Monday, March 26, 2012

BS #58: The McDougal Epilogue

BlogSpasm #58

The council resolution regarding ‘mediation’ efforts with McDougal over the Heritage District project is located at the below link from the DMN. While staff of the CCR understands that mediation is designed to resolve a conflict between parties, the resolution appears to give McDougal the city’s ATM pin number to drain the account.

Compromise or consideration of property tax payers apparently did not enter into these mediation sessions by city officials. McDougal appears to have been left whole in this redevelopment-financial fiasco, while the city’s finances are punched full of holes.

After reading the mediation document twice, it seems as if McDougal was the only aggrieved party in this nightmarish redevelopment debacle. There is little regard for the city’s property tax payers expressed or conveyed in the settlement terms.

The end result is that the city now owns about $32 million of property purchased with Comerica and McDougal personal loans that have an appraised value of maybe $13 million. The city will be issuing bonds to cover McDougal’s note with Comerica and a Lubbock bank to assume control over all the property.

How did all of this come about? Who should be held accountable? What role did the Lubbock Mafia play with any decisions during the course of this endeavor? What should be done regarding future thoughts on redeveloping the Heritage District?

If all the dots were connected, the history of this redevelopment failure might be connected as follows...if the cynical staff of the CCR was drawing the lines and subscribing to conspiracy theories:

  • Ex-mayor Gears’ personal recruitment and lobbying for Tommy Gonzalez to be Irving’s city manager.
  • Tommy Gonzalez was the former Lubbock assistant city manager when Marc McDougal was mayor of Lubbock
  • Birth of the Lubbock Mafia in Irving with Gonzalez installed as the Capo. The Irving crew should probably include Chris Wallace, Irving chamber of commerce president, who was also working in Lubbock when Gonzalez was there. (Remember, the chamber has a $2.2 million contract with the city that includes $485,000 for a suite at Cowboys Stadium.)
  • Contract redevelopment documents which favored the developer were probably drawn up by city staff with significant input from McDougal and reviewed by the city manager.
  • Contracts approved by a city council sipping Kool-Aid spiked with incomprehension and incompetence to appease a developer.
  • Significant consultant fees and expenses reimbursed to McDougal during the contract period along with their ability to obtain commissions on buying and selling Heritage District properties. (Later it was learned, McDougal did not even have to submit receipts for project expenses. Isn’t that special!)
  • City council fails to hold the developer to contractual obligations during the contract period.
  • City council’s failure to recognize and take action when all signs pointed to the project going south.
  • City council determining that the redevelopment contract should be terminated after citizen criticism of the developer -- for not following through on redevelopment plans -- reaches a boiling point.
  • McDougal probably threatening a law suit if the contract was terminated and they were left holding the bag for any personal or Comerica loans used to purchase property or other development expenses in the Heritage District.
  • City council awakened from their stupor of mismanagement and did not want to be engaged in a law suit with McDougal. A law suit would freeze the property by not allowing the city to take control for future sales until the litigation was resolved.
  • City council agreed to a mediation resolution that basically gave McDougal everything with the city left holding the $34-million bag and an overpriced inventory of property.
  • By not engaging in a law suit, this also kept any dirty city laundry (personnel/political?) from being washed in the light of day.
  • City council ‘spins’ the negotiated settlement resolution as being ‘the best of all possible outcomes.’ (Maybe they had McDougal in mind with this assessment.)

Since one should not identify problems without possible solutions, staff of the CCR believes the following might be of interest. In order to keep this type of mismanagement by city staff and city council from occurring in the future, three items might be considered:

  • A letter of reprimand for poor performance should be issued and placed in the city manager’s personnel file which also hints that he start checking the DMN classified ads.
  • All city contracts should be prepared and vetted utilizing pro bono legal assistance or opinions before being approved by the council to ensure citizen’s interest are protected. (Sort of a contract Ombudsman.)
  • Voters should not re-elect any incumbent council member.

While this may not stop all future city development deals from going off track, it should give pause to those who might be responsible for safeguarding city assets and citizen's interest.

DMN link to mediation document:

…………..Mark Holbrook