By Katie Kieffer
Image credit: “St. Paul, MN” by cursedthing on Flickr via Creative Commons.
The City of St. Paul is the sister city to Taxapolis. But whereas the City of Minneapolis publicly raises property taxes to support its drunken spending habits, the City of St. Paul clandestinely ignores the law to get its way.
I want to shine some sunshine on a $9 million problem that the City of St. Paul seems willing to hide from the public eye. This problem is known as “The Lofts of Farmers Market.” The City of St. Paul violated Minnesota Statute 471.345, Uniform Municipal Contracting Law and St. Paul Ordinance 82.02 in awarding the construction contract to Shaw-Lundquist and Associates over Rochon Corp. for The Lofts of Farmers Market.
The City of St. Paul received Build America Bonds as part of the American Recovery and Reinvestment Act. On Dec. 22, 2010, the Ramsey County Metro Housing & Redevelopment Authority (HRA) held a budget meeting for the 56-unit, five-story apartment complex on the corner of Fifth and Wall streets, adjacent to the St. Paul Farmer’s Market. The HRA set a construction budget of $8,778,130 – with approval to borrow additional funds up to $9 million.
Rendering of The Lofts at Farmers Market project. Image credit: The City of St. Paul.
Today, the City of St. Paul faces a landmark lawsuit from the Rochon Corp. that will set the precedent for the integrity and health of the business climate in St. Paul. Rochon is suing the City for violating the aforementioned statute and policy. Both require Ramsey County to use a “sealed bidding” process to award contracts for large construction projects.
The lawsuit stems from this timeline of events:
- The City of St. Paul accepted six bids for The Lofts at Farmers Market.
- The City’s project bid manual stated, “No request by the bidder after the bid due date due to errors, inconsistencies or ambiguities will be granted by the owner.”
- The lowest initial bidder, namely Shaw, asked the City to withdraw its bid after admitting a typographical mistake on a line-item worth $619,200.
- Despite violating the City’s project bid rules, the City negotiated with Shaw behind the scenes and insisted that Shaw remain in the bidding pool.
- Without explanation, the City arbitrarily increased Shaw’s bid by $708,411.
- The City awarded the contract to Shaw.
- Rochon was the “lowest responsive bidder” because state statute, city ordinance and Minnesota Supreme Court precedent indicate that Shaw’s bid should have been tossed from the hopper.
- The reason the City gave a judge for denying Rochon’s bid was that it was “out of the budget.” However, Rochon’s final bid was $8.725 million and the City’s approved budget was “up to $9 million” as I explained above.
Rochon initially tried to stop the construction process with a restraining order, but was denied by a judge. The judge did allow Rochon’s lawsuit to proceed and has recognized the weight of Rochon’s case. A summary judgment is scheduled for Mar. 30, 2011.
Image credit: “St. Paul Sunrise Pano” by Jeremiah Peterson on Flickr via Creative Commons.
Rochon’s Executive V.P. Jeff Wellman told me: “I have no grudges against Shaw. It’s very competitive right now [due to the slow economy]. Everyone is looking for work. We are a small company. There’s nine people in my office and eight in the field. A job of that size would be one-third of our work for the year. We might not have another job of that stature come around for another year. I don’t have an endless budget to fight City Hall. We want to resolve this as quickly as possible.”
What is at stake in this lawsuit? Wellman says, “Reputable contractors are going to get the word that St. Paul is not a place to do business. ” An attorney for Rochon Corp., Jeffrey Wieland, told me: “Actions of this kind [Rochon’s lawsuit] are intended to protect the integrity of the public procurement system and ensure fair compensation for everyone, and, over the long term, ensure that the public is protected.”
Rochon Corp. believes that the City is lawfully required to award the bid to Rochon or, at minimum, rebid the entire project: “At least give me a chance at building the project,” said Wellman.
The lesson from this story seems clear: If you live in Minnesota, it is wise to neither own property in Minneapolis nor to construct public property in St. Paul until the Twin Cities clean their acts up.
View beneath the Wabasha Street Bridge in St. Paul, MN. Image credit: “Under the Bridge” by TBoard on Flickr via Creative Commons.
