City abandons interest in City Hall site after alderman gets ‘too close’
By Kellen Olshefski
Editor
The City of Elkhorn has backed away from a possible downtown site for a new City Hall after several members of the Common Council expressed concern that an alderman had a conflict of interest in the matter.
The council voted Oct. 19 in closed session not to pursue further discussions into the possible purchase of the US Bank building in downtown Elkhorn.
According to emails obtained through an open records request, the City of Elkhorn had been considering the US Bank building as a possible site for the relocation of City Hall since at least the end of April.
Mayor Brian Olson said the city began pursuing the building after Alderman Tom Myrin, who is employed as the branch manager at the bank’s Elkhorn location, brought it to the attention of the city the bank had a potential interest in selling its Elkhorn location.
Olson said the city turned dealings over to its broker, Stu Rosenberg with ICI Commercial Corporation. According to emails from Rosenberg obtained through an open records request, US Bank’s Senior Vice President of Property Management David Wright hadn’t shown overwhelming interest in the sale and the building was not officially on the market – something which Olson said was also his understanding.
Alderman Mike Kluck said in dealings with the city’s broker, officials had learned there wasn’t mutual interest at the time and the city began to look at other possible sites.
Olson said dealings had gone cold until city staff recently received emails from Myrin stating he had made the deal a possibility.
In an email to city officials, Myrin wrote:
“I have been busy involving many of our upper level management team in regards to this building, and the future needs of the city of Elkhorn. To be honest, this was not a priority for US Bank. Fortunately, with some influential help, I have made it one.”
Myrin also stated he had arranged a meeting with David Wright from Corporate Real Estate for this week Wednesday to discuss the city’s interest in the building, where US Bank stands with the building and any and all options for the sale and or lease of the building.
For Olson and councilmembers, Myrin’s involvement in pursuing the sale of the Elkhorn US Bank building was a little too close for comfort.
“It just politically didn’t pass the sniff test,” Olson said.
The council discussed the situation in closed session on Oct. 19 and, according to minutes obtained through an open records request, while the city could pursue the acquisition from a legal standpoint, Olson believed it could become a political issue in the future.
Furthermore, City Attorney Ward Phillips said the concern was with Myrin’s Oct. 13 email, if the acquisition would benefit Myrin in his position with the bank and if anything had happened to affect the city legally pursuing the building.
While Phillips said he did not see evidence Myrin had used his position as an alderman to assist with the sale through his research, he noted Myrin had been advised to recuse himself from the discussion and matters relating to the acquisition of the building from the beginning.
Olson said he, Phillips and City Administrator Sam Tapson all told Myrin to recuse himself from all dealings as soon as Myrin brought the potential sale to the city’s attention.
A motion to withdraw from further negotiations with US Bank regarding the purchase was passed on a voice vote. Myrin recused himself from the Oct. 19 closed session discussions.
“It was pretty unanimous that this just didn’t seem right,” Olson said.
“We’re going in a different direction in Elkhorn. Deals need to be clean and this just didn’t pass it.”
For Myrin’s response, see the related story by clicking here.
Weighing in
Olson said because Myrin had supposedly recused himself prior to this situation, he was a little confused as to why he reinserted himself into the dealings. He also said because Elkhorn has a history of “questionable dealings,” it’s not something that’s going to happen while he’s in office.
“Under my leadership, we’re not going to have questionable dealings,” he said. “It’s not going to happen under my watch.”
Olson said he feels this could have been a good opportunity for the City of Elkhorn to at least investigate, however, with a city member negotiating on behalf of the city, as he interpreted the emails, it’s something the city needed to wash it’s hands of.
“We want to keep City Hall downtown, we want to keep commerce downtown with City Hall and this seemed like a good opportunity,” he said. “Unfortunately, due to Alderman Myrin’s actions, we felt we couldn’t go further … it is a missed opportunity, unfortunately.”
While Olson said Phillips had made it clear the city was legally OK to continue pursuing the acquisition, Olson just didn’t feel it was morally OK and it presented a conflict of interest. Additionally, while Phillips also made it clear Myrin would not benefit financially from the sale of the bank, Olson said he doesn’t know how corporate US Bank handles any “financial gain post-facto,” and dealing with the corporate world in his line of work, while he cannot “confirm that nor say it’s true,” it’s something he would question.
“It’s very disappointing,” he said. “I’m very disappointed and I hope we can come together and find a new location for City Hall, appropriately downtown … it’s just disappointing at best that we couldn’t even pursue this opportunity.”
Others agree
Alderman Scott McClory said it’s unfortunate the city wasn’t able to explore the possibility, but as long as the council remains committed to getting the City Hall moved in a timely manner, he’s confident it will happen.
“It was a viable option to peel back the onion and see what’s available there,” he said. “Unfortunately, that’s no longer a position, a posture that we’re willing to pursue.”
McClory said with the US Bank building being the closest the city has come to finding a new location, it’s very disappointing to him to see it’s no longer a viable option.
Kluck said when Myrin came “too close” to the subject, it was something he could no longer endorse and he had to step away from.
“To me, it just wasn’t right, so, unfortunately, I couldn’t vote for pursuing US Bank anymore,” he said.
Kluck said when something comes before the council an alderman has personal ties to, it’s something the alderman needs to keep a distance from.
“I just think we owe it to the people if something like that happens, we recuse ourselves and let the other alderman take care of it,” he said. “The fact that Tom Myrin got closer to it than he had been in the past, I can’t speak on behalf of the other alderman, but to me, that threw up a red flag and made me vote the way I voted.
“I just think he was too close and to avoid anything in the future that might happen. I voted no.”
While little details were known about the potential sale, as no plans had been drawn up and the city was simply exploring the potential purchase, Kluck said he can’t say for sure whether or not it would have been a suitable location though it’s something that would have been worth exploring.
“Any opportunity that is blown that doesn’t go through due process is a disappointment to me,” he said.
“If we would have gone through everything properly, if Tom would have stayed away and we would have found out it was good or bad and decided on that, that’s the way I wish it would have went.
“It’s a disappointment we had to walk away even if there is or is not any interest on behalf of US Bank.”
To be clear, Kluck said he doesn’t believe Myrin got involved due to personal interest, though he just feels Myrin was too close to the subject matter.
“I owe honesty to the citizens who elected me to do things the right way,” he said.
Appearance of conflict
Alderman Hoss Rehberg said, like others, with Myrin’s affiliation with US Bank it isn’t an opportunity that is right for the city.
“I just think when you mix those two things it becomes complicated and just isn’t always possibly in the best interest of the city,” he said.
“It’s just a conflict in my personal opinion. I agree with Attorney Phillips that there’s probably no legal thing wrong, it’s just more how it looks to the community … I’d rather just walk away from the situation.”
Rehberg said if the Myrin was not on the council or associated with the Elkhorn branch and the opportunity came again, then it might be an opportunity worth pursuing.
“To use myself as an example, it’d be no different if the city needed insurance quotes,” he said. “I don’t feel it would be right, first of all, for me to engage with the city, second of all for the city to even pursue a proposal I put through because I’m directly involved as well as an alderman.
“I think other community members would wonder are they looking out for the city or are they trying to help another alderman and his business. That’s just not what I’m about. I want to be transparent and I’m there to help the community.”
Rehberg agreed with Kluck, saying that with very little information it’s difficult to say whether or not for sure it’s a missed opportunity for the city.
“I couldn’t say that because who knows, the price tag could have come back at $2 million, we don’t know,” he said.
Alderman Bruce Lechner, who replaced Jim D’Alessandro on the council earlier this year, said being new to the council he didn’t know too much about the situation though he agrees stepping away at this time was the right decision.
Alderman Greg Huss wasn’t interested in commenting on the topic at this time.
Moving forward
Olson said he believes the City of Elkhorn will continue to look for opportunities to relocate City Hall, a clear priority in the council’s mind, while limiting their opportunities to downtown.
“We’re going to pursue all options downtown,” he said.
“This council is committed to that.”
Olson said the relocation of City Hall is something the city has been pursuing for more than a decade, from his understanding. The need is confirmed by the city because it’s spending “way too much” on constant fixes and operational costs on building that’s too big for the city’s needs.
McClory said as long as the city continues to pursue a more suitable location, he’s satisfied.
“As the senior person on the council and as council president, I have banged that drum since day one that we need to get out of that building, our current building,” he said.
McClory said it was important to him that the city remains committed to finding a new location within the near future, as soon as 2017.
“I’m hopeful with the current six members on the council that is going to become a reality, it is going to come to fruition, not only for the citizens of Elkhorn, but for the staff members that continue to work in a place that clearly we’ve outgrown the seams in the building,” he said.
Kluck said he agrees with other elected officials in the fact that relocation of City Hall is a priority.
“We owe it to the employees that work there and the people that visit it to have a respectable City Hall,” he said.
Rehberg said as well the council has taken a stance and will continue to work towards that goal, though it needs to be in the financial interest of the community and stay close to downtown.
“I don’t think we’re willing to jump into anything nor do it at any expense,” he said.
“I don’t think it’s something we’re going to make quick decisions and just move on something and really not research and make sure it’s in the best interest in all the citizens of Elkhorn.”
