Judge Doyle Square Implodes Again . . .

Seriously, we’ve paid over a quarter million dollars to just one guy to negotiate this things and we failed . . . again? Beitler apparently said they were done negotiating, Board of Estimates rejects their proposal and instructs staff to keep negotiating with someone who says they won’t negotiate. Deadline: July 5th.

First of all, how does the State Journal write this headline “City creeps toward agreement on Judge Doyle Square project” and then summarize what happened as “Members of the city’s finance committee unanimously agreed in closed session to reject a development agreement proposal from Chicago-based Beitler Real Estate Services and chose to continue with negotiations as a key date to use public money for the project nears.” Beitler told the city they were done negotiating. How is that creeping towards agreement?

Here’s my summary of the vigorous debate on the matter.

You can view the “discussion” at about 50 minutes in . . .

After a closed session Mike Verveer says, which appears to be a motion “The Board of Estimates formally rejects the development agreement proposal dated June 8th from Beitler Real Estate (someone is interrupting him off camera to make sure that it is June 8th) Services LLC, and directs the city negotiating team to continue to meet with Beitler for negotiations to finalize an agreement.” Rummel seconds. It unanimously passes and they adjourn.

To figure out what is going on, the staff memo might give us some clues? In short they summarize as follows:

As of June 10, 2016, there are four key issues that remain unresolved and at issue:
1. Development Services Agreement terms;
2. Timing of the demolition of the Government East Garage;
3. Project Labor Agreement and Labor Peace Agreement language;
4. Termination language; and

Beitler’s representatives have informed the City Negotiating Team that they do not intend to negotiate further. Beitler has, therefore, asked that the Board of Estimates review these issues at its meeting of June 13, 2016 and make a final recommendation on the form of development agreement.

Beitler’s requests are in this memo.

DEVELOPMENT SERVICES AGREEMENT – Section 5.1(a)
Approximately $150M of the Project will be the Private Development and the success of the Private Development is heavily impacted by the smaller Public Development. In order to ensure the most expeditious delivery of the Public Development, Beitler must have day to day management of the entire Project. This does not remove the City’s ability to have input or
influence in the Public Project.

GE GARAGE DEMOLITION TIMING – Section 5.1(e)
Beitler’s initial position for phasing was under the assumption that the Public Ramp could be delivered in a 12 month period. It was not until recently that the City provided a timeline
(see the Appendix B) that indicated the Block 105 site would not be available for 30 months or 2.5 years.

Working to balance minimizing displaced parking while also ensuring the development of the Project can proceed, Beitler proposed the development of Block 105 “early” only in the event
Beitler had secured financing for Block 105.

In short, the 2.5 year hold period is unreasonable as no financing source will set funds aside for a Project 2.5 years in advance nor can a Project be underwritten for a start date 3.5 years
from today.

PROJECT LABOR AND LABOR PEACE AGREEMENTS – Section 5.2(f) & 5.2(c)
We have agreed to terms with the Negotiating Team for this section. Beitler’s position is supportive of Project Labor and Labor Peace and is consistent with Beitler’s Memo to the City dated 3/2/16.

TERMINATION PROVISIONS – Section 12.1(b)
The wording between the attorneys appears to say the same thing. Beitler is agreeable to the
time frame outlined in 5.2(d) as a termination provision and will have our attorney review and
verify.

So we’re headed for another last minute showdown after a holiday weekend. The council is scheduled to vote on this July 5th so the development agreement can be approved by July 15th to meet deadlines.

Brilliant strategy on the developers part, as the council gets squirrely with their backs against the wall.