Citing ‘Lack of ‘Transparency,’ City Cuts Ties With MEDC

09/03/14 | By | 151 More
MEDC DISCUSSION - Montrose City Councilors and staff listened to resident Dee Laird during public comment Tuesday during the city council's regular meeting. (Photo by William Woody)

MEDC DISCUSSION – Montrose City Councilors and staff listened to resident Dee Laird during public comment Tuesday during the city council’s regular meeting. (Photo by William Woody)

MONTROSE – Citing a greater need for “transparency and accountability,” City of Montrose officials publicly severed ties with the Montrose Economic Development Corporation Tuesday.

City councilors unanimously passed the resolution, which stated: “The City of Montrose hereby severs its operational and financial ties to Montrose Economic Development Corporation and declares its firm commitment to economic growth in a manner of transparency and accountability to the citizens of Montrose. The city will continue to cooperate and work with MEDC on well-defined projects, with the strong desire to bring new economic growth to our community.”

Councilors said the city will hand over to MEDC money held in escrow following a July real-estate deal in the Airport Industrial Park (MEDC sold two parcels located in the industrial park totaling 5.57-acres to be developed as a new 22,840 square-foot Federal Express sorting facility).

At issue was whether the City of Montrose or MEDC would receive proceeds of roughly $400,000, from the sale. The city, which made improvements to the land over a period of years, hoped to recoup some of its investment; MEDC officials wanted the entire sum, no strings attached.

The resolution states the city wants MEDC to use 60 percent of the money held in escrow for economic development and business assistance, and not “administrative expenses.”

The resolution additionally directs the city attorney’s office to transfer the remaining city-owned property at the Airport Industrial Park and Aerospace Park to MEDC. The City’s total investment to the properties is about $393,000, or 62 percent, and the MEDC investment is about $242,000, or about 38 percent. The MEDC did invest more in the land, with expenses of about $156,000 in real estate to the City’s investment of $30,500; the city, however, spent more in development of the properties, at $362,804 to the MEDC’s $86,448.

MEDC purchased the 5.57-acres with private investment dollars in 1989, and quit-claimed the property to the City in the early 1990s, to avoid real-estate taxes, for $10. With approval, the City will quit-claim the property back to MEDC for $20.

The details of these negotiations between the MEDC and City are unclear; historically, land transfers have been completed mostly in private, and ratified in public with little if any written documentation.

The City is calling for a greater need for public accountability, and working to facilitate economic development through city resources and personnel.

MEDC is a private corporation and can make financial decisions outside of public inspection; the City, as a governmental agency, is required to disclose all of its financial transactions.

“Council recognizes that economic development corporations are unique and are legally able to take actions that a municipal government cannot,” the resolution reads. “If Montrose Economic Development Corporation operates under best practice standards of such an organization, those standards have become incompatible with current practices of municipal governments.

Three residents spoke during public comment period and all agreed the city needed to pass the resolution. Dennis Olmstead said the city, MEDC relationship has become too strained and Jim Anderson told councilors “I think you’re doing the right thing … they (MEDC) deserve to pay taxes.”

Dee Laird said the MEDC leadership has been misguided for the past decade, but added there is still a need for their efforts in Montrose.

“I think it’s smart to make a ruling, and a long-arm relationship with the MEDC,” Laird said.

No MEDC representatives attended Tuesday’s meeting; Councilor Judy Ann File is, however, a board member of MEDC.

“In order for both of us to be true to our own rules, and to our constituents, the separation stated in this resolution is in my opinion very necessary,” Files said.

Councilor Kathy Ellis cited a recent story in the Montrose Mirror quoting  MEDC President Sandy Head dubbing the City’s resolution “confusing,” and not preventing the MEDC from seeking legal action against the City.

“We can never predict who is going to bring suit against the City,” Montrose City Attorney Stephen Alcorn replied.

But, he added, “I think it would be one of the shortest cases in history.”

Requiring the MEDC to use 60 percent of the money held in escrow for only economic development or business assistance remains open for interpretation.

Anderson told the council the City and MEDC’s Board of Directors need to sit down for “frank conversations,” so as to forge a common vision for economic development, moving forward.

“I think it’s unfortunate that the last 10 to 12 years have led us to a situation where we can no longer support MEDC,” said Mayor Bob Nicholson, “but I really think that’s come from their own actions.

“I’m hoping that they’ll be able to agree to our resolution.”

Tuesday’s agenda was amended to include an executive session, withdiscussion about the possibility of a new “outdoor recreation company” seeking to open a facility in Montrose. City Manager Bill Bell said the name of the company, which is headquartered out-of-state, cannot be released at this time, but that a full disclosure of the negotiations will be made public to keep the process as “transparent and open as possible.”


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