The Journal Gazette
Wednesday, September 16, 2020 1:00 am

Electric Works probe step closer

City Council slated to hold final vote Monday

DAVE GONG | The Journal Gazette

A Fort Wayne City Council investigation into termination of an economic development agreement for the Electric Works project will move forward, following a 5-3 preliminary vote Tuesday. 

The investigation will cover the decision-making process behind an Aug. 3 decision by the city's Redevelopment Commission to cancel the deal with RTM Ventures, the firm that owns the site.

A final City Council vote on the resolution will be held Monday.

“Since we cannot get Mayor (Tom) Henry and his deputy to voluntarily share their logic model, their motives, the process for terminating the (economic development agreement) with RTM and present hard evidence of their rationale and communications, Councilman (Tom) Didier and I have pursued an alternative at our disposal allowed by state statute,” Councilman Glynn Hines, D-at large, said. 

The resolution launches an investigation and does not automatically issue subpoenas. Instead, a three-person investigation committee would have to request a subpoena from the entire City Council. 

If the subpoena would require an elected official to testify in person, six council members would need to approve the request, under an amendment offered by Councilman Paul Ensley, R-1st. All other in-person subpoenas would need to be approved by a simple majority vote. 

An amendment offered by Councilman Jason Arp, R-4th, expanded the list of people and entities that could be subpoenaed during the investigation to include, among others, Greater Fort Wayne Inc. and the City Council. 

City officials have said RTM Ventures, the firm that owns the former General Electric campus, did not meet the agreement's requirements for bank financing and private equity.

Representatives of RTM Ventures have repeatedly said they disagree with the city's assessment, stating an equity funding gap was much smaller than city officials described it and the firm's bank financing was in place before the July 30 deadline – although it wasn't documented to officials' satisfaction. RTM Ventures claims it has since obtained the necessary commitment documents and could move forward today if the economic development agreement were still in place. 

Presenting the resolution, Hines – who co-sponsored the resolution with Didier – criticized Henry's response to council members' questions. Hines specifically pointed to an email chain last week, in which Henry appears to call Hines a bully. The Journal Gazette obtained a copy of that email chain.

The thread originated with Nancy Townsend, Community Development director, and notified council members of an op-ed column written by Redevelopment Commission President Christopher Guerin that appeared in The Journal Gazette on Sept. 8, hours before Guerin and Townsend appeared before the City Council to discuss the project.

Hines responded by stating there were discrepancies in Guerin's account and added, “You will not be under oath tonight but all of you may be subpoenaed in the future and I would highly recommend your testimony be truthfully so as not to commit perjury.”

Hines' reply was forwarded to Deputy Mayor Karl Bandemer and Tim Haffner, the city's corporation counsel, then passed on to Henry. 

“Just a reminder – 'Bullying is for people who have no confidence in themselves. Most people who bully are scared individuals, scared because they know you have something they don't (self-esteem). Don't let their words affect you, they try to intimidate because they're weak and cowardly,'” Henry wrote back in an email to Bandemer, Townsend, Guerin, Haffner and the entire City Council. 

When reached for comment Tuesday night, mayoral spokesman John Perlich said he was looking into the matter but did not provide further details. 

Council members Arp, Geoff Paddock, D-5th, and Sharon Tucker, D-6th, voted against the resolution. Councilwoman Michelle Chambers, D-at large, was absent Tuesday. 

Paddock, who represents the district where the site is located, said although he appreciates the enthusiasm, he does not believe an investigation is warranted.

“I'm not comfortable moving forward on this particular resolution because I don't believe I've seen anything happen that was illegal, nefarious, behind-the-scenes, untoward, whatever you want to refer to it, including the Redevelopment Commission meeting of Aug. 3,” he said.  

Paddock said his goal is to continue working to revive the deal and he doesn't want the project to get “bogged down” in subpoenas or litigation. 

Arp said he suspects the investigation will overlook key information if council fails to subpoena representatives from Greater Fort Wayne. Additionally, Arp said the bigger question is really how the council could “vote for something that just does not make any financial sense.”

“I described, and even the developers ratified, all of the numbers we discussed at that time – how the project was going to cost three times what an independent valuation of it would be worth,” he said. “And yet this council voted for it.”

Tucker said she doesn't think council members will get the answers they seek, even with an investigation.

“Outside of reading every single email or every single phone call, I just honestly don't believe we'll ever get the answers as to why the deal fell through ...,” she said. “I just don't think we'll be gaining any real solutions or answers to what's going on.”

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