Jeramey Jannene
City Hall

Council Could End Fight Over Couture Provision

But City Attorney and Acting Mayor object. Legality of requiring $100,000 donation at issue.

By - Feb 22nd, 2022 04:03 pm
The Couture construction. Photo from Findorff.

The Couture construction. Photo from Findorff.

One of the more unusual proxy wars inside City Hall could be coming to an end.

A Common Council committee voted 4-0-1 to recommend halting the third-party review process designed to determine whether Alderman Robert Bauman and the council acted appropriately in modifying a tax incremental financing development agreement for The Couture apartment tower.

Halting the effort is opposed by City Attorney Tearman Spencer and Acting Mayor Cavalier Johnson.

Spencer, in March 2021, refused to sign off on the agreement for the $190 million project after Bauman added an amendment that required the development team to contribute $100,000 to the anti-displacement fund administered by the nonprofit MKE United.

Bauman negotiated the amendment directly with developer Rick Barrett after Barrett Lo Visionary Development failed to start construction by the prior agreement’s start date and was seeking a liability shield for its investors.

The City Attorney, as he reiterated in a press conference Monday, believes Bauman violated city, state and federal law by negotiating the deal and committed ethics violations in the process, even if he didn’t personally benefit. Spencer is maintaining his position that only the Department of City Development is to negotiate and propose tax incremental financing agreements, while council members maintain they have the authority to amend the agreements.

Spencer ultimately signed The Couture agreement after the money was placed into escrow pending the decision of an outside attorney on who acted appropriately. The deal to appease Spencer, negotiated by then-council president Johnson, created a situation where the city would spend nearly $100,000 (up to $45,000 on the outside counsel and up to $45,000 for an outside attorney for the council) to determine if the $100,000 contribution was legal.

“Basically this has gone for a year now,” said Bauman on Tuesday. “We are no closer to a decision than we were a year ago.”

A big reason for that is a November water main break flooded a downtown office building owned by retired judge Chuck Kahn, the outside counsel selected to decide the case. Kahn had to recuse himself given that he was now going to be filing a claim against the city.

Kahn has not billed the city. The council’s outside attorney, Michael Maistelman, has billed the city approximately $30,000.

Retired federal judge Charles Clevert is poised to replace Kahn, but Bauman is now seeking to end the process.

“At this point, just throw our hands up, give the money back, let the project move forward,” said the alderman. “This just stops all this back and forth.” The Couture itself is technically already moving forward: the building is now under construction, but is behind schedule as laid out in the agreement and imperiling the streetcar extension’s completion as required in an expiring federal grant.

The committee backed Bauman’s position, with Alderwoman Milele A. Coggs abstaining without explanation.

Committee chair Alderman Jose G. Perez declined to allow Spencer to speak on the matter Tuesday. “I think your comments have been made very clear through the letter you provided the council,” said Perez.

Spencer, in his letter and press conference, cited specific statutes he believes Bauman violated and said ending the process would be a “cover up.” In his letter to the committee, Spencer accused Johnson of being complicit with Bauman because he wouldn’t advance a meeting schedule on the special counsel process.

“There is an important issue that ought to be resolved regarding the Council’s role in finalizing and approving city agreements,” said Johnson in a statement Monday. “This process needs to proceed without heightened emotions, accusations, or legislative modifications.”

The full council is scheduled to take up the matter on March 1. If approved it would refund the escrow deposit to Barrett.

Bauman’s idea to require the displacement fund donation, which would be used to support a private program that offsets rising tax bills for low-income homeowners in neighborhoods surrounding Downtown, was first floated to other city officials before being given to Barrett. In an email obtained by Urban Milwaukee, City Development Commissioner Lafayette Crump backed Bauman’s idea before raising concerns about it when a council committee publicly debated it.

Spencer’s refusal to sign the agreement wasn’t without consequence. The council, over the objections of then-mayor Tom Barrett, unanimously stripped the City Attorney’s Office of its contract review power, with Bauman and others arguing Spencer overstepped his authority. Other attempts to limit Spencer’s power or staff size have failed.

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Related Legislation: File 211682

More about the Couture

Read more about Couture here

More about the Turmoil at the City Attorney's Office

Read more about Turmoil at the City Attorney's Office here

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