Land Bank: Eliminate Apparent Conflicts Of Interest, Clarify Boundaries And Fiduciary Responsibilities, Targeting Blighted Properties And Communities
A recent item in the Sullivan County Democrat (PDF file) revealed details that have been been kept under wraps regarding a proposed Land Bank that is intended to benefit distressed communities in Sullivan County, namely the villages of Monticello and Liberty.
Unfortunately, the governing body in Monticello has mostly been left out of the loop by one or two local officials acting on their own without board approval, each with apparent conflicts of interest.
The Democrat article quotes me and Trustee Aleta Lymon as voicing concern over the fact that one Trustee has maintained an inside track on information which she has not shared with the rest of the board. Trustee Jill Weyer candidly confessed to a reporter that she does indeed have the appearance of a conflict of interest by virtue of her employment as deputy commissioner of the Sullivan County Planning Department. Ms. Weyer's immediate supervisor is overseeing the creation of the Land Bank: "In response, Weyer acknowledged that there might be a perception of a conflict, but noted that she is not on the board of the land bank and has no decision making capacity." But, of course, she has an obvious interest in doing the bidding of the County, which may differ from the Village's interests.
As a result of her admitted apparent conflict of interest, it should be clear to any honest and unbiased observer that Ms. Weyer is ethically constrained from taking part in any vote or deliberations concerning the Land Bank, and also from taking any part in her employment with the County of Sullivan in decisions involving the Village of Monticello. She must fully recuse herself at both ends, immediately.
"...if not conducted in an open and transparent manner, accountable to elected officials and the public, a Land Bank may also create a honeypot for unethical opportunists - which I do not believe was the intent of County and State elected officials who worked hard to create this resource for our community."
My reservations are not with the concept of the proposed Land Bank itself. Monticello definitely needs help, and this may be an excellent vehicle for economic redevelopment.
What troubles me is not just Ms. Weyer's appearance of a conflict of interest (which is sufficient cause for her to recuse herself), but the Village Manager David Sager's actual conflict. Mr. Sager has managed to secure himself a position as a member of the Board of Directors of the Land Bank. He did this without informing the Village Board of Trustees. In fact, despite being the longest-serving member of the Village Board, I had to learn of of his fiduciary role in relation to the Land Bank by reading about it in the May 5th edition of the Democrat. At least one other board member I have spoken with was also unaware of Mr. Sager's position on the Land Bank's board of directors.
The Land Bank does not yet have an executive director. We have not even been told who will be applying for the job. It has not been explained to the Village Board and public how acquisitions and sales will work and how resulting revenues will be divided. All we know is that the County planning department is integrally involved in its creation and implementation. We need more information.
Mr. Sager's failure to disclose this conflict raises more questions in my mind about how the eight properties, totaling over $1,000,000 in assessed value, were cherry-picked.
Some of my questions include:
- How were these properties selected? Not all of them are run down or hard-to-sell. For example, the former Rosen & Rosen law office at 504 Broadway is prime real estate, the value of which may be expected to rise as the local economy improves. Another parcel on Mr. Sager's list appears to have no delinnquent taxes due. My understanding of the Land Bank is that it is intended to target properties which are not economically viable - of which Monticello has plenty. The properties we were asked to relinquish do not all fit this description.
- The County presently holds title to numerous properties in Monticello. Why not start by transferring those sites to the Land Bank? Why the rush to grab eight additional sites on short notice before the next auction with little explanation to elected officials?
- Once the Land Bank takes ownership of a parcel, does the bank's Board of Directors have authority to transfer the property to the County or nonprofit organizations for tax-exempt use? If so, I would like assurances that this will not occur.
- Will taxpayers of the Village of Monticello receive a significant portion of the sale revenues? If not, I would like assurances that we will, rather than the funds being spread out in the County's general treasury.
For example, recalling back a few years, after Appolo Plaza was taken by the County, our Village (which formerly held title) had to fight for scraps. In the end, we had to threaten to sue the County just to collect a portion of the taxes that were due to us. Now, years later, Apollo still sits vacant and rotting, after bringing in a new investor with yet another plan. (I do not fault the investors in Apollo, but mention it as a prime example of what happens when the County asserts precedence over Village ownership.)
Mr. Sager withheld full details about the Land Bank from the full Board of Trustees until shortly before the May 2nd board meeting when he sent an e-mail describing the Land Bank as being "charged with helping to stabilize communitites through site control, property improvements or potentially necessary demoltion in certain circumstances." His brief email listed the section, block, and lot numbers of eight parcels that he wanted handed over to the financial institution on whose Board of Directors he serves (without disclosing this dual role to the Village). I had to research the SBL numbers myself and pull up property records to understand what parcels Mr. Sager was pushing the board to hand over, relying on public sources like taxlookup.net, in order to share the information with the Mayor and Trustees (see PDF file).
The Village of Liberty, by contrast, appears to have rightly exercised its discretion to seat a Village Trustee to the board. Why was our Board never consulted concerning who we wanted to represent us on the Land Bank board? (If Mr. Sager unlawfully selected himself to represent our Village on the Land Bank board of directors, without approval of the Village Board, might this might open up the Land Bank to legal challenges if any interested taxpayer wished to file an Article 78 petition challenging its actions and organizational structure down the road? I would not rule out the possibility.) I presently have no opinion on who we should select to represent the Village of Monticello on the Land Bank board, but have doubts about the manner of Mr. Sager's seeming self-appointment to that fiduciary role.
In response to questions raised at the May 2nd board meeting, on May 4th Mr. Sager fired off a disrespectful e-mail numerous large file attachments (see below) on the subject of land banks, directing the board to "take the time to fully educate yourselves" on the subject.
Informing the board is the Village Manager's job!
Not until I read it in the Democrat did I learn that one of the incorporating directors (confirmed by reading the Certificate of Incorporation on the County's website) is "David Sager 2 Pleasant Street Village of Monticello Manager Monticello, New York 12701", a fiduciary role which I believe can only be legitimized by a vote of the Village Board of Trustees.
Why did our Manager fail to explicitly disclose to the governing body for whom he works the nature of his role with the Land Bank, as well as his reasons for seeking to take the eight properties he asked for? The Board of Trustees should have had the option of selecting its representative, which could have been the Manager, a board member, or perhaps a local businessperson.
The Village Manager works for us, at a salary of $78,000 per year, so it is fully incumbent on him to "educate" the board, without partisan discrimination about his conflict of interest, to make recommendations, and allow the elected Board of Trustees to make our rightful decision - not try to bully a vote with only limited data, and then dumping documents on us by e-mail and telling us to educate ourselves after elected officials betin to ask questions.
On May 4th (two days after the meeting where he pushed for eight properties to be turned over to the Land Bank), Mr. Sager got aroun to addressing an e-mail to the Mayor and Trustees with the following attachments:
- An article entitled New York State Land Banks: Combating Blight and Vacancy in New York Communities, 16 pages.
- A book entitled Land Banks and Land Banking by Frank S. Alexander (2011), 120 pages.
- An article entitled Pay Now or Pay More Later: St. Paul’s Experience in Rehabilitating Vacant Housing, 1998, 4 pages.
- A map of the 2017 Foreclosures in the Village of Monticello
- A table showing potential auction properties for 2017 including prior history of tax foreclosures
I am aware of no resolution by the Village Board authorizing Mr. Sager to serve as an incorporator or member of the board of directors of the Land Bank. I would like to know what claims he made to the Land Bank board concerning his representation of the Village's legislative body, or whether he believes he has the power to appoint himself unilaterally because he works for us as Village Manager, or if he believes one or two Village Board members have the authority to appoint him on behalf of the Village to the bank's board of directors outside of an open meeting and without a board vote.
As a Trustee, I consider his behavior in this matter unethical and I am may seek a formal investigation of how he was appointed to his role as an incorporator and director of the Land Bank without consulting or even informing, the Village of Monticello Board of Trustees.
In my opinion, Mr. Sager's behavior has been demonstrated a lack of professional boundaries, resulting in conflicts of fiduciary responsibilities. Did he not have a duty to disclose to the Village of Monticello Board of Trustees that he sits on the Board of Directors of the Land Bank? Did he not have a duty to disclose to the Land Bank that the Village Board was never informed of his dual role?
I am hopeful that the Land Bank may end up being a useful tool for community improvement. My objection is not to the Land Bank concept, but to the manner in which the legislative governing body of the Village of Monticello has been kept in the dark by individuals those financial and personal interests are not at all clear. However, if not conducted in an open and transparent manner, accountable to elected officials and the public, a Land Bank may also create a honeypot for unethical opportunists - which I do not believe was the intent of County and State elected officials who worked hard to create this resource for our community.
I look forward to representatives of the Land Bank attending a meeting of the Village Board to make a full and formal presentation, including answering questions by the public, so ultimately we can confidently support this endeavor. It seems like a good idea, but all board members deserve to be treated with the same respect in order to make policy decisions that serve the best interest of our constituents and so the Board of Trustees can appropriately supervise our staff and employees.