Secured Financing


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Raufeisen hasn’t proved financing, city attorney says

Davenport aldermen may decide this week whether to move forward with Todd Raufeisen to redevelop the former Dock restaurant.

Raufeisen had until last Thursday to prove he has the financing for the $11.2 million project to demolish the vacant restaurant on the citys riverfront and replace it with a 40,000-square-foot restaurant and office building.

What he submitted was insufficient, City Attorney Tom Warner told the Quad-City Times Monday.

It does not appear to (be sufficient) in terms of a secured, legally enforceable financing commitment, Warner said. But its not my call.

Warner said he will brief aldermen on the issue during closed-door meetings Tuesday afternoon.

Aldermen regularly meet behind closed doors Tuesdays in briefings of not more than five council members at a time so they do not violate the open meetings law.

They are not allowed to vote during their Tuesday briefings, but a vote is not needed for the city to terminate its contract with Raufeisen, Warner said.

The City Council voted April 8 to extend the right-to-cure period for the Dock project. In it, Raufeisen had to provide the city by noon last Thursday proof of adequate, available and committed financial capacity demonstrating sufficient liquid assets or secured financing or a combination thereof. And the commitment must be legally enforceable by the creditor or investor.

Failure to meet the deadline will automatically and immediately terminate Raufeisens agreement with the city.

Raufeisen is putting his project on hold until he hears from the City Council or city staff, he said Monday. Last week, he said he was going to begin asbestos remediation Monday morning and demolition in three to four weeks.

Theyve asked me for additional information, Raufeisen said. Theyll review everything. Im confident theyll let me continue.

Warner said the council could reach consensus as early as Tuesday afternoon. If the council agrees Raufeisen hasnt met his obligations, they can allow the agreement to end without a vote. If aldermen choose to extend Raufeisens deadline again, that will require a vote at a regular council meeting.

Aldermen meet Wednesday as a committee of the whole, where they usually do not vote on business unless they suspend the rules. They meet July 8 in a regular City Council meeting.

There will be no decision, but staff will get an idea of how the council wants to proceed, Alderman Gene Meeker, at-large, said.

Meeker said he still supports the project.

Its bad we get into these predicaments now, Meeker said. Its a good project and a great amenity for the downtown riverfront.

Alderman Mike Matson, 7th Ward, said hes waiting to hear from staff Tuesday before making a recommendation.

Ill listen to everybody tomorrow, Matson said. I dont have a position yet.

Alderman Barney Barnhill, 5th Ward, said he expects the council will have a unified statement following Tuesdays briefings.

Weve got to take action on this, Barnhill said. Its an eyesore down there.

Another deadline comes up Tuesday for Raufeisen. He was supposed to have the vacant Dock restaurant torn down.

Part of the councils April 8 vote was to authorize city staff to solicit bids for demolition. Those are expected Thursday, Finance Director Brandon Wright said.

The City Council unanimously approved a development agreement with Raufeisen for The Dock last summer over the objections of Mayor Bill Gluba.

Gluba vetoed the agreement, but the council then voted unanimously to override the veto.

Gluba raised questions over the weekend about Raufeisens financing for The Dock.

In an email sent to interim City Administrator Corri Spiegel, Gluba asked if Raufeisen can be prevented from starting work at The Dock until after a review by Spiegel, the citys legal staff and City Council members.

In the email, Gluba said, my reading is that Raufeisen still does not have a firm commitment for financing. Gluba also questions whether all aspects of Raufeisens plans for a new Dock building have been reviewed by city staff.

Gluba said Monday hes trying to convince aldermen to cut him loose.

Hes like flypaper, Gluba said of Raufeisen. Once you get started with him, youre stuck with him.

Raufeisen accused Gluba of running a one-man show.

Hes fought us for two years, Raufeisen said.

Gluba said he has not been alone in opposing the project, saying the Levee Improvement Commission, which has jurisdiction over the city-owned Dock property, had expressed its opposition prior to the council vote last summer.

The commission consists of Davenport residents who are appointed by the mayor with consent of the City Council.

Gluba said he has raised his doubts to aldermen about both the size of the project and whether Raufeisen was the developer who could pull it off.

I hate to say, I told you so, but the aldermen screwed up on this one, Gluba said. I know its hard to admit when youre wrong, but I hope this time they listen to me.

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