02/12/13 - Laserfiche WebLink

Home

the HRA's word should be its word and it should stand by its contract. Commissioner Tossey stated he did not support seeking an outside opinion. Commissioner Riley agreed with the comments of Chairperson Backous that had been read into the record that the HRA should not be in the land development business. He also agreed the City needed to perform on its contracts and the issue of politics should be taken out; however, in this case the issue is a potentially illegal contract. Commissioner Strommen stated she thinks it is worth seeking an outside opinion and it is her intent to honor the contract unless it contains a fatal flaw. She suggested the HRA proceed carefully, seek any and all legal advise available, and take that information under advisement. Commissioner Strommen agreed it should not be a political issue and the HRA should proceed based on facts. Commissioner Tossey stated an attorney wrote something anonymously but did not put his/her name on it so he does not know who wrote it. He wants the era of the HRA being a master developer to be at an end and for people to know that Ramsey will abide by its word. Commissioner Kuzma stated questions were raised about the legality of the contract so he supports obtaining another opinion. Rob Shainess, Capstone Law, counsel for Landform, asked that his letter dated January 31, 2013, be entered into the record. He stated he understands this issue will be continued but he wanted to make some points. He indicated Landform does not object to the HRA obtaining outside counsel but he has reservations in how the contract will be examined because the law at issue is one that says you cannot be compensated if you do not have a license for certain conduct so the attorney would need to know the precise tasks Landform performed. Mr. Shainess noted the contract does not provide that information so he questions whether for $2,000, it is a review of the contract that has already been reviewed by HRA counsel, who also drafted the contract. He explained that in the lifecycle, this review usually occurs at the front end and that was the case because the contract contained rigorous language indicating Landform is not a broker and will not be compensated for any services that require such a license. That issue was vetted. Mr. Shainess stated he is confident an objective attorney will come to the same conclusions he reached in his January 31, 2013, letter. He asked the HRA whether an outside opinion would cause them to make a different decision, questioning the prudent course when the contract ends in March. Mr. Shainess noted the incentive compensation portion of the contract is at issue and the focus. He stated Landform had been more than happy to charge for services on a monthly rate but the alternate option allowed the HRA to finance Landform's work over time. The incentive compensation was put off until the HRA received revenue through development. That was the financing mechanism used and if the HRA said it was not now allowed, then it could no longer offer incentive pay. The only option would then be flat fees or monthly payment. Mr. Shainess questioned whether the HRA wants to take that option off the table. Housing and Redevelopment Authority / February 12, 2013 Page 4 of 6