Shamsie just needs more support.
We gave him a $2.4 million dollar bond to finance his project and created a TIF district for him, and now he's into us for $675,000 that he promised. But really, shouldn't we just give him a little support?
Once again, the name Mike Shamsie is in the news in connection with controversy and problems with major developments.
First he renigged on his guarantee to reimburse the City of Moline for $675,000 in principle and interest payments which the city has been paying, and the city took a decidedly liberal and compassionate approach, letting him off the hook in hopes he might at least be able to construct something which brings in tax revenue by some open-ended distant point in the future.
The city won't force the developer of One Moline Place to honor his guarantee to reimburse it more than $675,000 in principal and interest payments it has paid on a $2.4 million bond used to fund infrastructure improvements on the project.
Officials say they need to be supportive and encourage the project's completion rather than going after the money. They believe tax revenues from the project will pay off the loan in the next 15 years.
The city took out a $2.415 million bond in 2003 to assist Moline Place Development LLC, in which Mike Shamsie is a principal, with the infrastructure costs of the four-phase residential project.
The city created a tax-increment financing district, or TIF, for the project. New real-estate taxes generated by the development were earmarked to pay off the bond.
Mr. Shamsie signed a personal guarantee in May 2003 that he would pay any interest and principal payments on the bond that were not covered by increased real-estate taxes.
Because the project is not completed to the point where it is generating enough real-estate taxes, Mr. Shamsie owes the city $676,328 -- payments it has covered the past three years.
Mr. Shamsie did not return a message left by a reporter at his office Wednesday seeking comment and did not respond to questions e-mailed to him.
Now Mr. Shamsie has provided a project timetable at their request in which he's scaled back much of the original plans.
One hopes the city doesn't take too big a bath on this when all is said and done.
posted by The Inside Dope @ 2/08/2007
9 comments
9 Comments:
The people running the city of Moline are being extremely patient with Mr. Shamsie. They are not always so patient with redevelopment projects - just talk to the poor guy trying to restore the old Deere house. My guess is that no one except Mr. Shamsie has expressed any interest in doing anything with that piece of land. So we have no choice now that we have loaned him the money and given him the tax breaks. All we can do is keep giving him more time and hope that he can eventually give us some value in return for our investment.
Why are city governments always so eager to rush into deals like this? Whenever anyone tries to ask questions or suggest that the proposal needs more thought and discussion the council ignores them and rushes ahead with the deal.
Just think how Davenport folks, and the River City Reader would react if this was happening here.
Try and not be so negative. Shamsie has a wonderful project here and it is going to get completed. The city doesn't seem to be worried so why are you?
QCI, Good observation, it certainly is true that both yourself, a couple other blogs, and RCR pay much more attention to civic and development issues on the Iowa side.
The list of bum deals and rip-offs which the City of Moline was involved in is a long one. It seems that the Leach era was the golden age for developers. It seemed that anyone who came up with a scheme for development got the city to pony up and subsidize and finance their business plans, but these schemes rarely if ever resulted as promised, and didn't generate a fraction of the supposed tax income the city used to justify their largess.
It just seemed as though the city threw money at anyone with their hand out, but had very poor judgement about what was a good bet and what wasn't.
If Moline were a bank, they'd be belly up long ago. Instead, they just raised taxes to the highest in the Quad Cities.
Anon 7:02.
You write:
"The city doesn't seem to be worried so why are you?"
That's a joke, right?
I imagine you riding in a car with someone who's drunk and weaving all over the place at 75 mph. I'm sure you wouldn't be worried at all, since the driver didn't seem to be, right?
And what is it that allows folks like yourself to be content blissfully unconcerned as to what government does with your money?
Though I'm sure it's a politicians wet dream to have all their constituents be as trusting and lemming-like as you appear, I'm not sure it's the best attitude.
You accuse me of being negative. Where? Keep in mind that I'm not making up the facts in this matter, which certainly appear negative.
I personally wish Shamsie's project had worked out exactly as originally planned. It sounded like a great idea which would add a lot to the city as well as bring in tax revenue.
That didn't happen, unfortunately. As I stated in the post, I hope this turns out well, but it's appearing more iffy all the time.
The negative press has really hurt One Moline Place. It has been reamed by the local newspapers from day one. Controversy with the project makes people leary of buiding or buying there. I personally think they need to remove that existing building that is left from the hospital days. It may have had an original purpose but I think it hurts the overall appearance of the neighborhood.
The next day the paper said that they are not going after Shamsie for the money. They are going on with the project. Maybe you are to new to the area to remember what that property looked like before Shamsie put his mark on that piece of property. It looked like Iraq after a bomb raid.
Don't forget that the Trinity foundation really left the city in a bad position by leaving that property for the city to clean up in the first place. It was a disaster and Shamsie is the only one interested - and his motivation was to get some free money from the city. He's done this before and always seems to get away with it. Nice of us to pay for his new home he built for himself recently in One Moline Place wasn't it??
When Moliners pay their taxes, there should be a line-item called "Shamsie tax refund" because that's one more reason the city is broke. Good job Mayor W.....
Everything Shamsie touches is controversial. When will they learn that he's the scam master?
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