Wednesday, September 25, 2013

ROC Building Owner Makes Shocking Claim: City Paid Him Up Front Under Secret Deal

WTHR's Sandra Chapman sat down and interviewed the owner of the former Eastgate Consumer Mall, which the City of Indianapolis leased under an $18 million deal in 2011 before the Super Bowl in a rush to establish a regional operations center ("ROC") for the city's Department of Homeland Security, as well as the headquarters for IMPD's east district command. Alex Carroll makes a shocking claim that he got all of his money for the lease up front for a long-term lease agreement under which the city assumed virtually all liabilities and expenses under a secret deal he worked out with Mayor Greg Ballard, former Public Safety Director Frank Straub and the City-County Council. Earlier this month, Straub's successor, Troy Riggs, announced that the city was pulling up stakes and moving the ROC and east district command elsewhere due to unsafe conditions in the building which he blamed on Carroll despite lease terms that clearly imposed those obligations on the city to remedy. Here's an excerpt from Chapman's story tonight where Carroll made shocking allegations that should have people at the highest levels in the City-County Building shaking in their boots:
Metro police officers were forced to evacuate the east side facility because of ongoing fire concerns. But that hasn't stopped the flow of city taxpayer dollars.
Now, the landowner claims he was given a secret deal that put a chunk of money into his hands up front . . .
It's no secret former Public Safety Director Frank Straub signed the public contract.
"This was not built in the shadow of a box," said land owner, Alex Carroll. "If it was unsafe, why are they waiting a year and a half to say it's unsafe?" 
Carroll insists there were plenty of eyes on the deal.
"It was Frank Straub, it was the mayor, it was the City-County Council, it was everybody," Carroll said.
"They all said yes?," asked 13 Investigates.
"They all said yes," Carroll said, emphatically.
Mayor Greg Ballard and his staff don't want to talk about the ROC. The city overlooked the unfinished business there in 2011 and used the site as security headquarters for Super Bowl XLVI.
But Carroll says this lease deal is different. He says the city got a bond and is paying the bank nearly $60,000 a month for rent . . .
Carroll already got a good amount of his money. Now for the first time, he reveals he was paid a secret amount up front by the city to lease the Eastgate Mall property, as part of a confidential agreement.
"We've been paid," Carroll told 13 Investigates.
"Are you saying then that you guys have already received the $18 million?" questioned 13 Investigates.
"It's not $18 million," Carroll said of his share.
That $18 million price tag is what the city will pay for the loan, including principal and interest over 25 years. Not even Carroll thinks that's a good deal.
"It doesn't seem like a very prudent way to spend taxpayer money. We had nothing to do with drafting the lease," he explained.
It's a bit confusing, but Carroll seems to be claiming that the City secretly agreed to pay him an unspecified sum of money up front under a secret deal, and the $18 million referenced as the cost for the city's investment in the ROC and east district command is what the city is actually paying over a 25-year term in the form of monthly payments in the amount of $60,000 to repay the bank for the money it borrowed to invest into improvements to the building. The mayor's office has claimed that those payments have been paid into an escrow account with a bank, which completely contradicts Carroll's claims. What Carroll is now threatening to sue the city over are nearly $1 million in improvements to the building he says that he made at the city's request which he paid out of his own pocket. Those obligations rested with the city under the terms of the lease Carroll maintains.
Carroll's disclosures are a real bombshell and raise serious concerns of impropriety that occurred at the highest levels of city government. Clearly, the Mayor and the City-County Council misrepresented to the public the deal it entered into with Carroll. The lease agreement that has been released to the public gives the impression that those monthly payments are being made to Carroll and not to a bank, and it makes no mention of the up front payment Carroll says he received. Campaign finance records also show that Carroll made large campaign contributions to Mayor Ballard and two key city council members who pushed the deal to benefit their districts, Councilors Ben Hunter (R) and Mary Moriarty Adams. It is incumbent upon Marion Co. Prosecutor Terry Curry to immediately convene a grand jury to investigate and get to the bottom of what transpired with this shady transaction. The people of this city are being told they must have their taxes raised to shore up the city's budget to properly fund public safety and then we learn that tens of millions of dollars were simply squandered in this poorly-executed, if not illegal transaction. 


Flogger said...

I would be surprised if anyone from the criminal justice system (Federal, City) will touch this. I suspect the Mayor's Office or City-County Council will conduct no investigation either.

These secret deals are part of politics and business in Marion County.

Gary R. Welsh said...

Since the city council really doesn't perform any oversight and our local prosecutor doesn't typically investigate public corruption, you are probably correct in your assessment.

Anonymous said...

City County Councilman Vernon Brown had his fingerprints all over this project from the beginning, it was his idea to put it at Eastgate at any cost!

Anonymous said...

City Council Vernon Brown, had his fingerprints on this project from the beginning, he is the one who wanted this project at the run down Eastgate mall.
Looks like he got his way!
Now look what we have.

Anonymous said...

Actually, Gary, if this deal contains fraud, and if bonds were issued to fund this project, and if the bonds were sold to the public absent a good faith attempt to verify the legitimacy of the project, the issuer, all parties involved in effecting the sale, and the selling broker-dealer can all be federally prosecuted for securities fraud.

If what you have written is true, then Hogsett, not Curry, should convene a grand jury.

Anonymous said...

Maybe we can get the feds to charge our city council under a RICO statute.

Anonymous said...

This probably relates to why Mayor Ballard DESPERATELY wants to finance infrastructure improvements with bonds. On the one side he's pleasing the construction patrons, and on the other he's there to service the financiers who stand to gain plenty more from these uneven financial arrangements who will probably turn around and enrich him and his friends once they leave office. Ballard and his friends have no conscience.

The moment you stop looking at Marion County government as anything other than a bunch of crooks looking to control the lucrative marketplace of government spending,the sooner you'll be able to rest a little easier at night.

This sort of sinister behavior within government has seemed to accelerate during the economic downturn, making it harder and harder to make an honest profit. The more money we allow these pigs to control, the more they will continue to enslave us under their deceptive tyranny.

Marycatherine Barton said...

Thank for calling on Prosecutor Curry to call for a grand jury to fully investigate what you properly call a "shady" transaction, Gary. In the meantime, I miss the absence of the former Eastgate Consumer Mall which offered a lot of us a friendly place to gather and walk, eat and shop.

Unknown said...

I hate to say it, but maybe it's time for Joe Hogsett to step in.

Anonymous said...

This is the true test of whether or not Hogsett is dedicated to stamping out corruption in Marion County. If he shies away from this, we'll know that his prosecution of two low-level deadbeats for petty bribery was nothing but a show. I hope he steps up to the plate.

Flogger said...

I do not see Hogsett stepping up to the plate on this one. The Republicrat Party would not like that. Just as important the Campaign Donors, and Crony-Capitalists would are very well protected.

The Star seems to be pushing Hogsett as a Mayoral Candidate.

Maybe I will be surprised and Joe will come out punching, but given the past performances of our "Justice System" I have my doubts.

Unigov said...

Did the city council authorize up-front payment ? If not, how is this not theft ?

Anonymous said...

If Hogsett "comes out punching," takes on Barnes & Thornburg, Ballard & Co., the Republican Machine and the folks who make money off these bonds, he'd be seen as a reformer who "cleaned up Indy."

He could walk into the Mayor's office and hold it as long as he pleased, and he'd forever turn Indy into a Democratic stronghold.

Now is the time for the Democratic National Committee to consider taking a strong step in turning a red state blue by turning Hogsett loose.

Anonymous said...

Now is the time for a complaint to make it to Washington!

Hogsett is too much an insider to handle this one.

The Public Integrity Section (PIN) of the Department of Justice in Washington is led by an Assistant Attorney General. It oversees the federal effort to combat corruption through the prosecution of elected and appointed public officials at all levels of government. The Section has exclusive jurisdiction over allegations of criminal misconduct on the part of federal judges and also supervises the nationwide investigation and prosecution of election crimes. Section attorneys prosecute selected cases against federal, state, and local officials, and are available as a source of advice and expertise to other prosecutors and investigators.

Anonymous said...

...and where is the forensic audit of what Frank Straub did? Didn't he fire the city attorney and bypass the Corporation Counsel to sign off???

Anonymous said...

f8rtspOle Bart is looking better all the time :-)