Bob Dunn is not easily deterred. Despite a series of disruptive controversies, he remains upbeat about his company's chances of undertaking a $109 million renovation of the Edgewater Hotel.
"I'd say generally we feel as though we've made significant strides forward," says Dunn, president of Madison-based Hammes Sports and Entertainment. "We've had a tremendous amount of support in the community."
Among other things.
Madison's city attorney, Michael May, has affirmed that Hammes apparently engaged in "violations of the Madison lobbying ordinance." And concerns have been raised about its efforts to drum up Internet posts and a past lawsuit against the city of Miami.
On Aug. 11, former alder Brenda Konkel filed six lobbying complaints with the city clerk, including allegations of falsified registration documents and failure to register and authorize lobbyists.
"I welcome Brenda's complaints," says Ald. Mike Verveer. "In my opinion, this is clearly a great example of why the [lobbying] ordinance is important and helpful to people, particularly given the unorthodox, behind-the-scenes methods in which Hammes has proceeded these many months."
Hammes has until Aug. 29 to respond before the City Attorney's Office decides what actions to take. It could seek up to $79,000 in fines and a suspension of lobbying privileges. In the past, the office has issued warnings and sought compliance rather than impose penalties.
While the redevelopment of the $5.3 million Edgewater Hotel would be done by Hammes Sports and Entertainment, a subsidiary of Brookfield-based Hammes Company, the hotel's owner would be a company named Landmark X.
Landmark X has six registered lobbyists, including Dunn and two other Hammes Sports employees. The company is asking Madison for $16.8 million in tax incremental financing (TIF), one of the largest requests in city history.
Who will get that money? One of the complaints is that Landmark X's composition is unknown. The city requires lobbyists to name partners if their principal is a limited liability company (LLC). Five of the six Edgewater lobbyists, including Dunn, stated in their registrations that Landmark X is not an LLC.
But according to the State Department of Financial Institutions, Landmark X is indeed an LLC, created Feb. 6, 2004. Dunn says that he, personally, is its principal partner. He will not yet name the other partners, but he says he will if required to by the ordinance.
Dunn declines to explain why he claimed Landmark X is not an LLC, the subject of one of Konkel's complaints, or why Landmark X did not report lobbying activities, but says there was no intent to violate the law.
"The ordinance is not terribly clear," he argues. "We're working with the city to clarify issues with the ordinance and better understand what their requirements are. I'm very confident that as we go forward we'll be in full compliance."
Konkel notes that the sole Edgewater lobbyist who correctly identified Landmark X as an LLC is former City Attorney Henry Gempeler. Gempeler, she says, "works with the lobby law and the registration forms and statements on a regular basis, so it's not like they're unfamiliar with the ordinance. This is not rocket science."
The City Clerk's Office offers a text of the ordinance, a training video and guides to lobbying forms on its website (an Isthmus article published July 2 warned that Hammes appeared to be violating the lobbying ordinance by failing to register or file contact and spending reports in 2008, and by registering lobbyists too late in 2009. The company still failed to file 2008 reports before the next deadline, on July 31. These apparent violations are included in Konkel's complaints.
As Isthmus reported, Hammes helped create a neighborhood group that serves as an alternative to Capitol Neighborhoods, which has been critical of the Edgewater plan. It is also heavily focused on public relations with, as Verveer points out, a strong behind-the-scenes component.
On Aug. 5, Hammes community relations director Sarah Carpenter emailed supporters, asking them to monitor and post to specific blogs and forums. Hammes even offered to create text for posts.
"We will notify you each time an article appears in the paper," Carpenter wrote, "and we will assist you by drafting and distributing key message statements so you can tailor your comments for specific audiences."
Asked about the email, Carpenter was initially taken aback: "Where did you get that? It was sent to a very select list of people." She recovered to say, "No comment."
Dunn says there's nothing unusual about orchestrating signs of support. "It's fairly typical on projects," he says. "We work very hard to communicate with a broad range of different interests, oftentimes supporters, making sure that we're speaking about fact, clarifying issues."
Despite these efforts, significant opposition to the project was apparent at a Landmarks Commission hearing on Monday and a neighborhood meeting on Tuesday. At Tuesday's meeting, which drew nearly 300 people, Dunn assured the group, "Our effort has been to work slowly." But according to information distributed by the city and Hammes, the approvals process, which has just begun, could be over as early as Nov. 3, with construction starting in early 2010.
Supporters point to Hammes Sports' many successful projects, but whether those are comparable to the Edgewater is unclear. The firm provides a variety of consulting services, so the definition of a Hammes Sports project varies. For the Kohl Center, for example, the firm provided project management. For Lambeau Field, it offered financial, development, marketing and operations-planning services.
Instead of consulting, are there properties that Hammes Sports/Landmark X developed, owns and operates, as it would with the Edgewater?
"Here in Wisconsin, we have Brookfield Lakes in Milwaukee," says Dunn. "It's a large commercial office park." He says that it's owned by "a variety of different interests within the company."
Actually, Brookfield Lakes Corporate Center was a project of the parent firm, Hammes Company, which sold it in 2006 for $80 million to Core Realty Holdings of Newport Beach, Calif. It remains the corporate home of Hammes Company, which manages it. According to news accounts, after a 15-year divestment it was the last commercial real estate property the company owned.
A Hammes Sports project that did not go well was the Orange Bowl. After a redevelopment deal soured, the company brought a compensatory lawsuit against the city of Miami for more than $2 million. Miami had wanted to hire the parent firm, not a Florida LLC created by Hammes Sports.
Officials felt they "were tricked into a contract with a company that would be less liable for mistakes and mismanagement," wrote Miami SunPost reporter Ryan Brown. The city settled in 2006 for $750,000. Former city manager Joe Arriola complained, "They are getting away with murder."
"I gotta tell you, I think the situation in Miami is real cut and dry," says Dunn.His version ofeventsis that the Hammes Sports contract was awarded through an emergency bidding process put in place after hurricane damage. "The city of Miami came under tremendous internal scrutiny from their audit department over their contracting practices," he says. "They tried to void our contract, at which point we filed a claim against the city. We prevailed completely in the claim. It's real simple. It was entirely politically motivated."
Madison is also a very political city, especially when it comes to development, but Dunn insists there are absolutely no lessons to be drawn from Miami. "I think our relationship with the city of Madison is very good," he says.
Still, Konkel remains concerned about the larger picture. "This isn't just a tiny project that's going to build 32 units downtown," she says. "This is a $100 million project, with a substantial amount of TIF money being put in."
