The City of Longmont is hiding something from its citizens to protect a “favored” client: Thistle Community Housing, who has proposed to partner with the Longmont Downtown Development Authority (LDDA) on a mixed-use project in downtown Longmont . The City Council needs to explain why it’s considering giving millions in taxpayer dollars to a non-profit developer with potentially serious financial problems. And the city’s financial director needs to explain why he’s keeping this developer’s financial problems a secret.
Thistle wants $9 million from the city
According to a March 26 Times-Call story, LDDA wanted more financial information from Thistle before moving forward with their project. The article stated, “Under the tentative agreement, the LDDA would put up $5.5 million out of its tax increment financing fund and the city would donate the land — valued last year at about $2 million — and would waive about $800,000 in development fees.” And a “$752,000 financing gap that one side or the other must fill”. According to my math, that’s $9,052,000!
City’s Secret Audit
I received an anonymous tip that the City of Longmont did an audit of Thistle, and that the financial audit revealed serious problems. Although LDDA board members were able to see the audit, no one could keep a copy because Thistle asked the Longmont Finance Director Jim Golden to keep the document’s findings a secret.
Now the city is denying Open Records requests to release this information. Thistle is a non-profit 501(c)(3) organization. How many of you know what that is? I did a random poll of people, none were attorneys, but all knew what a 501(c)(3) was: a group that you can give contributions to and write it off on your taxes. Just about every aspect of these types of organizations is supposed to be open to public scrutiny.
IRS Code mandates Thistle disclose its financial records
When I asked the Longmont City Attorney Eugene Mei about this, his response was: “I am unaware of Thistle’s corporate status, or the law pertaining to 501(C)3 entities.” Let me help out here. At the following link http://www.990online.com/fedlaws.html there is an explanation of this part of the IRS code. Here are some relevant highlights:
26 USC 6104(d). Public Inspection of Certain Annual Returns and Applications for Exemption.
(1) In general.–In the case of an organization described in subsection (c) or (d) of section 501 —
(A) a copy of– (i) the annual return filed under section 6033 (relating to returns by exempt organizations) by such organization, and
(ii) (refers to exemptions, no exemption has been requested)
(B) upon request of an individual made at such principal office or such a regional or district office, a copy of such annual return and exempt status application materials shall be provided to such individual without charge other than a reasonable fee for any reproduction and mailing costs.
The request described in subparagraph (B) must be made in person or in writing. If such request is made in person, such copy shall be provided immediately and, if made in writing, shall be provided within 30 days.
State Records show Thistle $23.5 million in the hole
Thistle’s records, by federal law, are not confidential. Why is Longmont treating it as such? Here’s where it gets interesting, and the point of this story: Thistle did file a short preliminary report with the Colorado Secretary of State’s office, as it is required to do. The numbers are troubling, which I’d guess is why the LDDA wanted more financial information and the city did an audit on Thistle. According to this Secretary of State link, for the year ending 9/30/2008 , Thistle had expenses that outpaced revenues by over $4 million, and an End of Year balance of -$23,535,929. Those are both negative numbers. What hasn’t been released yet is the full report describing the sources of revenue, where the expenses went to, and why they were nearly triple the revenue coming in.
What is in the city audit Thistle doesn’t want the public to know?
Now maybe there is a good explanation for this and the numbers could just reveal what is happening to many non-profits during these tough financial times. But these poor numbers should make the public very curious about what the city’s independent audit revealed. The numbers published online by Thistle were bad enough. What is it that the city found that makes Thistle demand that the findings remain a secret?
If you’ll recall, 2 years ago a similar downtown project was discontinued after it was revealed there was a $9 million “financial gap”. And of course we know about the bait and switch of FasTracks and how the price continues to go up and the construction gets further and further away. Regardless of your opinion about this project and this organization, we need to make sure something similar doesn’t happen partnering up with Thistle.
Some council members are playing favorites with developers
Some members of this council stalled Panattoni’s request to move forward with the redeveloping the Twin Peaks Mall, and their emboldened city mouthpieces have smeared Panattoni, a company with a proven record. Look at Harvest Junction and the news releases featuring new stores and even a new hotel, as well as their plans for a new theater and their overall vision for the mall (no, I’m not paid or asked by anyone to say the above).
But when members of this council favor (Thistle) in an area they’d prefer to focus on (Downtown), it gets completely different treatment, even if they may not be financially sound. Something’s rotten here, and the involvement of those involved, including certain members of city council and city staff, should be held accountable. And preferably before this project even gets close to reality.
Go to the LDDA board meeting on Wednesday and ask some good questions
The LDDA will be holding a meeting this Wednesday April 22 at 528 Main Street at 4:15 p.m. If you are concerned about this issue, show up and ask questions, like: Can Thistle really come up with the money to fund this project, or not? Is the city going to be left holding the bag if Thistle goes belly up? Is Thistle using taxpayer money to get itself out of a financial jam? Ask the council members who were on the Technical Review Committee (TRC) that recommended this project if they are aware of this financial information? The council liaison is Karen Benker (303)774-7745 firstname.lastname@example.org and the staff liaison is Finance Director Jim Golden (who originally denied the Open Records request) (303)651-8629 email@example.com
A dark cloud is going to remain over this project unless Longmont lives up to its promise of open and honest government.
(Picture source: City of Longmont government website)