demanded that invoices worth $110,000
be paid despite being invalid.
MASON CITY – Bill Schickel demanded bogus invoices totaling $110,000 from Gatehouse Mason City, LLC, be paid by the City even as they were owed nothing and the process of signing a final agreement with a hotel developer for the Renaissance Project was still in motion.
LOCATION IN MINNEAPOLIS
NIT has confirmed that former city councilman and newly-elected Mayor Bill Schickel marched into the City’s finance department between November 16 and November 21 and demanded that invoices from Gatehouse Mason City, LLC – invoices that turned out to be “void” or bogus – be paid by the the City. The invoices totaled $110,000 and were submitted via email to the City’s finance department at 2:37 PM on November 16 by Donald A. Kaiser, who owns 5541 Clinton Avenue in Minneapolis – the single-family house where Gatehouse Mason City, LLC is located. At 3:51 PM that same day, the finance department responded by saying “Any payment will take place after” a November 21 city council meeting in which the council was considering an agreement with Gatehouse.
Additional to the fact there was no final agreement in place, as the Globe Gazette reported on November 18, “No payments are due to Gatehouse until there is proof a senior lender has been secured.”
A high-ranking City employee who handled the invoices told NIT, “Bill Schickel stopped in and asked that they be paid.”
Schickel admitted he went to the finance department in reference to the payment of the invoices. He told NIT, “There are obligations that we place on developers and obligations that the city commits to.”
Schickel was then lectured by this City employee on “the need for a signed development agreement.”
The City did not pay Gatehouse Mason City, LLC, for the questionable invoices. There has never been a signed final agreement between the City of Mason City and Gatehouse Mason City, LLC, to build a hotel – but Schickel wanted these three invoices ($30,000, $30,000 and $50,000) paid, anyway. This would have been in addition to $150,000 that was sent to Gatehouse’s David Rachie for a “Predevelopment Plan”. Bill Schickel and the rest of the city council voted unanimously on May 11, 2017 to hand over the $150,000 to David Rachie’s Gatehouse.
Interim City Administrator Kevin Jacobson told NIT on November 29 the $150,000 is gone and not recoverable.
“I would imagine it is all spent,” Mr. Jacobson said. “I’m not sure what he did with the money.”
for one more payday when
$110,000 of questionable invoices
were sent to City Hall,
and why did Bill Schickel
demand he get paid?
On March 21, 2017, the city council voted 5-0 (Bill Schickel absent) to direct city staff to meet with Gatehouse Capital representatives to negotiate and develop the terms of a development agreement. Although the City continued to work with Gatehouse in the following months, frustrations mounted at a lack of progress and later, Gatehouse altered its original proposal to the city. This opened the door to the city accepting competing bids for the hotel in connection to the Renaissance Project. G8 Development, Inc., ousted by the city council in March as the hotelier of choice in favor of Gatehouse, submitted a competing bid on November 21. This led to a bid-off at City Hall between G8 and Gatehouse on November 27. As a result of that bid-off, G8 Development was selected that night by the city council to be the hotelier of choice with the Renaissance Project.
Speculation continues to swirl in the community as a new mayor and council are seated tonight as to whether the City is done playing musical chairs with hotel developers. Will Gatehouse be brought back, and as millions of dollars hang in the balance, will state officials stand for yet another change to the Renaissance Project?
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INVOICES SUBMITTED ON NOV. 16 BY DONALD KAISER:
“Please find attached invoices for Preconstruction Services for Gatehouse Mason City for November and December, as provided in Section 9.1.b of the Purchase, Sale and Development Agreement. Also attached id the invoice for the Hyatt Place Application Fee Deposit.”
http://northiowatoday.com/wp-content/uploads/2018/01/Mason-City-2017-11-Gatehouse-North-Invoice.pdf
http://northiowatoday.com/wp-content/uploads/2018/01/Mason-City-2017-11a-Gatehouse-North-Invoice.pdf
http://northiowatoday.com/wp-content/uploads/2018/01/Mason-City-2017-12-Gatehouse-North-Invoice.pdf
