MASON CITY – The $150,000 handout to David Rachie, the ousted hotel developer in Mason City’s Renaissance Project – is gone and the city won’t be getting it back – and the damage could have been worse.
David Rachie and his Gatehouse Mason City, LLC was given a check for $150,000 months ago for preliminary work on the Renaissance Project involving his proposed hotel. Rachie demanded the $150,000 up-front payment from Mason City for a “Predevelopment Plan” for the hotel, which he allegedly planned to build in a Southbridge Mall parking lot. Rachie claimed this payment is a standard business practice. The Mason City council agreed and cut him the check. The general contractor for that project would have been Dean Snyder Construction of Clear Lake. NIT has learned that at least one Mason City councilman has a friendship with persons connected to that company. Rachie turned in a plan to the city in October, but it appears to have been removed from the City’s website.
Interim City Administrator Kevin Jacobson tells NIT the $150,000 is gone and not recoverable.
“I would imagine it is all spent,” Mr. Jacobson said today. “I’m not sure what he did with the money.”
Until Mason City ousted Rachie’s Gatehouse Mason City, LLC, he was poised to collect upwards of $750,000 in non-refundable “pre-construction funding” from Mason City taxpayers.
A person connected to City Hall tells NIT his bet is “Rachie would have strung us along while he collected the $750,000 and then, he would have been gone.”
Councilmen Paul Adams, John Lee and Bill Schickel strongly supported Gatehouse and David Rachie.
Only through the savvy maneuverings of Mayor Eric Bookmeyer – along with three council members who wouldn’t budge on not supporting Gatehouse – and the Mayor’s threat of a veto was Rachie sent back to Minnesota, as the council instead chose G8 Development and Philip Chodur as the new hotel developer in the Renaissance Project. Mr. Chodur promises any pre-development dollars would be paid back, should the project not go ahead. He’ll work with Henkel Construction on his hotel plan.
Moving forward, the next step in the Renaissance Project is to get approval by IEAD on December 15 for alleged millions of dollars in tax credits (this means, the taxes are collected in a small downtown area of new construction, then sent to Des Moines, then parceled back to the city in small increments – NOT a lump sum check). After that takes place, there is a meeting scheduled for December 28 to approve the development agreement.
“We are working on a timeline of things to do early next week and I will know more,” Mr. Jacobson told NIT Wednesday night.
Paul, John, Bill and the Yes voters pffffffffft!
I don’t believe the taxpayers were poised to shell out $750,000. More like greased up and bent over. 75% of about 1/3 of registered voters is not a mandate, it’s a joke! Just like everything else that our “leadership” has managed to get passed.
75% of the people that care enough to vote is a mandate because the other 2/3s of the people must not care enough to take the 5 minuets it takes to vote. If you don’t take the time to vote you don’t get the time to bitch about the outcome.
Except now that all the TRUE details are released…. after people voted, I’m sure the out come would be very different.
And my taxes are going up again, already.
the headline has to be wrong Bill promossed there would be no new taxes, so how can this move save 750.000 that was not going to go to the tax payer. Must has misunderstood
If this ice arena/ hotel project doesn’t bring in residents, I’m sure poor decisions made by elected officials and giving away city money to con artist sure will.
We havent dodged shit with this fiasco. It will only get worse. The hockey rink how many games do da bulls play at home in a week? I hope dill pickle Bill can get something going in the right direction. I said HOPE. What a friggen mess we got.
If John Lee had a brain, he’d take it out & play with it.
People seem to think the state is going to give 7 million dollars to this project. That also is not true. It is a portion of as yet uncollected taxes. If the hotel fails (and it probably will) there will be no money and the city will be on the hook for the debt. Fools!
What a joke Paul Adams is. The people actually voted him in over Max. Paul is totally clueless and hasn’t brought anything to the table since being elected. I have heard from people at city hall that it is going to be a joke after the first of the year because they feel that Bill John and Paul are incompetent.
I have a plan to build a company that will hire 10,000 people, all I need is some money for a pre-development plan, please city may I have $200,000 to do it, please
They will find a way to mess it up, they have proven they know how to do that. The big lie that hits my brain the worst is that all along this process, they told us that this was not going to cost the taxpayers anything. Now they are coming back and telling us that G-8 will save us taxpayer money? How do you reconcile that statement with the lie told?
Mason City is in way over their head!
lol
The Gatehouse deal had scam written all over it.
Chodur possibly/probably won’t get the motel built, but at least the city won’t be out money.
Regarding Lee, what is he doing on the council anyway? Hasn’t looked competent.
Are you kidding me? They have already wasted over $1 million on this farce.