Hartman Tree Farm (HTF) Purchase

Narrative

This contains my opinions based on the data I have reviewed.

There were numerous properties considered for the location of the public works building and the process started as early as 27 June 2011. Discussions could have been happening earlier. I did find references for close to 20 properties and four properties seemed to be viable solutions which were further evaluated and discussed.

It is estimated that the first discussions referencing the HTF as a potential location for the new Public Works building were held in the fall of 2012 just after the election. This is the election where Council Member Thomas O’Connor was elected as Mayor and Lani Basa and Joe Pavelko were elected as new Council members. Uram made a comment in the closed Council session on 25 February 2013 that he had been working with Hartman for about 90 days. Counting backwards, it is estimated that o/a 25 November 2012 Don Uram began discussions with Terry Hartman about the HTF Purchase for the Public Works building.

Key pricing discussions occurred in both the 25 February 2013 and 11 March 2013 closed Council sessions. In these discussions Uram asked what the price the city should pay. The comments regarding pricing that were made by Mayor O’Connor and Councilmember Crowley are of particular interest. Uram, O’Connor and Crowley were members of the Real Estate Committee (REC)* which was not known to exist by the public and its meetings were not noticed to the public. Comments made in the 11 March 2013 closed Council session by Crowley and Basa, both members of the Victoria Business Owners Association (VBOA) stating it would take $70,000 to get Terry Hartman to agree to sell also seemed interesting to me. The final price per acre the City paid was $70,000 per acre.

  • 25 February 2013 closed Council session summary
  • Pavelko stated the Arboretum is paying $55,000/acre up the street.
  • O’Connor and Basa said $55,000 is too low.
  • Crowley said to get the land for the least amount.
  • Uram said he would go in at $60,000.
  • Uram asked if $65,000 is the maximum and council approved this price as the maximum.
  • O’Connor and Crowley stated the magic number would be $70,000/acre.
  • In the 11 March 2013 closed Council session summary
  • Strigel asked what would happen if the city stayed at $65,000 and both VBOA members, Crowley and Basa, said Hartman would say no.NOTE: Terry Hartman was also a VBOA member at this time.
  • The price that was finally approved by the council was the price that O’Connor, Crowley and Basa had said it would be for Hartman to accept.
  • The city paid the $70,000 per acre.
  • There was no discussion or approval of the $78,000 purchase price of treesin this closed Council session.
  • There was no apparent discussion or approval in this closed session of extending the water and sewer lines to Hartman’s adjacent southern property. This eventually cost the tax payers $60,000.

* The REC was determined by the Judge in the OML suit to be an official committee of the Council and its meeting were required to be noticed to the public. They were not noticed. The defendants did not believe the REC was subject to the Open Meeting Law even though it was evaluating locations for the City Hall and Public Works buildings. At a minimum, this process avoided public scrutiny and was not transparent.

During the 25 February 2013 closed session Pavelko also suggested trying to negotiate the trees that were purchased. Uram said bids would have to be open. He said they (Hartman) talked about the trees and based on the age of some of them they many not want to move them. The final HTF purchase agreement contains the purchase price for the trees (Full retail, installed price). This clause was added into the final version of the purchase agreement that was sent to Uram by Hartman on the morning of 22 April 2013. There was no open bid process that I have seen and there appears there was no documented opportunity for the Council Members to review and approve the agreement before they voted to approved the agreement later that night. Pavelko was the only council member to vote against approving the agreement.

It is also clear from the record that the final version of the HTF purchase agreement was negotiated on the morning of 22 April 2013. I have emails showing the various draft agreements and then the final agreement that was completed that morning. These versions were sent by Terry Hartman to Uram at 11:20AM via email. His email message, in part states “… Also, it is important that the revisions that we discussed be completed first thing this morning so that we can review and make changes. Than this has to go thru a round of negotiations this morning/early afternoon with the City Committee. Eventually, this has to get to City Council for this evening meeting. Hopefully this can all work as planned. …”

The night of 22 April, the full City Council in open session voted on and approved this agreement, 4 Ayes, 1 Nay. Pavelko was the one nay vote. There are no records indicating this final agreement was reviewed or agreed upon by the Council in closed session, yet the purchase of the trees and the extension of the water and sewer lines did not show up in any draft agreement until the one that arrived the morning of 22 April 2013. It appears that the “City Committee” negotiated and approved that agreement outside of a closed Council session. It is interesting to note that there is discussion related to the trees and sewer water lines in the open session on the night of 22 April 2013.

It also needs to investigated further, but it looks like article 21A of the agreement pre-approves a sub division for Hartman on his adjacent property. It is unclear why this is included in the agreement other than to give Hartman preferential treatment of his adjacent property. Uram in discussions with council in open the night of 22 April 2013 states this does not guarantee the landowner any type of zoning or site plan approval. He explained it says the landowner has a right to go through the process and receive consideration from the Planning Commission and City Council. Question: Why pre-approve a sub division in this agreement? It is not clear to me why this was included in Tree Farm Purchase Agreement.

It should be noted that there are an entire block of “missing” emails from my first formal Data Requestthat cover this same time frame when discussions with Hartman were occurring about both the HTF purchase the potential of a land swap for the City Hall. We already know Council Members used their personal emails for City business, but the City claims there are no city emails that are related to real estate from 15 September 2012 through 13 March 2013 and only one email up to early April. According to various documents provided by the city, the following real estate related meetings and/or activities took place between 15 September 2012 and 13 March 2013, but no emails exist for this period:

  • 19 September 2012 was the kick-off date for a public works working group.
  • 25 November 2012 is the estimated date when Don Uram began discussions with Terry Hartman. See City Council Closed meeting notes from 25 Feb 2013.
  • 10 December 2012 Video recording of open city council discussions about “working group”.
  • 14 January 2013 Closed Session to discuss real estate.
  • 11 February 2013 video discussions about real estate committee.
  • 19 February 2013 real estate committee meeting.
  • 25 February 2013 Closed Session to discuss real estate
  • 11 March 2012 Closed Session to discuss real estate

Financial Overview of Final HTF Purchase Agreement

  1. Per Acre Price
  2. The city paid $70,000 per acre for 10 acres.
  3. See final Hartman Tree Farm purchase agreement—Article 2.
  4. The city refused to get an appraisal of Hartman’s property.
  5. Norton said in closed session on 22 April 2013 that they could can get an analysis or brokers opinion (This is in reference to the land swap, but supports the point the Council doesn’t get appraisals on these deals.)
  6. Tress
  7. The city bought Hartman’s tree for ~$72.810 or $7,300/acre
  8. See final Hartman Tree Farm purchase agreement—Article 5 (c)(ii)
  9. Mayor O’Connor mentioned this part of the deal in open sessions.
  10. Utilities
  11. The city agreed to pay to extend water/sewer lines to Hartman’s adjacent property at an estimated cost of $60,000. (Uram in closed session on 25 Feb 2013).
  12. See final Hartman Tree Farm purchase agreement—Article 20(b)
  13. I have no documents that show or confirm the actual final cost to extend these water and sewer lines.
  14. Effective Price Per Acre Paid

The city paid an effective rate of ~$84K per acre if you take into account the trees and water/sewer line extension costs. The Payne Fowler property, a prime candidate for a new public Works building, was sold for $55K per acre about 4 months after the HRT purchase.