SIOUX CITY | While they said it isn't exactly a "win," City Council members on Monday agreed the timing and terms were right to approve a deal that could end the years-long legal wrangling over a Fourth Street commercial development.
The council unanimously approved a settlement agreement with Civic Partners and its owners regarding the building at 924 Fourth St. The deal will allow the city to recoup some of the $2.5 million that an ill-fated commercial development deal has cost the city.
"These are the kind of deals you plug your nose and vote for them, even though they stink," Mayor Bob Scott said of the settlement.
The settlement also opens the possibility of a sale of the property or for tenants moving into its long-vacant spaces.
Jeff Wright, a private Sioux City attorney representing the city, told the council he believed the deal was "as good as we're going to get."
Civic Partners, a California-based developer, is accused of defaulting on a $5.63 million bank loan for the project, built at a cost of $13 million in 2001. After years of losses, the company filed for Chapter 11 bankruptcy protection in April 2011 in U.S. Bankruptcy Court in Sioux City. That action came five months after Northwest Bank (known as First National Bank at the time) had filed for foreclosure.
Under the agreement, the city will drop all litigation against Civic Partners and its owners, Steve and Rose Semingson. It will also reduce the property's assessment of approximately $10 million to a minimum valuation of $6 million for a five-year period.
In return, Civic Partners will forgive the final $300,000 payment the city owes on the defaulted loan guarantee and reimburse the city for the $300,000 payment made in 2017. Civic Partners also has agreed to pay the city $852,000 within one year of the bankruptcy case dismissal. That could rise to $1 million if paid after one year of the dismissal but within two years.
Councilman Dan Moore applauded the work of the city's legal counsel on the deal and said he believes the city needs to move forward.
"I think it's time to move on and to do what we know is the right thing to do with the development and see good things happen at that location," he said.
Scott said after the meeting that he's hopeful that a developer will acquire the building who will be able attract tenants.
Civic Partners constructed the one-story building in 2004 with millions of dollars in tax incentives and loan guarantees from the city. Promenade Cinema 14 opened in 2005, but nearly all of the remaining 12,000 square feet of retail space remains vacant.
Water problems identified shortly after the facility opened in late 2005 led Main Street Theaters, the Promenade's Omaha-based owner, to seek a renegotiation of rent payments for the movie theater space. A settlement lowering the lease amount paid by Main Street to Civic Partners fell apart in 2010, leading to Northwest Bank's foreclosure filing, which led to Civic Partners' bankruptcy filing.
In 2013, a judge ordered the city to pay the portion of the defaulted loan the city had guaranteed. The city paid $1.3 million in 2013 and has made yearly payments of $300,000 since then, bringing the total paid to $2.5 million. The final $300,000 payment, now forgiven under terms of the settlement, was due in 2018.
A bankruptcy court judge at one point dismissed the bankruptcy case, a ruling that was later overturned on appeal.
Earlier this year, Northwest Bank dismissed its foreclosure action after agreeing to a deal with Iowa Holdings, a California limited liability company that is an affiliate of Civic Partners and Semingson, in which Iowa Holdings bought Civic Partners' loan from the bank for $3.6 million, far less than the $6.3 million in principal and interest court documents showed was still owed.
The action meant Civic Partners was in debt to the new holding company instead of the bank, and also meant that the city would have made the final $300,000 guarantee payment to the same developer who owed the city money.
The settlement cancels that payment and settles the city's lawsuit against Semingson that sought $505,601, the amount the city paid to a bank to settle another defaulted loan the city had guaranteed. Payment of all or a portion of that total is included in the funds Civic Partners will pay to the city.
Next week, the council will be asked to pass a resolution amending the assessment agreement. The settlement and amended assessment agreement then will go before the clerk of bankruptcy court to be submitted for a judge's approval and dismissal.
SIOUX CITY | Less than two weeks after the death of her mother, Makenzie Montano called Andy Cavins, volleyball coach at Lindsey Wilson College in Columbia, Kentucky.
Montano told Cavins she had nowhere to go. She needed help.
Montano and Cavins stand in Sioux City this week to compete for the NAIA National Volleyball Championship. The tournament represents the final action for Montano in a most fulfilling playing career, one whose collegiate arc began in August 2012 when Donna Montano was diagnosed with stage IV kidney cancer.
"On the second day of my junior year in high school, my mom had a nine-hour surgery," Makenzie Montano says.
Makenzie's parents, Tony and Donna Montano, divorced when Makenzie was 5 years old. Her older sister, Morgan Montano, was a student at Western Kentucky University in 2012. It meant that Makenzie, a junior at Mercy Academy High School in Louisville, Kentucky, resided at home, largely alone, during her junior year. Well, when she wasn't sleeping next to her mother at the hospital.
The cancer moved to Donna Montano's spine in February 2013. Six months later, Makenzie Montano signed a volleyball scholarship offered by Queens University of Charlotte, North Carolina, an NCAA Division II institution nearly 500 miles from Louisville.
However, by the start of Montano's high school senior year, her mother's condition worsened. By the early spring of 2014, the family knew time was running out. Makenzie and her date for the senior prom stopped by the hospital to see her mother.
On July 3, 2014, Donna Montano collapsed at home. Makenzie rode along in the ambulance, shouting at her mother, imploring her to wake up. "She was having seizures and would only respond to my voice," she says.
Eleven days later, Makenzie sat with her mother in her room at an assisted living facility in Louisville. Her mother rolled away from her daughter and lay on her side, prompting Makenzie to ask, "Mom, are you OK?"
"My mom turned back over, looked me dead in the eye and said, 'I love you more than you will ever know.'"
It was the last time Donna Montano spoke. Seconds later, she suffered a seizure and fell into a coma. She died a few hours later, at 12:27 a.m. on July 15, 2014, just three minutes after Makenzie and sister Morgan ran into her room. Makenzie said it was her mother's last selfless act, shielding her daughters from watching her die.
"That was just like Mom," Makenzie says.
Makenzie Montano, then 18 years old, helped plan her mother's funeral. She signed papers to have her cremated. She stayed at home, surrounded by her sister and her father. In a matter of days, she was supposed to make an eight-hour drive to Queens University.
"Around July 25, I called the coach at Queens and asked for my release from their scholarship," she says. "I told them I couldn't go that far from home. I wasn't ready to do that. They understood."
She then called Coach Cavins, a man who had served as a recommendation for Montano's scholarship application at Queens. Cavins had coached Montano in one season of club volleyball. "I called Coach Cavins and said I had nowhere to go," Montano said. "I asked if he could help me out."
He did. Cavins asked Montano to fill out an application for admission to Lindsey Wilson College. She followed orders and did it that night. Officials expedited the paperwork and let Montano know that, as a high school graduate with a 3.98 grade-point average, she'd earn academic and athletic scholarships.
"I'd never been to Lindsey Wilson College before," Montano remembers. "I'd barely heard of it. My only connection was Coach Cavins."
She made the 102-mile drive and visited the school on July 27, 2014. She moved in one week later. She has since started four years as the setter for the Blue Raiders, who begin pool play in the national tournament at 9 a.m. Tuesday against Texas Wesleyan, of Fort Worth Texas.
"I didn't chose Lindsey Wilson," Montano says, "Lindsey Wilson chose me."
The college, she says, saved her, allowing her to remain close to home while extending her playing career, something she's passionate about. Coach Cavins and his wife, Jessica Cavins, and their 3-year-old son, Kellar Cavins, have become Montano's second family.
Cavins called his setter this summer and asked to connect with her father, Tony Montano, simultaneously. Cavins took the opportunity to laud the elder Montano for his support of his daughter through an extremely trying time. "I wouldn't have made it without my dad," Makenzie Montano says.
And then Cavins disclosed that his star setter, a first-team NAIA All-American as a junior, would be on full scholarship her senior year. The news allowed the Montanos to go car shopping as Makenzie had been without wheels for six months following an accident.
After her graduation, Makenzie Montano, a communications major with a 3.94 grade-point average, plans to enter graduate school at Lindsey Wilson while possibly working as a graduate assistant in the volleyball program, one way in which she'll return some of what Lindsey Wilson College has offered her.
While Montano, player of the year in the Mid-South Conference, can't wait to get going in the national tournament, she remains a bit reflective this week, examining how her mother's fight against cancer ultimately set her collegiate volleyball career in motion.
Her mother, she says, is never far from her thoughts, especially on the volleyball court. She shows off a tattoo that reads, "Always on my mind. Forever in my heart. 7-15-14."
"The tattoo is on my right side, which is odd for a tattoo on the ribs," she admits. "I did that to hide it, and because my mom was always my right hand, my best friend."
The Blue Raider setter also wears a necklace. Before each match, she removes the necklace and, prior to placing it in her bag, gives it a kiss.
The necklace also features that date: 7-15-2014; a day she'll never forget, for all the right reasons.
SIOUX CITY | In separate Monday meetings, the Sioux City School Board and Sioux City Council nearly simultaneously approved a sharing agreement that will allow the district to re-purpose unused portions of the downtown public museum for specialty courses.
The school district in mid-July approved a purchase agreement with Museum Building Property Inc. to pay $1.5 million for 75,000 square feet of the building at 607 Fourth St. That purchasing-process step necessitated the new lease agreement between the city and the district.
The city council voted first on the agreement, passing it 4-0, with Councilman Dan Moore -- who serves as the school district's legal counsel on real estate matters -- abstaining. The school board followed just over an hour later with a 7-0 vote, so the 50-year lease has been set, at $1 per year.
The district's plans include constructing new rooms in a portion of the museum building that at one time housed a Delta Air Lines call center before the center closed in 2012, which resulted in 165 lost jobs. A large portion of the building was converted into a more expansive home for the public museum.
The lease says common area charges will be split between the museum and the school district based on the square footage used. The museum will be responsible for 45 percent of the costs with the exception of the elevators, where it will be responsible for 20 percent.
The move is seen by the district as a more centralized way to offer Life Academy and Career Academy courses, which have previously been spread through all three high schools -- West, North and East -- as well as Western Iowa Tech Community College and the downtown Ho-Chunk Centre. The classrooms could be converted by the 2018-19 school year.
The goal is to soon no longer use the high schools for the Life Academy and Career Academy courses. They will then only be held in Ho-Chunk and the museum, which is also where school district administrators are located in the wing called the Education Service Center.
The district's growing Career Academy allows students to take specialty courses in 36 so-called pathways, covering business and marketing, family and consumer science, health science and industrial technology.
"The Career Academy classes are open to all high school students who elect to participate. The Sioux City Career Academy even offers these classes to students who attend private schools, homeschool, or from any other area public school districts," said school district spokeswoman Amanda Mayo.
Most Sioux City Career Academy courses follow a sequence, offer college credit, and in many cases offer a level of certification toward the workforce or further post-secondary study.
Life Academy courses have been held at WIT, but college officials have said they need that space for other uses. The Ho-Chunk Centre space is leased for Career Academy courses at a cost of $75,000 annually through 2024.
"Next year, courses will still be held in the Southern Hills Mall and Western Iowa Tech as well as in the Ho-Chunk Centre, at the Harry Hopkins Campus, and at all three of our high schools. However, the long-term goal is to use just the Harry Hopkins Campus for a portion of the Career Academy courses (in Ho-Chunk) while also offering Career Academy and Life Academy courses in the expanded downtown campus at the Education Service Center," Mayo said.