Yard Waste Site Part 2 - Adding Insult to Injury

This is a follow-up post to the previous  post "What a Waste of a Yard Waste Site" found elsewhere on this blogsite.     

  As if the original loss of a great yard waste site wasn't enough, now this news comes out of how undervalued the property was at the time when Kronenwetter sold that land.

   It turns out that even with a left-hand thread, the screw job that the Village got under the "leadership" of (then) President Chris Voll, Village Administrator Richard Downey, and particularly Community Development Director Randy Fifrick, was worse than we knew.

   It appears that after Kronenwetter's staff-promoted an ill-advised, under-informed sale of the 29 acre yard waste site property to the neighboring granite pit owner Mitch King for something like $258,000, King has recently sold the operation including Bevent and Reid properties for a cool $3.5 million.  The county land records show that the total value of the land in that sale is designated at $1.21 million, of which our former yard waste site was valued at $606,500.

   No doubt there was some "enterprise value" and/or equipment in the remaining $2.3 million of the sale price, but very likely this "lump sum" type of sale allows the land portion to be undervalued for for obvious tax purposes. 

   The point is, that even accounting for inflation, the property was undervalued by our staff to the buyer's advantage back when Kronenwetter owned it, but presented to the Village Board as if it was driving a hard bargain and getting a good price.

   Now, King is a businessman, and that's what business people do, they buy low, sell high. He has done well for himself on this deal and more power to him.

   But in my opinion the same cannot be said for our former employees that should have looked out for Village's best interest in the deal. 

   This news of the financial angle certainly twists the dagger that in my personal opinion Fifrick & Cohorts stuck in the Village Board's back a few years ago in negotiating this deal.

   I shouldn't be surprised at the news of the undervalued nature of the sale. This all fits with the other anomalies associated with the sale, and in my mind it answers a lot of questions about why Randy Fifrick was so eager about facilitating the Village sale of this property, and doing so under the radar as much as possible with President Chris Voll invoking closed session meetings to accomplish it.

   According to the Public Works Director at the time Chris Johnson, when he voiced questions and opposition about this sale to Fifrick and Downey, Johnson was told to "butt out, it's none of your concern". 

   Likewise, the Public Works crew was perplexed and extremely aggravated as to why this sale was even being considered, since they had put a lot of work into improving this property and the use of that property was very valuable to their operations. 

   I was later told after the sale, that the employees were instructed by the Village Administrator to not discuss this issue with any of the Village Board members, or indicate their discontent with the sale. I'd believe that story because it appears to be confirmed by Downey's cleverly worded admission and version of events.

    In a report that I requested he write, Administrator Downey phrased it this way:

   " While the Public Works Director tried to communicate the wishes of the field crew, not enough time was provided to him to put together meetings and reports, and he was distracted by other duties. Hence his voice was minimized."

     Tell me - how long would it take for Johnson to tell the Board members "The Work Crew says this deal sucks!", if he would have been allowed to?  Downey was right when he said "not enough time was provided to him (Johnson)". If you tell someone something like "shut up and don't say a word about this", I guess you can call that "not providing enough time to him" to say anything. 

    And never mind Johnson, Downey admits here that he knew about the Work Crew's opinion of the sale. Why didn't Downey say something to the Board about it? The whole premise of the sale of this land was that the Village had no use for it.

   In hindsight, the sale process was full of red flags:

•    Fifrick/Downey skipped over PIC (forerunner of the current CLIPP) committee review and possible recommendation of this sale, which normally would be an important part of the process. 
•   Randy Fifrick rebuffed public inquiries about why this land was not being sold on the open market with competitive buyers. 
•   They never got a commercial value appraisal on the property, which in my mind is like "due diligence 101". Instead they just estimated the land value based on the value of surrounding residential property. So, based on the recent, possibly understated sale price of about $606,000 for 29 acre portion of the deal, the failure to get a qualified appraisal like they should have, cost the village a couple hundred thousand dollars in bargaining power.
•     Fifrick never told the board about the wetland and the very rough, unsuitable condition of the 8 acre piece (the current yard waste site) that his plan called for using as the new yard waste site, and he never told the Board about the time (several years) and the cost (over $50,000)  it would take to get even a smaller yard waste site up and operating. 
•    Finally, Fifrick never ran the sale plan past Plan Commission for review and approval as required by State statute.

   All of this was unknown to me at the time, because by the time I was elected in 2018, this was all nearly a done deal, with only some back-and-forth haggling over the final price. It never even occurred to me that there had never been any real due diligence done by Fifrick, Downey, or the Board prior to the time I got involved as a trustee. 

   It was only after the sale was completed that I started to smell a rat in this deal. I learned of what a loss this was to the Public Works Dept, and that the 8 acres that the Village retained out of the deal was nearly worthless. 

   As a trustee I started to look into this, then as chairman of CLIPP I wanted to investigate the origins and history of this sale, because at that time the deal could still have been reversed by a judge due to the legal failure to obtain the Plan Commission approval of the sale. 

  Shortly after that on April King transferred a warranty deed to another LLC as the new owener, which I believe might have been a defensive move against the possibility of a court reversing the sale.

 

     My attempt to investigate got intense administrative opposition, lies, and hostility to my inquiries. I got no support from the committee, the Board, or from President Chris Voll, who was closely associated with Downey and Fifrick. The Board had a "what's done is done" attitude after being told that there was nothing we could do about it. Of course, most Board members were not privy to the apparently inside knowledge of what a granite deposit like that was really worth.

    I was never able to get to the bottom of it and eventually had to let the issue go, although Downey himself admitted after the sale that

    "if the committees would have been used, the process would have slowed down, on site meetings could have occurred and the field crew and other stakeholders could have had input into the sale. More eyes would have seen the sale, and perhaps the situation could have changed."

   

    Yeah, gee. Do ya really think so?

    Suddenly when it was "too late" and the money's in and damage done, the administrator became an expert on what should have taken place. It doesn't help to close the doors after the horses are out of the barn, as they say. 

   Now that we see what kind of money and value was involved in the underpriced nature of the deal, all of the puzzle pieces fit together and the above described secrecy, conniving, opposition and allegedly withheld information makes perfect sense. To me, anyway.