Saturday, April 12, 2014

Marion City Officials Let Korean Businessman Off The Hook For $2.5 Million, Letting Him Keep Ownership Of YMCA Building

The Marion Chronicle-Tribune recently obtained documents indicating that the City of Marion forgave $2.5 million owed by Korean businessman Michael An's Global Investment Consulting when it refinanced the debt less than two years after it offered TIF subsidies to An to redevelop the former YMCA building when the project failed to come to fruition. Global Investment Consulting is now in negotiations to sell the unfinished building to a prospective buyer.

Barnes & Thornburg's Bruce Donaldson, the City's attorney on the failed project, provided written assurance to the potential buyer that all debt owed by An was fully paid when the City of Marion refinanced it in 2011, and that he was released from any further liability for the $2.5 million debt. Donaldson assured the buyer that "if you move forward with the purchase of the YMCA building, you will not inherit any obligations with respect to the YMCA bonds."

Donaldson refused to provide any comment to the Chronicle-Tribune as to why An was left entirely off the hook for the debt as did Marion Mayor Wayne Seybold, who is seeking to become the Republican Party's candidate for State Treasurer this year. City officials have still been unable to provide the newspaper invoices documenting where more than $2 million from the bond issue went for construction work on the building.

Another company owned by An, World Enterprise Group, performed most of the renovation work on the building. The company employed Mayor Seybold's brother, Chad Seybold, as its director of operations and construction. Another company owned by the city's building commissioner, Larry Oradat, performed work on the building as well. Oradat's Erma's Home Improvement filed suit against World Enterprise Group for an unspecified sum of money for failing to pay for improvement work it performed on the building. Oradat refused to respond to questions from the newspaper about his lawsuit.

The Chronicle-Tribune has a spot-on editorial in reaction to this latest news:
As time goes on we learn more about how our mayor and the community economic development apparatus do their jobs. We learn more about whose interests are at the heart of the finagling development deals crammed through in recent years and continue to strap local taxpayers with few jobs to show for the investment of the community.
And now we discover that Michael An was removed from responsibility to repay the $2.5 million in public money his company was given through a 2009 bond issue by way of a refinanced bond issue taxpayers are paying back now.
If you don’t think things seem quite right here, maybe you should let Republican Party officials know the man they are poised to nominate for state treasurer, Mayor Wayne Seybold, perhaps needs a bit more vetting.
So, exactly what does matter most in these deals? The creation of a viable, long-term employer in Marion? Apparently, not so much. We can say that our tax money, sparse as it might be, is important. Wealthy and connected professionals, the sort who fund statewide political campaigns, are also important to enable bond issues and public finance to keep flowing. Public funds for their duties keep moving their way even when the generating projects we were once excited about vanish into the thin air they were conjured from.
Family is also still important; the dealmakers’ families.
Common sense and the rest of us, we think, are secondary or tertiary considerations.
Maybe your votes and taxes matter but your interests are not at the heart of the matter in regard to these projects, such as Earthbound luxury trailer manufacturing, which left town with taxpayers holding a $2 million bag. Earthbound, which left with apologies, got the major piece of its collateral back from mayor Wayne Seybold before leaving and simply settling into another Indiana community down the road.
Now, in a fascinating turn suitable for a television miniseries, the jabberwocky dream of turning the old YMCA on Third Street into a boutique hotel and Korean retail shops has fully imploded. But the wreckage is proving as elusive to inspect as debris from Malaysian Flight 370.
The doors are locked and for some reason owner Michael An is keeping delinquent taxes paid on the structure, which he agreed to sell essentially for the cost of back taxes just a few months ago.
Of course now he doesn’t owe the $2.5 million bond issue that was made in 2009 to provide for the redevelopment of the old YMCA. That money was spent, we don’t know where because receipts were not kept by the city or made available by the trustee of the funds. There were some general claims that the money was being spent on construction matters, such as installation of the heating and air conditioning system and an elevator. But no one who is talking has actually seen if an elevator or HVAC system has been installed. No receipts are available for such purchases and since An paid the taxes he still controls the locks on the doors.
The construction contractor for An’s work was Mayor Wayne Seybold’s brother, Chad Seybold. The mayor’s city building commissioner, Larry Oradat, is suing An for payment concerning construction work he performed for An.
State auditors have started going through the city’s financial records. They certainly have a lot to look at but we hope some time is spent untangling the story of Michael An, the old YMCA and the Seybold administration.


Flogger said...

Congratulations are in order for the Chronicle-Tribune!!!! Too bad The Indy Star cannot learn a lesson in Journalism from them. Just think of all the material The Star could work with.

Anonymous said...

I'd say that Seybold will feel right at home in the state house. Pay to play, cronyism, self dealing are all values that go a long way in the republican dominated state house. I wonder if loftus, grand, and burdick are advising this 'leader'.