Perspectives on the WTA /812 13th Avenue Swap
Three Key Voices Clarify Their Positions On Proposed Deal
August 17, 2023
We interviewed three of the key players involved in the WTA/812 13th Avenue sale and purchase transaction to clarify some of the issues involved and to give citizens a clearer understanding of the deal as proposed. Basically, as UST Global terminated their lease in February of 2023, WTA quickly contacted the City of Sidney and proposed a "swap" of properties; the 1200 Pole Creek building and property for the 812 13th Avenue property, along with cash and other considerations. The deal in total will get the City of Sidney out from under the costs of owning 812 13th Ave. and the remaining TIF bond expense, and also provide an upgraded Police Department building while at least "breaking even" from the initial investment made on the 812 13th Avenue property. WTA is taking on the responsibility of paying off the TIF bond as part of the agreement, saving the City of Sidney from a large expense that would most likely have to be financed through tax increases or the curtailing of city services.
We first interviewed City Manager David Scott to get a clearer perspective on the City of Sidney's position on the transaction. Scott said, "It was nice to see a big crowd at the City Council meeting on August 8. Although there were accusations about me thrown around, I don't pay much attention to that," he said.
He continued, "We have to have two public hearings because there's two different issues here, the buying of one property and the selling of another. By "we", I mean the council. Some people think I'm the one doing the buying and selling, but only the city council can do that, and I'm doing what they are instructing me to do. Everybody wants to think I'm some big devil doing all of this--but I can't buy or sell anything--only the city Council can."
He clarified that the August 8 meeting was about the purchase of 1200 Pole Creek, and the August 22 meeting is about the sale of 812 13th Avenue, and although they are separate transactions, they are intertwined.
Scott was the City's Finance Director when initial building purchase occurred. He said, "The deal was done because UST Global promised 200 jobs--and they had a good number in there, then the pandemic hit, and they had all these people working from home. They only had 7 people working in the building. The didn't need all that overhead for 7 people, so they asked to terminate their lease, and they did."
WTA approached the city as soon as lease termination was made public, and proposed a deal for a building swap. The building at 1200 Pole Creek Crossing plus cash and other considerations in exchange for 812 13th Avenue. The city also gets to keep the parking lot across from 812 13th to use for the KCTS Shuttle Service.
Scott said, "If we put 812 13th up for sale and tried to sell it, if we're lucky maybe we get 2 million for the building--that would be great and fantastic, or maybe we get 400k and the building is used as a warehouse for some company out of Denver, and you'd still have the same old Police Department building that's ready to fall to the ground. Even the biggest detractors of this deal agree that the current Police Department building is unacceptable."
The City of Sidney also gets out from under the obligations of the TIF (Tax Incremental Financing) Bond. Simply put, a TIF Bond is way for a developer or property owner to develop and improve property using future tax payments to develop now. The Bond is paid back with future tax revenues over the next 15 years, and the holder of the Bond cannot challenge assessed values for a period typically running 6 years. Without the sale of 812 13th Avenue, the City of Sidney would have to pay off the bond as the city does not pay property taxes, and therefore cannot use future tax payments to pay back the TIF Bond.
Scott also said that he has been completely transparent and has responded to every request for information made by citizens. He said that he did not have to disclose the appraised value of 812 13th Avenue, as Nebraska State law does not require such a disclosure until after a sale or purchase has been finalized. However, the wording of the statute uses the term "May Disclose", meaning it is not required, but can be disclosed if desired, usually if the matter is of great public interest.
Next we spoke with Ryan Watchorn, CEO of WTA (Worldwide Trophy Adventures) for his perspective on the proposed transaction. WTA currently owns the property at 1200 Pole Creek Crossing, between Sidney Regional Medical Center and the Sidney Sewage Disposal Plant. The WTA building has undergone extensive improvement, with fresh and clean office space suitable for the Police Department to be located. Extensive upgrades in electrical and internet systems have been done at great expense to the company, and with a few additions and modifications, like security doors, the facility could quickly be ready to accommodate the Sidney Police Department.
On the purchase of 812 13th Avenue, Watchorn said, "The TIF Bond is $50,000 a year for 6 years, meaning that's $300,000 in cash we have to come up with. We're not looking to get rich off of 812 13th Avenue, we're looking for a forever home. During the meeting it was asked are you going to pull out if you don't get this building?-- to which I said, no we'll stay in tents if we have to. I wish I would have added, what I can't do is I can't recruit (new employees) to Sidney if I don't have a home for them. I will hire them, but they will be in Texas, New Mexico and on the East Coast, West Coast, wherever...but they won't be here in Sidney. The beauty of this deal is all of them coming in, most will be living in Sidney or Cheyenne County, like in Dalton or wherever, close to the office."
Watchorn talked about the quality of jobs at WTA, and for the new jobs they anticipate creating, saying "These are really good jobs. You have salespeople with 20 years of experience, IT guys with a lot of experience, really great jobs. One of the fears we heard is that we were going to "poach" the best employees from other companies and offer them more than their current employer. I'll tell you this, if anyone comes from an outside business here, 100% we will not poach, we will not recruit and they would have to have a conversation with their leadership about making a move before I would even engage with them."
Asked about the benefits of the transaction for WTA, Watchorn said, "A forever home for our company. If we ever outgrow that, the City of Sidney will be well, well, well taken care of. We're out of room here and it's going to stall growth except for work from home. Being able to bring people in and show them we have space for growth, that's by far the number one benefit."
Asked about the potential downsides of the transaction, Watchorn said, "There's absolutely a financial risk for us, and I'll give a great example. When COVID hit, we are the largest private outfitter in all of Canada, and Canada is a great market for us. Canadians don't hunt, it is the American market that drives hunting globally. Without Americans hunting ducks, it dies. The American market 100% dominates the hunting and fishing industry. When that stopped, it was huge. We did not see that coming. But we stuck it out and OK, we'll figure it out. You should have seen the impact on the Canadian outfits, they had nothing, The government did nothing to help. But they stuck it out for two years. For two and half years we didn't make one penny from Canada and we kept every single employee and we went some really rough times. So the potential downside is we take on a large financial burden like this and there's another global pandemic that impacts the hunting world, well we're in trouble. Straight up. But we weathered through it and surprisingly hunting and shooting numbers in the United States went up. It's part miracle, because the hunting numbers, the fishing numbers, in the United States haven't been this high since I was a kid."
When asked about how the people of Sidney should feel about this transaction, he said, "There was a comment at the meeting the other night about the purchase causing division. It stuck in my mind and I thought about it for a long time. Then I remembered the room. In that room there was probably 300-350 people. 95% support this, and 5% do not. I don't call that division, I call that unity. And I understand there will always be opposition, and I'm not asking you to agree with this deal. I'm asking that you simply know the facts, and you just don't go out and throw bad stuff out there all the time and not pay a price for that. And it was time. I don't engage on social media, I think it's a one-sided platform and I prefer to engage face-to-face. One of my biggest weaknesses is that I'm an open book, and I probably overshare. Had you just called and asked me to explain this deal, I would have been like sure, what do you want to know. Every business deal in the world starts with an appraisal, and then you meet in the middle. And I knew that I would have to stand up in front of the entire Cheyenne County community and state exactly what the deal is, and that never bothered me, from day one. Because we have nothing to hide. When and if we get "Big Red", we're going to take care of it. We've invested heavily in the community. We've had 24 new hires in the last five years, and 20 of them are right here in Cheyenne County."
Finally, we met with David Jansen, owner of the Sidney Fine Arts building and founder of the Facebook group "Bring Back Sidney". Jansen and followers of the Bring Back Sidney page have been the most vocal opponents of the transaction, and we asked if he could clarify his position on the deal between the City of Sidney and WTA.
"In a community, if you have a sale or transaction over $100,000, you have to notify the community. Here we have one of the most expensive buildings, basically the shining jewel as Mayor Galloway said when we bought the building back in 2019 as an investment, and it went into a closed room executive session discussion that no one was aware of, and the people find out only after the deal is done, and we were the ones who found out about it. To me, if Sidney is supposed to be a caring community, which it is, and about the people, and this is such a great deal--why aren't you telling the people? This is the people's money-this isn't the city's money, this is the taxpayer's money. And all we have to do--public hearings are a great thing--they could have very easily, at the very beginning held a public hearing and said "hey, people, we're thinking of selling this building. Do any of you have any ideas about what we can do with this building?" Because after they put it up for sale, a lot of people were saying things like, lets put our city offices there. It would immediately improve the downtown area. But no, the city was closed minded about it."
Jansen continued, "Our whole thing was, this should have been done in some public forum. Especially since when they purchased it in 2019, the city knew how volatile it was. There were a lot of people for it and a lot of people against it. And to me, it's something that the people should be asked about. In all of these big decisions, hold a public hearing, announce it everywhere, and let the public come in and say something about it. Be absolutely transparent. We read the law, we understand the law, we use the law and their understanding of the law several times has been wrong.
When the city originally purchased this building in 2019, they used the wrong law and Nebraska Auditor of Public Accounts came in a slapped them for that, it was in your newspaper. They did it wrong, they illegally used electric funds to buy the building. So, the city doesn't always do everything right. And here's the big thing, I have nothing against WTA, I would love to see them expand--it's a business and I'm a businessman. But people need to know, and the the people are the watchdogs of the government. It's even in our Nebraska legislature, you go into the state capitol it says, "The State is saved by the watchfulness of the people" We have the Open Meetings Act so that nothing is hidden from the people. And what bothers about this deal, and this is not anything against any of the people involved with the deal, it's the fact this deal was done completely behind closed doors and in secret and away from the people. All we asked for is transparency and we want to see the documents. You say the building has gone down (in value), we want to see the documents. David Scott misquoted a lot of facts in that preamble to the City Ordinance that he wrote. He misquoted a lot of facts we knew to be wrong, because we track property taxes and building values because we think property taxes are too high here."
"It's against the law, 28911, to write a document of public record that contains false information. People here say 'Trust, Trust, Trust'--I would love to trust, but just like Reagan said so many years ago, 'Trust but Verify'. And if we're a community that cares, what is wrong with asking the community? We have a lot of amazing people here in Sidney that had great ideas of what could be done with that building, and they were never heard," he said.