Monday, March 24, 2014

State Auditors Office Says Marion Officials Should Have Documentation For More Than $2 Million In Missing Bond Funds Spent On Failed Project

Last month, I discussed the discovery of a Chronicle-Tribune investigative report that uncovered the fact that documentation for more than $2 million Marion city officials spent from a $2.5 million bond issuance for redevelopment of the old YMCA building cannot be furnished. In 2009, Marion Mayor Wayne Seybold's administration obtained city council approval to issue $2.5 million in bonds to aid a Korean businessman from California, Michael An, in redeveloping the closed YMCA building for a mixed use purpose. Two years later, Marion officials refinanced that debt after the project failed with little work to show for the investment and the building still vacant and the property subject to sheriff's sale for failure to pay property taxes. When the Chronicle-Tribune attempted to obtain documentation for how more than $2 million of the bond proceeds was spent, city officials claimed no documentation for the spent funds existed.

The State Board of Accounts tells the Chronicle-Tribune's Karla Bowsher that the $2.5 million in bond proceeds, by law, should have been deposited into a dedicated construction account. "You should have been able to track all those (construction fund expenditures) beginning to end," the State Board of Accounts Charlie Pride told Bowsher. City officials provided the Chronicle-Tribune no bank statements detailing the construction fund account, including receipt for vendor invoices detailing any expenditures spent on renovation work at the YMCA building in response to its public records request. What little documentation was provided showed that renovation work on behalf of An's Global Investment Consulting had been paid out to another company owned by An, World Enterprise Group.

Raising alarming conflict of interest concerns is the fact that Mayor Wayne Seybold's brother, Chad, was employed by and earning money from World Enterprise Group. According to the Chronicle-Tribune, Seybold served as a director of operations and construction for the company at the time. A company owned by Marion Building Commissioner Larry Oradat, Erma's Home Improvement, is suing World Enterprise Group for construction work it claims it is owed by An's company for work on the building. City council members tell the Chronicle-Tribune that they are becoming increasingly concerned, particularly since Mayor Seybold's administration won't comment on the missing documentation for the more than $2 million debt the city is on the hook for repaying with TIF funds.

Meanwhile, a Whitley County businessman, Bill Reece, tells the Chronicle-Tribune that his company, RCM Real Estate, has entered into a contract with An's Global Investment Consulting to purchase the YMCA building. Reece declined to discuss his plans for the building or any work that was supposed to have been completed with the more than $2 million in missing construction funds.

1 comment:

Anonymous said...

Once again, a great journalistic piece filled with facts of abuse, corruption and more. I liked Ogden's piece tying them all together (Mayor's with a Platform)...
End this drama. Keep writing.