What happened between the arena developers?
To all my faithful subscribers: If you haven’t already migrated over to my new home at Nebraska Watchdog, I hope you will do so today. Last night I published a story about the real story behind the breakup of the two most active downtown developers in Lincoln right now — the same developers who are responsible for all of the private buildings that will be built near Lincoln’s future arena.
You can find my story here. And thanks for migrating with me.
Arena lease with UNL contains few surprises
It was front-page news today in the Journal Star: On Monday, the City Council will vote on a 30-year lease with UNL for the arena. But the lease looks pretty much like the “memorandum of understanding” that the city and UNL signed off on last year.
During the arena groundbreaking, it was somewhat alarming to see Nebraska Athletic Director and the UNL mascot missing, and even more alarming to learn the city and UNL had not yet signed a lease. So now, here it is, and it is the same deal we were told it would be before the election.
The upshot? UNL basically gets to have its men and women basketball teams play in the arena for about nothing. Sure, UNL is supposed to pay $750,000 in rent, but they get so many credits that arena program manager Dan Marvin told me long ago that it’s basically a wash for them. The credits are all turnback sales tax receipts the city receives from the sale of basketball tickets (70 percent of the state sales tax), the first dollar of all ticket surcharges on basketball tickets and $300,000 for UNL’s lost concessions revenues.
No news there.
Other nuggets in the lease include: (11164a)
• Just in case you didn’t pick up on this during the campaign, UNL “shall have no responsibility or liability for repayment of the bonds” that were sold to finance the $340 million project. “Except as otherwise expressly provided in this Agreement, the Parties recognize and agree that any Arena components or services identified in this Agreement shall be at the City’s sole cost and expense.” So no matter what, even if we slip into the second Great Depression, repayment is the city’s responsibility, not UNL’s.
• The lease says “although plans and specifications for the arena have not been completed” (really?), “there are certain components of the Arena and the Basketball Space required in order satisfy the needs of UNL.” In other words, they’re gonna build it the way UNL likes it — right down to promising to re-seal the basketball floor every summer and repainting it every five years.
• There will be a minimum of 2,000 student seats — with the location determined by a design working group comprised of city and UNL representatives — and a portion devoted to risers for students to stand on, if UNL wants them. And the risers will belong to UNL — if another event wants to use them, they’ll have to rent them from UNL.
• As expected, alcohol will not be served in the arena during UNL events. But check out this little nugget in the lease: “The city agrees to renegotiate the make-whole provision for concessions in the event UNL eliminates or modifies its restrictions on the sale of alcohol at Home Games and other UNL events held in the Arena.”
• UNL retains all gross income and revenues from sale of merchandise, UNL suites, club and floor seating, UNL ticket sales, naming rights, signage and broadcast rights or other intangible rights in connection with signage and ribbon boards and scoreboards.
• In addition to using the arena for 30 home games per basketball season (15 men’s, 15 women’s), UNL may schedule use of the arena for up to 15 non-basketball events per year (such as commencement ceremonies) without paying additional rent.
• UNL promises to try not to schedule games during state high school volleyball, basketball and wrestling tournaments.
• Somewhere on the exterior of the arena, there will be a big, fat (presumably red) “N” — in an “appropriate location mutually acceptable to the city and UNL.”
• The city intends to charge a $1 surcharge on all event tickets, but may increase that up to $3 if the money is needed.
• The city will have the right to selling naming rights for the arena, and UNL will sell naming rights for the basketball court, locker rooms and other UNL spaces.
• If the city fails to get the arena built in time for the 2013 basketball season, the city will have to pay UNL $100,000 for each of the first two games delayed, $200,000 for each game after. In addition, the city would have to provide UNL the use of Pershing Auditorium free of charge for any women’s basketball game that must be relocated or rescheduled because of the construction delay.
• No “adult-oriented” nor political advertising will be allowed during UNL events (TransCanada, we’re lookin at you) and any casino, alcohol and tobacco ads can only be digital, so they can be removed for UNL events.
Councilwoman wanted arena groundbreaking “before I became too ill”
Outgoing City Councilwoman Jayne Snyder talks about what Lincoln’s arena project means to her in an interview on the city public access channel.
Snyder is resigning from her position on the City Council because she has pancreatic cancer. In a “City Focus” segment that airs on Channel 5, Snyder said the project means a lot to her and even though she doesn’t expect to live long enough to see the arena opening in September 2013, she can visualize crowds cheering.
“Some peole don’t realize the true meaning it has for me,” she said. “I put a lot of hours into it. I wanted the groundbreaking before I became too ill. I know I won’t make it to the first opening but I very much can dream and think about the first show and the first opening of the arena.”
Snyder said if she could choose the first act to perform in the arena, it would be the Rolling Stones.
“I think it would bring together people of all ages,” Snyder said.
You can watch the segment here by clicking on “City Focus: The arena.”
Snyder said she is most proud of her contribution to Lincoln’s trail system, but the arena will also be part of her legacy. She was elected in 2009. This week the City Council will vote on a replacement for her.
Arenas not a good investment?
Today’s LJS story on a prominent economist’s opinion that most arenas and stadiums are not the economic panaceas they’re advertised to be was interesting to me, having covered the planning of Lincoln’s $340 million arena project for a half dozen years.
Perhaps the toughest story to get in the Journal Star was one in which I interviewed a bunch of economists about this very sentiment that such publicly financed projects are not the shot in the arm supporters say they will be.
It was one of the most heavily edited, scrutinized stories I’ve written in my 20-year journalism career. The city election was coming, and we wouldn’t want to poison people’s mind with such sacrilege, would we? After the story was published, one of the leaders of the pro-arena movement told me they would be coming out with their own economist to refute my story’s findings. About a week later, a UNL economics professor wrote this guest column, sort of vaguely refuting my story, I guess.
Which was funny, given that UNL economists just were nowhere to be found whenever I tried to get them to comment on Lincoln’s proposed arena. It seemed they were ducking the issue.
And then last year I took a UNL economics/journalism class, and that very professor, David Rosenbaum, was frequently a guest speaker. I couldn’t wait to ask him about how his opinion of arenas seemed to go against the grain among economists. When I finally got my chance, he refused to answer my question. I think he knew who I was. I dropped the class soon thereafter. I figured if we couldn’t speak freely about the biggest economic question facing our own fair city at that moment, what could we talk about honestly?
Ground broken on arena, but no lease with UNL?
I think the Journal Star buried the lead on this story about the arena groundbreaking — which was skipped by UNL athletic officials.
After all the pomp and circumstance that groundbreakings are built for, the story contained some rather interesting actual news: That the city still has not finalized its lease agreement with the University of Nebraska-Lincoln.
And the fact that Nebraska Athletic Director Tom Osborne skipped the groundbreaking — “I had something come up,” he told the reporter — makes me wonder what’s going on behind the scenes. I thought they had this lease deal hammered out a long time ago.
Remember when the Board of Regents approved an agreement to create the Joint Public Agency and forge ahead with the project?
The reporter who covered the groundbreaking noted that a construction hard hat reserved for a Husker mascot — complete with “a Lil Red” name on it — lay unused at the groundbreaking.
That’s a good detail to include in the story — and a strong indication something may be afoot. Here’s hoping more reporting will be done by the LJS on this.
You’d think with the city paying a Lincoln company $24,000 to build and maintain a pro-arena, cheerleading website and Facebook page, that they would be really good at keeping the site updated. But if you check out the home page, they still have “June milestones” and a now-outdated story that the groundbreaking is “today.” For $24,000 — plus who knows how much in monthly maintenance fees — don’t taxpayers deserve better?
Construction of the arena to begin Sept. 15
I’ve been trying for awhile to determine whether the arena project is on time or not — after a construction bidder pointed out to me that bidding documents made it appear the project is three or four months behind schedule.
However, project coordinator Dan Marvin insisted to me that the project is on schedule. And the mayor certainly has repeatedly said the project is on schedule. So I’ve been taking them at their word. And I’ve been keeping my eye on one major milestone coming: The date they said they would actually begin construction of the arena itself.
That date was set for Sept. 16, 2011. And guess what? Looks like they’re on target for that, because a true groundbreaking for the arena is scheduled for Sept. 15 (weather permitting). Now, I’m not naive enough to thinks reporters can’t be easily snowed, and we’ll all know for sure when September 2013 rolls around whether this baby is coming in on time. (Or should I say coming out?)
The Watchdogs of Lincoln keep city officials on their toes
JoAnn Murphy taught for 43 years in Waverly and Lincoln schools and her husband, Buzz, worked with emotionally ill people in an adult day center before they both retired.
In all that time, they never got involved in politics – until Lincoln began debating whether to embark upon a $340 million arena project in a railyard west of downtown Lincoln.
They started attending meetings of the No2Arena group – which raised many questions about the arena project’s cost, location and environmental issues. After Lincoln voters approved the project — despite their concerns – the No2Arena group did not dissolve, it evolved — into a new group called the Watchdogs of Lincoln Government.
Murphy facilitates meetings and her husband is an active member. We asked JoAnn a few questions about the Watchdogs – whose members are increasingly involved in local politics, from writing letters to the editor to inviting public officials to address topics at their meetings, to attending public meetings wearing their Watchdog T-shirts.
How did the Watchdog group get started? Is it an offshoot of the No2Arena group? Watchdogs is an offshoot group mostly of the No2Arena members.. However, there are some folks who have joined who were not part of that group. No2Arena was never opposed to an arena, just the location and funding. The group has some professional people, blue-collar workers, retired folks, Democrats, Republicans, and Independents. We are all concerned citizens who want to influence city decisions for the good of all, not just a few.
About how many people come to your meetings? Organizational meetings are usually attended by eight to 12 people. Educational meetings anywhere from 15 to 25 folks. We try to schedule meetings at least once a month – sometimes more. We notify folks through e-mail, and we put notices in the newspaper’s calendar of events.
What is the purpose or mission of the group? The purpose of mission of the group is to educate Lincoln’s citizens about what is going on in city government – thus, increasing the transparency of Lincoln’s city government. Transparency is always the focus for our group. That transparency is achieved by informing the public. We hope that once the public is better informed, better decisions can be made about issues.
Your members sometimes go to public meetings like the arena board meetings wearing T-shirts that identify yourselves… what’s the thinking behind that? We wear our Watchdogs T-shirts to call attention to our group and its purpose – to be watchdogs (protectors) of our tax dollars.
Have you ever gotten any response from the mayor or other public officials to your presence? If so, how did they respond? We have never had any response from the mayor or public officials about our presence at meetings. However, we know that we are noticed by comments during the meetings because of some of the explanations are geared to the public audience – the Watchdogs.
Are you actively recruiting people and how large do you hope to become? We are actively recruiting people and would like to grow. We would very much like to have large attendance at our presentations. We have had Dave Landis come to speak about TIF funds, a presentation about lottery funds, a CPA come to explain the city budget. In the future we hope to have presentations about Innovation Park, the Comprehensive Plan, more on the city budget by the CPA, street department, water department, jobs in Lincoln, etc. We have had some discussion about Pershing Auditorium and the Breslow facility as well as other issues.
Do you intend to get politically active — endorsing candidates and so on — at some point? We do not intend to get politically active. We want to be a conduit of information and not endorse any particular candidate.
What are some issues that galvanized your members — inspired them to join the Watchdogs? Issues that have galvanized our members are expenses connected to the Haymarket Arena project and the continued spending of tax dollars by the city. It appears that it is easy for our city officials to spend other people’s money. Antelope Valley and the proposed LES lines to be buried using the water channel in Antelope Valley are of great concern as well. The increase in property taxes and the wheel tax increase is also a concern. Most who come to our meetings are amazed to find out facts they previously did not know.
Are there any obstacles that you’ve come across as you try to grow and have influence? Our greatest obstacles to growth are spreading the word about our group and encouraging folks to become active. We need lots of input to meet the needs of Lincoln citizens for information. Most recently, we have developed fliers that are handed out at events — county fair, Ribfest, etc. We intend to do more of this, perhaps distributing fliers through businesses or displays.
If you could tell the mayor one thing, what would it be? Increase the transparency in your administration – not after the fact, but before. Let the voters vote (Antelope Valley, the jail, moving the state fair). Present all of the facts, not half.
How can people find out more information about your group? Jane Kinsey is our spokeswoman and can be contacted at firstname.lastname@example.org. The Watchdogs also have a website under construction: http://www.watchdogslnkgov.com.
Arena board terminates program manager, and does other stuff
The three-member board overseeing Lincoln’s construction of a new arena in a railyard west of downtown cut loose the company that has been in charge of the whole deal up to now.
Read the background story here.
The Joint Public Agency:
• Ended its contract with a Virginia company that had been serving as program manager for the whole $340 million arena project, SAIC. Marvin and the mayor said SAIC was terminated because they decided the management structure was just too top-heavy and this is a way to save money on management. Mayor Chris Beutler thanked SAIC for their services and said a “good-sized engineering consortium,” city engineers and SAIC’s subcontractor, PC Sports, can handle things. Then the JPA approved a new contract with PC Sports that makes it the interim program manager while the city negotiates a permanent contract with the company.
• Was told that the last in a series of three bonds to finance the arena project — $100 million in tax-exempt bonds — will likely be issued on Aug. 9. The city’s investment advisor expects the JPA will pay a little higher interest rate than on the first two issuances, at 4.5 percent, compared to 3.25 and 3.75 percent. The City Council votes on the issuance on July 25.
• Approved a new one-year management contract with former Councilman Dan Marvin – who is the city’s arena go-to guy – that gives him a 4 percent raise to $88,150 per year.
• Was asked to approve the purchase of the Watson-Brickson lumber yard for $481,000 plus $314,000 in moving costs and $121,000 for racking expenses. However, JPA board member Tim Clare, a UNL regent, refused to approve the purchase agreement because the figures were wrong on his copy. The closing is scheduled for July 19.
Clare said this has happened before – documents are incomplete or have errors – and he has said “I’m not gonna do it.”
“I’m happy to stay here until midnight if that’s what it takes,” he said. Eventually, the paperwork was put in order and approved.
So the JPA continued on with its agenda and then went into recess while officials scurried to get the paperwork in order for his approval.
• Approved a $24,000 change order for work on the 10th and Salt Creek Roadway double roundabouts, and a $589,000 change order because the city is unable to get to the fill it had planned to use to bring the arena pad up to grade, because BNSF won’t let trucks drive over its temporary crossing because it could be damaged.
Arena program manager about to get terminated
Well, it finally happened.
I believe we now know what the private, closed-door JPA meeting was all about a few weeks ago, when the public was kicked out of an arena board meeting for an “executive session” about a “personnel matter” “to prevent needless injury to reputation” while “discussing work performance on the project.”
The program manager in charge of Lincoln’s $340 million arena project is about to get canned — and replaced by their subcontractor.
Rumors that the city is not happy with the performance of the program manager overseeing the arena project will come to fruition this Friday when the Joint Public Agency votes to end its $4.3 million contract with a Virginia-based company called SAIC. At least, that’s what’s on the JPA agenda. A draft of the termination letter is even there, although it doesn’t say why the contract is being ended, other than “for the convenience of the JPA.”
The LJS reported this morning that the JPA plans to terminate its contract with SAIC this month.
Of course, city officials tried to put their best spin on this development (which is no surprise to those on the inside of this project), with arena guru Dan Marvin saying they just came to the conclusion that the project was too top-heavy with managers. I remember early on in this process when the organizational chart was coming together I expressed concern to Marvin that it was difficult just keeping straight Who’s was on What base. The organizational chart is headed up by the three-member JPA (mayor, Councilwoman Jayne Snyder and UNL Regent Time Clare). Then city elective officials are ostensibly below the JPA. Then the program manager, SAIC, whose main man in Lincoln is Jim Martin of Missouri.
Then below him is an arena project manager (they just concentrate on the arena). And then there’s the team of marketers, architects and construction manager Mortenson Construction. Are you getting confused yet? I don’t even know where Dan Marvin fits into the chart, quite frankly.
I’ve never built an arena, but that chart alone made my head spin. But from what I’ve heard, it’s not just that the process is top-heavy with too many cooks in the kitchen — Martin’s performance has been causing consternation since last fall, but I’m told our controversy-averse mayor didn’t want to do anything about it until after the spring election. SAIC was working under temporary contracts from August until March, when the JPA went ahead and signed a permanent $4.3 million contract (which makes no sense if they were concerned about the company, does it?). The contract allows the JPA to pull out with just 10 days notice and no cause — which is probably why Marvin and Snyder refused to tell the paper whether they were concerned about Martin’s performance.
Although Snyder was willing to say the two sides are “leaving on good terms.” Really?
Marvin said the city used a program manager for the $240 million Antelope Valley Project, but doesn’t really need one on this project. You telling me this project isn’t just as complicated as that one? This one costs about $100 million more, for starters, and involves moving an active rail line, construction near an active rail line, remediation of a contaminated rail yard and construction in a flood plain — to name a few issues.
Another interesting twist: SAIC’s subcontractor, PC Sports (Paula Yancey) will continue working for the city. (I’m told city officials love PC Sports.) And the JPA will vote to appoint PC Sports the interim program manager on a month-to-month basis — in other words, the subcontractor will take over the main contractor’s gig. But it appears the JPA intends to hire PC Sports on a permanent basis, because the draft contract language says the two will meet promptly to come up with a new agreement and compensation for PC Sports to be the program manager. In a letter to the mayor’s office, Yancey proposes that her company’s fee increase from the current $30,450 per month to $98,500 beginning Aug. 1.
Apparently, this job doesn’t have to be re-advertised for bids.
Oh, and the contract contains this nifty paragraph: “All services, including reports, opinions and information to be furnished under this Agreement shall be considered confidential and shall not be divulged, in whole or in part, to any person other than to duly authorized representatives of the JPA, without the prior written approval of the JPA or by order of a court of competent jurisdiction.”
How’s that for transparency?
Arena board closes meeting to discuss personnel matter
At its last meeting, the board overseeing arena construction — the Joint Public Agency — kicked the public out at the end to have a private discussion.
About what? We don’t know.
We only know that Mayor Chris Beutler made a motion to go into a closed, executive session “to prevent needless injury to reputation” while “discussing work performance on the project.”
The JPA meetings are, of course, open to the public. But there are exceptions in state law that allow public bodies like the JPA to close portions of meetings. That’s what happened here. The exception would be discussion of a personnel matter.
So someone, or some company’s job performance was discussed by the JPA. And the JPA and city don’t have to say who, or why.
However, if the board is going to take any action (vote), the board has to reconvene and do it in public. I don’t believe they did that in this case, so presumably no votes were taken.
I’ve heard rumblings about unhappiness with a certain contractor on the job — but to avoid any controversies before the election, nothing was done about it back then. Perhaps this is the same issue.
If you know anything about it, give me a call or email me at email@example.com.