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TEDA to seek retraction of false report

Jodi Summit
Posted 10/9/19

TOWER- The Tower Economic Development Authority (TEDA), last week, voted unanimously to send a retraction demand to the Tower News and its publisher, Gary Albertson, with a deadline of Nov. 1 to …

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TEDA to seek retraction of false report

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TOWER- The Tower Economic Development Authority (TEDA), last week, voted unanimously to send a retraction demand to the Tower News and its publisher, Gary Albertson, with a deadline of Nov. 1 to address a false and defamatory “news story” written by Steve Altenburg, which the Tower News published on Sept. 13.

Altenburg has claimed on multiple occasions that he submitted a claim months ago to the state auditor’s office, detailing wrongdoing relating to the city’s loan to Tower Harbor Shores, but to date has refused to show TEDA or the city council a copy of the complaint or any accompanying documents.

TEDA will also be submitting a detailed PowerPoint presentation to the state auditor’s office, all based on the relevant city documentation, that shows the city’s and TEDA’s handling of the Harbor Shores loan was done properly and was well-documented.

TEDA members were clearly ready to take proactive steps to address the drumbeat of negative and false reporting, which members fear is hurting the city’s economic development efforts.

“I find it very disturbing that he [Steve Altenburg] is claiming we didn’t do our job,” said TEDA member Joan Broten. “I am tired of the negative undermining, with no regard or respect for this committee.”

TEDA vice-president Marshall Helmberger, who had assembled the information in the PowerPoint presentation, agreed. “We do have to take a stand here. There has been enough negativity. I always like to think that people have enough sense not to believe the garbage that comes out, but some people want to believe the worst, sometimes.”

“This is not just TEDA being dragged through the mud,” noted Helmberger. “It is creating problems for prospective developers. These are people the city asked to come and do a project. They are being accused of receiving money illegally with no evidence at all. We need to do what we can to make sure their names are cleared.”

TEDA member Dick Larmouth said the allegations create a cloud over TEDA and may turn off other investors.

“We need to turn that attitude around,” he said, “and create a more friendly environment.”

Audience member Mary Batinich, who leads the group restoring the Lake Vermilion Cultural Center, said they are hearing feedback from potential donors who are concerned about “the mess in Tower.”

“I have also heard from someone who was looking to buy a house in Tower, who had similar concerns,” said Batanich.

The Tower City Council, at their Sept. 30 meeting, had directed Altenburg to attend the Oct. 3 TEDA meeting and bring any evidence to back up his claim. They also directed Altenburg to discuss the issues with TEDA to try to resolve his questions.

Altenburg was present at the meeting but did not comply with the council’s request to engage with the TEDA board. Instead, Altenburg spoke briefly during public input, telling the board that “on the advice of legal counsel, I have been instructed to inform you this meeting is being recorded for evidentiary purposes, regarding egregious violations of whistleblower protection act perpetration by Tower City Council, forcing an employee to attend a meeting on his own time, and attempting to interrogate, harass, force and intimidate, over a legally-protected submission of legitimate concern to the proper authority.”

Laying out the facts

The TEDA presentation (which can be found online at www.timberjay.com) went through the Harbor Shores loan process, step by step, documenting how TEDA applied for and received the monies as a grant from the IRRR, specifically for the Harbor Shores development. The presentation outlined how TEDA documented that the loan met the guidelines TEDA had developed, including the requirements that it fund only eligible uses and that the developers have at least a 50-percent equity stake in the start-up funding.

“There is nothing in these findings that anyone could point to that were erroneous or fraudulent,” said Helmberger. “Altenburg stated the loan met none of the requirements in the guidelines. This is a provably false and reckless statement.”

The presentation noted that neither the IRRR or the city’s auditor raised any questions on the loan approval, except for questions raised by the auditor on the documentation, interest calculations, and handling of the loan by the former city clerk/treasurer.

The allegations by Altenburg were aimed at Helmberger, who was TEDA president at the time, along with now-Mayor Orlyn Kringstad, who was one of the project partners at the time. Neither of them had any authority to approve or disburse any of the loan funds, which were handled by the city council and the clerk-treasurer, not the TEDA board.

Helmberger’s presentation also touched on the origins of the townhome concept itself, which was the brainchild of the city’s Harbor Committee, which at the time consisted of Altenburg, former Mayor Josh Carlson, and former Clerk-Treasurer Linda Keith. Those three, with approval of the city council, had issued a Request for Qualifications that eventually led to the decision to work with a development group assembled by Kringstad to undertake architectural and construction management for the project on a fee-for-service basis with the city as the developer. The city later asked the group to take over as project developers.

Helmberger also addressed Altenburg’s other significant allegation, that loan monies were used for a buyout of one of the project partners, architect Dewey Thorbeck.

“This is provably false,” said Helmberger. “Thorbeck was never a partner.”

“This is the definition of reckless disregard for the truth,” Helmberger said. “Altenburg never made any effort to verify this point.”

Helmberger said while Thorbeck was a part of the initial management team, he was never part of the legal partnership that had been formed. “He simply wanted to be paid for his architectural services,” Helmberger said.

Helmberger also disputed Altenburg’s claim that he was legally required to report what he saw as “fraud.”

“The law makes no reference to fraud,” said Helmberger, “and can only apply to those who are authorized to expend public funds. This law has no relationship to this case.”

Helmberger said it appeared that Altenburg is abusing the state’s whistleblower law to try to provide protection for his own job, since there was no actual fraud or unauthorized use of public funds to report.

“His actions are unethical,” said Helmberger.

The whistleblower law does not provide any legal protection for those who make claims that are false or are made with reckless regard for the truth.

This matter is expected to be discussed at the Tuesday, Oct. 15 city council meeting, which will be held at the Tower Civic Center at 5:30 p.m. Note the change from the regular meeting date, due to the Columbus Day holiday.

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