The Town of Poughkeepsie police and court facility on Tucker Drive was built as a warehouse in 1987. Part of the complex is leased to a moving company.
Poughkeepsie Journal
Sunday, November 10, 2002
Town hopes Tucker Drive facility suit will bring
closure
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| Lee Ferris/Poughkeepsie Journal The Town of Poughkeepsie police and court facility on Tucker Drive was built as a warehouse in 1987. Part of the complex is leased to a moving company. |
The sale sparked controversy from the start, with some residents questioning why the price of the building, once appraised at $2.6 million in 1993, would end up costing so much more.
A four-year state and federal probe into town corruption, much of which focused on the sale of the property, led to the convictions of former town and Dutchess County GOP Chairman William Paroli Sr. and four former town employees on graft-related charges. Paroli pleaded guilty to a single count, although that count did not relate to the police/court facility purchase.
The current town board is suing Paroli, former town board members and officials and local businesses that worked on the facility in a nearly $50 million lawsuit. The case is scheduled to be heard Dec. 6 in federal court in White Plains.
Questions resurface
The town's suit has re-kindled questions about the purchase and could lead to an extended court battle that could take years to litigate. Supporters of the suit say it could help recoup money the town believes it was swindled out of in the allegedly illegal deal, with kickback money going to Paroli and the local GOP.
Others believe the suit could be a legal boondoggle that will cost the town hundreds of thousands of dollars to litigate with no promise of victory in the end.
Supervisor Joseph Davis said it is time to put the issues to rest, which he believes the lawsuit will do.
''There was a big cloud stationed over the building, a dark cloud,'' Davis said. ''The goal is to remove this dark cloud.''
Councilwoman Patricia Myers, D-4th Ward, agreed with Davis, adding the town believes it has a strong case.
''I think we need closure on this issue,'' Myers said. ''I think it's been hanging over the town's head for a long time. We would certainly have not undertaken this if we did not believe it was justified.''
One resident praised the board for filing the suit and said it could be a victory for taxpayers.
''The town board bought a lemon,'' resident Victor Gennodie said of the 1996 governing body and its members. ''This lawsuit is an absolute must.''
In the town suit, former town attorneys Patrick Moore and Frank Redl are accused of helping the town create a ''sham'' lease with the former owners of the property, part of a larger scheme to falsely inflate the price of the building to $6.95 million. The suit claims the scheme was hatched by Paroli and approved by the former all-GOP town board during an illegal meeting at Paroli's home.
Moore has said the meeting was a Republican caucus and, therefore, did not violate the state's open meeting laws.
Former town officials have pointed to a 1996 appraisal that valued the property and building at $7.275 million in defending the sale price. Repairs and other costs have since hiked the price of the facility to more than $7.5 million.
Moore has denied any wrongdoing and Redl has declined to comment on the suit.
Property a former landfill
The property appears to be an unlikely choice for a municipal facility. The site was part of a 120-acre landfill that operated from the 1940s until 1971. The site was shut down and later purchased by Thomas and Betty Espie, also defendants in the town's suit. They built a warehouse on the property in 1987.
In 1995, the state Department of Environmental Conservation removed the property from its list of inactive hazardous waste sites, clearing the way for the Espies and the town to begin negotiations on the sale.
Town officials had long been searching for a home for the police and court departments, which had been housed in leased locations for years.
The Espies and the town continued to negotiate, and the suit alleges, it was decided by both sides to increase the price from the agreed-upon $5.35 million to $6.95 million. The suit claims the original sale agreement called for the town to pay nearly $2 million for the land and another estimated $3.35 million for renovations to the facility.
Town officials who were in office at the time of the sale have said the increase was needed to cover extra costs to rehabilitate the building and an increased acreage with the sale.
But the current town suit alleges ''there was no adequate justification for the increase in the purchase price ... and representations to that effect were fraudulent and made with the intent to defraud the town.''
The Espies have denied any wrongdoing.
Wicks Law key in lawsuit
Key to the town's case is the allegation that officials circumvented the Wicks Law, which requires competitive bidding on various aspects of municipal projects.
''The defendants, through fraudulent and deceptive means, conspired to achieve personal benefit and enrichment through a conspiracy powered by bribes, kickbacks, overcharges, sham leases, and efforts to circumvent'' state law, the suit alleges.
The suit cites a July 1996 memo from Moore to the town board in which he refers to the lease agreement.
''The monthly lease figure (under the amended lease agreement) is $80,000,'' Moore wrote. ''However, in order to render the arrangement a legal one, we cannot and should not say publicly that we do not intend on paying any rental monies. In order to legally conclude this matter, we cannot publicly state that it is not our intention to lease the facility at any time, even though that is the case.''
Years later, the town still is paying annual interest on bonds taken out to pay for the facility. Town Comptroller Charles Em-berger said the town will pay about $600,000 each year toward two bonds taken out to buy the facility. The payments will hold steady for about five years and gradually decline until payments end in 2017, Emberger said.
The town receives rent money for part of the complex. Roe Movers leases space at the site for $22,400 per month.
The building has had its problems over the years, with cracks appearing on walls and complaints of strange odors. Several air quality tests have been performed and it was deemed safe for workers to remain in the facility.
There have been no recent complaints from employees or others who use the complex.
Meanwhile, six former town board members have filed suit in Dutchess County Court claiming Hartford Financial Services Group should pay for their legal fees as promised in the town's policy.
The insurance company disagrees and the matter will likely be decided by a judge.
Moore and Redl will have their defenses paid for by the Hartford, although the company would not pay any damages to the town should it win its case.
Paroli served federal prison time after pleading guilty to a corruption charge in 2000 and has declined comment.
CHRONOLOGY
TUCKER DRIVE FACILITY
A nearly $50 million lawsuit filed by the Town of Poughkeepsie centers on the
lease-purchase agreement former town officials made for the police and court
facility.
1940s-1971: Site is used as a landfill.
1980s: Property is purchased by Thomas and Betty Espie.
Jan. 1995: The property is removed from a state Department of Environmen-tal Conservation list of inactive hazardous waste sites. Town officials later begin negotiations in earnest with the Espies to purchase the warehouse facility for use as a police and court building.
March 1995: The town board votes to lease the 120,000-square-foot building with an option to buy it.
April 1996: Town board votes to borrow $1 million to pay for renovations at the facility.
Aug. and Sept. 1996: Town employees begin moving into the building.
Sept. 18, 1996: Town officials and the Espies close on the sale of the facility for $6.95 million.
Sept. 1998: Town board hires contractor to perform air quality tests after complaints of odors from some employees. Tests reveal mild problems, but none serious enough to keep employees from working in the building.
2001: Town board hires Manhattan attorney Richard Pu to investigate whether the town should file a civil suit over the purchase after repairs and other costs have hiked the price of the building to $7.5 million. He later recommends the town proceed with the suit.
Sept 2002: After hiring a second law firm to look into the matter and represent the town, the town board files a nearly $50 million civil suit in connection with the purchase, naming former town and Dutchess County GOP Chairman William Paroli Sr., former town board members and officials and others as defendants.
AT A GLANCE
RISING COSTS
The Town of Poughkeepsie police and court facility was supposed to cost $5.35
million in the spring of 1995, when officials said they were in the final stages of
negotiating its purchase. By the time the town closed a deal on the property in 1996,
the purchase price had risen to $6.95 million. Repairs and improvements made since
the purchase have boosted the price tag to at least $7.52 million.
DEFENDANTS
TOWN LAWSUIT
Here are the defendants listed in the Town of Poughkeepsie's suit regarding the
1996 purchase of the town's Tucker Drive police and court facility:
Thomas Espie: Former owner of police/court facility.
Betty Espie: Former owner of police/court facility.
Patrick Moore: Former town attorney.
Frank Redl: Former deputy town attorney.
William Paroli Sr.: Former town and Dutchess County GOP chairman.
Frances Raucci: Widow of late town Assessor Basil "Bill" Raucci and executor of Basil Raucci's estate.
Fred Andros: Former town water superintendent.
Lawrence Knapp: Principal with Roy C. Knapp & Sons.
Roy C. Knapp & Sons, Inc.: Contractor on police/court facility project.
Hayward & Pakan Associates: Architectural firm on police/court project.
Peter Cantline: Partner with Hayward & Pakan.
John Kane III: Partner with Hayward & Pakan.
Roger Mastri: Partner with Hayward & Pakan.
Donald Tomlins: Former partner with Hayward & Pakan.
Mark Johnson: Partner with Hayward & Pakan.
Thomas Murphy: Former town supervisor.
Michael Dunagan: Former town board member.
Mary Percesepe: Former town board member.
Lorraine Tracey: Former town board member.
Louis Murasso: Former town board member.
Patrick Hinkley: Former town board member.
Dennis Leary: Former town board member.
Presidential Homes of New York, Inc.: Hyde Park company controlled by Raucci and allegedly used to funnel bribe money to Paroli and the GOP.
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