City Council approved a $13.4 million settlement Tuesday for the failed Shipyards project, closing the book on the latest chapter of the Downtown riverfront property. Crescent Resources LLC and its subsidiary, LandMar, filed for Chapter 11 in 2010, with the $13.4 million representing the city’s portion of what’s been recovered.
LandMar entered into an agreement to redevelop the property into an almost $1 billion mixed-use community, but fell flat after putting close to $20 million worth of public improvements into the property.
Council decided to put the funds directly into the general fund instead of a reserve account. Combining the funds follows a U.S. Treasury rule that allows the money to be considered investment proceeds spent on government purposes.
It will have to be spent within six months, but with budget discussions approaching and the Oct. 1 start of the next fiscal year within that time frame, there shouldn’t be a problem.
There wasn’t any discussion from council members Tuesday evening on specific purposes for the cash influx, but council President Bill Gulliford said he opposed it being applied for operational costs. Instead, he said, it would be better served offsetting debt obligations or applied toward capital maintenance.
Council Finance Chair Greg Anderson has suggested the funds should be used to complete the Southbank Riverwalk in its entirety instead of borrowing the $2 million. Council passed an ordinance to bump the $15 million project to $17 million to complete it at its current footprint.
The Downtown Investment Authority also has staked its claim to the funds by passing a resolution for the entire amount.
Also from council Tuesday:
• Council members heaped praise upon Kelley Boree, the former City Parks and Recreation director who recently took a job with the State Department of Environmental Protection. She now serves as the director of Division of State Lands.
“You’ve been a true champion,” council member Johnny Gaffney told her.
Others echoed the sentiments, with Jim Love calling it a loss to the city but gain to the state while Bill Bishop praised her for her even-tempered demeanor and being a “fantastic” representative to the public. After the kind words, council passed a resolution honoring her.
• After questions and lengthy discussion, council passed by a 16-2 vote to appropriate $400,000 from the Office of General Counsel’s retained earnings account to a legal charges account to pay for expert witnesses. Council members John Crescimbeni and Matt Schellenberg opposed it.
That vote came after a failed attempt to postpone any action until questions about expenses were answered. General Counsel Cindy Laquidara said the expenses could be explained, but holding off on the appropriation meant delaying cases that ultimately cost the city money.
The check isn’t in the mail — it’s almost in the bank.