Part of controversial Centreville commercial land site is now for sale

News-DemocratSeptember 7, 2013 

Centreville taxpayers have paid $500,000, or 75 percent of the total cost of a 55-acre commercial site now totally owned by a private company.

The property is just west of Illinois 15 opposite the Flying J Restaurant.

The taxpayers' money was spent without a written agreement. There was no collateral. The money was transferred to a title company and the land was deeded entirely to Strong Holding LLC.

Without an invitation from the owners, taxpayers cannot legally set foot on the land they paid for. If they did, they could be cited for trespassing.

A 10-acre portion of the site along the front with Illinois 15 is now up for sale to raise money for an access road. But any income from such a transaction would go entirely to the private owners, not the city's government.

And the promised economic development of a hotel and lock factory that was supposed to provide local jobs and tax income to offset the public cost? A lawyer for the developer said a few days ago that won't happen "any time soon." There is no written document requiring the developer to develop anything.

But the bank loan plus interest that raised the $500,000? Taxpayers are responsible for that.

What started out as an ambitious plan to develop Centreville's property and sales tax base and lower unemployment has degenerated into a squabble between Mayor Mark Jackson and the city's attorney and an attorney for the developer. City officials say that the money was wired before an agreement was signed because the option to buy the property was about to expire.

Jackson could not be reached for comment. Centreville city attorney Robert Sprague did not respond to a written request for comment.

Roger Strong was asked in April what he thought about taxpayers paying for land turned over to his company without any written protection for the public's investment or input from the City Council.

Strong sat back in his office chair at a New Athens bait shop, folded his arms, smiled, and answered: "I found it absolutely ignorant. Hell, I don't know why they did it. I wasn't going to ask any questions."

The transfer benefited Strong Holding LLC, the company then managed by Strong, by helping make it the sole owner of the 55 acres. The company took out a mortgage to cover the remaining $175,000 of the cost.

Since the interview, Strong has been advised by his firm's attorney not to comment about the money.

Strong has moved onto other projects and is no longer the manager of the Centreville project, according to his lawyer.

Previously, Strong complained that the city owes his firm $1 million for allegedly failing to make good on certain development promises including an access road.

City officials and John J. Pawloski, the company's St. Louis-based attorney and registered agent, say the matter appears headed for a lawsuit, much of which could also be paid for by taxpayers.

The land transaction has caused concern among some members of the City Council.

"I don't care what your name is or who you are, the money shouldn't get paid until the paperwork is done," said Alderman Parris McIntosh said Friday. He was one of two Centreville aldermen who said the money transfer was never brought before the nine-member City Council for a discussion or vote.

"That's a bad situation. They're trying to straighten it out with the lawyers. Give them a chance," McIntosh said.

"I can't see a lawsuit doing anything about retrieving the money," said Riley Owens, a five-term former Centreville mayor who spent 20 years in office. Owens said he questioned Jackson about the matter during a City Council meeting on Tuesday and said he was first told a lawsuit had been filed, and was then advised that it was planned.

Owens, who is not a lawyer, said, "I can't see any grounds the city has for recovering the money. This is the worst case of misappropriation of funds that I know of."

The public's money was electronically sent to a title company, which filed a deed in the St. Clair County Recorder's Office listing Strong's firm as sole owner without mention of any obligation to Centreville. The $175,000 mortgage is also listed.

The wire transfer was made, former Centreville economic coordinator Rodney Lewis has said, because an option to purchase the property was about to expire within 24 hours, leaving not enough time to formalize a written agreement with the developer even though talks had been underway for more than a year. Lewis, who has said the city lost control of the money, said he and Jackson made the decision to wire the money.

Strong has said that while nothing has been built he still hopes some development can be completed. But Pawloski, his firm's attorney, said in a written response on Sept. 1, "We are not optimistic that the project can be revived any time soon given what appears to be gross mismanagement of the city's (tax increment financing) funds."

Alderman Everett Temple, who also confirmed the money was sent without first coming before the council, said, "This was according to the mayor. The mayor is responsible. I'm hoping that we can get our money back."

Pawloski provided several pages of comment in answer to questions by the BND. He said contact has broken down between the company and the city to the point that Centreville officials will not provide blank applications for building permits or return calls.

One of the issues raised by Lewis, the former city economic adviser, consisted of his claim that the developer had agreed to provide $200,000 for an access road.

Pawloski addressed the $200,000 in his written responses.

"It was my legal opinion that it may constitute a bribe or kickback, or have the appearance of such, and our organization does not do business in that fashion," he wrote.

Contact reporter George Pawlaczyk at gpawlaczyk@bnd.com or 239-2625. Contact reporter Beth Hundsdorfer at bhundsdorfer@bnd.com or 239-2570.

 

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