Scott Rhodes: The city loses more than $3 million of taxpayer money in shadow transaction

Why does the City of Cape Girardeau continue to operate in the shadow of darkness?

My name is Scott Rhodes, and my family and I own The Rhodes Group, a commercial real estate development company.

I am responding to Mayor Stacy Kinder's column dated Dec. 10 and published in the Southeast Missourian regarding the sale of The Greater Cape Girardeau Business Park to Touchdown Development Group.

In late November, I spoke with Mayor Kinder and Dr. Kenneth Haskin, city manager, regarding the sale of the Greater Cape Girardeau Business Park.

My concern was not regarding the fact the park was sold; in fact, I think the sale of the park was a good decision. However, I do not agree that the sale was handled in the best interests of taxpayers. There was a lack of process and transparency with the city in seeking out potential buyers and conducting the sale of the property.

The city's marketing attempts or lack thereof

From the time that the property was purchased in January 2013, I do not recall that the property was ever marketed to the public. Neither do I recall seeing a sign posted on the property.

Even if someone was aware that the property was for sale and wanted to call to inquire about it, who was the contact at the city? Did the city have a marketing plan or listing price?

The sale process or lack thereof

As far as I can tell, the recent sale of the park was never advertised or marketed. However, Mayor Kinder states that the city manager had been "actively engaged in that process, casting a 'wide net' in the area to generate interest from developers."

I am not sure exactly what this means. Our organization has been one of the most active commercial developers in Cape Girardeau in recent years, and I do not recall being contacted about the property nor does anyone in our organization.

This raises a few questions: Why was there not a press release and related news article announcing the city's intent to sell the park? Why was a commercial broker not engaged in marketing the property? Where are the relevant marketing materials, such as signs or brochures? Did Dr. Haskins' "wide net" reach developers outside of the Cape Girardeau area? If local developers like our organization weren't contacted, what about developers in St. Louis, Kansas City, Springfield, Nashville, Memphis, or Little Rock? If outside developers were contacted, what kind of developers were they? Were they commercial, industrial or multi-family developers?

What was the big hurry in making the sale? I always believe time is of the essence, but before our organization would accept a loss ranging from $1.6 million to $3.6 million dollars, I would have slowed down and thought through the process a little longer.

Additionally, Mayor Kinder stated that by selling the property it would save the city four payments of $480,000 -- or $1,920,000 total. This is an outright misstatement. This amount was debt against the property that was paid at closing. This was not a savings.

Fuel to the fire

On Dec. 13, Cape Girardeau County announced that they had reached a deal with Touchdown to purchase six acres in the park for $750,000 -- or $125,000 per acre. This is one of the more visible and accessible parcels, so that may explain the premium price for those six acres, but did the city and county ever talk to each other to allow local tax dollars to be used as efficiently as possible? This announcement was made 71 days after the city council approved to sell the property to Touchdown.

The city's authority

The city states they had authority to do this in closed session and they may. However, they forgot that legal and ethical are not interchangeable.

The Rhodes Group's prior experience

In May 2005, our organization partnered with another local organization and purchased the former Public Works property which was owned by the City of Cape Girardeau. Culvers and Plato's Closet are now located on this property.

The property was advertised for auction; however, the city did not receive an offer causing the property not to sell. At that time city leadership reached out to developers, and ultimately our organizations negotiated a deal and purchased the property.

Although the sale didn't happen with the auction, the city had a defined process by advertising the auction which gave the public the opportunity to bid.

The city leaders operating in the shadow of darkness may have cost the taxpayers millions of dollars, but one must also ask the questions: Why would they choose to operate in this manner and what other decisions are made in this reckless manner?

To the new owners

I want to be clear that I do not begrudge the Touchdown Group. They had a deal handed to them, and they took it. For the community, I hope they have a prosperous development.

Scott M. Rhodes is co-owner of The Rhodes Group.