Cheryl Hentz of Eye on Oshkosh emailed questions to Oshkosh Common Councilor Meredith Scheuermann regarding the Five Rivers project. Scheuermann forwarded the questions to Director of Community Development Jackson Kinney. Below are Hentz's questions followed by Kinney's response.

Kinney statement before answering the questions: First, in the Council's approval of the Term Sheet, the Resolution authorized the proper officials to enter into an agreement with the developer based on the parameters in the Term Sheet document. Also, various Security/Guarantee measures will be built into the Development Agreement to help protect the City/RDA's interests.

Hentz Question: Who decides if the term sheet has "substantially" changed or not? Jackson Kinney? Warren Kraft? Richard Wollangk? All of the above? and wouldn't you think that a contractor underwriting some or all of the very project they're going to work on is a substantial change?

Kinney Response: City/RDA staff will determine if there is a substantial change to the parameters in the Term Sheet. This would be a reasonable interpretation of City/RDA staff responsibilities. It needs to be recognized that the Development Agreement document will be a public document and the Council and general public will see that document and there should be able to be a rather straightforward recognition of whether a substantial change has occurred from the basic parameters set forth in the Term Sheet document.

Hentz Questions: There's been a lot of talk about "pay as you go" TIFs and those which are "direct pay." It's been well-documented that the "pay as you go" better protects taxpayers' interests. If this doesn't come back before the council, who decides which pay option developer Tom Doig and his friends get? Jackson Kinney? Richard Wollangk?

Kinney Response: The Term Sheet does give Five Rivers the option of selecting either the "Direct Pay DAG" or the "Pay-As-You-Go DAG." While the "Pay-As-You-Go DAG" may be the preferred DAG approach from a City/RDA perspective, we also recognize it is more the exception than the rule when it comes to the provision of assistance in support of projects. We wanted, however, to at least include the option for a "Pay-As-You-Go" DAG, so if the developer could see an advantage to taking assistance on that basis we would be in a position to work with them in that regard. The developer has, however, indicated they wish to receive a Direct Pay DAG.

The Term Sheet spells out the format for either DAG funding approach.

The Term Sheet document, page 5 item C, "has given Five Rivers the option to choose either."

Hentz Question: Exactly how much of this project is C.D. Smith financing and why would a contractor finance a project like this? You'd think they'd want to MAKE money, not just break even. If they're underwriting it, where and how do they make a profit and how much of the grant money do they get?

Kinney Response: According to CD Smith's commitment letter of May 31st, they state: "Funds will be advanced and provided for all phases of construction, including all hard and soft costs, as more specifically provided in a construction contract between Smith and Five Rivers and development agreement between Five Rivers and the City of Oshkosh (the "City"). The financing will be in an amount sufficient to complete the Project less any amounts awarded to Smith pursuant to developer's assistance grants through the creation of a tax incremental finance district by the City of Oshkosh (the "City")."

As noted in the City's Press Release of last week: "Upon initial review, the commitment appears to meet the financial requirement of the amended term sheet dated March, 2006. However, the city and its consultants will continue to review the commitment letter and will meet with the parties to ensure common understanding of this commitment."

Hentz Question: If C.D. Smith is getting some or all of the grant money available for this project, what is to prevent them from stopping the project partway through - basically taking the money and running? We've certainly seen other companies take our money and run, or have we forgotten Wisconsin Automated a few years ago? Different circumstances true, but the Common Council at the time operated on information given to them by Jackson Kinney and we all see where that ended up. I do not believe Mr. Kinney is as careful as he should be OR he simply doesn't have the taxpayers' best interests in mind.

Kinney Response: As pointed out previously, various Security/Guarantee measures will be built into the Development Agreement to protect the City/RDA's interests.

Hentz Question: How did C.D. Smith automatically become the contractor on this project? It is being built in a TIF district with a lot of TIF money being funneled into it. Where is the competitive bidding on the job or is this yet another project where the public will be told bids can be waived? If so, I would like someone in the Attorney General's office or State Legislature to explain to us under what conditions bids ARE necessary.

Kinney Response: It's not up to the City/RDA to select the contractor on the construction of the hotel/resort complex, that's an obvious developer responsibility, and those are not "public improvements" subject to public bidding.