In the wake of the Michigan Court of Appeals decision to re-instate our hazardous waste complaint against the City of Grand Rapids and the Boardwalk developers, the developers have announced that the Boardwalk (a.k.a. Toxic Towers) is for sale. It's yours for a cool $38.5 million.
The Boardwalk developers -- who include Fifth Third Bank, National City Community Development Corporation, Thomas Beckering, James Dykema, Scott McGregor, David Mehney, Diane Helms, among others -- are organized into two jointly-operated limited liabilities companies, 900 Monroe L.L.C. and 940 Monroe L.L.C. These companies are the entities, not the individual developers, that are named as defendants in the hazardous waste complaint currently pending in Kent County Circuit Court.
If the developers were successful in selling the Boardwalk before the resolution of the complaint, one possible effect is that the developers distribute the proceeds of the sale amongst themselves making the defendant companies uncollectible entities. Therefore, an adverse judgment against 900 and 940 Monroe L.L.C. assessing the cost of cleaning up the environmental contamination that resulted from using the nearby Monroe Avenue Water Filtration Plant and other locations as unlicensed landfills for the Boardwalk's hazardous waste would be worthless. Meanwhile, the actual decision-makers behind these rogue companies walk away with the cash.
If the Boardwalk developers are not reacting to the bad news from the Court of Appeals, why are they selling at this time? After all, the publicly stated rationale behind Fifth Third's and National City's participation in the Boardwalk project was the receipt of five million dollars in state and federal historic preservation tax credits. Qualification for those tax credits requires retaining ownership of the property for at least five years, which won't be case for the banks if the Boardwalk is sold soon.
Furthermore, the developers are making a big noise now about how they have invested in the Boardwalk to justify a $38.5 million price tag. Beckering has told Press reporter Chris Knape that the Boardwalk project cost $34 million, which is greatly at odds with the $20 million figure the developers gave the City of Grand Rapids to obtain a low-ball tax assessment of $9 million. Perhaps the Boardwalk developers think they have enough juice in town to evade any problems with the City over these conflicting statements of value. Nevertheless, still it reinforces the appearance of crookedness for a gang not noted for their pristine business ethics. (Click here and here for a couple of examples.)
Who courts that image problem unless a bigger problem looms?
Suffice it to say, folks, the timing of this vis-a-vis the hazardous waste showdown in court makes one wonder.