Avon beats up on Lindholm
September 7, 2005
At Tuesday night’s Avon Council meeting, council members took on the the Village at Avon’s Magnus Lindholm and the Traer Creek Metro District for the Metro District not paying the developers of the Buffalo Ridge affordable housing project several hundred thousand dollars in payments that they claim is owed.
However, Lindholm claims that the developer, Corum Real Estate Group, signed an agreement, with the understanding that as taxes are raised by the district, a portion would first go to pay outstanding bonds of the Metro District, then when available, to Lindholm’s Traer Creek LLC, and then when available, a portion in taxes received would go to Corum.
Traer Creek Metro President Dan Leary does not dispute that Corum is owed money, but claims the contract is clear that money is not due Corum until enough taxes are collected. He claims there is no date certain as to when Corum would be paid.
Hey, a deal is a deal in my book, even if it’s a bad deal. Unfortunately for Corum, they apparently are close to defaulting to their lender on the Buffalo Ridge project.
Clearly, the tone of the majority of Avon council members was to put pressure on Lindholm, as though he should be a good citizen and front the money to Corum, even though Lindholm’s company has yet to receive it.
At one point, Avon Mayor Ron Wolfe, a decent fellow, implied that Lindholm would get bad press if he didn’t do that. And Councilman Brian Sipes, another decent fellow, seemed to think that the Lindholm should be the solution to the problem, rather that the town bailing out Corum.
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But Yours Truly told the council that the issue is not Lindholm’s problem, nor should it be the Avon taxpayers’ problem. Rather, the issue is Corum’s problem and also Corum’s lender’s problem.
Council was told by me that taxpayers should not be guarantors of private business deals gone south. Taxpayers never voted to approve this deal. Then, I cited the airline bailout of 2002 as an example of taxpayers getting soaked by giving multi-millions to the airlines, who in turn, have made us pay through the nose for airline tickets ever since, with the exception of occasional deal offerings when business is slow. Hey, I should know. I’m in the travel business.
Rather, government should forego any thought of bailing out bad private business decisions, and allow the companies that make them to go bankrupt.
Frankly, it is usually better for the public if the defaulting businesses go out of business, and the assets are purchased at a discounted price. For example, if Corum’s lender takes back a portion of Buffalo Ridge in foreclosure, they will either rent out the units themselves, or sell them to a new owner for less than Corum would have to charge.
The new owner would be in a position to offer the public even lower prices on housing rentals, because they wouldn’t be invested as heavily in the project as Corum is. This is not personal against Corum. It’s just business. Nobody held a gun to Corum’s head to make their deal with Lindholm. Nor did anybody hold a gun to the head of Corum’s lender to loan Corum money. They are all big boys and girls.
And, don’t forget, Eagle County Commissioner Arn Menconi actually was instrumental in giving Corum approximately $200,000.00 a while back, when he and former Vail Councilman Rob LeVine voted to take money from an Eagle County 6320 corporation, Lake Creek Housing, and gave it to Corum, against Commissioner Tom Stone’s and former Commissioner Michael Gallagher’s wishes. Stone and Gallagher then removed Menconi from the Lake Creek board.
I also spoke out at the time against the idiocy of the gift by Menconi and LeVine from the Lake Creek board, which had no legal association with the Avon project.
And, Lindholm himself mentioned that if council gives Corum the money, it would probably not be enough to bail out Corum, suggesting it would just be more good money after bad. Apparently, even Town Manager Larry Brooks acknowledged last year that Corum would probably be back for more, after the idiot Menconi and LeVine decision, according to former Avon councilman Peter Buckley.
Speaking of Menconi, he appeared on KZYR Radio Wednesday morning to condemn the “I am not Arn’s poodle” Vail Daily headline, referring to the perception that new Commissioner Peter Runyon does not think for himself. Menconi attacked the local Colorado Mountain News Media newspapers, saying they have “no investigative reporters.” It was almost reminiscent of the ludicrous Gary Hart statement in a previous presidential election, when Hart, a married man, challenged reporters to “follow him around” if they wanted to, suggesting “they would be bored.”
So, a reporter did follow Hart around and guess what turned up? Gorgeous girlfriend Donna Rice and a boat called Monkey Business.
I wonder if the Daily’s reporters are up to Menconi’s challenge?
Naw, probably not. They like Menconi too much to actually investigate him. After all, most reporters are liberals like Menconi. But, what was Arn thinking, making that kind of statement? Dumb, really dumb!
Michael Cacioppo, a former conservative radio talk show host and newspaper publisher, is managing director of BookPlayaDelCarmen.com LLC, a local travel planning consultant on vacations to Mexico. This column, as with all personal columns, does not necessarily reflect the views of the Vail Daily.