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City seeks TIF law assistance with Blue Building sale
Blue Building proposal.jpg
Pictured is a rendering of what a condo may look like inside the Blue Building once renovation is complete. Investment Partners has proposed making 24 condos inside the Blue Building.

The firm of Reno & Cavanaugh has been hired by the city of McMinnville to provide legal services to assist in navigating the Tax Increment Financing agreement and subsequent sale of the Blue Building.

“I think I speak for both the city attorney (Tim Pirtle) and myself that TIF law is very complex,” said Community Development director David Baird, in explaining why outside legal counsel needs to be used. “It’s definitely something from the city’s perspective you want to make sure is done right. That’s not an expertise area for either myself or Mr. Pirtle. We felt that it made sense to engage an outside group in this.”

Investment Partners has entered into an agreement with the city to purchase the Blue Building and its property. However, that agreement is contingent upon securing a TIF to assist financially in the residential development.

Baird presented members of the Board of Mayor and Aldermen with an engagement letter from Reno & Cavanaugh which outlined the firm’s fee.

“Our fees will be based on the amount of time spent on your behalf, calculated by multiplying each attorney’s and paralegal’s hourly rate for matters of this type by number of hours expended,” said attorney David L. Kleinfelter. “My billing rate for this matter will be $400 an hour, and the rate of Dwayne Barrett, who will provide the primary advice with respect to the TIF agreement, will be $500 per hour. Our paralegal billing rate is currently $150 per hour.”

The correspondence went on to state that if other attorneys within the firm assist their billing rates will be similar to the rates quoted. For younger attorneys, that rate would be in the range of $280 per hour.

“As is customary, the fees described above do not include expenses that may be incurred in the course of our work and which may be included in your bill,” said Kleinfelter. “Those expenses may include express service, filing and recording fees, searches of official records, and messengers. We do not charge clients for photocopies, except in situations where an extraordinary number of copies are required.”

Alderman Steve Harvey expressed concern for the cost being unknown and becoming an extraordinary amount, “I don’t know if we are going to spend $5,000 or $50,000.”

“That is their ballpark estimate, about $5,000,” said Baird. “We wanted to bring it to the board because there could be a little bit of an overrun there. We don’t expect this to be a $50,000 engagement.”

Because the ballpark amount was not included in the written correspondence, discussed was the possibility of contacting the firm and having that ballpark amount included.

“I don’t disagree with us needed some outside expertise, but I feel like having some and not giving them a blank check,” said Aldermen Zach Sutton. “I think we do need to have some sort of cap on that motion.”

Pirtle stated, “I have total comfort in the engagement letter that (Baird) obtained and negotiated. I don’t think you need to worry. If the cost starts going in the wrong direction or we feel that it is getting out of hand or out of proportion, we can have conversations with them. We are not locked in.”

The engagement letter, as it was presented, was unanimously approved by the Board of Mayor and Alderman.