One problem with doing public business behind closed doors is that usually the public doesn’t know what business happened.
Such is the case with the 2012 settlement the Santa Fe City Council approved with Railyard Co. LLC, developers of the commercial Market Station building that includes REI and the Flying Star restaurants in the city-owned Railyard.
It was largely worked out in secret before the council approved it in a public vote. Under threat of a lawsuit blaming the city for project delays the developers maintained had cost them millions and stalled their success, the council agreed to buy part of the building for $3.6 million. Another $1.4 million or so in taxpayers’ dollars was then spent fixing the space up for city offices.
In return, Railyard Co. agreed not to subject the city to future lawsuits over Railyard development. Also, the company gave the city control over a Railyard parcel where development of a movie theater had been stalled for years (construction of the Violet Crown cinema there is finally underway).
But as they say in the infomercials, “Wait, there’s more.”
Not only did Railyard Co. give up any claims against the city, but also the city and the nonprofit that manages the Railyard under city contract abandoned their rights to make claims against Railyard Co. over anything related to the company’s construction of the Railyard parking garage, Market Station or the theater land parcel.
Yes, now that we’ve checked it out, this particular part of the deal is presented in gloriously detailed legalese in the settlement document. But no one talked about it until now.
It turns out sidewalks built by the developers around Market Station are settling, causing potential safety and accessibility issues. The city attorney’s office says it’s up to the city to fix the problem – at a cost of up to $400,000 – even though Railyard Co. built Market Station and its underground garage.
The city assumed such liability under the settlement, plus a second settlement in a lawsuit over Railyard construction, the City Council was told last week.
As legal amateurs, we don’t see assumption of liability for Market Station work spelled out in the language of the 2012 settlement. But it’s pretty clear that the city has abandoned any right to take the Railyard Co. developers to court for just about any reason, including recovery of repair costs.
We tried to get a statement from City Hall this week on what might have motivated city officials in 2012 to assume liability for work done by the developers. None was provided.
Here’s the current tally, as far as we know, on what the city has spent to clear things up with the Railyard Co.: $5 million to buy and fix up the office space in Market Station; $300,000 to help settle a parking garage builder’s non-payment claims; waiver of $188,000 in Market Station impact fees as part of the 2012 settlement; and now the cost, starting with a $69,000 study, to fix the sidewalks.
Importantly, the city did get the movie theater parcel back and the Railyard managers seem to have found a great fit in the Violet Crown project. A movie theater was always envisioned as part of creating an active urban space at the Railyard.
But we questioned the council’s agreement to buy a piece of Market Station for city offices in the first place and now we have to wonder what else the public is on the hook for as part of the deal.