"People like [Minneapolis Community Development Agency executive director Steve] Cramer will say that we as commissioners should have known that this was the way the deal was structured when we agreed to it," says McDonald, a longtime critic of the city's development practices. "I want the public to know that we don't get these kinds of details when these things come before us. They don't tell us that what they have set up hides the facts or we wouldn't have agreed to it.
"It seems to me when you spend government money, whether it's federal or state, there is a responsibility level for openness that goes with that," McDonald continues. "The public has a right to know how their money is being spent. If our city leaders structured a deal to hide details from the public, then that's unacceptable and they should be called on that."
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Cherryhomes insists that she had no idea the deal was private. "This was very informative to me," she says. "I was not aware that mixed-finance agreements meant documents would be private."
But she isn't sure whether the deal can or should be restructured. "At this point I don't know, but we need to be clear about what this kind of agreement means in the future."
City officials may not have known that they were agreeing to a deal they wouldn't be able to scrutinize, affirms the MCDA's Chuck Lutz. But this kind of transaction is common at the MCDA, he says, so no one there was surprised. "Way back during the master planning phase, we told the city council that this would be a mixed-finance deal," he explains. "I think that Jackie [Cherryhomes] understands that mixed-finance means private ownership of public units. But whether she understood that these kinds of documents would then be private, I can't say."
In any case, the fact that so much of this construction process is not open even to city officials does not concern Lutz. "The point here is that we select a developer and we have every confidence that they will do a good job on our part," he says. "I think that this is the best way to do these deals to achieve the product we all want."
It's clear, however, that at least some of those involved in the planning process saw clouds looming on the horizon more than a year ago. In July 2000, Legal Aid attorney Tom Streitz, one of a handful of Hollman critics with any power to change the process, posed some tough questions at that month's meeting of the city panel overseeing the redevelopment, the Near Northside Implementation Committee. Streitz, who represented the individuals who sued to have the projects torn down, asked a McCormack Baron official whether the developer would be evaluating contractors' proposals on its own.
Cherryhomes responded by suggesting that a special committee be set up specifically to assist with the selection of the contractor. "She added that given the public nature of this private deal, there should be representation from the community involved with the selection process," according to the minutes of the meeting.
The oversight Streitz and Cherryhomes spoke of never materialized. Cherryhomes did establish a committee after that July meeting, but its members were only asked to review minority-hiring goals. City officials say they aren't yet sure whether the rest of the details concerning how McCormack Baron and Legacy Management spends the $200 million will remain private forever.
None of this makes Fred Shaw feel any better. On August 2 he received a reply to his letter to McCormack Baron from the developer's Missouri law firm, Bryan Cave, rejecting his demand for the return of the money he spent preparing his bid. "We are in receipt of your letter dated July 10, 2001 protesting the selection of Weis Builders, Inc. for the above-referenced project and demanding reimbursement for proposal preparation costs in the amount of $67,050.00," the letter says. "Your protest and demand are both unwarranted."
At this point, Shaw isn't sure what more he might do. "A lawsuit is expensive, so we hate to do that," he muses. "But we believe we have been treated unfairly. We just wanted an answer to our question about why we didn't get the job. There's still something about this process that we don't understand."
