Columbus’ strategy for developing the former Walesboro airport property has changed, based on information that became public late last week.
Private meetings to discuss development options for the property — which involved Mayor Kristen Brown, Columbus Redevelopment Commission member Dave Wright, aviation board president Caleb Tennis, aviation board member Dennis Tibbetts and city consultant Doug Pacheco — were revealed during a joint meeting of the commission and aviation board Thursday night.
The meetings began in February as a way to develop a request for proposals for a developer to purchase and develop the airport property, Tennis said. More recently, the meetings evolved into developing a backup plan for the city, including evaluating and interviewing engineering firms, Pacheco said.
On April 27, the city released the request for proposals to developers for the airport property, which were due in June.
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The request sought proposals to redevelop an estimated 700 acres at the former airport, identified as the only acreage available for economic expansion in Columbus, Brown said in earlier interviews. The aviation board has been renting most of the land as farmland to generate income for Columbus Municipal Airport operations, as the city does not fund the airport’s operational expenses.
The private meetings were revealed when Tennis asked the aviation board at the special meeting Thursday to reject a proposal from Indianapolis developer Hageman Group, the only company that responded to the request for proposals to develop the airport property.
Tennis explained that the aviation board was not in favor of the Hageman Group’s response, as the company proposed spending about $8,500 an acre to purchase the land, far below appraised value. Hageman offered $6 million for the entire Walesboro site as the base purchase price.City officials said the land was appraised at $19,500 an acre, and Columbus manufacturer Faurecia paid about $28,000 an acre for 36 acres it purchased on the airport property in May.Aviation board members gave a hint that something was up Sept. 8 when they tabled an item about the airport property and declined to reveal why.
Tennis explained that aviation board members had learned that the Federal Aviation Administration would have had to approve any sale of the former Walesboro airport property, and the federal agency would not allow a sale for below appraised value.
The need for FAA approval complicated any future sale of the airport land as Faurecia bought its 36 acres at the former airport site for just more than $1 million, Tennis said. The company plans build a $30 million facility to produce emission control systems.
The Faurecia sale happened at the same time the city was attempting to sell the acreage through the request-for-proposal process.
But instead of rejecting Hageman’s offer immediately, Tennis said aviation officials began considering whether the city would be better off developing the land itself instead of selling to a developer, so the city could control the process.
In that vein, the private meetings included representatives of engineering firms who might have an interest in providing economic development and planning services for the property, with the city maintaining control of the sale of individual lots, Pacheco told the boards.
Although aviation board members initially didn’t agree with that, they now think it could be the best way to go, Tennis said.
While the aviation board voted Thursday to reject the Hageman proposal, the conversation became more heated during public comment when the redevelopment commission was asked to approve an engineering contract with HWC Engineering, Indianapolis, not to exceed $135,000.
The contract would be for HWC to create a conceptual and development plan for the property and to produce three exhibits to assist in the marketing and redevelopment of the site. The aviation board anticipates that the company would plat out lots on the property, which would be on file with the city’s planning department, and allow the city to get for-sale signs out on the property, Tennis said.
Columbus City Council members Frank Miller, who is liaison to the aviation board and attends its meetings, and Frank Jerome, who is vice president of the redevelopment commission, questioned why nothing had been mentioned by Pacheco about the ongoing private meetings during his reports in public meetings about development of the airport property.The councilmen asked why they had never heard that the private meetings were occurring or that another plan with HWC was in the works while a company already had responded to a public request for proposals to develop the property and had not received a response.Jerome asked Wright directly why he was asked to attend the meetings and didn’t tell anyone, and Wright replied, “I was available.”
“Why was this not open?” Miller asked members of both boards. “It is a huge project.”
Since none of the meetings involved a quorum of any public board, the meetings were not violations of Indiana’s Open Door law and no public notice was required.
However, Miller said leaving the one company that had responded to an advertised request for proposals in limbo, including keeping a $600,000 escrow check during that time, was not something the city should have done.
“That’s not how the city of Columbus should be operating,” Miller said. “I don’t care for doing business that way.”
Miller and Jerome questioned the process of negotiating privately with engineering firms while the Hageman proposal was still pending publicly, and the company had money tied up in escrow with the city.
Both questioned why the negotiations and background searches of engineering firms was never brought up by Pacheco or anyone during public redevelopment and aviation meetings.
Brown told the councilmen that the city does not bid out engineering services and that selection is based on qualifications.
Miller asked why the Hageman Group was not asked about the engineering services contract to see if the company was interested.
“We did have a discussion,” Brown said, but it was mainly to drive the piecemeal price of the acreage up in Hageman’s proposal. She said the question of Hageman doing the work “didn’t come up.”
John Fairbanks, representing Hageman Group, told the redevelopment commission the company has experienced engineering partners who could have done the work but the company was never asked.
Fairbanks declined to comment after the meeting about the city’s decision.
kup planPacheco told both boards the private meetings were a form of a backup plan, in case the request for proposals did not work out.“We needed to have a second option,” Pacheco said. “And I wanted to have some companies in our back pocket.”
When questioned, Pacheco said he had the meetings with engineering firms after receiving authorization from Redevelopment Director Heather Pope.
Pope, a city department head, has been on leave from the city for about a month, which Brown confirmed Thursday.
Brown told the councilmen that the city must rely on recommendations of professional people hired by the city and that HWC’s selection was not hastily or secretly done.
Tennis said that had the process been done differently, the aviation board would have been vilified for rejecting the request for proposals without having a backup plan in place.
On Friday, city attorney Jeff Logston provided a letter from the Hageman Group to Brown dated Sept. 4, which said the company had been trying to acquire the Walesboro land since late 2013. The letter — from Tom Peck, vice president for investments for Hageman — said the company understood that the city was considering selling the land itself, and if that were the case, offered assistance in the role of purchaser, developer or development consultant.
Peck wrote it was the company’s understanding that the request for proposals response the company submitted on June 15 would remain open for 90 days, and that time period had not expired — as of the date on the letter.
Peck wrote that if Columbus was not interested in continuing discussions with Hageman, the company was asking for its $600,000 earnest money deposit back.
Columbus Clerk-Treasurer Luann Welmer said Friday morning she had not received the earnest money check from the company, which is normally stored in a vault in the clerk-treasurer’s office.
Tennis said the check had been kept in a safe at the airport and was being returned to the company by certified mail on Friday.
As the redevelopment commission approved the contract with HWC, with Jerome voting no, commission member Russ Poling said he liked the fact that the city had a backup plan.
“One thing that has frustrated me is we don’t don’t seem to get anything done,” Poling said of the redevelopment commission, mentioning the Crump Theatre and the amphitheater projects where money was spent but no progress was made.
But Miller countered that when the city talked about the Crump or Mill Race, those projects were all discussed and planned in open meetings.
“This does not seem to be that way,” Miller said.
Saying repeatedly he was in favor of developing the airport property, Miller said this process also should have been out in the open.
Because the contract is for $135,000, it does not require city council approval. Only expenditures of $500,000 or above require council approval.
“The airport board should have publicly discussed this,” Miller said. “The redevelopment commission should have publicly discussed this. It should have been a more public and open process.”
Per the scope of services section of the city’s contract with HWC Engineering, the firm will review the city’s redevelopment plan for the former Walesboro Airport property and conduct additional research. The first team meeting will then be scheduled to gain additional input from the city about the factfinding in order to establish the project budget.
Source: Memorandum of agreement for engineering services with HWC Engineering, Indianapolis