelligence at all ever believes anything printed in the GLOB. It is only good for comics.
Pat, Do you really think the average NIT reader understands a word you’re saying?
We got a frequent poster here that thinks TIF is an additional tax, another that thinks Worth County has the highest property taxes in the state, countless others that think there is a secret society that keeps new businesses out of Mason City, and a bunch of geriatrics that are upset the City buys gas at Caseys instead of Fleet Farm. And you’re using words like debt service, general obligation bonds, and full faith and credit with these doofuses?!?! Good luck!
They might not understand what he is saying, but, I sure hope they understand what higher taxes means.
While TIF is not supposed to be an additional tax, our experience in Mason City shows us that the TIF district never produces enough money to pay off our Bonds. The taxpayers always ends up with higher taxes to pay off the Bonds.
It is just not a perfect world.
Actually the promoters know this and they are lying to the people anyway to get the issue passed. It will just boil down to how gullible the unsuspecting voters are.
Hopefully after this passes you will stop writing.
Hopefully after this fails, and it will fail, you will go away permanently.
If you would just omit the cheap chicken shit references from your posts you would gain some respect.
“cheap chicken shit references” Refresh my memory and cite a few.
“go away permanently”………. is that some chicken shit reference to wishing death on someone, or doing them physical harm. Other chicken shit comments are consistently littered throughout LVS posts
Are you having trouble understanding it, you damn sissy. Go cry to your momma.
Dumb Ass thinks I care about his opinion.
Did you miss 3rd grade Larry? Teachers generally instruct students on the childishness of name calling and how badly it reflects on the one calling names. Give your family something positive to remember you, rather than recalling your childish posts in your obit.
Another Dumb Ass shooting off his Dumb Ass mouth.
If you would just eliminate your cheap dumb ass attacks on other people you would do a little better. Someone like you can never do well.