ROC Owner: City Got A Heckuva Deal

The Indianapolis news media in typical fashion continue to ignore the debacle known as the Regional Operations Center ("ROC"), the 25-year, $20 million lease for the former Eastgate Mall that one city employee described as worse than war-torn buildings he encountered touring a tour of duty in Iraq. At the most recent meeting of the City-County Council's ROC Investigating Committee, committee members learned that taxpayers have shelled out at least $5 million in expenses associated with the ROC facility during its first 28 months of operation, including about $1.6 million in rent. The Ballard administration lied to the council and the public and claimed the City had to build the ROC in order to host the Super Bowl in 2012. Council members also heard from the owner's politically-connected owner, Alex Carroll, who insists taxpayers got "an amazing deal." Watch this brief clip of the council's chairman, Joe Simpson, sparring with Carroll and his attorney, David Brooks, and as Carroll explains the "amazing deal."

ROC Investigating Committee Still Can't Get Any Answers

If such a large amount of our taxpayer dollars hadn't been pilfered, it would be easy to laugh it off. The Indianapolis City-County Council's ROC Investigating Committee met again this past week where we learned very little since the last meeting in December. The council's attorney, Fred Biesecker, reported to committee members that the Ballard administration has still not turned over documentation showing how much money the City spent on the build-out of the Regional Operations Center and detailed expenditures of what it has cost to operate it to date, making it necessary to seek yet another court order compelling the production of documents.

The Republicans on the committee continued to run distraction for the administration no matter how corrupt and silly they look. Councilor Marilyn Pfisterer demanded the committee chairman, Joe Simpson, resign from the committee because he has a pending lawsuit against IMPD for allegedly violating his constitutional rights, while her colleague Ben Hunter, a chief co-conspirator behind this scheme to defraud taxpayers out of nearly $20 million, did his best to keep throwing stink bombs into the deliberations as a distraction from the real issues before the committee.

The committee heard testimony from three individuals, including Tom Peacock of Peacock Financial, Inc., homeland security director Gary Coons and former DPS general counsel Jonathan Mayes. Peacock was the person responsible for concocting the idea of using the credit-tenant financing arrangement that benefited only the building's owner, Alex Carroll, and royally screwed over taxpayers. He told committee members he was sitting around talking to his neighbor one day, a fellow who used to be the City's chief information officer, and asked him if he had any ideas how to get some good government consulting work. His neighbor introduced him to Mike Huber and the rest is history. He cashed a nearly $200,000 check for a few hours work. Gary Coons' lengthy testimony shed little light on how this train wreck went down. Jonathan Mayes said, well, very little. I could show you video clips of their testimony, but these three short clips probably better summarize their testimony.

Tom Peacock:

Gary Coons:

Jonathan Mayes:

Ballard Administration Admits Key Documents Related To ROC Were Destroyed, Discrediting State Police Investigation

There has been outrage nationally over the discovery that the computer of a key IRS official at the center of the congressional investigation concerning the political targeting of the Tea Party had crashed in 2011 and that because computer backups had been recycled her e-mails could not be produced to comply with a congressional subpoena. Suspicions concerning the supposed computer crash were heightened after it was learned that it occurred only days after congressional investigators began asking questions about IRS scrutiny of donations to certain nonprofit groups. So where's similar outrage over the admission by the Ballard administration that computer hard drives of city project and contract managers had been "wiped clean" making it impossible for them to produce key documents related to the Regional Operations Committee?

Instead of reporting on what is arguably a crime, most of the local news media this week instead touted a conveniently-timed tour of the Regional Operations Center conducted by Public Safety Director Troy Riggs to show off the fact that the troubled landlord had finally corrected problems with the leased building that made it unsafe for occupancy more than two years after it was required to deliver the premises for occupancy under terms of an unconventional, one-sided lease that favored the politically-connected owner, Alex Carroll. At least Fox 59 News' Russ McQuaid took note of what was transpiring in the courtroom where a special council committee investigating the ROC lease was seeking a court order compelling the Ballard administration to produce key documents related to the lease that is has sought for months:

In response to a subpoena by a City-County Council committee, attorneys representing Indianapolis Mayor Greg Ballard have told a Marion Circuit Court judge that they can’t find key paperwork related to the city’s selection and lease of the Regional Operations Center at the former Eastgate Consumer Mall. 

The council’s ROC Investigating Committee sought 30 sets of documents that were expected to detail the decision of the Ballard administration in 2011 to sign a 25-year, $18 million lease for an emergency operations center and police headquarters on North Shadeland Avenue . . . 

Among documents crucial to the ROC investigation that the lawyers claim they cannot find are hard drives belonging to city project and contract managers and consultants that have been “wiped” clean of information.  

The city also doesn’t have any contracts with an engineering firm hired to work on the project, Drafts of the Development Agreement and audit reports related to expenditures at the center. Most glaring is the city’s inability to answer the demand for the  “contract with the NFL that required the city to have an emergency operations center in time for the 2012 Super Bowl.”

“Defendant has no documents responsive to this Request,” answered the Corporation Counsel. Former Public Safety Director Frank Straub and Mayor Ballard repeatedly claimed that such a center was a contracted stipulation for Indianapolis’ successful bid to host Super Bowl XLVI. 

“The answer is, they should have it,” said Simpson. “I think there is some information about the NFL that we asked for and that we want. “Or they still exist. They just don’t want to give them to us.”

Public Safety Director Troy Riggs admits that his predecessor, Frank Straub, left behind no documents that his office had maintained concerning the ROC lease. Adding further to the problem was Riggs' acknowledgment to McQuaid that the City's Code Enforcement inspectors had uncovered multiple violations during construction taking place within the leased space in 2011 but had been ordered by city legal to stop conducting inspections due to questions the corporation counsel's office had concerning the lease. The Ballard administration has refused to produce "all notices of Code Violations and Stop Work Orders" and e-mail communications of Code Enforcement employees concerning the construction work taking place at the ROC to the ROC Investigating Committee, claiming the request is "overly burdensome." A fire investigator told McQuaid that he never investigated the leased premises for a fire suppression system until October 2012, more than 9 months after city employees had first moved into the building. "Inspector Fred Pervine said he was busy with other projects and therefore unaware of the lack of a fire sprinkler system in the center," McQuaid reported.

The Ballard administration waited until a deadline set by Marion Co. Circuit Court Judge Louis Rosenberg  to produce documents unsuccessfully sought by the council, including Straub's e-mails. Advance Indiana exclusively reported on the contents of some of those e-mails earlier this week in which then-City Controller Jeff Spalding admitted to serious funding problems facing IMPD that resulting in Straub making last-minute changes in the ROC lease to reduce its costs as the administration scrambled to win council approval of the ROC lease.

Interestingly, one of the e-mails produced in this latest request was sent to a Republican member of the investigating committee, Jack Sandlin, concerning lost recordings of Public Safety Board meetings by WCTY. This occurred after it was discovered that WCTY's archived recordings of past meetings of the Public Safety Board were missing key meetings during Straub's tenure at which the ROC lease was discussed. Channel 16's Manager wrote in an e-mail to Sandlin dated January 16 of this year that WCTY had covered meetings of the Public Safety Board in 2010 but were later ordered by Straub to stop recording them. "After our conversation I did some research that helped jog my memory," Montgomery wrote. "Channel 16 covered two meeting of the PSB in 2010, on April 14th and May 20th." "We were then directed to discontinue coverage as per Director Straub," Montgomery continued. "We resumed coverage on February 9th, 2012, with Director Straub still presiding." Montgomery told Sandlin that he had e-mails from that period and indicated that he did not get any push back from Straub over the renewed coverage of the PSB meetings. Montgomery offers no explanation as to what authority Straub had to order him to stop covering meetings that it was required to cover in contravention of its own policies.

These latest disclosures completely discredit the supposed investigation conducted by the Indiana State Police which concluded that no criminal wrongdoing had occurred in connection with the ROC lease. Based on that investigation, Marion Co. Prosecutor Terry Curry announced that his office would not be conducting any prosecutions. "It was not our role to determine if it was a one-sided lease or the terms were inappropriate," Curry told Fox 59 News . . . Curry said detectives told him they examined enough evidence and interviewed enough witnesses to determine there was no crime in the agreement." I'm not a prosecutor, but I know enough about the law, Mr. Curry, to know that the destruction of these key public documents related to the ROC lease constitutes official misconduct and possibly obstruction of justice, both felony crimes. If the media in this town does its job, it will demand that Curry convene a grand jury immediately to determine who was responsible for the destruction of those documents. Both Straub and his counsel, Jonathan Mayes, along with other key administration officials, should be compelled to appear before the grand jury to explain what they knew about the destruction of those documents and when they knew it. If Curry fails to act in response to these latest disclosures, then he has proven that he is as unfit to serve as the county's prosecutor as his corrupt predecessor, Carl Brizzi.

Three Year-Old E-Mail From City Controller Discussing ROC Funding Issue Foretold IMPD Funding Problem

As former Public Safety Director Frank Straub and other members of the Ballard administration scrambled to salvage Straub's ill-fated plan to establish a Regional Operations Center at the former Eastgate Mall site after the Administration & Finance Committee tabled the plan, an e-mail sent by former City Controller Jeff Spalding revealed big holes in the honestly-balanced budget meme on which Mayor Greg Ballard was touting as he ran for re-election to a second term against Democrat Melina Kennedy. The scramble to explain funding for the ROC came after the Administration & Finance Committee tabled a proposal to approve the leasing of 210,000 square feet of space at the committee's April 12, 2011 committee meeting. The committee members were completely caught off guard by the enormity of the undertaking (a lease costing more than $1 million annually over a 20-year period) at the same time Homeland Security Director Gary Coons and Jonathan Mayes, counsel for the Department of Public Safety, were unable to answer basic questions committee members had of them about the lease.

It wasn't until near the end of the discussion that committee members learned that the ROC had to be operational six months prior to the Super Bowl the following year, and that construction at the site had already commenced despite the lack of an approved and signed lease agreement as required by state law. "I am not amused," Councilor Jackie Nytes said upon learning that last fact as the proposal was tabled by the committee. Before giving any kudos to Nytes, you should know that she totally discredited herself earlier in the meeting when she told Coons and Mayes that she would have no problem supporting approval of the lease if they told her that this was something they needed to get done because of the Super Bowl. Nytes, of course, provided critical support for passage of the approval of the sale of the water and sewer utilities to Citizens Energy, which provided the necessary funding for Mayor Ballard's more than $400 million Rebuild Indy infrastructure spending program. Nytes was later rewarded with a paid board appointment on Citizens Energy's board, along with a six-figure job as the new CEO of the Indianapolis public library.

"I am sure Jon told you, they tabled it due to lack of information specific to the lease," Coons said in an e-mail later that evening to Director Straub. "Wow-that is ridiculous," Straub replied. Councilor Maryilyn Pfisterer, who chaired the committee meeting, e-mailed administration folks to let them know "the lease generated some heat tonight." "Lots of info about Public Safety--not much about the lease itself," Pfisterer wrote. She wondered "why the need for so much square footage?", how it would "impact DPS' budget going forward" and "how does this comport with the proposed new IFD headquarters?".

Councilor Ben Hunter, who co-sponsored the ROC lease proposal with Councilor Mary Moriarty-Adams, fumed over the committee's action in an e-mail to Ryan Vaughn. "Perfect platform for embarrassment," Hunter complained. "Someone should brief the Mayor he was very well thrown under the bus tonight." Hunter complained about the heat he and Mary were getting from area residents in their districts near Eastgate Mall and how Melina Kennedy was already capitalizing on the misstep. He complained that nobody raised any questions about the lease during the Republican caucus meeting the night before. "Mary vetted it in her caucus, and again not one councilor raised a red flag," Hunter said. He defended the fact that construction had already started on the project, noting "that's the owner's decision to do so." In a follow-up e-mail to Straub and his chief of staff, Hunter derisively said that he should have taken into account "this committee's past history in not passing simple leases." "My apologies and there will be some serious hand holding by Mary and I moving forward," he concluded. Hunter and Adams, along with Mayor Ballard, received large campaign contributions from the owner of the Eastgate Mall while these discussions were underway.

Over the course of the next two weeks, Straub's office scrambled to make the proposed lease agreement more palatable to council members. The square footage was cut substantially from 210,000 to 76,000 square feet. A decision had suddenly been made to move the East District IMPD headquarters to the ROC, allowing its current lease on Shadeland to expire in June. Councilor Adams wondered what happened to the plan to move K-9, Swat and ATF into the ROC. "These seem to be huge changes over a 10-day time frame," Adams wrote in an e-mail to Straub. "As we continued to model out the project it became clear that we could not afford the 210,000 sq ft at this time," Straub replied. Straub said the other specialized units might be consolidated at the ROC in the future if the financial picture improves.

By moving the East District to the ROC, Straub looked to save about $250,000 a year in costs from that lease. Straub further conceded that the FBI would not have any permanent presence at the building following the Super Bowl. He said the feds were, however, donating furniture and a "significant portion" of the wiring costs for the ROC. Around the same time, an e-mail from Mayes to Straub and other DPS staff members lamented that there wasn't enough space within the 76,000 square feet area to fit what was known as MECA before Straub made the decision to do away with MECA. That came in response to an e-mail from Straub's chief of staff, Carolin Requiz-Smith inquiring if "we can fit them in the ROC." Mayes said, "We can look at adding them in Phase II or III." MECA, by the way, served as Marion County's emergency planning agency prior to Straub doing away with it, in part, due to disagreements with its boss. Straub wasn't interested in hearing about better, more economical options for locating the ROC at a site near the airport that had already been identified.

Ten days after the Administration and Finance Committee tabled the ROC lease, Straub's staff asked to meet with then-Controller Jeff Spalding to discuss revenue options for funding the ROC lease. Spalding furnished a brief revenue outlook for IMPD funding in the coming years in an e-mail to Straub and his staff that was bleak to say the least. Spalding described the two largest sources of funding for IMPD's $195 million operating budget as coming from the local option income taxes ($105 million and property taxes ($40 million). IMPD also received about $3.5 million from a variety of smaller tax sources (vehicle excise taxes and financial institutions tax), along with $6.5 million from the county rainy day fund, $3.8 million from parking meter revenues and $5.4 million from the wastewater PILOT, with the balance coming in the form of federal and state grants. Spalding's discussion of local income tax revenues was particularly enlightening when he explained that the City only had a Rainy Day Fund because state officials had intentionally over-distributed local income tax revenues to Indianapolis and Marion County to lessen the economic impact of the Great Recession:

Even as economic recovery begins to raise taxable income in Marion County, there is the overhang of past over-distribution by the State. Through 2010, the State distributed more local income tax revenues to local governments than it actually collected on behalf of local governments. The reasons this happened require a much longer separate discussion, but this is how the City-County accumulated its Rainy Day Fund. The proposed state budget, now moving towards passage in the Indiana General Assembly, presumes that distributions of local income tax will be held flat through 2015 as the State recaptures this past over-distribution.

Spalding estimated that the "course correction" would take at least four years to correct unless the taxable income of Marion County residents substantially outpaced the statewide average growth in income tax collections. Spalding projected that property tax revenues would grow at 2.5% on average, although he noted the speculative nature of that projection without knowing the full impact of property tax caps in the coming years and the cumulative decisions of all local governments impacted by property tax caps. Spalding thought it was doubtful that IMPD would be able to rely on any county rainy day funds in 2012. Of particular note was Spalding's comment about the $3.8 million that IMPD had been getting from parking meter revenues. He warned Straub and his staff that "there is no guarantee that these $ can continue to be used to support IMPD.

Indeed, the City-County Council's approval of the privatization of the City's parking meter revenues in November 2010, which was taken over by the private operator in March 2011, provided that the City's share of parking meter revenues would be used to pay for street, sidewalk and infrastructure improvements in the downtown area and Broad Ripple Village. Spaulding added, "Not many councilors truly understand the 'funding box' that municipal government is operating within, but J. Nytes certainly does." "Does the possibility exist that some paradigm shifting change will happen over the next decade to alter current trajectory of local government revenues in Indiana generally or Marion County specifically?" he rhetorically asked. "Sure! But we can't plan on it."

E-mails produced to the ROC Investigating Committee don't shed any light on how the administration explained that it was going to pay for the costs of the ROC lease. A new model with the scaled-down lease footprint for the ROC was not fully devised until a day before the administration made a new presentation to the Administration & Finance Committee. Only two days before the committee hearing, DPS' attorney, Jon Mayes, was still learning details about the lease agreement according to one e-mail when he seemed surprised that it was shifting to a 25-year agreement (rather than 20) with the first lease payments not kicking in until January 1, 2013. The lease payments were revised to $685,000 for the first ten years of the lease, rising to $760,000, which didn't include substantial, ongoing maintenance and utility expenses. Although the leased space was reduced in size by nearly two-thirds, charge per square foot rose more than 40%. The 25-year term of the lease payments included the initial build-out costs of about $8.6 million. The building's owner received funding for the costs of the build-out upfront from its lender, Wells Fargo. As to the City's funding for the ROC lease, Straub cautioned his staff not to "go crazy." He told his staff in an e-mail that his was "comfortable" telling council members that "the controller projects [annual] property tax levy increases of 2 1/2 percent going forward, better fiscal mgt., potential fees, etc." Despite his "poor" revenue outlook, Spalding agreed to help Straub's staff articulate revenue assumptions to deal with any potential hang-ups council members might have.

During that second presentation to the Administration & Finance Committee, you will see in the video below where Straub and his staff deliberately lied to the committee members about being able to get out of the lease in the future at any point if the council simply chose not to appropriate funds to pay for the lease. Straub would also claim that only demolition work and not build-out work had commenced at Eastgate. After a snow-job of a presentation by Straub and his staff during which council members proved completely inept at delving more deeply into questioning the lease proposal in front of them, the committee unanimously voted to send it to the full council and the rest is history. City legal would claim that it never signed off on the lease. Yet we now know that the administration, even after learning of the one-sided lease agreement negotiated by Straub and Mayes and the laundry list of problems with the property that would force DPS to vacate the space until the landlord made repairs, signed another agreement with the landlord locking the city into the long-term, credit-tenant lease agreement and relieving the landlord of any liability to the city for all of the problems encountered after the City took possession of the leased space. And, of course, the council never got an answer to the big question about relocating IFD's headquarters until we learned much later that a sweetheart deal with a pay-to-play developer would result in the City incurring nearly $60 million in added costs related to that relocation of IFD's headquarters, the Station 7 and the Firefighter's Credit Union, along with the gifting of the valuable property currently owned by the City to the pay-to-play developer for its private development use.

Council Files Lawsuit To Compel City's Compliance With ROC Subpoena

The Indianapolis City-County Council's clerk has acted upon a council resolution approved by the full council and filed a lawsuit in the Marion County Circuit Court seeking enforcement of a subpoena it issued to the City's corporation counsel's office seeking the production of dozens of documents related to the controversial, 25-year, $20 million lease of the former East Gate Mall property from the politically-connected landlord, Alex Carroll, for the Regional Operations Center. The lawsuit asks Circuit Court Judge Louis Rosenberg to compel the City's corporation counsel to produce the documents identified in the subpoena within five (5) days of the court's order, and to produce within fifteen (15) days of the court's order, the balance of documents it first requested from city last November. The Ballard administration has been stonewalling for months now the requests of the ROC Investigating Committee established last year by the council to learn the circumstances under which the City entered into the one-sided, costly, long-term lease for property that was ill-suited for housing the Regional Operations Center. You can view a copy of the complaint filed by the council's clerk by clicking here.

Indiana State Police Investigation Of ROC Appears To Be A Total Whitewash

WRTV's Jack Rinehart reports tonight that Indiana State Police investigators are about to wrap up an investigation of the ROC lease that was originally requested by Marion Co. Prosecutor Terry Curry in January. Earlier this week, WISH-TV reported that neither the building's owner, Alex Carroll, nor his attorney had been contacted by investigators. Former Public Safety Director Frank Straub, who engineered the execution of the one-sided ROC lease agreement with Carroll for his Eastgate Mall property, told Rinehart that investigators had not spoken to him either. How can you investigate the execution of a controversial lease investigation if you don't bother to speak to the principal parties to the agreement?

DPS' Deputy Director Valerie Washington told Rinehart that nobody broke any criminal laws. "I think it was a tricky business deal," Washington said. "I don't think there were any criminal elements in any way, shape or form, tied to this lease." She claimed that ISP investigators were reaching out to all the principal parties involved in the lease, which couldn't have included her as clueless as she appeared to be during her testimony to the committee about her knowledge of the lease.

Washington's comments echo the comments made by Councilor Ben Hunter, who pushed approval of the lease through the council and received large campaign contributions from Carroll. Hunter made public the existence of the ISP investigation for the first time at the ROC Investigating Committee meeting this past week, which seemed to come as a complete surprise to the committee's chairman, Councilor Joe Simpson. Hunter challenged the need for the ROC Investigating Committee to continue investigating the lease because of the ISP investigation despite the ongoing refusal of the Ballard administration to turn over key documents regarding the lease, forcing the committee to seek a court order to enforce a subpoena it issued to the administration after five months of stonewalling. Hunter told other council members that he was confident the ISP would conclude that nobody broke any criminal laws.

Curry made a terrible error in judgment by turning over the investigation to ISP if he was truly interested in getting to the bottom of this sordid deal. I've yet to see the ROC Investigating Committee call the project manager as a witness before the committee. Didn't he advise Straub early on that there were too many issues that arose with the building after the lease was signed and the project was commenced, and that the City needed to cut its losses by finding a way out of the lease? And didn't Straub reply to his advice the same way he responded to former emergency services director Jim White, who advised Straub not to choose the Eastgate Mall property, by firing the ROC's project manager? Are there damning e-mail communications between Straub and the former ROC project manager that the Ballard administration is withholding from the ROC Investigating Committee?

Former Emergency Services Director Tells ROC Investigating Committee About Airport Site Straub Rejected Before Firing Him

During the first part of this week's ROC Investigating Committee, testimony was provided by Jim White, a retired member of the Indiana State Police and veteran of the U.S. Army who served in Iraq. When Frank Straub became Director of Public Safety, White was serving as director of the city's emergency services. He currently serves on the faculty of IUPUI's school of public and environmental affairs. At the time of Straub's arrival, White had been working for months on a new site to relocate MECA's operations from its old location. He identified an excellent site at the Indianapolis International Airport, which was owned by Kite Realty and available for immediate occupancy. After White shared with the committee the details of that proposed lease agreement, it was absurd to think that Straub would have rejected the airport location in favor of the Eastgate location. As White told the committee, "As a taxpayer, I scratch my head. It doesn't pass the common sense test."

According to White, Kite presented the City a signed lease offering more than triple the space MECA had at its current location at that time for a minimum ten-year period for total lease payments of $2.2 million compared to the estimated $3 million in rent payments it would be required to make if it stayed at its current location, a savings of more than $800,000 over the 10-year period. The airport site met all of the requirements White said were necessary for the siting of an emergency operations center, plus it had the added benefit of providing covered space for storing emergency vehicles. The rent also included all utilities and trash removal. White planned to spend about $1.875 million to build out the space to meet the regional operations centers' requirements, all of which would have been covered by a $2.3 million federal grant the City of Indianapolis was eligible to receive. Additionally, he received buy-in at the location from several of the surrounding counties to make it truly a regional operations center. White estimated that a regional operations center could have been completed and ready for move-in as soon as July, 2011 but no later than September, 2011, allowing plenty of time for getting the emergency operations center up-and-running prior to the Super Bowl in February, 2012.

Straub had professional differences with White after he became Public Safety Director and fired him.  White had been contacted by Alex Carroll, who pitched his site to him. He toured the building and found it unsuitable due to its poor condition and the length of time he believed would be needed to prepare the site. As it turned out, the regional operations center didn't open up at the Eastgate site until January, 2012, shortly before the Super Bowl and the building was still not suited for occupancy at that time. None of the neighboring counties which planned to participate at the airport site agreed to partner with Straub's chosen site at Eastgate. Straub later testified to the Administration & Finance Committee that he had rejected White's proposed airport site because it was located within a flight path. White scoffed at that explanation, noting that the Eastgate Consumer Mall location is also located within a flight path. The lease that Kite had signed contained the standard lease terms that government leases traditionally include. White said at the time that he didn't want to lock the City into more than a 10-year lease because it was presumed that a new justice center would be built and that the regional operations center would be relocated permanently at that new facility.

If you watch the video above, you will witness the rude treatment White received from the Republican members of the committee, who thought his testimony was purposeless. Councilor Marilyn Pfisterer tried to insist that the lease agreement that had already been signed by Kite had not been formally approved, and she suggested without substantiation that the airport authority didn't want the operations center located there. Incidentally, the regional operations center has been temporarily relocated to the airport site while repairs continue to be made to the building to make it safe for occupancy. A forced evacuation of the building was ordered by Straub's successor, Troy Riggs, last September, after he determined that the building was unsafe for occupancy. The City continues to pay $57,000 a month rent for the ROC space even though it is not currently able to occupy it. Councilor Pfisterer is obviously not a whiz at math. She also claimed that the lease White had presented was at least as costly as the 25-year, $20 million lease Straub signed with Alex Carroll for the Eastgate space.

Councilor Ben Hunter, who thinks he knows more about emergency services planning than White, insisted that Straub's assessment of the airport site being unsuited for a regional operations center because of its location near the airport was a correct assessment based on "best practices." Hunter admitted that he had toured the proposed airport site with White, along with a much larger group, at the time White had promoted the site. So yes, he knew that there was a much better and less costly option when he hopped on Alex Carroll's bandwagon in pushing the Eastgate site located within his council district. Councilor Hunter was rewarded with generous campaign contributions by Carroll for pushing the ill-fated ROC location. By all rights, Hunter should be a witness at these proceedings, not a member of the investigating committee. I would like to ask him if he knew whether Marvin Slomowitz of White Plains, New York became an investor in Alex Carroll's real estate before or after Frank Straub arrived from White Plains, New York and began an almost immediate push to locate the ROC at the Eastgate property, even at the expense of getting White out of his way by firing him. That change in plans allowed Carroll's trash heap to be instantly converted into a golden cash cow for his benefit at the expense of Indianapolis taxpayers, who Hunter believes are paying too little in taxes and are responsible for the lack of funding to pay for basic city services like public safety. I would also like to ask Hunter who paid for his trip down to Naples, Florida with Ryan Vaughn to attend the Susan Brooks annual fundraiser for the high rollers with whom she and David like to keep company. Isn't David representing Alex Carroll? Hmmm.

UPDATE: In this short video clip below, witness Councilor Ben Hunter announcing to committee members the existence of a criminal investigation that he says he learned of independently. Later, it was reported that the Indiana State Police is the law enforcement agency investigating the ROC lease. Hunter used the existence of that investigation as an excuse for questioning the continuing need for the committee to investigate the lease.

WISH-TV got confirmation from ISP that it had started an investigation in January at the request of the Marion County Prosecutor's Office, which is awaiting the results of the investigation. They've been investigating the case for the past three months, but the building's landlord, Alex Carroll, says he has not been contacted by investigators. Sounds like a thorough investigation. They plan to wrap up their investigation within 45 to 60 days. Hunter clammed up when WISH-TV contacted him for additional comment on his knowledge of the investigation other than to say he was sure there was no criminal wrongdoing--at least that's what David and Ryan told him the official line is, and I'm sure they're confident of the outcome of the ISP investigation in advance.

While the scope of the investigation is not clear, Capt. Dave Bursten, spokesman for ISP, confirmed to I-Team 8 that the Indiana State Police Criminal Investigation Division began looking into the matter in early January 2014. The acknowledgement of a police investigation marks the latest twist in the tale of the controversial building.

“It is anticipated the investigation will conclude within the next 45 to 60 days.  Once concluded, the investigation will be submitted to the Marion County Prosecutor’s Office for review and action as that office deems appropriate,” Bursten said in an email to I-Team 8.

Peg McLeish, spokeswoman for Marion County Prosecutor Terry Curry, said Curry’s office requested the investigation, but declined to provide specifics. The same was true for Samantha DeWester, the city’s attorney, who acknowledged the investigation was ongoing but declined to say what the city had provided or who was questioned, if anyone.

A spokeswoman for the building’s owner, Alex Carroll, said neither Carroll nor his attorney had been contacted by investigators.

News of the ISP investigation first surfaced publicly Monday night when it was mentioned by Councillor Ben Hunter toward the end of the ROC council committee meeting.

“I am independently aware of it and I am again shocked that it has not come out to this committee… Why are we duplicating work that has gone on? And if committee members are aware of it, I would like for committee members to be more transparent,” Hunter said during the meeting.

Councillor Joe Simpson, who chairs the ROC committee, said: “Why would they share something with us when it’s criminal? We are not here for a criminal matter.”

Councillor Hunter declined to discuss the matter on camera, stating over the phone that he didn’t want to speculate on the nature of the investigation. He later added: “I’m confident there’s no criminal wrongdoing.”

Hey, Capt. Bursten, I'm still waiting for ISP to include Pixie Grismore's unsolved murder on your cold case list that you told me a couple of years ago was going to occur in short order. Isn't her case just one in a long string of cases your agency has deep-sixed for corrupt political motives?

ROC Investigating Committee Approves Resolution Seeking Court Order To Enforce Subpoena

It's been close to a month since the full Indianapolis City-County Council approved a resolution authorizing the issuance of a subpoena to the Indianapolis corporation counsel's office requesting production of documents the ROC Investigating Committee has sought from city officials for the past five months. Tonight, the committee voted on party lines to send a proposal to the full council seeking permission to file an action in the Marion Circuit Court to compel production of the requested documents regarding the controversial 25-year, $20 million lease agreement for the regional operations center.

According to information provided to the committee by the council's counsel, Fred Biesecker, the City has failed to produce close to three-quarters of the dozens of documents requested by the committee either because it says it doesn't have the documents or has just failed to produce them. The building's landlord, Alex Carroll, produced those documents that he says he alone possessed and that the City did not have. His attorney said the council should seek the balance of the documents from the City because they are public records in its possession. If tonight's resolution is approved by the full council, Circuit Court Judge Louis Rosenberg will be asked to determine whether an order should be issued to compel production of the documents. Republicans continued to challenge and question the motivations of Biesecker and Democratic council members in seeking production of the documents. They believe the City will eventually produce the documents if given more time.

Interestingly, Councilor Ben Hunter, who sits on the committee despite sponsoring the original resolution approving the controversial lease and collecting campaign contributions from the politically-connected owner of the ROC building, suggested tonight that the committee should back off its push to investigate the lease because of a separate criminal investigation that he says has been launched. Hunter said he was surprised the media had not yet reported on the criminal investigation. Councilor Joe Simpson, who chairs the committee, said he had not been apprised of a criminal investigation when Hunter queried him about it. Apparently, the Indiana State Police is investigating, which could mean a political cover up is underway. ISP, a highly-political law enforcement agency that operates at the whims of the state's governor, might give a pretense of a serious investigation simply to clear everyone of any criminal wrongdoing so the Ballard administration can argue case closed. These people are too predictable.

Hunter also pushed the idea of passing an ordinance to modify the process for entering into leases to prevent city officials from ignoring long-standing practices followed prior to the ROC lease, which he said should include a requirement that the services of commercial brokers be retained for the negotiation of any city leases. Of course, the commercial real estate brokers are stuffing a lot of money in the politicians' pockets so that idea from Hunter comes as no big surprise. The use of a commercial broker for the redevelopment project for the Mass Avenue block now home to IFD headquarters and IFD Station 7 has turned into a total boondoggle that is costing taxpayers a fortune, while rewarding the broker more than a $1 million fee for performing the absolute worst negotiations possible from the public's standpoint.

Ballard Administration Fails To Comply With ROC Subpoena

The Ballard administration's conspiracy to cover up multiple possible criminal law violations committed to defraud Indianapolis taxpayers out of tens of millions of dollars in order to reward a campaign contributor continues unabated. Fox59 News' Russ McQuaid reports that the administration ignored a deadline to respond to a subpoena issued on March 10, 2014 by the ROC Investigating Committee to produce dozens of documents the committee has sought from the administration for more than four months. A few outstanding document requests trickled in to the council's attorney's office after the deadline passed but many others were not produced. According to news reports, former Public Safety Director Frank Straub ordered many documents related to the controversial 25-year, $20 million lease for the regional operations center shredded after his forced resignation but before he left his job to become the new police chief for the Spokane, Washington police department. The committee may have to go to court to force the administration to comply with the subpoena. Here's more from McQuaid's report tonight:

“What we got today is unacceptable and most of it was on the documents request since November,” said Councilman Joe Simpson. “You heard the same story from the word, ‘Go!’ ‘We don’t have them. We don’t know where they are. It’s not my job.’ My job is for you to tell me if you don’t have them, then, why? Where are they?”

Hours after the committee’s deadline, passed over republican objections, passed, Simpson said partial documents began trickling into the council’s attorney from the city’s lawyers.

“There were about ten documents that had no documents attached to it. Some we’re not able to find and four of them, there were no documents period.” . . .

Meanwhile, Indianapolis taxpayers continue to shell out nearly $60,000 a month in rent for a building it cannot occupy while it awaits a punch list of more than 100 repair items the City never bothered getting around to identifying until months after it abandoned the building because of its unsafe conditions and only after it entered into a settlement agreement late last year which left the City without any legal remedy, and which ratified the terms of the long-term, credit tenant financing lease agreement that Straub executed without proper authority in 2011 in a rush to get the ROC operating prior to the Super Bowl in 2012. In any other city in America people would be going to jail for all the fraud perpetrated on the public in this deal, but this is Indianapolis where it's an acceptable practice to defraud taxpayers any way you can in order to reward campaign contributors.

Unnerved by their pathetic handling of the regional operations center, the Ballard administration is pushing forward with its first public hearing tonight to privatize Marion County's criminal justice system. The plan calls for moving the county's jail, sheriff's department, criminal courts, prosecutors, public defenders and other related criminal justice agencies out of their current downtown locations into a new, single facility. The administration wants to award a long-term, credit lease financing agreement to a private vendor to build, operate and maintain a new criminal justice center at a single location, a plan that will cost taxpayers hundreds of millions of dollars more in the long-run than if the City financed, owned and operated its own facility. The administration's consultant originally picked a site near the county line on the far west side next to the airport as the preferred location. After being bombarded with public criticism, the Ballard administration switched course and announced that its new preferred site is the former GM stamping plant site just west of the downtown across from the zoo on West Washington Street. This has nothing to do with what is best for the taxpaying public; it's all about doing what will provide the biggest financial reward to the campaign contributors stuffing money in the politicians' pockets.

ROC Investigating Committee Moves Forward With Subpoena, Corrupt Ballard Administration's Settlement Agreement Designed To Quash Any Taxpayer Remedy

UPDATE: See update below disclosing that lease agreement facilitated $9.6 million loan to ROC owner
Over the continuing objections of the Republican members of the ROC Investigating Committee, the newly-constituted majority Democratic members voted tonight to issue a subpoena to the City of Indianapolis' corporation counsel to obtain at least thirty documents that were requested four months ago but not produced pertaining to the one-sided lease agreement the City's Department of Public Safety entered into with the politically-connected owner of the former Eastgate Consumer Mall. Public Safety Director Troy Riggs ordered public safety employees to evacuate the building last September after he determined that continued occupancy of the building was unsafe for workers, but the City has continued paying about $57,000 a month in rent into escrow for the premises leased under the terms of a 25-year, $20 million lease as the site of the Regional Operations Center.

The good news at tonight's meeting was that the building's landlord, Alex Carroll, finally produced the documents at the end of last week that the council committee had threatened to obtain pursuant to a separate subpoena issued to him for documents the City claimed only the landlord possessed, either because it never obtained copies of them when the agreement with Carroll and his business associates was entered into, or the records were among those that former Public Safety Director Frank Straub had destroyed before he vacated his office and moved to his new job as Spokane, Washington's police chief. The bad news is that the reason Republican committee members have stonewalled production of the documents the past few months becomes crystal clear after viewing the unconscionable settlement agreement the city's corporation counsel entered into with the landlord late last year on December 10, 2013 after the ROC Investigating Committee had been formed and began its work in November.

Under the terms of that troubling settlement agreement, the City agreed to reimburse the various business entities owned by Carroll (401-Public Safety, LLC, Lifeline Data Centers, LLC and Lifeline Construction Services, LLC) approximately $120,000 for several items, including insurance on the building ($9,000), improvements to the leased premises ($40,000), reimbursement of maintenance expenses ($35,000) and data line use ($34,000). The City gave the landlord ninety days to complete a punch list of unfinished items (until May 2014 for some items) that should have been completed before the City's employees ever began occupying the premises prior to the Super Bowl in January 2012. The City assumed responsibility for obtaining permits for all work required to be done to complete the punch list of items and agreed not to unreasonably withhold approval of any work completed by contractors hired to perform the work. The agreement freed up the rent money being escrowed by the lender to be released to the landlord and made clear that the original lease would remain in full force and effect.

Adding further insult to injury, the City waived all legal and equitable remedies of any kind it might have had under the original one-sided lease agreement pursuant to the settlement agreement, including the damages it incurred from having to relocate the Regional Operations Center to another location while the problems within it were being remedied and the 24x7 fire watch expenses the Department incurred as a result of the premises not having an operating life safety system as required by law. Any attempt by the City to bring a legal or equitable action in the future based on a breach of the original lease agreement would constitute a breach of the settlement agreement and the City would be liable to the landlord for any attorney's fees it incurred defending against such a lawsuit. The agreement even included a non-disclosure clause applicable to the landlord concerning the settlement agreement unless the City chose to disclose its terms to the city council, pursuant to a public records request, a duly issued subpoena, the landlord's accountant or as necessary pursuant to a court action to enforce the terms of the settlement agreement. The settlement agreement even instructed the landlord how to respond to media inquiries regarding the lease agreement as follows: "The matter has been settled and the Lease Agreement remains in full effect."

Every standard provision that I thought was deemed mandatory in all government contracts is missing from this lease agreement. For example, the standard provision allowing the City to terminate the lease agreement for convenience is conveniently not included so that when the public finally found out what a white elephant this lease was the City would have no choice but to swallow the bitter pill and continue making exorbitant lease payments and paying to maintain the building over the next 25 years, or exercise its right to purchase the building. They've pretty much locked the agreement down so tightly to benefit the landlord that taxpayers will be socked with costly litigation that could allow the landlord to recover tens of millions of dollars, plus his attorney's fees, if the City tried walking away from it:

What it boils down to is that the politically-connected developer bought a white elephant of a property and looked to figure out a way of getting out from under it. He turned to taxpayers to not only bail him out of his current mortgage on the property but turn the property into a cash cow for the next 25 years. The City would have been better off buying the property from him for the amount of the mortgage and to simply demolish the building. Any normal buyer of this property would have bought it for the land and simply demolished the building so something new could be redeveloped on the site. When the ROC was closed last September, the employees were moved to a site out by the airport, which is where the Ballard administration is now trying to relocate the entire criminal justice system. Under that pending proposal, taxpayers would be stuck with another credit tenant lease agreement just like this boner that would put the taxpayers on the hook for decades for at least $2 billion to occupy a building that will be owned, operated and maintained by a private developer.

What the Republican council members have been trying to do is run out the clock to allow the landlord these additional months to remedy all of the problems with the leased premises until it is suitable for occupancy and use again by city employees, at which time they will then argue that the point of the investigation is meaningless because all is well now. They've been offering specious reasoning that instead of getting all of the relevant documents pertaining to the lease agreement first would have the committee devote its time hearing Carroll's attorney, David Brooks (husband of U.S. Rep. Susan Brooks), spout off talking points in an effort to hoodwink the public into believing that the criminal lease isn't really as bad of a deal for taxpayers as it so obviously is. The hell with the fact that the Ballard administration entered into a settlement agreement that was even more criminal than the original one-sided lease agreement. If there was a provision in the law for the impeachment of the city's mayor, this would be grounds for doing so.

I would again call on U.S. Attorney Joe Hogsett to move off his butt and do something about the rampant public corruption going on in this city. We're sick and tired of sitting by and watching our tax dollars being pilfered by corrupt politicians in pursuit of their sole aim of rewarding their campaign contributors without a concern in the world about whether there is any public benefit resulting from their actions. Yeah, this sort of crap happens in Chicago all the time, but at least when it's disclosed to the public, there has been a federal prosecutor to bring those responsible for the corruption to account for their actions. That never seems to happen here. If Hogsett's inaction wasn't bad enough, the media's coverage of this issue has been equally as unsettling. News reports portray the ROC Investigating Committees strictly in terms of it being partisan bickering to date, obviously unconcerned that public documents the media normally clamors for release on demand haven't been produced even to the council, let alone members of the public.

UPDATE: WTHR's Sandra Chapman, who has pretty much been the lone person in the mainstream media pursuing the ROC story, got some information out of Carroll and his attorney, David Brooks. She surmises that what he's been trying to keep a secret all along is the fact that he used the city's credit to obtain a $9.6 million loan from Wells Fargo Bank:

The issue first surfaced last September during a sit down interview with 13 Investigates.

"You get paid your fee up front, so we've been paid," said Carroll. "We were paid a nominal fee up front to allow them to lease the place to what amounted to $9 a square foot."

13 Investigates Reporter Sandra Chapman pressed Carroll for more information.

"Can you tell us what..." she started to ask about the payment.

"No, ma'am, I'm not able to tell that. It was signed up in confidential agreements, as well," Carroll said.

Now, Carroll and his attorneys are revealing what they previously wanted secret: a $9.6 million loan Carroll obtained using the city's low bond rating.

Off the top, $1.4 million was used to pay 401 Public Safety's existing mortgage on the ROC property. Another $5.6 million was put into a construction escrow account for labor and materials and $1.5 million went to cover financing costs and surveys. What was left was pocketed by 401 Public Safety as a base lease price payment of $1.1 million.

"He got that money, (it did) not come from the city, it was part of the loan proceeds and he ended up paying almost all of it out in tenant improvements," Brooks said . . .  

Records show 401 Public Safety is making a profit. The company is due to get $800 a month from each lease payment over the next 10 years. That figure jumps to $7,000 a month during the final 15 years of the loan.

As you can see, Carroll is doing business like Ersal Ozdemir. He formed a construction company that's making money off the supposed $5.6 million in tenant improvements. His original mortgage on the entire property of $1.4 million, which presumably included property not covered by the lease, got paid off and presumably replaced with a much lower-interest rate loan since city revenues are pledged towards repayment of the loan. He got $1.1 million of the lease payments up front with graduated lease payments made available to him by the bank starting at $800 a month and increasing to $7,000 a month by the 15th year of the lease. City taxpayers picked up Carroll's entire tab for obtaining his personal financing. I'm assuming that $1.5 million cost of obtaining financing included the huge legal bill David Brooks got paid out of the deal as well. Perhaps he and Susan can purchase another $1 million home in Washington, D.C. to complement their $1 million Carmel home courtesy of Indianapolis taxpayers. These amounts don't count the maintenance fees Carroll is getting from the City, which are quite substantial. The City's monthly lease payments from day one were to be made to the bank directly and not Carroll so the idea that any lease payments were ever escrowed was a bunch of bull. Basically, the City is fronting all the upfront costs of making the entire building suitable for tenant occupancy, including parts of the building not leased by the City. The long and short of it is that we're paying at least double the amount of rent we should be paying on this pile of crap building that Carroll owns and we're still no closer to having a building that can be occupied than we were the day the Ballard administration signed the settlement agreement in December. According to Chapman's report, that's still months away.
The video clip from last night's meeting puts on display what stonewalling looks like, scripted questions and all.

ROC Investigative Commitee: Little Progress In Unraveling A Major Scandal

The special council committee tasked with investigating the controversial lease agreement that we are led to believe that former Public Safety Director Frank Straub unilaterally entered into with a company controlled by businessman Alex Carroll for space within the former Eastgate Consumer Mall for the Regional Operations Center met again last week. As I noted in a previous post about a news story by WTHR's Sandra Chapman, the City has still not turned over the most pertinent documents related to the highly unusual lease agreement. The corporation counsel's office and the Office of Finance & Management didn't review the legal documents before they were signed off on by Straub, the City-County Council and the Board of Public Safety. According to the Office of Corporation Counsel, files related to the deal went missing when Straub departed the City so it has become necessary to obtain those documents from third parties. OCC says it needs another 30 days to track down the documents that have been sought by the committee for months now. Interestingly, the council's counsel, Fred Biesecker, also informed members of the committee that when he sought the archived video of the relative meetings of the Board of Public Safety where Straub discussed the ROC deal with members of that board, he learned that no recorded videos exist for those meetings.

The meeting last week was quite lengthy. I've provided the video above of only Biesecker's presentation of what he's learned about the lease agreement to date given that all of the key financial documents are still missing. As he notes in his presentation, the agreement is more akin to a borrowing agreement than a true real estate lease, which is why the lease agreement reads more like a bond indenture. The City obligated itself to this borrowing agreement before it formally entered into the lease through the execution of a development agreement with Lifeline Construction Services, LLC under which the City began advancing funds to Carroll for the build-out of the tenant space before the lease agreement received final approval that detailed a more than $14.2 million project that mentions a $1.1 million upfront payment to Carroll's business entity. As soon as the lease agreement with 401 Public Safety, LLC was executed, Carroll assigned his interest in the lease to Wells Fargo, which advanced him an unknown sum of money at the closing in consideration for the City signing some long-term financial commitment to repay the funds advanced to Carroll's business entity. The City is on the hook to pay at least $18.2 million in lease payments over the life of what is essentially a 25-year credit lease agreement; however, when you factor into consideration other financial obligations with respect to the leased space, the obligation is closer to $24 million. Particularly troubling are the "hell or high water" one-sided terms of the deal outlined by Biesecker in his presentation that gives one cause to question whether anyone representing the City's interest was present at the table during negotiations.

As a Republican, I'm appalled by the dismissive attitude and seemingly stone-walling attitude of several of the Republican committee members appointed to this investigative committee. In the case of a couple of the council members participating in the investigation, it is the equivalent of permitting E. Howard Hunt and G. Gordon Liddy to investigate Watergate and their actions to date as members of the committee only serve to reinforce that notion. Let there be no mistake. This a major scandal that has not been accorded the attention it deserves by the local news media, particularly the Indianapolis Star, which is asleep at the wheel as usual when it comes to good investigative journalism. It is unimaginable to me that this is not a criminal matter. There are no indications that either the Marion Co. Prosecutor's Office or the U.S. Attorney's Office has opened an investigation of the ROC, which is equally troubling given the amount of money taxpayers are on the hook to pay. It's just sickening how easy it is for some people to defraud the taxpayers in this city on a regular basis without any threat of criminal prosecution. Keep in mind that these are the same people who want you to entrust them with using a private developer to build, own and operate a new criminal justice center for Marion County using a similar mechanism.