Details of the rationale for Mayor Thad Birmingham’s veto of a settlement agreement related to the city’s waterfront property has been made public. The information is contained in the agenda for the Sturgeon Bay City Council meeting Tuesday evening. A majority of the council approved the $360,000 settlement agreement with developer Bob Papke and Sawyer Hotel Development in an effort to resolve the matter of a more than $500,000 lawsuit filed by Papke. The suit claims misrepresentations by the city in connection with Papke’s attempt to build a hotel on the west side waterfront.
In his veto document, Mayor Birmingham contends the council action fails to recognize the financial impacts of such a large settlement and the value of mounting a vigorous defense. Birmingham’s second point says the settlement supporters claim that the city could lose in court. However, he notes that the advice of its insurer and multiple attorneys is that the city would have an excellent chance of prevailing in court. Mayor Birmingham also says the $360,000 cost of settling is too much money. He notes that the city’s maximum exposure, should it lose, is much less than the settlement offer. The mayor’s fourth point is that its insurer has indicated that it will not contribute to the cost of the settlement because it believes the defense of the city’s case is strong, meaning every cent of the settlement payout is tax dollars. Finally, Birmingham points out that litigation with the Friends of the Sturgeon Bay Public Waterfront, and action by the Department of Natural Resources with regard to the property have not been resolved, making it premature to settle before decisions have been made. The Sturgeon Bay City Council will consider the settlement issue as part of meeting Tuesday evening. In order to override the mayor’s veto, five of the seven council-members must vote against the action.