Dirty Deeds: Ham handed Freeport bureaucrats blame their own missteps on citizens defending their property rights
By Nathaniel Lukefahr
FREEPORT — The new leader of the city’s economic development board said Thursday he found records of potentially improper land transfers, mounting bills and a requirement for a sprinkler system estimated to cost more than $400,000 related to the controversial marina project.
Mayor Larry McDonald said he expects the latest problems to push the project’s cost to $8 million — exceeding original estimates by $2 million — and taxpayers likely will be left to pick up the tab.
Economic Development Corp. President Dan Tarver told a meeting of the group’s board Thursday night he made those discoveries two weeks ago while going through documents in the office of former development director Lee Cameron.
Tarver said he found deeds of sale from the corporation to Freeport Marina LLP on four pieces of waterfront property that were not the corporation’s to sell. He also found bills of more than $6,000 and $3,000 dated in September for two 40-year leases the corporation must pay, Tarver said. Before the marina’s many project delays, the marina was set to open that month.
Board members also were told about a fire marshal’s requirement to install a $400,000 sprinkler system in the marina’s boat storage facility, which Tarver said Lee Cameron had not discussed with the new board.
But the former director, who was fired Oct. 3 after seven years in the post, said prior boards were completely knowledgeable about the actions. He said Tarver and the new board have no idea what went on, so of course everything would be new to them.
“They have no clue,” he said. “Before they got on the board, they had never attended an EDC meeting before. They got rid of me, and I was the only guy who knew what was going on.”
The developments led corporation Vice President Clan Cameron, also a city councilman, to say the former board was tossing money into a shredder. McDonald, who watched from the audience, had a similar take on the marina project.
“It’s basically tossing money into a black hole,” he said.
Freeport Property Manager Nat Hickey presented the board with an overview of 22 pieces of property along the waterfront that make up the marina project. The corporation sold four pieces to Freeport Marina LLP last year, but the land belonged to the city. While the corporation is housed within the city, the two are separate entities.
The boat storage facility is on two of the pieces of property, Hickey said.
“We’ve got a marina that’s built on land that was deeded to the developer that was deeded by an organization that didn’t own the land,” Tarver said. “I think the ultimate authority of that falls back on the city council to see what they want to do. While it could just be a formality of the city re-deeding the land again, we’ll have to get legal advice on this on which way to go. It could be a formality and it may not. I don’t know, a legal authority will have to say.”
McDonald declined comment on what the city’s actions will be until lawyers can research the issue. Tarver blamed the problem on a secretive director and ill-informed board members.
“The deeds, what we had shown here tonight, is a reflection of the director that we dismissed two weeks ago and some members of city council at the time played fast and loose with some things they didn’t necessarily understand,” Tarver said. ”And now it looks like it’s a situation that’s going to involve the city of Freeport as well as the EDC in trying to back out and find where we stand on trying to get the marina to move forward.
“If they had done their homework correctly, if they had followed proper procedures, we wouldn’t be in the mess we have right now,” Tarver said.
Neither board members nor McDonald could say whether former corporation members sold or gave the land to Freeport Marina LLP. Records of the transaction have yet to be discovered, Clan Cameron said.
But Lee Cameron said the land was sold from the city to the corporation in 2003 for between $5,000 and $10,000. The corporation then sold it to Freeport Marina LLP for $75,000.
“He’s crazy,” Lee Cameron said of Tarver. “He doesn’t know what he’s talking about. That board did nothing they weren’t totally knowledgeable about.”
When asked whether Freeport Marina LLP could abruptly stop the marina project and use the land for other things, board members said legal counsel would have to decide that.
Lee Cameron said that was the reason for two 40-year leases signed in the early 2000s. That way, the company would be forced to use the land for the project.
Briarwood Holdings, another company of the developer, sent bills to the corporation in September for the first payments of 40-year leases on the land where the marina is being built, Tarver said.
The corporation will receive two bills each month until the leases are fulfilled. Tarver said the original plan was to have the marina completed and the developer would send equal-priced checks back to the corporation and the two would “wash.” But since the marina is more than one year behind schedule, Tarver said the payments must be fulfilled.
“That has to do with that land transfer that they did,” Tarver said. “The prior council members signed this contract and passed it. It set us up to be in a lease exchange. But since it was all contingent upon the marina being online, well, the marina’s not online because of the past actions of the director and the previous board. So half of the contract is in effect. So we’re having to pay out around $10,000 a month and we’re not getting that other return back because the marina’s not online.
“So we had projected the marina would come online sometime in March or April,” Tarver said. “So in between now and then, the city would still have to pay $10,000 a month to the developer to rent the land that we found out was improperly deeded to him.”
Lee Cameron, however, said city officials knew the bills would be coming because it was approved by city council in 2003.
Tarver plans to speak with Briarwood Holdings officials about the issue, but McDonald expected the cost to be passed on to the taxpayers.
“Hell, who else do you think it’ll get passed on to?” he said. “It’s not right.”
Fire Marshal Chris Motley told the board the 51,000-square-foot boat storage building must have a sprinkler system.
The International Fire Code, which Freeport follows, requires one for storage facilities larger than 12,000 square feet, Motley said. Motley said he contacted Lee Cameron through suspended City Manager Gary Beverly many times about the problem.
Cameron acknowledged he had been contacted by Motley about the sprinkler system but was under the impression one was not needed for the boat storage facility.
“There were exceptions to that law,” he said. “Even now, we’re still trying to make a determination whether one was needed.”
The sprinkler system could cost between $400,000 and $500,000 to install, engineer Rene Damian said.
Tarver said the cost of the sprinkler system adds to the marina’s already increasing project cost of about $7.2 million.
McDonald expected the marina’s price tag to jump to $8 million before completion.
Over the course of the project since its inception in the early 2000s, officials have debated the project’s need. The marina survived six years of political power struggles and court battles. Many opposed the city’s attempted use of eminent domain to secure dockfront property for the marina.
In the ensuing turmoil, former City Manager Ron Bottoms left and former Mayor Jim Phillips was defeated by McDonald.
McDonald reiterated the marina project will go through because that was one of his campaign promises. But the new findings will push the marina further behind schedule. Tarver predicted a summer 2009 opening but said it needs to be completed in a timely manner so the city could start getting money back on the lease.
“It’s difficult for me to say what’s going to happen at this stage,” Tarver said. “I think we need some legal advice to find out where we stand and what our options about the land that was improperly deeded.
“Again, if the previous board had done their homework correctly, we wouldn’t be in this situation and would be racing toward marina completion,” Tarver said.
But Lee Cameron said that is not true at all.
“If it wouldn’t have been for people trying to block the marina, it would be completed and creating jobs and revitalizing the city,” Cameron said.
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