History Lesson worth remembering

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Among all the tempest of the Mesquite City Council decision on what to do with the I-15 Exit 118 land sale that’s dominated the public interest is the resolution passed by the council regarding a 2009 financing agreement between the city and Barcelona Partners, LLC.

The agreement would have allowed the city to create a Special Improvement District and issue up to $6 million in bonds to help finance the Barcelona project on the corner of Pioneer Boulevard and Falcon Ridge Parkway. You know, that empty dirt lot where so much was promised.

The council tore up the SID agreement Tuesday night and threw it in the trash can. Along with it went $2.5 million in redevelopment funds the city will never recover. As Councilman George Rapson said a couple weeks ago, “that money is gone. We’re never going to see any of it.”

Let’s go back in time to explain the importance of this issue.

In February 2009, then-Mayor Susan Holecheck and then-Council members Dave Bennett, Robert “Bubba” Smith, Karl Gustaveson, Randy Ence and Bill Wells first considered establishing a Special Improvement District that would provide funding for the Barcelona project. The developer needed $2.5 million to build a road to the Solstice luxury motorcoach RV park located near the base of the Flat Top Mesa. Provisions of the SID would have placed the city’s Redevelopment Agency in first position to collect its money or assume ownership of the land in the case of a default or bankruptcy by the developer.

The sale of SID bonds required the city to use its bond rating to reduce interest rates and loan costs for the borrower. The bond sale never happened.

Instead, Holecheck signed a Development Loan Agreement with Barcelona ultimately placing the RDA in third position behind banks and investors to collect its money in case of a default or bankruptcy. The agreement allowed the city to loan Barcelona $2.5 million to build a road to the RV park.

A video from 2009 shows Holecheck saying “I want to assure everyone that I have seen funding information so I know what they are obtaining which gives us a level of assurance. I know people want to know if the funding documents have been shared. I can assure you that I have seen them.”

As of Dec. 10, 2012, Barcelona owed the RDA slightly over $3.1 million, including interest, from the 2009 loan. At that point the company had made only two payments of about $5,000 each.

At a February 2013 RDA meeting then Gustaveson said, “Yes, this is an unfortunate situation. But it’s not quite as unfortunate as it’s been made out.” He explained the city would have paid for the road construction anyway. “Regardless of whether we paid them (Barcelona) to build the road or not, we would have been building the road. It’s not like we lost all that money. We still have the assets of the road. Part of the $2.5 million was spent on drainage pipes. That has to be taken into consideration. It’s not like anyone is out $2.5 million because the road is there.”

We beg to differ with the former councilman. The RDA, therefore the taxpayer, is out $2.5 million because of a bad deal agreed to by former Mayor Holecheck and the 2009 council.

After Barcelona Partners declared bankruptcy, Bank of America foreclosed on the RV park in June 2014 and recently found a buyer to purchase it. By passing the resolution at Tuesday night’s council meeting, the property became unencumbered and the buyer can now get clear title to the park.

Ultimately, that’s a good thing and hopefully the new owner will improve the property and the city will realize some increased tax revenue.

We aren’t bringing all this back up just to drag people through the mud. Rather, we want the current mayor and council to remember the history lesson in all of this mess.

The city is now back on its feet and in the process of selling some of its – our – land. We’re already seeing a land rush underway at the upcoming I-15 Exit 118 interchange. It will open up all kinds of possibilities for development in the Mesquite Technology and Commerce Center where the city – we – own a few hundred acres.

Developers and speculators will be in a hurry to sign agreements and contracts with the city. This history lesson should cause the mayor and council to slow down and make sure any contract fully protects the taxpayers and puts us in first place to recoup any monies or land if the proposal goes south.

If that doesn’t sit well with the developers, too bad.

Referring to Holecheck’s comments about having seen Barcelona’s financial documents, Councilman Kraig Hafen stated at the February 2013 RDA meeting, “I want to go on record about things like this. If someone is going to ask for public money, your money, they are going to show you the financial statements. If they ask for your money, you have the right to see the documents.”

“If those financial statements weren’t analyzed by competent people who are (professional) analysts, the whole matter is not pursued properly,” Councilman Geno Withelder commented at the same meeting.

Then-Councilman, now Mayor, Al Litman said at the 2013 meeting “MesTech, Solstice, Desert Falls. All three were fiascoes. We have a road but it’s a road to nowhere.”

Let’s remember our history and do things right this time around so that we don’t repeat the same mistakes made in the name of progress.

The taxpayers come first. All others line up behind them.

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