The co-op’s $12 million bid is doomed by legal, financial and regulatory concerns, and is inferior to the $27.5 million offer from Ting and the $30.8 million put up by Schurz Communications, the mayor said at a press conference in his City Hall office.
Weinberger voiced his opinion loud and clear several days before the City Council holds a key vote Monday to narrow the field from three to two finalists.
“Fundamentally, at this point, the KBTL proposal is not viable,” Weinberger said.
According to Weinberger, Citibank, which is owed proceeds from the sale, has implied that it could sue if the city accepts the co-op’s low bid.
He instead emphasized the positives found in the other two. Both proposals include a pledge to build out the system so that it can reach portions of the city where service is not now available. Both also are committed to strong privacy policies, net neutrality and to having an office and “major staff presence” in the Queen City, Weinberger said.
He urged councilors to accept both the Schurz and Ting bids so that city officials can do a final blitz of negotiations with the two outfits.
“Ultimately, accepting either will result in big wins for Burlington Telecom customers, taxpayers and the city itself,” Weinberger said.
“He’s one voice in this process,” Matson said of Weinberger.
Matson remains convinced that the co-op could clear any regulatory or legal hurdles. The real value of the co-op’s offer is in the benefits to members down the road, he said. The control and BT proceeds would go to the cooperative member-subscribers, not an out-of-state corporate group, Matson said.
Weinberger on Tuesday repeatedly thanked the co-op group for its involvement and said it made the bidding process better. But Matson said that while he appreciated the mayor’s words, he wished his support had gone further.
“It’s a little bit like taking your cousin to the prom,” Matson said. “You’re there but … you’re still not quite where you want to be.”
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Is it a coincidence that he only voiced these concerns with 2 months to go, when the coop has gotten widespread support from the community?
And why have a public process at all if none of it mattered? The #1 issue voters wanted was to keep BT locally owned. How should those of us who participated in that seemingly pointless public process feel and why should we trust the Mayor in the future?
And can we expect our Mayor to show the same level of concern for lawsuits the ACLU has threatened to file against ordinances targeting our homeless residents?
cwinklem – there are only several days before one of the three bids needs to be eliminated, so no, it isn’t a coincidence that he timed his advice to the council this way. A public process doesn’t mean that a bid that has the support of local activists must win, especially when it is particularly weak and would put the city in legal jeopardy. The mayor has to be a responsible steward of city finances, even when that includes not taking the seemingly popular decision of selling something to a local owner for less than half what it is worth.
What exactly does Ms. Blackwood find troubling in the Citibank agreement that she interprets to mean a risk of lawsuit? What did Citibank do to “imply” that a suit would be forthcoming is the city accepts KBTL’s bid? Has the press asked these questions?
The city will only bring in +/- $5 million from a $30 million deal. Talk about locking in your losses. At least a Co-op keeps the money local to recoup the full $17 million.
These anti-Burlington accusations lack the transparency they deserve – not unlike many processes this administrations labels “transparent” but are that in name only.
I support the Mayor clearly speaking out on what should be obvious to us all: the KBTL option does not measure up to its competition. Two proposals contemplate similarly high cash purchase offers $27.5M & $30M) and both provide for a significant City equity position moving forward. Both are well capitalized and each have years of direct operational experience in larger markets around the US.
Ironically, the “local” KBTL bid is for $12M and relies on $10M debt (at 14%!) from an out-of-state partner/lender. Proposed senior management at KBTL has little operational experience in managing a system such as this. While I generally support the idea of local ownership (I am an active member of the Food COOP), this proposal simply does not pass the smell test.
Three points the City Council needs to keep front and center:
1. Fiscal Responsibility: Select two proposals that returns as much revenue to the taxpayers as possible from the sale. Financial mismanagement of the original BT model exposed City taxpayers to enormous financial risk which we can hopefully put in the rear view mirror.
2. Capitalization & Operational Experience: Select the two finalists that are best positioned to expand BTV’s digital infrastructure. Anyone making an objective analysis of the financial and operational resources available to the competing proposals should come to the same conclusion the Mayor has.
3. Impact on Future BTV Viability: Burlington is closer (than not) to becoming the next Plattsburgh or Rutland; a small northern New England City and largely irrelevant to the dynamics of the 21st century economy. With this transaction, the City can alter this dynamic by developing a first-class digital infrastructure that better positions our community as a meaningful participant in the creative economy.
In the end, this is more than simply maintaining affordable CATV rates for BTV citizens.
Is anyone surprised about the mayor’s decision? The man loves big business, and only embraces small, local when it builds out otherwise unused land, like City Market. This is no different than his full embrace of the new mall project at a time when there are empty retail spaces on Church St and marketing is turning to the internet rather than brick-and-mortar stores. The fact that all the proceeds from KBTL would be kept local didn’t impress him at all. His concern is the business sector and not the private sector at all, unless it’s election time.