Real Estate Committee wasn’t unreasonable at all

To the Editor:

The recommendations made by the Real Estate Committee are based on an in-depth knowledge of each project as well as input from fellow Port Authority Board members, the City Council and the community. Members are committed to listening to those who choose to be vocal at public forums as well as those who choose to express their opinions individually to them.

The Red Wing Port Authority’s mission is to be “the primary leader for promoting economic and industrial development, together with identifying and coordinating redevelopment for the purpose of enhancing the tax base, promoting employment and contributing to the economic vitality and quality of life in Red Wing.” That mission is foremost in the minds of the members with every decision made.

The Real Estate Committee spent more than a year researching and evaluating the Falconer winery project, its business plan and financial model to make a sound decision about whether it could be the best use of one of Red Wing’s last remaining large land parcels in a way that will help accomplish the Port’s mission — creating jobs and tax base.

We request that readers consider the following responses to the claims by John Falconer and Ann Lowe (R-E, March 29):

1) The Port has always given first position to a lender and refused to give first position to the lender on this project.

The committee made very clear it needed assurances that the property would be utilized for winery and viticulture purposes. This was done in response to local support for a winery operation at that location. In the end, Falconer Winery was unwilling to provide those assurances. In essence, Falconer proposed that if the project did not work, he (or anyone to whom he assigned the property) would have been free to develop the property in any manner as long as it met the uses designated by light industrial zoning. In other similar Port projects, first position has not been given to the lender, but rather to the Port to ensure developments occur in a manner that creates jobs and tax base as well as considers community impacts.

2) The deadlines must become target dates.

The Port wanted assurances that, if the property were sold, development of a winery would indeed take place within the proposed time frame in 2010. The committee felt the applicant’s desire for flexibility to “phase in” the project over an undetermined number of years did not serve the community adequately.

3) The committee did not honor its statements in regard to the return of the earnest money.

The Port agreed to return the earnest money as long as all parties acted in good faith in executing the agreement. The only time the Port would have sought to retain earnest money would have been if the Falconer group would have knowingly and willingly defaulted on the agreement.

4) The Port failed to secure the terms of the well and its water.

The Port and city agreed to allow the winery to use the property’s well for irrigation. The Port was unwilling to commit legal time and expense to drafting this agreement as long as larger issues were looming.

5) The lease was altered from $165 per month to $165 per day. The agreement clearly defined a 14-month lease for $2,250 (about $160 per month) in an effort to encourage the project to move forward in a timely fashion and provide time for the development of project plans and acquisition of permits and licenses. It also defined that, after the initial 14-month lease, the property would either transfer ownership or the lease rate would increase to reflect the actual cost of the money being obligated to the property: borrowing $1,000,000 at 6 percent would cost a borrower $165 in interest per day.

Considering the claims above and the extensive time spent in negotiations, the Real Estate Committee does not believe it has been unreasonable at all. In fact, several board members have received input from community members that too many concessions were being considered. In the end, the deal fell through because the committee was unwilling to recommend moving the project forward without proper assurances that if ownership of this valuable property was transferred, a winery would indeed be built within a reasonable period of time.

The Port does not wish to continue debating this project on the editorial page. Rather, as always, encourages anyone with questions or concerns about the project, any Port Authority practices or decisions made to contact staff or a board member.

Nona Nelson, Jim Kelm, Steve Castner

Red Wing Port Authority Real Estate Committee

Tags: opinion, port, authority