Report and Presentments of the Special Purpose Grand Jury
The 2009 - 2010 Session of the Gwinnett County Special Purpose Grand Jury consisted of the following members:
Maydel Masselli-Montero, Foreperson
Will C. Warrick, III, Vice-Foreperson
Janice N. McCloskey, Clerk
Oliver Bojarski, Deputy Clerk
Emily D. Chesser
William K. Conklin, Jr.
Randall Cunico
Art Cuthbert
Tamara (Tammy) L. Delk
Dawn Fischer
Sandra Franklin
Kenneth Gauthier
Joseph Gentry
Brian Green
Sally Gustafson
Latonya .Holt
Robert Johnston (excused)
Carole de la Cruz Jones
Ronald (Ron) D. Miller
Holly Shelnutt
Randy Sneed
David Charles Steffes
Joseph Yeager
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INTRODUCTION
The Special Purpose Grand Jury was empanelled by a vote of the
Superior Court judges on November 9th, 2009. We have been hearing
evidence essentially every other Friday since December, 2009. During that
time we have followed the order which empanelled the Grand Jury and
inquired into the acquisition of land by the Gwinnett County Board of
Commissioners from 2004 until 2009. Utilizing a methodology which will be
described later, the Grand Jury made a detailed inquiry into five land
acquisitions which were ostensibly purchased for parks. It should be noted
at the outset that none of the properties, three of which were purchased in
2007, are currently being utilized as parks.
The Grand Jury has diligently inquired into the standard county
practices for land acquisitions, and the results of deviations from these
practices. The information that we were required to review was so
voluminous that the District Attorney was forced to establish a secure
website to produce the documents in an electronic format to make these
documents available for review. We heard the testimony of over 70
witnesses both from county government and the private sector. It is this
evidence which allows us to reach our conclusions and make our
recommendations.
From the beginning, each individual Grand Jury member believed that
we were engaged in important work. It was our goal to determine whether
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or not the elected officials and county employees were making decisions that
were proper, legal, and wise in the expenditure of taxpayer money. This
task was undertaken at no small price, both personally and financially, by
each Grand Jury member. The Grand Jury wishes to express our
appreciation to member Robert Johnston who stayed with us as long as he
could until financial and work issues forced him to seek an excusal. It is
unfortunate that the individual elected county Commissioners did not take
our task as seriously. In fact, one was heard to say in the Grand Jury
waiting room that we were "a pain in the ass." The Grand Jury regrets that
an elected official would make such a remark. It is particularly worrisome
that this remark was made about a group of citizens who were summoned to
be grand jurors and have been performing their civic obligation for the last
ten months.
The Grand Jury wishes to thank and commend many of the witnesses
who appeared before us, including members of the county staff, who
brought records for our review, prepared for their testimony by looking at
notes and documents and in several cases prepared presentations and
charts to assist us in understanding their testimony. In particular the Grand
Jury wishes to thank and commend former Commissioner Lorraine Green for
her willingness to appear on numerous occasions. The Grand Jury also
appreciates her prepared and knowledgeable testimony as well as her
familiarity with the community.
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By contrast, under oath, every single sitting County Commissioner
testified that they had not reviewed any of the readily available documents
prior to their testimony. This failure to prepare in even the most basic way
for their appearance resulted in a lack of recall about most important facts of
each transaction. It is the Grand Jury's opinion that this failure to prepare
for their appearance in any meaningful way is not only an insult to the Grand
Jury but is consistent with the way in which decisions are made involving
millions of taxpayer dollars.
That being said, it is our purpose that the citizens of Gwinnett County
know the results of our investigation, hear our recommendations and that
the judges of the Superior Court consider our work complete.
HISTORICAL CONTEXT
The Grand Jury heard testimony that prior to late 2007, the County
was actually in competition with developers in its efforts to acquire land for
various government purposes such as parks, water treatment, and roads.
Prior to 2007, in order to be competitive, county government often paid
more than the appraised price of land. In fact, this was so common that
oftentimes the first offer to buy made by the County was appraised value
plus ten percent. The Grand Jury heard examples of purchases prior to 2007
where even this offer was insufficient to induce sellers to sell.
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In late 2007 and certainly by 2008, the real estate market collapsed.
Prices for raw land plummeted and proposed developments were foreclosed
on. Yet, the Grand Jury heard testimony from the Director of Support
Services and from the current elected County Commissioners that county
government continued its practice of offering, and paying, at least the
appraised price plus ten percent.
Neither the Director of Support Services, nor the commissioners could
provide the Grand Jury with a plausible explanation for continuing the
practice.
STANDARD PRACTICES IN LAND ACQUISITION
In our first 3 meetings the Grand Jury was presented evidence about
howland is acquired by county government in the normal course of
business. In general, we found that several departments are involved in
land acquisition depending on the purpose for which the property is being
acquired.
Department of Support Services
The Grand Jury heard testimony from Steve North, the Director of
Support Services. He testified that the role of his department in land
acquisition was two-fold. In the case of park acquisition, once a need had
been established for a park or a particular tract had been identified, he was
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notified by the Director of Community Services, Phil Hoskins. He would then
direct his staff to either locate a suitable parcel or parcels to meet the need
or to conduct an evaluation of an identified parcel.
The evaluation process consisted of several steps. First, employees of
Support Services would research the property using available county
resources to determine the apparent sultablllty of the property for the
proposed purpose. The owner of the property may also be contacted to
determine if there is an interest in selling and at what price. The second
step was to receive Board of Commissioners' approval to obtain an appraisal
of the property. If approval was denied, the process would end.
After the appraisal was approved, North would request bids from a list
of approved appraisers, select the lowest qualifying bidder and have the
appraisal done. Once the appraisal was done, the results of the work of
Support Services would be presented to the Board of Commissioners in an
executive session. Since 2006, the commission has adopted a rule that
there can be no vote on land purchases in executive session, these votes
must be made in an open public meeting. Based upon this rule, Mr. North
testified that if he receives a "consensus" from the Board and "dlrectlon"
from the Board he moves forward to the next step.
Mr. North could not, nor could any present or former county employee,
describe how he determined that there was a "consensus." It was variously
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described as "no one said anything," "no one disagreed, everyone nodded."
The consensus or directions to Mr. North are not recorded in any county
document and as we learned later, no elected commissioner had a clear
recollection of the meetings. In fact, on at least one of the transactions
reviewed in detail, there was a strenuous disagreement about the purchase
price between Chairman Bannister and Commissioner Beaudreau, but this
was described by county staff that they left the meeting believing there was
a "consensus" to purchase the property at a higher price. This is a common
practice which ended up costing taxpayers $1,152,662.00. To date, the
Grand Jury has not been provided with an explanation of this "consensus"
concept but does note that Webster's Dictionary defines consensus as:
a) general agreement; unanimity
b) the judgment arrived at by most concerned
Mr. North then testified that once a consensus had been arrived at, he
was authorized to negotiate a purchase price within the limits set by the
Board. If an agreement could be reached with the seller, the documents
were delivered to the Law Department for the preparation of a formal offer
which was then submitted to the Board of Commissioners for approval to
purchase. No purchase or offer was final until approved by the Board.
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Mr. North also testified that his department was responsible for the
purchase of land for other facilities such as fire stations, police precincts and
libraries but that the process was the same.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Support Services. The Grand Jury does note that Director
Steve North provided us with documents which supported his testimony and
answered our questions.
DEPARTMENT OF COMMUNITY SERVICES
The Grand Jury heard testimony from Phil Hoskins regarding the role
of his department in land acquisitions. Mr. Hoskins testified that land needs
for his department were identified from two primary sources. First was the
Master Plan developed by county staff and approved by the Board of
Commissioners in 2004 and 2007. The second was the traditional practice of
placing a large "active" park near high schools so that the park athletic
program would support the athletic program at the high school. Mr. Hoskins
testified that there was no formal process in place between the county
government and the Gwinnett County Public Schools to coordinate this
process.
Once a need had been identified, the process of acquisition was turned
over to the Department of Support Services to handle the acquisition. Mr.
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Hoskins testified that he was present at executive sessions when properties
related to his department were presented to the Board. He also attempted
to describe to the Grand Jury the "consensus" concept.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Community Services. The Grand Jury does note that
Director Phil Hoskins provided us with documents which supported his
testimony and answered our questions.
LAW DEPARTMENT
Karen Thomas, the County Attorney testified that the role of her
department fell into two general categories. First, her department is
responsible for the preparation of all legal documents related to the
purchase in the "standard acquisition." Second, her department is
responsible for litigating or overseeing the litigation of re-zoning cases,
condemnations and all other cases which may arise out of land acquisition.
In the course of preparing for litigation, county attorneys are authorized to
hire appraisers of their own choosing as expert witnesses without the
necessity of Board approval.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
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Law Department. The Grand Jury does note that Karen Thomas provided us
with documents which supported her testimony and answered our questions.
DEPARTMENT OF WATER RESOURCES
Lynn Smarr, the Director of Water Resources testified that her
department acquired land for sewer and water lines, pump stations and
treatment facilities. These acquisitions were handled within the department
and no property could be purchased without Board approval.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Water Resources as it relates to land acquisition. The Grand
Jury does note that Director Lynn Smarr provided us with documents which
supported her testimony and answered our questions.
DEPARTMENT OF TRANSPORTATION
The Grand Jury heard testimony from Brian Allen regarding land
acquisition by his department. Mr. Allen described that his department was
responsible for acquiring land for roads including intersections and rights of
way. He described that his department acquired land in accordance with the
Transportation Master Plan through either purchase or condemnation. Land
acquisition was done within the department.
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Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Transportation. The Grand Jury does note that Director
Brian Allen provided us with documents which supported his testimony and
answered our questions.
GENERAL fINDINGS
It should be noted that none of the acquisitions reviewed by the Grand
Jury followed the procedures outlined by these witnesses.
The procedures described above are not in any comprehensive
document or procedure manual that the Grand Jury could find.
No present or past commissioner who testified before the Grand Jury
displayed any familiarity or understanding of this process.
Land parcels in which the county may be interested in purchasing are
identified from a variety of sources including inquiries from sellers, contacts
with individual commissioners, and investigation by county employees.
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No parcel would be put on an executive session agenda for review by
the Board unless staff received the approval of the District Commissioner for
the district in which the land was located or the approval of the Chairman.
METHODOLOGY
The Grand Jury was presented evidence that as of November 13, 2009
the county government owned approximately 4,682 discrete parcels of land.
These parcels ranged in size from several hundred acres to parcels which
could be measured in square feet. We were then presented evidence that
during the time period from 2005 to 2009 the county acquired 1,156 parcels
of varying sizes.
We qulckly realized that to examine each transaction during the
relevant time period would be impossible for a group of twenty-three citizens
had been asked to "put aside the press of their everyday lives" and serve as
Grand Jurors. At the suggestion of the District Attorney, we developed a set
of criteria to evaluate the purchases to determine which transactions would
be reviewed.
We applied these criteria to all of the land acquisitions and arrived at
seventeen (17) potential properties. Of those seventeen (17) we selected
five (5). After ten months of evidence and after hearing testimony twice a
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month for those ten months we are confident that we have enough
information to draw our conclusions and issue this report.
The criteria which the Grand Jury used to filter the transactions were
as follows:
- Was the transaction initiated by an individual commissioner? (As opposed
to initiated by staff as part of a Master Plan)
- Was the transaction to settle litigation?
- Was there a relationship between the seller and the commissioner who
initiated the purchase?
- Was there a significant difference between the county's appraisal and the
purchase price?
- How long had the seller owned the property before it was sold to the
county?
- Was the parcel suitable for the proposed use?
The information to answer these questions was provided from public
records, the testimony of investigators from the District Attorney's Office
and from the testimony of the previously mentioned county employees.
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The properties which were initially selected for review were identified
by the Grand Jury as follows and each transaction will be described in
detail in this report.
RABBIT HILL PARK EXPANSION
Summary of the Transaction
The Rabbit Hill Park expansion was actually made up of three
separate transactions spanning several years and involving a number
of parcels. The stated purpose for the acquisition was to provide an
expansion of the existing Rabbit Hill Park and/or to settle pending
. litigation.
According to the evidence that was presented, these tracts of
land are located along Rabbit Hill Road in Dacula and are across from
and adjacent to the existing Rabbit Hill Soccer Park. The three
transactions resulted in the acquisition of 124.3 acres by the Gwinnett
County Board of Commissioners in 2005 and 2007.
Transaction 1
According to the testimony of James Braden, he purchased a
tract of land on Rabbit Hill Road in 2003 primarily to reinvest funds
from another transaction primarily for tax reasons. The tract was a
roughly triangular piece of property consisting of approximately 19.5
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acres. When Braden purchased the property, it was zoned as part of a
Light Industry District (M-l) and was physically located in the district
represented by Commissioner Kevin Kenerly.
In February 2003 Braden applied to have the property re-zoned
for multi-famllv residences at a density of 8 units per acre (RM-8). A
vote by the Planning Commission on November 2003 denied the
zoning as requested but allowed for detached single family dwellings
(R-ZT Detached). The Board of Commissioners upon motion of
Commissioner Kenerly, voted to modify the original zoning request to
R-ZT Detached.
After the re-zoning was approved, as modified, Braden and the
Gwinnett County Board of Commissioners were sued by Publix
Supermarkets who operated a large distribution facility on an adjacent
tract. Publix contended that placing residences so close to the
distribution center would lead to a disruption of their business.
In order to settle the lawsuit, the Board of Commissioners
purchased the tract for $1,903,163.00 and entered into certain
agreements regarding future development of the property.
Transaction 2
The second transaction in the Rabbit Hill expansion involved
several tracts with an aggregate of 90.58 acres. The evidence before
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the Grand Jury showed that D.G. Jenkins Development Corp., a
corporation owned and operated by David Jenkins purchased the
property in November of 2005 for $7,981.400.00. When Jenkins
purchased the property there was a pending re-zoning application filed
by the seller C.E. Smith to zone the property from R-100 (Single
Family Residence) to R-ZT (Residential Zero Lot Line/Townhouse).
Jenkins, represented by the law firm of Mahaffey, Pickens and Tucker
amended the application to include some commercial development on
two of the included tracts.
In July of 2006, the Board of Commissioners denied the
applications and left the property zoned R-100 for the commercial
application. The residential application was approved as R-100
modified and R-ZT. In light of the re-zoning decision and its effect on
his planned development, Jenkins instructed his attorneys to file suit
against Gwinnett County.
In April of 2007 Jenkins transferred ownership of the property
from D.G. Jenkins Development Corporation to Sydney Investments
for a stated purchase price of $10,390,554.00. This transaction was
described by Jenkins as a "cash out" transaction that did not change
the real ownership of the property or his plans for developing the
property.
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In May of 2007 based upon a motion by Commissioner Kenerly,
the County agreed to purchase the property for $16,260,000.00 as an
active park and to settle the lawsuit.
Transaction 3
The third transaction was the acquisition of 14.2 acres located
adjacent to Rabbit Hill Park. The testimony disclosed that the
property was purchased in May of 2006 by Charles Ashworth d/b/a/
Cidpro, Inc. This purchase was made to acquire a full interest in the
property from a partnership in which Mr. Ashworth was a partner. The
purchase price in 2006 for 14.22 acres was $370,865.00.
Mr. Ashworth applied in August of 2007 to change the zoning to
R-ZT. This application was denied by both the Planning Commission
and by a vote of the Board of Commissioners. The zoning was
modified from RA-200 to R-60 with the stipulation that the owner
donate approximately 4 acres to the County.
Based upon the vote of the Board, Mr. Ashworth instructed his
attorney Lee Thompson to file suit against the County. In October
2007 Ashworth sold the property to the County for $1,000,000.00
partially based upon the purchase price paid to Jenkins and Braden.
This payment was made in settlement of the litigation and as an
expansion of Rabbit Hill Park.
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TESTIMONY OF WITNESSES
Based upon our findings and recommendation, the Grand Jury believes
that a presentment or report is not the appropriate forum to report our
findings.
FINDINGS OF THE GRAND JURY
Based upon a review of all the evidence and testimony of witnesses,
the District Attorney is directed to prepare a Bill of Indictment which charges
Kevin Kenerly with one count of Bribery and two counts of Failure to Disclose
Financial Interest. The Bill of Indictment is to be served upon Kevin Kenerly
in accordance with law and brought before us for our consideration on
October 8, 2010.
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PEACHTREE INDUSTRIAL BOULEVARD PROPERTY
Summary of the Transaction
The Grand Jury heard testimony and received evidence regarding a
tract of land located on Peachtree Industrial Boulevard which consisted of
66.635 acres.
In the Spring of 2006, this parcel of land was identified as a possible
site for an active park for the new Lanier High School cluster. Pursuant to
procedure, the Department of Support Services contacted the owner, Mr.
Wendell Starke to determine his interest in selling. Mr. Starke indicated that
he would be willing to sell for the price listed in an appraisal he had obtained
which was approximately $10.5 million dollars. The Department of Support
Services obtained an independent appraisal which placed the value at
$10.89 million dollars. Mr. Starke indicated that he would be willing to sell
at his original price.
Former County Administrator Jock Connell testified that on six different
occasions between September 2006 and March 2007, he requested
permission from the district commissioner, Kevin Kenerly, to place the
purchase on an executive session agenda to get Board approval to move
forward with the purchase. On each occasion, permission was denied.
By April of 2007, Mr. Starke was frustrated by the lack of action by the
County and accepted an offer from Brickton Commercial Partners, LLC to buy
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58 acres of the parcel for $9.995 million dollars. The property was placed
under contract during the first week of April, 2007.
Brickton Commercial Partners is a company owned by David Bowen,
Thomas Michael Phelps, Jr. and Eric Cape. They testified that they
purchased the property for development but that after they put the property
under contract, they were informed by Mr. Starke's agent that the County
had been interested in the property. The partners instructed their attorney
to inquire about the County's interest and set an asking price of 13.95
million dollars. The attorney, Lee Tucker of Mahaffey, Pickens & Tucker
confirmed the interest and communicated the asking price.
Brickton closed on their contract and purchased the property on
August 6, 2007. The Gwinnett County Board of Commissioners, upon
motion by Kevin Kenerly, voted to purchase Brickton's 58 acres on August 7,
2007. The County closed with Brickton on August 14, 2007 paying the
asking price of $13,950,000.00.
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TESTIMONY Of WITNESSES
The Grand Jury acknowledges that when we first applied the criteria
for review to this transaction, there were several areas of concern.
However, after a complete review of the evidence only one question remains
unanswered.
Mr. Wendell Starke testified that in the Spring of 2006 he was
prepared to sell the entire tract of land to Gwinnett County and entered into
good-faith negotiations with the County.
The county staff, including Steve North and Jock Connell, testified that
they were ready to move forward with the purchase as early as September,
2006.
The principals of Brickton Commercial Partners, LLC testified that they
had been interested in the property and had made prior offers since 2001.
They testified that Mr. Starke's agent approached them in March of 2007 and
that they put the property under contract during the first week of April,
2007. Their stated intention was to build a development similar to the
Suwanee Town Center. They particularly believed this development would
be successful since the proposed Sugarloaf Extension was slated to end right
in front of the property. The timing of the closing date was adequately
explained by both the principal and their bankers as having to do with
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financing considerations. The Grand Jury finds nothing improper regarding
the purchase of the tract by Brickton.
The principals of Brickton testified that they learned of the County's
interest in the property after placing the property under contract. This was
confirmed by Mr. Starke and his agent. The principals then testified that
because they wanted to resolve the issue with the County they set a "take it
or leave it" purchase price: The County took it.
Commissioner Kevin Kenerly did not testify and asserted, through
counsel, his Fifth Amendment right against self-incrimination. The delay
from September 2006 until April 2007 was never explained.
FINDINGS OF THE GRAND JURY
The Grand Jury had been unable to ascertain the reason why
Commissioner Kenerly would not allow the land purchase to be placed on the
Executive Session agenda for review by the entire Board. This transaction is
a prime example of the custom of district courtesy gone Wildly out of control.
No Commissioner should be allowed by rule or custom to control the agenda
of the entire Board. Staff should be allowed to take it upon themselves to
bring a matter of this magnitude to the entire Board or, at the very least, to
the Chairman for action. This example of blind adherence to custom cost
the taxpayers three point four million dollars.
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LAKES PARKWAY PROPERTY
Summary of the Transaction
The Grand Jury heard testimony and received evidence that this is an
8.27 acre parcel located on Lakes Parkway outside of Lawrenceville. The
property is located in District 1 which was represented by former
Commissioner Lorraine Green until January 1, 2009 when Commissioner
Shirley Lasseter took office. The property was acquired by Elite Land
Development, Inc. in April 2005 for $300,000.00. The principle owner of
Elite, Joe Dixon, testified that the original purpose of the purchase was to
build office condos and that in fact he had begun development of the project
with the installation of infrastructure. However, because of financial issues
and the failing economy, he was unable to complete the project.
In 2007, Elite through its agent initially approached the County to
purchase the land for a park or as a headquarters for a central library.
On February 17, 2009 the Gwinnett County Board of Commissioners
voted to purchase the 8.27 acres for $1,161,500.00 from Elite. The
purchase was placed on the consent agenda and approved by consent. The
proposed use was for a trailhead of 35 acres already owned by the County.
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TESTIMONY OF WITNESSES
Mr. Phil Hoskins, the Director of Community Services first became
aware of the property when it was proposed as a possible site for a central
library. He did not recall who brought it to his attention but he rejected the
site because of its location. When asked to consider alternate uses, Mr.
Hoskins stated that the property provided entry to approximately 25 acres
already owned by the County but that it would require access across the
Yellow River. He stated that he had a feasibility study done which indicated
that a twelve foot wide pedestrian bridge would cost approximately one
million dollars. The cost of the bridge was included in the PowerPoint
presentation which was made to the Board of Commissioners in Executive
Session.
Mr. Steve North testified that as Director of Support Services he was
assigned by the Board of Commissioners to negotiate the purchase of the
Lakes Parkway property on behalf of Gwinnett County. He stated that on
January 6, 2009 the Board was first presented the property in Executive
Session and requested a cost estimate on the bridge. On January 20, 2010
the tract was brought up again including the cost of the bridge and Mr. North
was authorized to negotiate a purchase price of appraisal plus up to fifteen
percent ($1,000,000,00 + up to 15%).
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Mr. North stated that by January 20, 2010 he knew that sitting Senior
Judge James Oxendine was acting as an agent for the seller. On or about
January 20, 2010 he contacted James Oxendine at his office in the
courthouse to deliver the preliminary offer letter with the offer of appraised
value. Oxendine told him that rather than mail the letter, North could just
bring it over to his office. That is exactly what North did.
North testified that James Oxendine, upon receipt of the letter in his
office, made a counter offer of appraised value plus 10 percent. North
agreed and the purchase price was set at one million one hundred and
eleven_dollars. North testified that on January 30, 2010 he received a call
from James Oxendine and again met in Oxendine's office in the courthouse.
Oxendine told North that he knew North's authority to negotiate was
appraised value plus 15 percent and that he needed to change the purchase
price to reflect that amount. Mr. North testified that he was surprised that
Oxendine was aware of the limits of his authority. Based upon that
knowledge and the position of James Oxendine as Senior Judge he felt
further negotiations would not be feasible.
Former County Administrator Jock Connell testified that he first
became aware of the property when it was brought to his attention by
former Senior Judge James Oxendine. Mr. Connell testified that Mr.
Oxendine indicated that he was representing the sellers, that they needed to
sell, and proposed that the County purchase the property for a library site.
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Mr. Connell stated that Mr. Oxendine met with him four to six times to press
the sale since Connell was not inclined to recommend the purchase of the
property. He stated that the property could possibly be used to "fill a qap"
in that area of the county but its acquisition was not a staff priority. Mr.
Connell stated that he was convinced that a member of the Board of
Commissioners disclosed the limits of the negotiating authority granted by
the Board.
Commissioner Kevin Kenerly, Bert Nasuti and Mike Beaudreau all
testified that they deferred to Commissioner Shirley Lasseter in this land
acquisition because of district courtesy and therefore had very little
knowledge of the transaction. They denied knowing about the cost of the
bridge when they voted to purchase. They denied knowing that James
Oxendine represented the seller.
Commissioner Shirley Lasseter testified that she took office in January,
2009 as District 1 Commissioner. She stated that she first learned of the
proposal to purchase the property in Executive Session. She did not recall
the specific authorization given to Mr. North. She stated that she did not
know James Oxendine was the seller's agent. She stated that she had
looked at the property. Mrs. Lasseter denied that she initiated the purchase
and then she relied on staff to work out the details and bring the purchase
forward when they were ready. She acknowledged that it was logical that
she would have initiated the process, and that she should have been the one
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to put the matter on the Executive Session agenda but denied doing so. She
testified that she did not know about the change in purchase price and the
negotiation with James Oxendine.
Former Judge James Oxendine testified that he did not consider his
actions to be engaging in the practice of law. He stated that he was doing a
favor for the son of his old friend Randall Dixon and took no fee. He stated
that it was common knowledge that Gwinnett County paid 15 percent over
the appraised value and he had just made a mistake when he agreed to 10
percent. He denied that he had received any information from any County
Commissioner about the negotiation authority granted to Mr. North.
FINDINGS OF THE GRAND JURY
First, it was a stunning revelation to the Grand Jury that no member of
the county staff expressed any reservations about-being involved in a real
estate transaction where a sitting Senior Superior Court Judge is acting as
the seller's agent. If the Commissioners who testified are to be believed, it
is inconceivable that this information was not disclosed prior to any vote to
purchase. Leaving aside questions of fees and negotiating a land deal in a
judge's office in the courthouse, the sheer impropriety of this representation
should have been a warning sign.
Second, despite testimony to the contrary by County Commissioners,
they were presented with information regarding the cost of the pedestrian
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bridge prior to the vote to purchase. The evidence is clear on that fact.
They weren't paying attention.
Third, it is the conclusion of the Grand Jury that the information
regarding the negotiation authorization was given to James Oxendine after
he signed the initial purchase price agreement. Also it was common practice
for the Board of Commissioners to authorize 10 percent over appraisal not
15 percent. An examination of all of the evidence, including the
relationships of the parties, can only lead to the conclusion that it was a
member of the Board of Commissioners who disclosed this information.
While this conduct may not constitute a crime, it is certainly a bad business
practice which led to an unfair benefit to the land seller in this case.
The Grand Jury believes that the conduct of former Senior Judge
James Oxendine was inappropriate if not unethical. However since he has
left the bench there seems to be no sanction available for us to recommend.
Commissioner Shirley Lasseter testified about her recollection of the
events which led up to this property acquisition. After observing her
demeanor and hearing her testimony the Grand Jury specifically
recommends the following:
1. That Commissioner Lasseter develop at least a basic
understanding of the land acquisition process;
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2. That Commissioner Lasseter become more engaged in issues
which affect her district and the entire county;
3. That Commissioner Lasseter must understand her role as a
policy maker and decision maker rather than relying on the
county staff to do her work for her.
In conclusion, the Grand Jury can find no rational, reasonable basis for
the acquisition of this property other than to bailout the son of an old friend
of several members of the Board of Commissioners. The Grand Jury can find
no evidence of a crime in this transaction but that doesn't make it right.
GIVENS ROAD PROPERTY
Summary of the Transaction
The Grand Jury heard testimony and received evidence regarding this
33.198 parcel of land which adjoins Palm Creek Park in District 3
represented by Commissioner Mike Beaudreau. The Grand Jury learned that
the property was placed under contract by Falcon Investments, LLC, a
company owned by Marvin Hewatt and Larry Fleeman, in October of 2007.
Once the property was placed under contract, Mr. Hewatt instructed his
attorney Lee Tucker of Mahaffey, Pickens &Tucker to file are-zoning
application to change the zoning from RA-200 to R75 Modified. Both the
30
Planning Commission and the Board of Commissioners voted to deny the
application. Hewatt then instructed Tucker to file suit against the County.
During the pendency of the suit in preparation for litigation, the county
law department commissioned an appraisal which valued the property at
$1,138,000.00.
During the pendency of the litigation Mr. Hewatt met with Chairman
Charles Bannister in Bannister's office in the courthouse and had delivered
his own appraisal which valued the property at $2,423,000.00. This
meeting occurred in February, 2009.
On May 5, 2009, the Board of Commissioners voted to approve the
purchase of the property for $2,290,662.00.
TESTIMONY Of WITNESSES
Mr. Marvin Hewatt testified that in addition to other business interests,
he and his partner had made several land purchase investments. The
business plan he described was that a parcel of land would be located, the
property would be purchased, and the property would be re-zoned for high
density residential purchases then sold on a per lot basis to a developer.
He testified that in 2007, Falcon Investments purchased approximately
33 acres of land located on Givens Road for forty-eight thousand five
hundred dollars per acre. Once the purchase was made, Mr. Hewatt
instructed his attorney, Lee Tucker to file a re-zoning application to change
31
the zoning from RA-200 (Residential/Agricultural) to RA-75 (High Density).
The application was filed and eventually denied. Mr. Hewatt testified that
during the pendency of the re-zoning application, he met with Commissioner
Mike Beaudreau but was not encouraged by the commissioner's response to
his application. His exact words were, "he didn't say what I wanted to
hear. "
After the denial, Mr. Hewatt authorized his attorney to file a lawsuit
which was served on Gwinnett County on December 2, 2008. While the
lawsuit was pending, Mr. Hewatt testified that he had received a phone call
from his attorney instructing him to get an appraisal of the property because
the county appraisal had valued the land at approximately thirty-four
thousand dollars per acre. Based upon this conversation, Mr. Hewatt hired
James Clower to appraise the property.
Mr. Hewatt testified that Mr. Clower appraised the property at
approximately seventy-three thousand dollars per acre.
Mr. Hewatt testified that on February 24, 2009 he met Mr. Clower in
the office of Chairman Charles Bannister and Mr. Clower delivered the
appraisal directly to the Chairman. He then stated that he received a call
from his attorney who told him that the county had made an offer of
approximately sixty-eight thousand dollars per acre. Mr. Hewatt testified he
was not happy with the offer but acting on advice of counsel he accepted it.
32
Mr. Hewatt described his relationship with Chairman Bannister as a
friend and political supporter. He stated that he allowed Bannister to use a
"
billboard for political advertising without charge and the use of a van for
political purposes without a charge. The Grand Jury has been unable to
locate these contributions on Mr. Bannister's disclosure filings. Mr. Larry
Fleeman testified that the van was later purchased with Bannister campaign
funds.
Mr. James Clower testified that he did an appraisal of the Givens Road
property at the request of Lee Tucker on behalf of Tucker's client Falcon
Investments. He stated that his opinion of value of the property was
seventy-three thousand dollars per acre and that the highest and best use
was for a RA-200 subdivision. He stated that his value per acre was based
on the amount paid per acre for comparable tracts adjusted for an economic
decline.
Mr. Clower then testified that he personally delivered his appraisal to
Chairman Charles Bannister and Marvin Hewatt in the Chairman's office in
the Justice and Administration Center. He stated that he believed it was on
February 23, 2009. He remembered because Mr. Hewatt and Chairman
Bannister pointed out an error in the appraisal where the appraisal was
directed to Marvin Hewatt rather than Lee Tucker. He said he left, returned
to his office, made the correction and returned to the chairman's office.
33
When he returned, Mr. Hewatt was still in the office so he delivered the
appraisal and left.
Commission Chairman Charles Bannister testified that he had known
Marvin Hewatt for years and considered him a friend. Bannister said that
Hewatt had sent him a plat of the Givens Road property expressing an
interest in selling the property to the County. Chairman Bannister testified
that he had a recollection of the re-zoning application, its denial and the
subsequent lawsuit. He was also aware of the County appraisal of the
property. He stated he believed the County appraisal was too low based on
prior County purchases. Chairman Bannister remembered becoming aware
that the County had received an appraisal from a third party which valued
the land at approximately seventy thousand dollars per acre but was unclear
about where that appraisal originated.
Chairman Bannister on the 23rd of July, 2010 denied that he met with
Marvin Hewatt in his office and denied that he received the appraisal from
James Clower or Marvin Hewatt. On August 20, 2010, after the Grand Jury
had subpoenaed his calendar, Mr. Bannister acknowledged that the meeting
may have taken place since it was on his calendar but again denied receiving
the appraisal from Hewatt or Clower.
Chairman Bannister stated that he decided to "take the lead" on this
particular purchase because of "so many no votes" coming from
34
Commissioner Mike Beaudreau. He stated that getting this land transaction
passed was to get Mr. Beaudreau's attention. To quote his testimony, "It
was pure politics." He testified that this purchase was an object lesson to
Commissioner Beaudreau.
Commissioner Kevin Kenerly testified that after the lawsuit was filed,
he spoke to Marvin Hewatt's attorney who attempted to settle the lawsuit
with the purchase of the land by the County. He said that he voted to deny
the re-zoning request out of district courtesy. Mr. Kenerly testified that after
the lawsuit was initiated he was in favor of the land acquisition because of
his perception that the Law Department lost most re-zoning suits and the
zoning decisions of the Board of Commissioners were not upheld. He also
stated that he believed that the County appraisal of the property w.as
incorrect and not in line with previous purchases in the same area.
Kenerly testified that Chairman Bannister produced an appraisal at an
Executive Session but that he didn't know where the appraisal came from.
However, he stated that based on a lack of information from county staff, he
believed that the sellers appraisal was a more accurate assessment of the
value of the property. Kenerly stated he witnessed a heated discussion
between Chairman Bannister and Commissioner Beaudreau and therefore he
stated that he believed that Chairman Bannister was pushing the acquisition
to "stick it to Mike". He stated that he disregarded district courtesy in his
vote because Commissioner Beaudreau had benefitted from previous Board
35
actions but then publicly criticized these actions. He cited the 2008 millage
rate vote as an example.
Commissioner Bert Nasuti basically testified to the same facts and
perceptions as Kenerly.
FINDINGS OF THE GRAND JURY
The Grand Jury could not find any evidence of any direct payment to
any public official to induce any performance of an official duty. However, it
is clear that in this land acquisition the regular process was subverted to
benefit a long-time friend and political supporter of Charles Bannister. Just
as disturbingly, over one million dollars of taxpayer money was used to
make a political point. The Grand Jury believes that all of the district
commissioners who voted in favor of the Givens Road property acquisition
made choices that were financially unsound, motivated by petty politics and
generally wrong for the citizens of Gwinnett County.
Furthermore, this particular acquisition is an example of what appears
to be a complete disconnect between county staff and the current Board of
Commissioners. Business decisions are being made without seeking input
from staff, without staff volunteering information or without any real
knowledge of the likelihood of success of any particular lawsuit.
The Grand Jury heard testimony in this case that the tract in question
was not part of the Parks Master Plan nor did the park that adjoined the
36
property need to be expanded. Despite that information the Board pursued
acquiring the land.
The Grand Jury also heard testimony that the perception of
Commissioners Kenerly, Nasuti and Beaudreau was that the lawyers for the
County were unable to prevail in zoning lawsuits so settlement was their
only option. The testimony from the Law Department was that the County
prevails in most zoning lawsuits and in any event the result of a loss would
be a remand for a new zoning decision not the payment of monetary
damages.
This particular case, in the opinion of the Grand Jury, was not one
which cried out for settlement unless the agenda was to allow the landowner
to make a profit on the sale. If settlement was not mandated, the question
of varying appraisals would never have come up. The only conclusion that
can be reached is that the Board of Commissioners made a decision based
on faulty information or perception or there was an agenda other than the
best interests of the public at work in this case.
Based upon the contradiction between the testimony of Charles
Bannister and Marvin Hewatt, the Grand Jury directed the District Attorney
to prepare and present an indictment charging Charles Bannister with
Perjury.
37
On October 8, 2010 Mr. Bannister asked the Grand Jury not to indict
him and to allow him to resign effective immediately. After a consideration
of the evidence in the case, the proposed charge, and in the interest of
limiting costs to taxpayers and expediting a resolution of this matter, the
Grand Jury decided that it was in the best interest of the citizens of Gwinnett
County to allow Bannister to resign and for the Grand Jury to return a "No
Bill" of Indictment. The Grand Jury in making this decision also considered
the following factors:
- In our investigation which included a review of financial records, we did
not uncover any evidence of an illegal payment or bribe in this
transaction. The proposed charge was based upon contradictions in
testimony before us, not upon the transaction itself.
- The Grand Jury weighed the possible outcomes. If we had returned an
indictment then removal from office would have depended upon the
outcome of the criminal trial. The Grand Jury decided that assured,
permanent removal from office was the appropriate solution to one of the
problems we uncovered in our investigation.
38
1-85 AT BEAVER RUIN PROPERTY
Summary of Transaction
The Grand Jury heard testimony regarding these two parcels
containing 36.79 acres (Tract A) and 21.12 acres (Tract B). In 2005 these
two tracts were owned by Retail Development Partners, LLC, a company
which is owned by Wayne Mason and others. In 2005, Retail Development
applied for a re-zoning of Tract A from Commercial (C-2) to Multi-Family
Residential (RZM). The Planning Commission voted to recommend approval
of the re-zoning however, the Board of Commissioners upon motion of
former Commissioner, Lorraine Green voted to deny the re-zoning. Retail
Partners filed suit to challenge the denial.
During the litigation Tract A was appraised at a value of
$4,650,000.00. On February 15, 2007, the County purchased Tract A for
$4,650,000.00 and Mr. Mason donated Tract B which consisted of a stream
and wetlands. The purpose of the purchase was for a public park and
settlement of litigation.
TESTIMONY OF WITNESSES
Mr. Wayne Mason testified that he and other partners originally
acquired a tract of land which he called the Rich's site in 1980 or 1981 and
that the tract originally was made up of over one hundred acres. Actually,
the Grand Jury learned that the tract contained one hundred thirty-three
acres. He testified that after two or three years, he wanted to sell the
39
property based on an offer but that his partners didn't want to sell so his
partners bought him out for 5.7 million dollars.
Mr. Mason testified that he reacquired the entire piece of property
back in "the 1990's" for 5.5 million dollars. He stated that one of the
reasons he reacquired the tract was he needed stream buffer credits to
develop another property at the now intersection of Pleasant Hill Road and
North Berkley Lake Road. He also stated that since he knew the property
was zoned for commercial development, he could use the property in his
business.
Mr. Mason then testified that he sold part of the property which has
frontage on Satellite Boulevard for commercial development and used his
approved stream crossings to subdivide the remaining property. He stated
that he applied for a zoning which would allow for the construction of
apartments, was granted the re-zonings and sold each of the parcels for in
excess of 5 million dollars. By 2007, the only parcel that had not been sold
was the parcel in question in this inquiry and the property surrounding the
stream. This was a total of approximately 57 acres.
Mr. Mason told the Grand Jury that he received an offer to sell 30
acres for the purpose of building apartments contingent upon a re-zoning of
the property. He applied for the re-zoning, received a positive
recommendation from the Planning Commissioner but when the matter went
40
to a vote before the Board of Commissioners, his application was denied.
When the application was denied, Mr. Mason instructed his attorneys to file
suit against Gwinnett County.
Mr. Mason testified that while the re-zoning process was ongoing he
had no official conversations with any county commissioner but
acknowledged that he may have spoken to one or more informally. After
the filing of the lawsuit, Mr. Mason acknowledged that he spoke to Lorraine
Green urging her to buy the property because he was confident he would
win the lawsuit.
Significantly, Mr. Mason also testified that as early as 2001 the
Gwinnett County Commission voted to condemn the entire 133 acres for
green space acqulsltlon. He testified that his understanding was that the
condemnation effort was dropped because of problems with title to the
property and because Commissioner Nasuti wanted an aquatic center on
Peachtree Industrial Boulevard.
Mr. Mason finally agreed to settle the lawsuit for less than the contract
price he had been offered and agreed to donate the wetlands (Tract B) to
the County. He stated that he agreed to settle because when he considered
the tax ramifications, the court costs and the value of the wetlands if he kept
them, it made no business sense.
41
Lorraine Green, former District 1 Commissioner testified about her
involvement in this transaction. She began by saying that from the outset
she was opposed to Mason's re-zoning application. She stated that it was
her belief that the last thing that Satellite Boulevard needed was more
apartments. However, she testified that she was contacted by
representatives of the neighborhoods adjoining the tract who were willing to
negotiate with the re-zoning applicant if they could not stop the re-zoning.
Mrs. Green testified that she remained opposed to additional apartments and
so despite the recommendation of the Planning Commission, after
consultations with the Law Department, she made the motion to deny the
re-zoning. She said that, with the exception of Chairman Charles Bannister,
it was not difficult to persuade the other commissioners to support her
motion.
Mrs. Green testified that the idea to purchase the property for green
space came from her. She testified that she was aware of the events of
2001 and believed the purchase was appropriate. She testified that
although the litigation was only about Tract A, she insisted on the donation
of Tract B as part of the settlement. Mrs. Green also testified that she asked
for an engineering study to be done to assure herself that the proposed
development by Mr. Mason was in fact feasible. Once this had been done,
despite opposition from Bannister and some hesitancy from Nasuti, she
42
made the motion to purchase the land to settle the lawsuit and as an
acquisition of green space. The motion passed by a vote of 4 to 1.
Chairman Charles Bannister testified that his opposition to the land
purchase began with the vote to deny the re-zoning application. He stated
that he was opposed to the purchase of the property because of the
development costs to the County. He also testified that he was opposed to
the re-zoning application because he had made a campaign promise not to
allow any more apartments. Chairman Bannister abstained from the vote to
deny Mason's zoning application.
Mr. Bannister testified that after the filing of the lawsuit, he believes
he inquired about the County's chances to prevail and was assured that
zoning votes were rarely over turned. He then stated that when the subject
of purchasing the land came up, he was surprised because he had spoken to
Community Services Director Phil Hoskins and had been informed about the
high costs of developing the property. He stated based on his prior
knowledge of the property and the other factors he mentioned he was
opposed to the purchase of the property.
FINDINGS OF THE GRAND JURY
The Grand Jury finds no evidence of wrongdoing in the acquisition of
this parcel of property. This is no evidence of any improper payment made
to, or solicited by, Lorraine Green in her role as a public official.
43
In essence, this acquisition came down to a question of priorities. If
Gwinnett County had won the lawsuit, Mr. Mason would have been left with
a tract of land which was already zoned for commercial development. If the
County had lost the lawsuit, apartments would have been built. This District
Commissioner was faced with a difficult choice. Whether she made the
correct choice depends on one's point of view. On one hand, green space
and wetlands were preserved, while on the other hand, valuable property
was removed from the tax digest.
RECOMMENDATIONS OF THE GRAND JURY
The Special Purpose Grand Jury would like to thank District Attorney,
Danny Porter, Stan Hall and the entire staff of the District Attorney's office
for the professional and capable assistance they have provided this Grand
Jury. We also want to express our appreciation to the court reporters Holly
Brown and Tara Johnson. We also wish to commend the bailiffs Bob
Hettesheimer and Mark Henderson for their professionalism and support as
the bailiffs to the Special Purpose Grand Jury.
After the conclusion of ten months of testimony and evidence, the
Special Purpose Grand Jury makes the following recommendations:
1. DISTRICT COURTESY
We understand that district commissioners work on a part-time basis
for Gwinnett County in addition to their full-time employment. Therefore,
44
due to the sheer volume of transactions and the amount of information
involved in each transaction, commissioners often end up deferring to the
commissioner of the district in which the transaction is proposed. This
practice is known as district courtesy. It is the opinion of the Grand Jury
that this concept of district courtesy, while useful in some ways, is at the
root of the problems with each land transaction we examined. District
courtesy has allowed commissioners to avoid responsibility and
accountability for their votes. We heard on numerous occasions a
commissioner testify that, unless there was something unusual about the
transaction, they always voted with the district commissioner. This in effect
allowed one commissioner to totally control a decision which affects all
citizens of Gwinnett County. An example of this control is the Peachtree
Industrial Boulevard property. The completely arbitrary and unexplained
delay by Commissioner Kenerly in keeping the transaction from the agenda
essentially ended up costing the taxpayers approximately four (4) million
dollars. No individual commissioner should have this kind of power.
The Grand Jury is strongly of the opinion that certain transactions such
as parks transcend the concept of district courtesy. These are transactions
which involve millions of dollars and affect all citizens of Gwinnett County.
All commissioners should be involved and held responsible for all phases of
these types of projects.
45
II. REORGANIZATION OF COUNTY GOVERNMENT
The Grand Jury recommends that the basic structure of Gwinnett
County government be changed. The current system with one full-time
chairman and four part-time district commissioners does not provide
adequate representation to the citizens of the County. The current system
with its reliance on district courtesy and its over-reliance on county staff
provides too many opportunities for conflicts of interest and fosters a culture
of inappropriate business relationships which have been the common thread
running through our investigation.
The majority of the Grand Jury is in favor of making all current county
commission seats, including the Chairman, a full-time position. Essential to
this concept would be that these new commissioners would be adequately
compensated and would be prevented from having any outside business
interests which could potentially conflict with their responsibilities to govern.
The expectation of these full-time commissioners would be that they would
have the opportunity to be better informed and make better decisions. This
system would also eliminate potential conflicts between their private life and
public responsibility.
In considering this recommendation, the Grand Jury recognized that it
is unrealistic to expect the current part-time commissioners to be able to
balance their private lives and occupations with the immense amount of
work needed to make intelligent decisions on county matters. Full-time
46
commissioners, who would not be allowed to have outside employment,
could devote the necessary time to each decision.
The Grand Jury also considered the cost of this system. Full-time
commissioners would have to be adequately compensated to attract the type
of candidate who could do the job. The Grand Jury recognizes that at first
qlancerthls appears to be an additional cost to taxpayers. But, if just one of
the land transactions we investigated could have been prevented by a wiser
decision, that would more than pay for the salaries of full-time
commissioners.
On the other hand, many members believe that moving to full-time
commissioners may not be the answer. These members believe that the
concept of a part-time Citizen/Commissioner is still valid. The members who
support the idea of part-time commissioners do agree that the current
system does not provide adequate representation and provides too many
opportunities for misconduct. These members agree that the current
workload is too burdensome and the current commission districts are too
large for one person to adequately do the job on a part-time basis.
The alternate recommendation of the Special Purpose Grand Jury is to
re-structure the current system to include more County Commissioners
representing smaller districts. This would have multiple benefits to the
citizens of the County.
47
- It would decrease the pervasive influence of district courtesy.
- It would reduce the workload on individual commissioners to allow and
require them to make decisions based on all the facts.
- More districts would allow for better representation of each district.
- More districts would dilute the ability of one commissioner to totally
control any given transaction.
Given these advantages and the Grand Jury's ultimate demand for more
accountability, the proposal to add commissioners has significant merit.
III. BUSINESS PLAN
It is the opinion of the Grand Jury that the current business plan utilized
by Gwinnett County government needs significant improvement. During the
course of our investigation we observed serious pervasive lack of
communication, information sharing, and even trust between the County
Commissioners and the heads of the major departments of county
government. On numerous occasions department heads testified that they
were not asked to offer an opinion about a particular land transaction. There
was no inquiry by the Board of Commissioners about how the purchase
would fit into the Parks Master Plan or the best use of the property was.
Members of the staff, including the current and past County Administrator
consistently testified that they were not asked and did not give an opinion
whether a particular transaction was in the best interest of the citizens. One
department head testified "that wasn't his job."
48
County Commissioners on the whole testified that department heads
did not provide them with the information to make informed decisions. One
current Commissioner described the staff as "note takers." It was clear from
the testimony that the decisions are being made by commissioners based on
a PowerPoint presentation made in Executive Session. Sometimes these
sessions occur fifteen minutes before a vote is taken. Although the evidence
shows that each commissioner is provided with a large packet of
information, either because of time limitations or for other reasons, the
packets are not being looked at.
The Grand Jury is of the opinion that there should be better
communication between the County Staff and the Board of Commissioners.
This communication should be clearly documented so that staff is clear on
the intentions of the Board of Commissioners and the Board is clear about its
intentions. Because of this lack of documentation, the Grand Jury was
forced to dissect each transaction in order to determine the truth behind
each purchase. The goal of the business process should be that every
citizen should be able to examine any transaction conducted by Gwinnett
County government and evaluate that transaction objectively. The county
government should be able, and willing, to explain on each transaction who
proposed it, who recommended it, why the Board voted for it, and why it
benefitted the citizens. Citizens should expect no less and the Grand Jury
49
finds that Gwinnett County government has failed to deliver on this
expectation.
IV. LAND ACQUISITION
Commissioner Kenerly testified that he believed that the citizens of
Gwinnett County had given him a mandate to acquire land to build parks and
preserve green space. The Grand Jury does not disagree but we found a
process that is ruled more by custom and by the whims of individual
commissioners than it is by sound business decisions and economic
considerations. The Grand Jury believes that the entire land acquisition
process should be restructured to increase efficiency and, most importantly,
accountability.
- First and foremost the acquisition should be based upon a philosophy of
obtaining best value for the taxpayer's dollar. Instead of the current
philosophy of buy it and make it work, each transaction should be
critically examined to determine its current or future use and value. The
presumption should be that unless a transaction can be justified under
stringent standards known to all involved, the Gwinnett County Board of
Commissioners should decline the purchase.
- Decisions to purchase land are important to all citizens and should
transcend all notions of district courtesy. All information on all land
transactions along with staff recommendations should be given to all
50
County Commissioners as soon as the transaction is ready to be
considered. No single commissioner should have the power to singlehandedly
delay consideration of a purchase for political or other reasons.
- No Limited Liability Company should be permitted to apply for a rezoning,
acquire property from the county or sell property to the county
without a full disclosure of the individual identities of the shareholders.
The Grand Jury recognizes that an LLC is a legitimate type of company
formed for a variety of legitimate reasons but it should not be a vehicle to
conceal the identity of individuals who are doing business with the
government.
- The Grand Jury found that the minutes of Executive Sessions as they now
exist are not useful to determine what actually happened in the meetings.
. .
They are cursory at best and only reflect the final action taken. The
Grand Jury recommends that Executive Sessions be audiotaped or
videotaped to insure that later review will reveal what actually happened
in the meetings.
- As stated earlier, the concept of consensus in Executive Session leaves all
parties involved confused and unsure about the decision that was actually
made. The Grand Jury recognizes that this procedure was instituted to
ensure that all votes were made at public meetings. The Grand Jury also
recognizes there are many topics, such as land pricing and negotiation
51
strategy that should not be discussed at a public meeting. The current
process should be re-evaluated since it clearly is not working.
- The Grand Jury became concerned about the apparent difference of
opinion between commissioners and staff about the appraisal process and
results. It appears that staff trusts the process and results implicitly
while the current Board of Commissioners does not trust it at all.
Provisions should be made and procedures put in place for those
situations in which the seller's appraisal and the County appraisal vary.
The decisions made by the Board of Commissioners, especially in
settlement of litigation, must be made based on appraisals that the Board
trusts and which are legally defensible.
- The Grand Jury found a profound lack of communication between the
County Law Department and the members of the Board of
Commissioners. The attorneys from the Law Department who testified
told us that the county prevailed in the majority of cases in which a rezoning
decision had been made. Several members of the Board of
Commissioners testified that most of those cases were remanded for a
different decision. In other words, the county lost the case. When
pressed for specifics, neither the County Attorneys nor the
Commissioners could provide the Grand Jury with detailed information. It
would seem that one of the fundamental pieces of information needed by
the Board of Commissioners in deciding whether to settle a lawsuit would
52
be an evaluation of the likelihood of success, including success in past
cases. Members of the current Board testified that they were not
provided this information. The County Attorneys testified that the Board
was provided the information. Without the documentation procedures
mentioned earlier, the Grand Jury is unable to determine what happened.
The Grand Jury is of the opinion that this type of information is critical to
making informed decisions. The Grand Jury recommends that Gwinnett
County government take whatever steps are necessary to restore
confidence in the Law Department and to make sure that information is
available to make sound decisions.
- The practice of offering appraisal price plus ten percent for land
acquisition should be abolished. County government should have trained
real estate negotiators on staff to obtain the best value for taxpayer
dollars. These negotiators should be experienced, aware of market
conditions and have sufficient authority to conduct aggressive
negotiations on behalf of taxpayers without undue influences from outside
forces.
- The Grand Jury has found that SPLOST funds have been used for a
variety of purposes from land acquisitions outside the Parks Master Plan
to settlement of litigation. The Grand Jury is of the opinion that these
actions have placed the passage of future SPLOST votes in jeopardy.
SPLOST funds should be used for clearly delineated purposes approved by
53
the voters, not as a general pot of money to be used for various purposes
based upon a commissioner's desire.
- Finally, land acquisition should follow a clearly defined and set system
of policies and procedures. These procedures should be public and
designed to make the property acquisition decision as objective as
possible and based upon a valid business reason. Deviation from
these procedures should be the exception rather than the norm and
each deviation should be adequately documented.
V. ETHICS REFORM
The Grand Jury was surprised to learn that the ethics ordinance passed by
the Gwinnett County Board of Commissioners has not been significantly
reviewed or changed since its passage in 1993. This is simply unacceptable.
The Grand Jury recommends that the ethics ordinance be reviewed and
updated as necessary every two years. This should be a priority of the
elected Board of Commissioners.
The Grand Jury has heard sufficient testimony to conclude that
comprehensive enforceable ethics ordinance should be a priority for'
Gwinnett County Government. The only way that any semblance of trust
can be re-established is for citizens to believe that their elected officials and
county employees are acting ethically and on their behalf. The basics of
such an ethics ordinance would have to include full disclosure of business
54
interests and prohibitions against receiving gifts or other things of value.
Without these basics, trust cannot exist.
CONCLUSION
Based upon the evidence gathered during the course of our
investigation, the Grand Jury, as a group of citizens, has been increasingly
concerned about the path that Gwinnett County government is on. We have
seen decisions involving millions of dollars made with little or no information
or for the most venal reasons.
As interested citizens we have carefully considered our decisions and
recommendations. It is now up to the elected leaders of Gwinnett County to
carefully consider these recommendations and implement those they believe
would best serve the public interest.
In many ways, Gwinnett County is still a great place to live, work and
raise our children but in order to remain great, changes must be made.
In addition to the publication of presentments, we recommend that a
copy of these presentments be delivered to:
Mr. Charles Bannister, Former Chairman, Gwinnett County Board of Commissioners
Ms. Shirley Lasseter, Gwinnett County Board of Commissioners
Mr. Bert Nasuti, Gwinnett County Board of Commissioners
55
Mr. Mike Beaudreau, Gwinnett County Board of Commissioners
Mr. Kevin Kenerly, Gwinnett County Board of Commissioners
Mr. Daniel J. Porter, Gwinnett County District Attorney
Honorable Dawson Jackson, Chief Superior Court Judge, Gwinnett Judicial Circuit
Honorable Michael C. Clark, Superior Court Judge, Gwinnett Judicial Circuit
Honorable William M. Ray, II, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Karen E. Beyers, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Ronnie K. Batchelor, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Melodie Snell Conner, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Debra K. Turner, Superior Court Judge, Gwinnett Judicial Circuit
Honorable R. Timothy Hamil, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Tom Davis, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Warren Davis, Superior Court Judge, Gwinnett Judicial Circuit
Karen Thomas, County Attorney
Steve North, Department of Support Services
Phil Hoskins, Department of Community Services
56
Lynn Smarr, Department of Water Resources
Brian Allen, Department of Transportation
Glenn Stephens, County Administration
Done this 22d day of October, 2010.
By the Grand Jury
MAYDEL MASSELLI-MONTERO, FOREPERSON
JANICE N. MCCLOSKEY, CLERK
57
ORDER
The within and foregoing Report and Presentments of the Special Purpose
Grand Jury, having been presented, it is ordered that the same be filed with the
Clerk of this Court and spread upon the minutes thereof.
It is ordered that the Report and Presentment of the Special Purpose Grand
Jury be published in the Officiai County news media, The Gwinnett Daily Post, as a
legal notice, at least one time with costs to be paid from the general funds of
Gwinnett County.
This day of October, 2010.
HONORABLE MICHAEL C. CLARK
SUPERVISING JUDGE
GWINNETI COUNTY SUPERIOR COURT
GWINNETI JUDICIAL CIRCUIT
58
The 2009 - 2010 Session of the Gwinnett County Special Purpose Grand Jury consisted of the following members:
Maydel Masselli-Montero, Foreperson
Will C. Warrick, III, Vice-Foreperson
Janice N. McCloskey, Clerk
Oliver Bojarski, Deputy Clerk
Emily D. Chesser
William K. Conklin, Jr.
Randall Cunico
Art Cuthbert
Tamara (Tammy) L. Delk
Dawn Fischer
Sandra Franklin
Kenneth Gauthier
Joseph Gentry
Brian Green
Sally Gustafson
Latonya .Holt
Robert Johnston (excused)
Carole de la Cruz Jones
Ronald (Ron) D. Miller
Holly Shelnutt
Randy Sneed
David Charles Steffes
Joseph Yeager
2
INTRODUCTION
The Special Purpose Grand Jury was empanelled by a vote of the
Superior Court judges on November 9th, 2009. We have been hearing
evidence essentially every other Friday since December, 2009. During that
time we have followed the order which empanelled the Grand Jury and
inquired into the acquisition of land by the Gwinnett County Board of
Commissioners from 2004 until 2009. Utilizing a methodology which will be
described later, the Grand Jury made a detailed inquiry into five land
acquisitions which were ostensibly purchased for parks. It should be noted
at the outset that none of the properties, three of which were purchased in
2007, are currently being utilized as parks.
The Grand Jury has diligently inquired into the standard county
practices for land acquisitions, and the results of deviations from these
practices. The information that we were required to review was so
voluminous that the District Attorney was forced to establish a secure
website to produce the documents in an electronic format to make these
documents available for review. We heard the testimony of over 70
witnesses both from county government and the private sector. It is this
evidence which allows us to reach our conclusions and make our
recommendations.
From the beginning, each individual Grand Jury member believed that
we were engaged in important work. It was our goal to determine whether
3
or not the elected officials and county employees were making decisions that
were proper, legal, and wise in the expenditure of taxpayer money. This
task was undertaken at no small price, both personally and financially, by
each Grand Jury member. The Grand Jury wishes to express our
appreciation to member Robert Johnston who stayed with us as long as he
could until financial and work issues forced him to seek an excusal. It is
unfortunate that the individual elected county Commissioners did not take
our task as seriously. In fact, one was heard to say in the Grand Jury
waiting room that we were "a pain in the ass." The Grand Jury regrets that
an elected official would make such a remark. It is particularly worrisome
that this remark was made about a group of citizens who were summoned to
be grand jurors and have been performing their civic obligation for the last
ten months.
The Grand Jury wishes to thank and commend many of the witnesses
who appeared before us, including members of the county staff, who
brought records for our review, prepared for their testimony by looking at
notes and documents and in several cases prepared presentations and
charts to assist us in understanding their testimony. In particular the Grand
Jury wishes to thank and commend former Commissioner Lorraine Green for
her willingness to appear on numerous occasions. The Grand Jury also
appreciates her prepared and knowledgeable testimony as well as her
familiarity with the community.
4
By contrast, under oath, every single sitting County Commissioner
testified that they had not reviewed any of the readily available documents
prior to their testimony. This failure to prepare in even the most basic way
for their appearance resulted in a lack of recall about most important facts of
each transaction. It is the Grand Jury's opinion that this failure to prepare
for their appearance in any meaningful way is not only an insult to the Grand
Jury but is consistent with the way in which decisions are made involving
millions of taxpayer dollars.
That being said, it is our purpose that the citizens of Gwinnett County
know the results of our investigation, hear our recommendations and that
the judges of the Superior Court consider our work complete.
HISTORICAL CONTEXT
The Grand Jury heard testimony that prior to late 2007, the County
was actually in competition with developers in its efforts to acquire land for
various government purposes such as parks, water treatment, and roads.
Prior to 2007, in order to be competitive, county government often paid
more than the appraised price of land. In fact, this was so common that
oftentimes the first offer to buy made by the County was appraised value
plus ten percent. The Grand Jury heard examples of purchases prior to 2007
where even this offer was insufficient to induce sellers to sell.
5
In late 2007 and certainly by 2008, the real estate market collapsed.
Prices for raw land plummeted and proposed developments were foreclosed
on. Yet, the Grand Jury heard testimony from the Director of Support
Services and from the current elected County Commissioners that county
government continued its practice of offering, and paying, at least the
appraised price plus ten percent.
Neither the Director of Support Services, nor the commissioners could
provide the Grand Jury with a plausible explanation for continuing the
practice.
STANDARD PRACTICES IN LAND ACQUISITION
In our first 3 meetings the Grand Jury was presented evidence about
howland is acquired by county government in the normal course of
business. In general, we found that several departments are involved in
land acquisition depending on the purpose for which the property is being
acquired.
Department of Support Services
The Grand Jury heard testimony from Steve North, the Director of
Support Services. He testified that the role of his department in land
acquisition was two-fold. In the case of park acquisition, once a need had
been established for a park or a particular tract had been identified, he was
6
notified by the Director of Community Services, Phil Hoskins. He would then
direct his staff to either locate a suitable parcel or parcels to meet the need
or to conduct an evaluation of an identified parcel.
The evaluation process consisted of several steps. First, employees of
Support Services would research the property using available county
resources to determine the apparent sultablllty of the property for the
proposed purpose. The owner of the property may also be contacted to
determine if there is an interest in selling and at what price. The second
step was to receive Board of Commissioners' approval to obtain an appraisal
of the property. If approval was denied, the process would end.
After the appraisal was approved, North would request bids from a list
of approved appraisers, select the lowest qualifying bidder and have the
appraisal done. Once the appraisal was done, the results of the work of
Support Services would be presented to the Board of Commissioners in an
executive session. Since 2006, the commission has adopted a rule that
there can be no vote on land purchases in executive session, these votes
must be made in an open public meeting. Based upon this rule, Mr. North
testified that if he receives a "consensus" from the Board and "dlrectlon"
from the Board he moves forward to the next step.
Mr. North could not, nor could any present or former county employee,
describe how he determined that there was a "consensus." It was variously
7
described as "no one said anything," "no one disagreed, everyone nodded."
The consensus or directions to Mr. North are not recorded in any county
document and as we learned later, no elected commissioner had a clear
recollection of the meetings. In fact, on at least one of the transactions
reviewed in detail, there was a strenuous disagreement about the purchase
price between Chairman Bannister and Commissioner Beaudreau, but this
was described by county staff that they left the meeting believing there was
a "consensus" to purchase the property at a higher price. This is a common
practice which ended up costing taxpayers $1,152,662.00. To date, the
Grand Jury has not been provided with an explanation of this "consensus"
concept but does note that Webster's Dictionary defines consensus as:
a) general agreement; unanimity
b) the judgment arrived at by most concerned
Mr. North then testified that once a consensus had been arrived at, he
was authorized to negotiate a purchase price within the limits set by the
Board. If an agreement could be reached with the seller, the documents
were delivered to the Law Department for the preparation of a formal offer
which was then submitted to the Board of Commissioners for approval to
purchase. No purchase or offer was final until approved by the Board.
8
Mr. North also testified that his department was responsible for the
purchase of land for other facilities such as fire stations, police precincts and
libraries but that the process was the same.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Support Services. The Grand Jury does note that Director
Steve North provided us with documents which supported his testimony and
answered our questions.
DEPARTMENT OF COMMUNITY SERVICES
The Grand Jury heard testimony from Phil Hoskins regarding the role
of his department in land acquisitions. Mr. Hoskins testified that land needs
for his department were identified from two primary sources. First was the
Master Plan developed by county staff and approved by the Board of
Commissioners in 2004 and 2007. The second was the traditional practice of
placing a large "active" park near high schools so that the park athletic
program would support the athletic program at the high school. Mr. Hoskins
testified that there was no formal process in place between the county
government and the Gwinnett County Public Schools to coordinate this
process.
Once a need had been identified, the process of acquisition was turned
over to the Department of Support Services to handle the acquisition. Mr.
9
Hoskins testified that he was present at executive sessions when properties
related to his department were presented to the Board. He also attempted
to describe to the Grand Jury the "consensus" concept.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Community Services. The Grand Jury does note that
Director Phil Hoskins provided us with documents which supported his
testimony and answered our questions.
LAW DEPARTMENT
Karen Thomas, the County Attorney testified that the role of her
department fell into two general categories. First, her department is
responsible for the preparation of all legal documents related to the
purchase in the "standard acquisition." Second, her department is
responsible for litigating or overseeing the litigation of re-zoning cases,
condemnations and all other cases which may arise out of land acquisition.
In the course of preparing for litigation, county attorneys are authorized to
hire appraisers of their own choosing as expert witnesses without the
necessity of Board approval.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
10
Law Department. The Grand Jury does note that Karen Thomas provided us
with documents which supported her testimony and answered our questions.
DEPARTMENT OF WATER RESOURCES
Lynn Smarr, the Director of Water Resources testified that her
department acquired land for sewer and water lines, pump stations and
treatment facilities. These acquisitions were handled within the department
and no property could be purchased without Board approval.
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Water Resources as it relates to land acquisition. The Grand
Jury does note that Director Lynn Smarr provided us with documents which
supported her testimony and answered our questions.
DEPARTMENT OF TRANSPORTATION
The Grand Jury heard testimony from Brian Allen regarding land
acquisition by his department. Mr. Allen described that his department was
responsible for acquiring land for roads including intersections and rights of
way. He described that his department acquired land in accordance with the
Transportation Master Plan through either purchase or condemnation. Land
acquisition was done within the department.
11
Since the Grand Jury did not select any acquisitions by this
department for further review, we have no comment on the operation of the
Department of Transportation. The Grand Jury does note that Director
Brian Allen provided us with documents which supported his testimony and
answered our questions.
GENERAL fINDINGS
It should be noted that none of the acquisitions reviewed by the Grand
Jury followed the procedures outlined by these witnesses.
The procedures described above are not in any comprehensive
document or procedure manual that the Grand Jury could find.
No present or past commissioner who testified before the Grand Jury
displayed any familiarity or understanding of this process.
Land parcels in which the county may be interested in purchasing are
identified from a variety of sources including inquiries from sellers, contacts
with individual commissioners, and investigation by county employees.
12
No parcel would be put on an executive session agenda for review by
the Board unless staff received the approval of the District Commissioner for
the district in which the land was located or the approval of the Chairman.
METHODOLOGY
The Grand Jury was presented evidence that as of November 13, 2009
the county government owned approximately 4,682 discrete parcels of land.
These parcels ranged in size from several hundred acres to parcels which
could be measured in square feet. We were then presented evidence that
during the time period from 2005 to 2009 the county acquired 1,156 parcels
of varying sizes.
We qulckly realized that to examine each transaction during the
relevant time period would be impossible for a group of twenty-three citizens
had been asked to "put aside the press of their everyday lives" and serve as
Grand Jurors. At the suggestion of the District Attorney, we developed a set
of criteria to evaluate the purchases to determine which transactions would
be reviewed.
We applied these criteria to all of the land acquisitions and arrived at
seventeen (17) potential properties. Of those seventeen (17) we selected
five (5). After ten months of evidence and after hearing testimony twice a
13
month for those ten months we are confident that we have enough
information to draw our conclusions and issue this report.
The criteria which the Grand Jury used to filter the transactions were
as follows:
- Was the transaction initiated by an individual commissioner? (As opposed
to initiated by staff as part of a Master Plan)
- Was the transaction to settle litigation?
- Was there a relationship between the seller and the commissioner who
initiated the purchase?
- Was there a significant difference between the county's appraisal and the
purchase price?
- How long had the seller owned the property before it was sold to the
county?
- Was the parcel suitable for the proposed use?
The information to answer these questions was provided from public
records, the testimony of investigators from the District Attorney's Office
and from the testimony of the previously mentioned county employees.
14
The properties which were initially selected for review were identified
by the Grand Jury as follows and each transaction will be described in
detail in this report.
RABBIT HILL PARK EXPANSION
Summary of the Transaction
The Rabbit Hill Park expansion was actually made up of three
separate transactions spanning several years and involving a number
of parcels. The stated purpose for the acquisition was to provide an
expansion of the existing Rabbit Hill Park and/or to settle pending
. litigation.
According to the evidence that was presented, these tracts of
land are located along Rabbit Hill Road in Dacula and are across from
and adjacent to the existing Rabbit Hill Soccer Park. The three
transactions resulted in the acquisition of 124.3 acres by the Gwinnett
County Board of Commissioners in 2005 and 2007.
Transaction 1
According to the testimony of James Braden, he purchased a
tract of land on Rabbit Hill Road in 2003 primarily to reinvest funds
from another transaction primarily for tax reasons. The tract was a
roughly triangular piece of property consisting of approximately 19.5
15
acres. When Braden purchased the property, it was zoned as part of a
Light Industry District (M-l) and was physically located in the district
represented by Commissioner Kevin Kenerly.
In February 2003 Braden applied to have the property re-zoned
for multi-famllv residences at a density of 8 units per acre (RM-8). A
vote by the Planning Commission on November 2003 denied the
zoning as requested but allowed for detached single family dwellings
(R-ZT Detached). The Board of Commissioners upon motion of
Commissioner Kenerly, voted to modify the original zoning request to
R-ZT Detached.
After the re-zoning was approved, as modified, Braden and the
Gwinnett County Board of Commissioners were sued by Publix
Supermarkets who operated a large distribution facility on an adjacent
tract. Publix contended that placing residences so close to the
distribution center would lead to a disruption of their business.
In order to settle the lawsuit, the Board of Commissioners
purchased the tract for $1,903,163.00 and entered into certain
agreements regarding future development of the property.
Transaction 2
The second transaction in the Rabbit Hill expansion involved
several tracts with an aggregate of 90.58 acres. The evidence before
16
the Grand Jury showed that D.G. Jenkins Development Corp., a
corporation owned and operated by David Jenkins purchased the
property in November of 2005 for $7,981.400.00. When Jenkins
purchased the property there was a pending re-zoning application filed
by the seller C.E. Smith to zone the property from R-100 (Single
Family Residence) to R-ZT (Residential Zero Lot Line/Townhouse).
Jenkins, represented by the law firm of Mahaffey, Pickens and Tucker
amended the application to include some commercial development on
two of the included tracts.
In July of 2006, the Board of Commissioners denied the
applications and left the property zoned R-100 for the commercial
application. The residential application was approved as R-100
modified and R-ZT. In light of the re-zoning decision and its effect on
his planned development, Jenkins instructed his attorneys to file suit
against Gwinnett County.
In April of 2007 Jenkins transferred ownership of the property
from D.G. Jenkins Development Corporation to Sydney Investments
for a stated purchase price of $10,390,554.00. This transaction was
described by Jenkins as a "cash out" transaction that did not change
the real ownership of the property or his plans for developing the
property.
17
In May of 2007 based upon a motion by Commissioner Kenerly,
the County agreed to purchase the property for $16,260,000.00 as an
active park and to settle the lawsuit.
Transaction 3
The third transaction was the acquisition of 14.2 acres located
adjacent to Rabbit Hill Park. The testimony disclosed that the
property was purchased in May of 2006 by Charles Ashworth d/b/a/
Cidpro, Inc. This purchase was made to acquire a full interest in the
property from a partnership in which Mr. Ashworth was a partner. The
purchase price in 2006 for 14.22 acres was $370,865.00.
Mr. Ashworth applied in August of 2007 to change the zoning to
R-ZT. This application was denied by both the Planning Commission
and by a vote of the Board of Commissioners. The zoning was
modified from RA-200 to R-60 with the stipulation that the owner
donate approximately 4 acres to the County.
Based upon the vote of the Board, Mr. Ashworth instructed his
attorney Lee Thompson to file suit against the County. In October
2007 Ashworth sold the property to the County for $1,000,000.00
partially based upon the purchase price paid to Jenkins and Braden.
This payment was made in settlement of the litigation and as an
expansion of Rabbit Hill Park.
18
TESTIMONY OF WITNESSES
Based upon our findings and recommendation, the Grand Jury believes
that a presentment or report is not the appropriate forum to report our
findings.
FINDINGS OF THE GRAND JURY
Based upon a review of all the evidence and testimony of witnesses,
the District Attorney is directed to prepare a Bill of Indictment which charges
Kevin Kenerly with one count of Bribery and two counts of Failure to Disclose
Financial Interest. The Bill of Indictment is to be served upon Kevin Kenerly
in accordance with law and brought before us for our consideration on
October 8, 2010.
19
PEACHTREE INDUSTRIAL BOULEVARD PROPERTY
Summary of the Transaction
The Grand Jury heard testimony and received evidence regarding a
tract of land located on Peachtree Industrial Boulevard which consisted of
66.635 acres.
In the Spring of 2006, this parcel of land was identified as a possible
site for an active park for the new Lanier High School cluster. Pursuant to
procedure, the Department of Support Services contacted the owner, Mr.
Wendell Starke to determine his interest in selling. Mr. Starke indicated that
he would be willing to sell for the price listed in an appraisal he had obtained
which was approximately $10.5 million dollars. The Department of Support
Services obtained an independent appraisal which placed the value at
$10.89 million dollars. Mr. Starke indicated that he would be willing to sell
at his original price.
Former County Administrator Jock Connell testified that on six different
occasions between September 2006 and March 2007, he requested
permission from the district commissioner, Kevin Kenerly, to place the
purchase on an executive session agenda to get Board approval to move
forward with the purchase. On each occasion, permission was denied.
By April of 2007, Mr. Starke was frustrated by the lack of action by the
County and accepted an offer from Brickton Commercial Partners, LLC to buy
20
58 acres of the parcel for $9.995 million dollars. The property was placed
under contract during the first week of April, 2007.
Brickton Commercial Partners is a company owned by David Bowen,
Thomas Michael Phelps, Jr. and Eric Cape. They testified that they
purchased the property for development but that after they put the property
under contract, they were informed by Mr. Starke's agent that the County
had been interested in the property. The partners instructed their attorney
to inquire about the County's interest and set an asking price of 13.95
million dollars. The attorney, Lee Tucker of Mahaffey, Pickens & Tucker
confirmed the interest and communicated the asking price.
Brickton closed on their contract and purchased the property on
August 6, 2007. The Gwinnett County Board of Commissioners, upon
motion by Kevin Kenerly, voted to purchase Brickton's 58 acres on August 7,
2007. The County closed with Brickton on August 14, 2007 paying the
asking price of $13,950,000.00.
21
TESTIMONY Of WITNESSES
The Grand Jury acknowledges that when we first applied the criteria
for review to this transaction, there were several areas of concern.
However, after a complete review of the evidence only one question remains
unanswered.
Mr. Wendell Starke testified that in the Spring of 2006 he was
prepared to sell the entire tract of land to Gwinnett County and entered into
good-faith negotiations with the County.
The county staff, including Steve North and Jock Connell, testified that
they were ready to move forward with the purchase as early as September,
2006.
The principals of Brickton Commercial Partners, LLC testified that they
had been interested in the property and had made prior offers since 2001.
They testified that Mr. Starke's agent approached them in March of 2007 and
that they put the property under contract during the first week of April,
2007. Their stated intention was to build a development similar to the
Suwanee Town Center. They particularly believed this development would
be successful since the proposed Sugarloaf Extension was slated to end right
in front of the property. The timing of the closing date was adequately
explained by both the principal and their bankers as having to do with
22
financing considerations. The Grand Jury finds nothing improper regarding
the purchase of the tract by Brickton.
The principals of Brickton testified that they learned of the County's
interest in the property after placing the property under contract. This was
confirmed by Mr. Starke and his agent. The principals then testified that
because they wanted to resolve the issue with the County they set a "take it
or leave it" purchase price: The County took it.
Commissioner Kevin Kenerly did not testify and asserted, through
counsel, his Fifth Amendment right against self-incrimination. The delay
from September 2006 until April 2007 was never explained.
FINDINGS OF THE GRAND JURY
The Grand Jury had been unable to ascertain the reason why
Commissioner Kenerly would not allow the land purchase to be placed on the
Executive Session agenda for review by the entire Board. This transaction is
a prime example of the custom of district courtesy gone Wildly out of control.
No Commissioner should be allowed by rule or custom to control the agenda
of the entire Board. Staff should be allowed to take it upon themselves to
bring a matter of this magnitude to the entire Board or, at the very least, to
the Chairman for action. This example of blind adherence to custom cost
the taxpayers three point four million dollars.
23
LAKES PARKWAY PROPERTY
Summary of the Transaction
The Grand Jury heard testimony and received evidence that this is an
8.27 acre parcel located on Lakes Parkway outside of Lawrenceville. The
property is located in District 1 which was represented by former
Commissioner Lorraine Green until January 1, 2009 when Commissioner
Shirley Lasseter took office. The property was acquired by Elite Land
Development, Inc. in April 2005 for $300,000.00. The principle owner of
Elite, Joe Dixon, testified that the original purpose of the purchase was to
build office condos and that in fact he had begun development of the project
with the installation of infrastructure. However, because of financial issues
and the failing economy, he was unable to complete the project.
In 2007, Elite through its agent initially approached the County to
purchase the land for a park or as a headquarters for a central library.
On February 17, 2009 the Gwinnett County Board of Commissioners
voted to purchase the 8.27 acres for $1,161,500.00 from Elite. The
purchase was placed on the consent agenda and approved by consent. The
proposed use was for a trailhead of 35 acres already owned by the County.
24
TESTIMONY OF WITNESSES
Mr. Phil Hoskins, the Director of Community Services first became
aware of the property when it was proposed as a possible site for a central
library. He did not recall who brought it to his attention but he rejected the
site because of its location. When asked to consider alternate uses, Mr.
Hoskins stated that the property provided entry to approximately 25 acres
already owned by the County but that it would require access across the
Yellow River. He stated that he had a feasibility study done which indicated
that a twelve foot wide pedestrian bridge would cost approximately one
million dollars. The cost of the bridge was included in the PowerPoint
presentation which was made to the Board of Commissioners in Executive
Session.
Mr. Steve North testified that as Director of Support Services he was
assigned by the Board of Commissioners to negotiate the purchase of the
Lakes Parkway property on behalf of Gwinnett County. He stated that on
January 6, 2009 the Board was first presented the property in Executive
Session and requested a cost estimate on the bridge. On January 20, 2010
the tract was brought up again including the cost of the bridge and Mr. North
was authorized to negotiate a purchase price of appraisal plus up to fifteen
percent ($1,000,000,00 + up to 15%).
25
Mr. North stated that by January 20, 2010 he knew that sitting Senior
Judge James Oxendine was acting as an agent for the seller. On or about
January 20, 2010 he contacted James Oxendine at his office in the
courthouse to deliver the preliminary offer letter with the offer of appraised
value. Oxendine told him that rather than mail the letter, North could just
bring it over to his office. That is exactly what North did.
North testified that James Oxendine, upon receipt of the letter in his
office, made a counter offer of appraised value plus 10 percent. North
agreed and the purchase price was set at one million one hundred and
eleven_dollars. North testified that on January 30, 2010 he received a call
from James Oxendine and again met in Oxendine's office in the courthouse.
Oxendine told North that he knew North's authority to negotiate was
appraised value plus 15 percent and that he needed to change the purchase
price to reflect that amount. Mr. North testified that he was surprised that
Oxendine was aware of the limits of his authority. Based upon that
knowledge and the position of James Oxendine as Senior Judge he felt
further negotiations would not be feasible.
Former County Administrator Jock Connell testified that he first
became aware of the property when it was brought to his attention by
former Senior Judge James Oxendine. Mr. Connell testified that Mr.
Oxendine indicated that he was representing the sellers, that they needed to
sell, and proposed that the County purchase the property for a library site.
26
Mr. Connell stated that Mr. Oxendine met with him four to six times to press
the sale since Connell was not inclined to recommend the purchase of the
property. He stated that the property could possibly be used to "fill a qap"
in that area of the county but its acquisition was not a staff priority. Mr.
Connell stated that he was convinced that a member of the Board of
Commissioners disclosed the limits of the negotiating authority granted by
the Board.
Commissioner Kevin Kenerly, Bert Nasuti and Mike Beaudreau all
testified that they deferred to Commissioner Shirley Lasseter in this land
acquisition because of district courtesy and therefore had very little
knowledge of the transaction. They denied knowing about the cost of the
bridge when they voted to purchase. They denied knowing that James
Oxendine represented the seller.
Commissioner Shirley Lasseter testified that she took office in January,
2009 as District 1 Commissioner. She stated that she first learned of the
proposal to purchase the property in Executive Session. She did not recall
the specific authorization given to Mr. North. She stated that she did not
know James Oxendine was the seller's agent. She stated that she had
looked at the property. Mrs. Lasseter denied that she initiated the purchase
and then she relied on staff to work out the details and bring the purchase
forward when they were ready. She acknowledged that it was logical that
she would have initiated the process, and that she should have been the one
27
to put the matter on the Executive Session agenda but denied doing so. She
testified that she did not know about the change in purchase price and the
negotiation with James Oxendine.
Former Judge James Oxendine testified that he did not consider his
actions to be engaging in the practice of law. He stated that he was doing a
favor for the son of his old friend Randall Dixon and took no fee. He stated
that it was common knowledge that Gwinnett County paid 15 percent over
the appraised value and he had just made a mistake when he agreed to 10
percent. He denied that he had received any information from any County
Commissioner about the negotiation authority granted to Mr. North.
FINDINGS OF THE GRAND JURY
First, it was a stunning revelation to the Grand Jury that no member of
the county staff expressed any reservations about-being involved in a real
estate transaction where a sitting Senior Superior Court Judge is acting as
the seller's agent. If the Commissioners who testified are to be believed, it
is inconceivable that this information was not disclosed prior to any vote to
purchase. Leaving aside questions of fees and negotiating a land deal in a
judge's office in the courthouse, the sheer impropriety of this representation
should have been a warning sign.
Second, despite testimony to the contrary by County Commissioners,
they were presented with information regarding the cost of the pedestrian
28
bridge prior to the vote to purchase. The evidence is clear on that fact.
They weren't paying attention.
Third, it is the conclusion of the Grand Jury that the information
regarding the negotiation authorization was given to James Oxendine after
he signed the initial purchase price agreement. Also it was common practice
for the Board of Commissioners to authorize 10 percent over appraisal not
15 percent. An examination of all of the evidence, including the
relationships of the parties, can only lead to the conclusion that it was a
member of the Board of Commissioners who disclosed this information.
While this conduct may not constitute a crime, it is certainly a bad business
practice which led to an unfair benefit to the land seller in this case.
The Grand Jury believes that the conduct of former Senior Judge
James Oxendine was inappropriate if not unethical. However since he has
left the bench there seems to be no sanction available for us to recommend.
Commissioner Shirley Lasseter testified about her recollection of the
events which led up to this property acquisition. After observing her
demeanor and hearing her testimony the Grand Jury specifically
recommends the following:
1. That Commissioner Lasseter develop at least a basic
understanding of the land acquisition process;
29
2. That Commissioner Lasseter become more engaged in issues
which affect her district and the entire county;
3. That Commissioner Lasseter must understand her role as a
policy maker and decision maker rather than relying on the
county staff to do her work for her.
In conclusion, the Grand Jury can find no rational, reasonable basis for
the acquisition of this property other than to bailout the son of an old friend
of several members of the Board of Commissioners. The Grand Jury can find
no evidence of a crime in this transaction but that doesn't make it right.
GIVENS ROAD PROPERTY
Summary of the Transaction
The Grand Jury heard testimony and received evidence regarding this
33.198 parcel of land which adjoins Palm Creek Park in District 3
represented by Commissioner Mike Beaudreau. The Grand Jury learned that
the property was placed under contract by Falcon Investments, LLC, a
company owned by Marvin Hewatt and Larry Fleeman, in October of 2007.
Once the property was placed under contract, Mr. Hewatt instructed his
attorney Lee Tucker of Mahaffey, Pickens &Tucker to file are-zoning
application to change the zoning from RA-200 to R75 Modified. Both the
30
Planning Commission and the Board of Commissioners voted to deny the
application. Hewatt then instructed Tucker to file suit against the County.
During the pendency of the suit in preparation for litigation, the county
law department commissioned an appraisal which valued the property at
$1,138,000.00.
During the pendency of the litigation Mr. Hewatt met with Chairman
Charles Bannister in Bannister's office in the courthouse and had delivered
his own appraisal which valued the property at $2,423,000.00. This
meeting occurred in February, 2009.
On May 5, 2009, the Board of Commissioners voted to approve the
purchase of the property for $2,290,662.00.
TESTIMONY Of WITNESSES
Mr. Marvin Hewatt testified that in addition to other business interests,
he and his partner had made several land purchase investments. The
business plan he described was that a parcel of land would be located, the
property would be purchased, and the property would be re-zoned for high
density residential purchases then sold on a per lot basis to a developer.
He testified that in 2007, Falcon Investments purchased approximately
33 acres of land located on Givens Road for forty-eight thousand five
hundred dollars per acre. Once the purchase was made, Mr. Hewatt
instructed his attorney, Lee Tucker to file a re-zoning application to change
31
the zoning from RA-200 (Residential/Agricultural) to RA-75 (High Density).
The application was filed and eventually denied. Mr. Hewatt testified that
during the pendency of the re-zoning application, he met with Commissioner
Mike Beaudreau but was not encouraged by the commissioner's response to
his application. His exact words were, "he didn't say what I wanted to
hear. "
After the denial, Mr. Hewatt authorized his attorney to file a lawsuit
which was served on Gwinnett County on December 2, 2008. While the
lawsuit was pending, Mr. Hewatt testified that he had received a phone call
from his attorney instructing him to get an appraisal of the property because
the county appraisal had valued the land at approximately thirty-four
thousand dollars per acre. Based upon this conversation, Mr. Hewatt hired
James Clower to appraise the property.
Mr. Hewatt testified that Mr. Clower appraised the property at
approximately seventy-three thousand dollars per acre.
Mr. Hewatt testified that on February 24, 2009 he met Mr. Clower in
the office of Chairman Charles Bannister and Mr. Clower delivered the
appraisal directly to the Chairman. He then stated that he received a call
from his attorney who told him that the county had made an offer of
approximately sixty-eight thousand dollars per acre. Mr. Hewatt testified he
was not happy with the offer but acting on advice of counsel he accepted it.
32
Mr. Hewatt described his relationship with Chairman Bannister as a
friend and political supporter. He stated that he allowed Bannister to use a
"
billboard for political advertising without charge and the use of a van for
political purposes without a charge. The Grand Jury has been unable to
locate these contributions on Mr. Bannister's disclosure filings. Mr. Larry
Fleeman testified that the van was later purchased with Bannister campaign
funds.
Mr. James Clower testified that he did an appraisal of the Givens Road
property at the request of Lee Tucker on behalf of Tucker's client Falcon
Investments. He stated that his opinion of value of the property was
seventy-three thousand dollars per acre and that the highest and best use
was for a RA-200 subdivision. He stated that his value per acre was based
on the amount paid per acre for comparable tracts adjusted for an economic
decline.
Mr. Clower then testified that he personally delivered his appraisal to
Chairman Charles Bannister and Marvin Hewatt in the Chairman's office in
the Justice and Administration Center. He stated that he believed it was on
February 23, 2009. He remembered because Mr. Hewatt and Chairman
Bannister pointed out an error in the appraisal where the appraisal was
directed to Marvin Hewatt rather than Lee Tucker. He said he left, returned
to his office, made the correction and returned to the chairman's office.
33
When he returned, Mr. Hewatt was still in the office so he delivered the
appraisal and left.
Commission Chairman Charles Bannister testified that he had known
Marvin Hewatt for years and considered him a friend. Bannister said that
Hewatt had sent him a plat of the Givens Road property expressing an
interest in selling the property to the County. Chairman Bannister testified
that he had a recollection of the re-zoning application, its denial and the
subsequent lawsuit. He was also aware of the County appraisal of the
property. He stated he believed the County appraisal was too low based on
prior County purchases. Chairman Bannister remembered becoming aware
that the County had received an appraisal from a third party which valued
the land at approximately seventy thousand dollars per acre but was unclear
about where that appraisal originated.
Chairman Bannister on the 23rd of July, 2010 denied that he met with
Marvin Hewatt in his office and denied that he received the appraisal from
James Clower or Marvin Hewatt. On August 20, 2010, after the Grand Jury
had subpoenaed his calendar, Mr. Bannister acknowledged that the meeting
may have taken place since it was on his calendar but again denied receiving
the appraisal from Hewatt or Clower.
Chairman Bannister stated that he decided to "take the lead" on this
particular purchase because of "so many no votes" coming from
34
Commissioner Mike Beaudreau. He stated that getting this land transaction
passed was to get Mr. Beaudreau's attention. To quote his testimony, "It
was pure politics." He testified that this purchase was an object lesson to
Commissioner Beaudreau.
Commissioner Kevin Kenerly testified that after the lawsuit was filed,
he spoke to Marvin Hewatt's attorney who attempted to settle the lawsuit
with the purchase of the land by the County. He said that he voted to deny
the re-zoning request out of district courtesy. Mr. Kenerly testified that after
the lawsuit was initiated he was in favor of the land acquisition because of
his perception that the Law Department lost most re-zoning suits and the
zoning decisions of the Board of Commissioners were not upheld. He also
stated that he believed that the County appraisal of the property w.as
incorrect and not in line with previous purchases in the same area.
Kenerly testified that Chairman Bannister produced an appraisal at an
Executive Session but that he didn't know where the appraisal came from.
However, he stated that based on a lack of information from county staff, he
believed that the sellers appraisal was a more accurate assessment of the
value of the property. Kenerly stated he witnessed a heated discussion
between Chairman Bannister and Commissioner Beaudreau and therefore he
stated that he believed that Chairman Bannister was pushing the acquisition
to "stick it to Mike". He stated that he disregarded district courtesy in his
vote because Commissioner Beaudreau had benefitted from previous Board
35
actions but then publicly criticized these actions. He cited the 2008 millage
rate vote as an example.
Commissioner Bert Nasuti basically testified to the same facts and
perceptions as Kenerly.
FINDINGS OF THE GRAND JURY
The Grand Jury could not find any evidence of any direct payment to
any public official to induce any performance of an official duty. However, it
is clear that in this land acquisition the regular process was subverted to
benefit a long-time friend and political supporter of Charles Bannister. Just
as disturbingly, over one million dollars of taxpayer money was used to
make a political point. The Grand Jury believes that all of the district
commissioners who voted in favor of the Givens Road property acquisition
made choices that were financially unsound, motivated by petty politics and
generally wrong for the citizens of Gwinnett County.
Furthermore, this particular acquisition is an example of what appears
to be a complete disconnect between county staff and the current Board of
Commissioners. Business decisions are being made without seeking input
from staff, without staff volunteering information or without any real
knowledge of the likelihood of success of any particular lawsuit.
The Grand Jury heard testimony in this case that the tract in question
was not part of the Parks Master Plan nor did the park that adjoined the
36
property need to be expanded. Despite that information the Board pursued
acquiring the land.
The Grand Jury also heard testimony that the perception of
Commissioners Kenerly, Nasuti and Beaudreau was that the lawyers for the
County were unable to prevail in zoning lawsuits so settlement was their
only option. The testimony from the Law Department was that the County
prevails in most zoning lawsuits and in any event the result of a loss would
be a remand for a new zoning decision not the payment of monetary
damages.
This particular case, in the opinion of the Grand Jury, was not one
which cried out for settlement unless the agenda was to allow the landowner
to make a profit on the sale. If settlement was not mandated, the question
of varying appraisals would never have come up. The only conclusion that
can be reached is that the Board of Commissioners made a decision based
on faulty information or perception or there was an agenda other than the
best interests of the public at work in this case.
Based upon the contradiction between the testimony of Charles
Bannister and Marvin Hewatt, the Grand Jury directed the District Attorney
to prepare and present an indictment charging Charles Bannister with
Perjury.
37
On October 8, 2010 Mr. Bannister asked the Grand Jury not to indict
him and to allow him to resign effective immediately. After a consideration
of the evidence in the case, the proposed charge, and in the interest of
limiting costs to taxpayers and expediting a resolution of this matter, the
Grand Jury decided that it was in the best interest of the citizens of Gwinnett
County to allow Bannister to resign and for the Grand Jury to return a "No
Bill" of Indictment. The Grand Jury in making this decision also considered
the following factors:
- In our investigation which included a review of financial records, we did
not uncover any evidence of an illegal payment or bribe in this
transaction. The proposed charge was based upon contradictions in
testimony before us, not upon the transaction itself.
- The Grand Jury weighed the possible outcomes. If we had returned an
indictment then removal from office would have depended upon the
outcome of the criminal trial. The Grand Jury decided that assured,
permanent removal from office was the appropriate solution to one of the
problems we uncovered in our investigation.
38
1-85 AT BEAVER RUIN PROPERTY
Summary of Transaction
The Grand Jury heard testimony regarding these two parcels
containing 36.79 acres (Tract A) and 21.12 acres (Tract B). In 2005 these
two tracts were owned by Retail Development Partners, LLC, a company
which is owned by Wayne Mason and others. In 2005, Retail Development
applied for a re-zoning of Tract A from Commercial (C-2) to Multi-Family
Residential (RZM). The Planning Commission voted to recommend approval
of the re-zoning however, the Board of Commissioners upon motion of
former Commissioner, Lorraine Green voted to deny the re-zoning. Retail
Partners filed suit to challenge the denial.
During the litigation Tract A was appraised at a value of
$4,650,000.00. On February 15, 2007, the County purchased Tract A for
$4,650,000.00 and Mr. Mason donated Tract B which consisted of a stream
and wetlands. The purpose of the purchase was for a public park and
settlement of litigation.
TESTIMONY OF WITNESSES
Mr. Wayne Mason testified that he and other partners originally
acquired a tract of land which he called the Rich's site in 1980 or 1981 and
that the tract originally was made up of over one hundred acres. Actually,
the Grand Jury learned that the tract contained one hundred thirty-three
acres. He testified that after two or three years, he wanted to sell the
39
property based on an offer but that his partners didn't want to sell so his
partners bought him out for 5.7 million dollars.
Mr. Mason testified that he reacquired the entire piece of property
back in "the 1990's" for 5.5 million dollars. He stated that one of the
reasons he reacquired the tract was he needed stream buffer credits to
develop another property at the now intersection of Pleasant Hill Road and
North Berkley Lake Road. He also stated that since he knew the property
was zoned for commercial development, he could use the property in his
business.
Mr. Mason then testified that he sold part of the property which has
frontage on Satellite Boulevard for commercial development and used his
approved stream crossings to subdivide the remaining property. He stated
that he applied for a zoning which would allow for the construction of
apartments, was granted the re-zonings and sold each of the parcels for in
excess of 5 million dollars. By 2007, the only parcel that had not been sold
was the parcel in question in this inquiry and the property surrounding the
stream. This was a total of approximately 57 acres.
Mr. Mason told the Grand Jury that he received an offer to sell 30
acres for the purpose of building apartments contingent upon a re-zoning of
the property. He applied for the re-zoning, received a positive
recommendation from the Planning Commissioner but when the matter went
40
to a vote before the Board of Commissioners, his application was denied.
When the application was denied, Mr. Mason instructed his attorneys to file
suit against Gwinnett County.
Mr. Mason testified that while the re-zoning process was ongoing he
had no official conversations with any county commissioner but
acknowledged that he may have spoken to one or more informally. After
the filing of the lawsuit, Mr. Mason acknowledged that he spoke to Lorraine
Green urging her to buy the property because he was confident he would
win the lawsuit.
Significantly, Mr. Mason also testified that as early as 2001 the
Gwinnett County Commission voted to condemn the entire 133 acres for
green space acqulsltlon. He testified that his understanding was that the
condemnation effort was dropped because of problems with title to the
property and because Commissioner Nasuti wanted an aquatic center on
Peachtree Industrial Boulevard.
Mr. Mason finally agreed to settle the lawsuit for less than the contract
price he had been offered and agreed to donate the wetlands (Tract B) to
the County. He stated that he agreed to settle because when he considered
the tax ramifications, the court costs and the value of the wetlands if he kept
them, it made no business sense.
41
Lorraine Green, former District 1 Commissioner testified about her
involvement in this transaction. She began by saying that from the outset
she was opposed to Mason's re-zoning application. She stated that it was
her belief that the last thing that Satellite Boulevard needed was more
apartments. However, she testified that she was contacted by
representatives of the neighborhoods adjoining the tract who were willing to
negotiate with the re-zoning applicant if they could not stop the re-zoning.
Mrs. Green testified that she remained opposed to additional apartments and
so despite the recommendation of the Planning Commission, after
consultations with the Law Department, she made the motion to deny the
re-zoning. She said that, with the exception of Chairman Charles Bannister,
it was not difficult to persuade the other commissioners to support her
motion.
Mrs. Green testified that the idea to purchase the property for green
space came from her. She testified that she was aware of the events of
2001 and believed the purchase was appropriate. She testified that
although the litigation was only about Tract A, she insisted on the donation
of Tract B as part of the settlement. Mrs. Green also testified that she asked
for an engineering study to be done to assure herself that the proposed
development by Mr. Mason was in fact feasible. Once this had been done,
despite opposition from Bannister and some hesitancy from Nasuti, she
42
made the motion to purchase the land to settle the lawsuit and as an
acquisition of green space. The motion passed by a vote of 4 to 1.
Chairman Charles Bannister testified that his opposition to the land
purchase began with the vote to deny the re-zoning application. He stated
that he was opposed to the purchase of the property because of the
development costs to the County. He also testified that he was opposed to
the re-zoning application because he had made a campaign promise not to
allow any more apartments. Chairman Bannister abstained from the vote to
deny Mason's zoning application.
Mr. Bannister testified that after the filing of the lawsuit, he believes
he inquired about the County's chances to prevail and was assured that
zoning votes were rarely over turned. He then stated that when the subject
of purchasing the land came up, he was surprised because he had spoken to
Community Services Director Phil Hoskins and had been informed about the
high costs of developing the property. He stated based on his prior
knowledge of the property and the other factors he mentioned he was
opposed to the purchase of the property.
FINDINGS OF THE GRAND JURY
The Grand Jury finds no evidence of wrongdoing in the acquisition of
this parcel of property. This is no evidence of any improper payment made
to, or solicited by, Lorraine Green in her role as a public official.
43
In essence, this acquisition came down to a question of priorities. If
Gwinnett County had won the lawsuit, Mr. Mason would have been left with
a tract of land which was already zoned for commercial development. If the
County had lost the lawsuit, apartments would have been built. This District
Commissioner was faced with a difficult choice. Whether she made the
correct choice depends on one's point of view. On one hand, green space
and wetlands were preserved, while on the other hand, valuable property
was removed from the tax digest.
RECOMMENDATIONS OF THE GRAND JURY
The Special Purpose Grand Jury would like to thank District Attorney,
Danny Porter, Stan Hall and the entire staff of the District Attorney's office
for the professional and capable assistance they have provided this Grand
Jury. We also want to express our appreciation to the court reporters Holly
Brown and Tara Johnson. We also wish to commend the bailiffs Bob
Hettesheimer and Mark Henderson for their professionalism and support as
the bailiffs to the Special Purpose Grand Jury.
After the conclusion of ten months of testimony and evidence, the
Special Purpose Grand Jury makes the following recommendations:
1. DISTRICT COURTESY
We understand that district commissioners work on a part-time basis
for Gwinnett County in addition to their full-time employment. Therefore,
44
due to the sheer volume of transactions and the amount of information
involved in each transaction, commissioners often end up deferring to the
commissioner of the district in which the transaction is proposed. This
practice is known as district courtesy. It is the opinion of the Grand Jury
that this concept of district courtesy, while useful in some ways, is at the
root of the problems with each land transaction we examined. District
courtesy has allowed commissioners to avoid responsibility and
accountability for their votes. We heard on numerous occasions a
commissioner testify that, unless there was something unusual about the
transaction, they always voted with the district commissioner. This in effect
allowed one commissioner to totally control a decision which affects all
citizens of Gwinnett County. An example of this control is the Peachtree
Industrial Boulevard property. The completely arbitrary and unexplained
delay by Commissioner Kenerly in keeping the transaction from the agenda
essentially ended up costing the taxpayers approximately four (4) million
dollars. No individual commissioner should have this kind of power.
The Grand Jury is strongly of the opinion that certain transactions such
as parks transcend the concept of district courtesy. These are transactions
which involve millions of dollars and affect all citizens of Gwinnett County.
All commissioners should be involved and held responsible for all phases of
these types of projects.
45
II. REORGANIZATION OF COUNTY GOVERNMENT
The Grand Jury recommends that the basic structure of Gwinnett
County government be changed. The current system with one full-time
chairman and four part-time district commissioners does not provide
adequate representation to the citizens of the County. The current system
with its reliance on district courtesy and its over-reliance on county staff
provides too many opportunities for conflicts of interest and fosters a culture
of inappropriate business relationships which have been the common thread
running through our investigation.
The majority of the Grand Jury is in favor of making all current county
commission seats, including the Chairman, a full-time position. Essential to
this concept would be that these new commissioners would be adequately
compensated and would be prevented from having any outside business
interests which could potentially conflict with their responsibilities to govern.
The expectation of these full-time commissioners would be that they would
have the opportunity to be better informed and make better decisions. This
system would also eliminate potential conflicts between their private life and
public responsibility.
In considering this recommendation, the Grand Jury recognized that it
is unrealistic to expect the current part-time commissioners to be able to
balance their private lives and occupations with the immense amount of
work needed to make intelligent decisions on county matters. Full-time
46
commissioners, who would not be allowed to have outside employment,
could devote the necessary time to each decision.
The Grand Jury also considered the cost of this system. Full-time
commissioners would have to be adequately compensated to attract the type
of candidate who could do the job. The Grand Jury recognizes that at first
qlancerthls appears to be an additional cost to taxpayers. But, if just one of
the land transactions we investigated could have been prevented by a wiser
decision, that would more than pay for the salaries of full-time
commissioners.
On the other hand, many members believe that moving to full-time
commissioners may not be the answer. These members believe that the
concept of a part-time Citizen/Commissioner is still valid. The members who
support the idea of part-time commissioners do agree that the current
system does not provide adequate representation and provides too many
opportunities for misconduct. These members agree that the current
workload is too burdensome and the current commission districts are too
large for one person to adequately do the job on a part-time basis.
The alternate recommendation of the Special Purpose Grand Jury is to
re-structure the current system to include more County Commissioners
representing smaller districts. This would have multiple benefits to the
citizens of the County.
47
- It would decrease the pervasive influence of district courtesy.
- It would reduce the workload on individual commissioners to allow and
require them to make decisions based on all the facts.
- More districts would allow for better representation of each district.
- More districts would dilute the ability of one commissioner to totally
control any given transaction.
Given these advantages and the Grand Jury's ultimate demand for more
accountability, the proposal to add commissioners has significant merit.
III. BUSINESS PLAN
It is the opinion of the Grand Jury that the current business plan utilized
by Gwinnett County government needs significant improvement. During the
course of our investigation we observed serious pervasive lack of
communication, information sharing, and even trust between the County
Commissioners and the heads of the major departments of county
government. On numerous occasions department heads testified that they
were not asked to offer an opinion about a particular land transaction. There
was no inquiry by the Board of Commissioners about how the purchase
would fit into the Parks Master Plan or the best use of the property was.
Members of the staff, including the current and past County Administrator
consistently testified that they were not asked and did not give an opinion
whether a particular transaction was in the best interest of the citizens. One
department head testified "that wasn't his job."
48
County Commissioners on the whole testified that department heads
did not provide them with the information to make informed decisions. One
current Commissioner described the staff as "note takers." It was clear from
the testimony that the decisions are being made by commissioners based on
a PowerPoint presentation made in Executive Session. Sometimes these
sessions occur fifteen minutes before a vote is taken. Although the evidence
shows that each commissioner is provided with a large packet of
information, either because of time limitations or for other reasons, the
packets are not being looked at.
The Grand Jury is of the opinion that there should be better
communication between the County Staff and the Board of Commissioners.
This communication should be clearly documented so that staff is clear on
the intentions of the Board of Commissioners and the Board is clear about its
intentions. Because of this lack of documentation, the Grand Jury was
forced to dissect each transaction in order to determine the truth behind
each purchase. The goal of the business process should be that every
citizen should be able to examine any transaction conducted by Gwinnett
County government and evaluate that transaction objectively. The county
government should be able, and willing, to explain on each transaction who
proposed it, who recommended it, why the Board voted for it, and why it
benefitted the citizens. Citizens should expect no less and the Grand Jury
49
finds that Gwinnett County government has failed to deliver on this
expectation.
IV. LAND ACQUISITION
Commissioner Kenerly testified that he believed that the citizens of
Gwinnett County had given him a mandate to acquire land to build parks and
preserve green space. The Grand Jury does not disagree but we found a
process that is ruled more by custom and by the whims of individual
commissioners than it is by sound business decisions and economic
considerations. The Grand Jury believes that the entire land acquisition
process should be restructured to increase efficiency and, most importantly,
accountability.
- First and foremost the acquisition should be based upon a philosophy of
obtaining best value for the taxpayer's dollar. Instead of the current
philosophy of buy it and make it work, each transaction should be
critically examined to determine its current or future use and value. The
presumption should be that unless a transaction can be justified under
stringent standards known to all involved, the Gwinnett County Board of
Commissioners should decline the purchase.
- Decisions to purchase land are important to all citizens and should
transcend all notions of district courtesy. All information on all land
transactions along with staff recommendations should be given to all
50
County Commissioners as soon as the transaction is ready to be
considered. No single commissioner should have the power to singlehandedly
delay consideration of a purchase for political or other reasons.
- No Limited Liability Company should be permitted to apply for a rezoning,
acquire property from the county or sell property to the county
without a full disclosure of the individual identities of the shareholders.
The Grand Jury recognizes that an LLC is a legitimate type of company
formed for a variety of legitimate reasons but it should not be a vehicle to
conceal the identity of individuals who are doing business with the
government.
- The Grand Jury found that the minutes of Executive Sessions as they now
exist are not useful to determine what actually happened in the meetings.
. .
They are cursory at best and only reflect the final action taken. The
Grand Jury recommends that Executive Sessions be audiotaped or
videotaped to insure that later review will reveal what actually happened
in the meetings.
- As stated earlier, the concept of consensus in Executive Session leaves all
parties involved confused and unsure about the decision that was actually
made. The Grand Jury recognizes that this procedure was instituted to
ensure that all votes were made at public meetings. The Grand Jury also
recognizes there are many topics, such as land pricing and negotiation
51
strategy that should not be discussed at a public meeting. The current
process should be re-evaluated since it clearly is not working.
- The Grand Jury became concerned about the apparent difference of
opinion between commissioners and staff about the appraisal process and
results. It appears that staff trusts the process and results implicitly
while the current Board of Commissioners does not trust it at all.
Provisions should be made and procedures put in place for those
situations in which the seller's appraisal and the County appraisal vary.
The decisions made by the Board of Commissioners, especially in
settlement of litigation, must be made based on appraisals that the Board
trusts and which are legally defensible.
- The Grand Jury found a profound lack of communication between the
County Law Department and the members of the Board of
Commissioners. The attorneys from the Law Department who testified
told us that the county prevailed in the majority of cases in which a rezoning
decision had been made. Several members of the Board of
Commissioners testified that most of those cases were remanded for a
different decision. In other words, the county lost the case. When
pressed for specifics, neither the County Attorneys nor the
Commissioners could provide the Grand Jury with detailed information. It
would seem that one of the fundamental pieces of information needed by
the Board of Commissioners in deciding whether to settle a lawsuit would
52
be an evaluation of the likelihood of success, including success in past
cases. Members of the current Board testified that they were not
provided this information. The County Attorneys testified that the Board
was provided the information. Without the documentation procedures
mentioned earlier, the Grand Jury is unable to determine what happened.
The Grand Jury is of the opinion that this type of information is critical to
making informed decisions. The Grand Jury recommends that Gwinnett
County government take whatever steps are necessary to restore
confidence in the Law Department and to make sure that information is
available to make sound decisions.
- The practice of offering appraisal price plus ten percent for land
acquisition should be abolished. County government should have trained
real estate negotiators on staff to obtain the best value for taxpayer
dollars. These negotiators should be experienced, aware of market
conditions and have sufficient authority to conduct aggressive
negotiations on behalf of taxpayers without undue influences from outside
forces.
- The Grand Jury has found that SPLOST funds have been used for a
variety of purposes from land acquisitions outside the Parks Master Plan
to settlement of litigation. The Grand Jury is of the opinion that these
actions have placed the passage of future SPLOST votes in jeopardy.
SPLOST funds should be used for clearly delineated purposes approved by
53
the voters, not as a general pot of money to be used for various purposes
based upon a commissioner's desire.
- Finally, land acquisition should follow a clearly defined and set system
of policies and procedures. These procedures should be public and
designed to make the property acquisition decision as objective as
possible and based upon a valid business reason. Deviation from
these procedures should be the exception rather than the norm and
each deviation should be adequately documented.
V. ETHICS REFORM
The Grand Jury was surprised to learn that the ethics ordinance passed by
the Gwinnett County Board of Commissioners has not been significantly
reviewed or changed since its passage in 1993. This is simply unacceptable.
The Grand Jury recommends that the ethics ordinance be reviewed and
updated as necessary every two years. This should be a priority of the
elected Board of Commissioners.
The Grand Jury has heard sufficient testimony to conclude that
comprehensive enforceable ethics ordinance should be a priority for'
Gwinnett County Government. The only way that any semblance of trust
can be re-established is for citizens to believe that their elected officials and
county employees are acting ethically and on their behalf. The basics of
such an ethics ordinance would have to include full disclosure of business
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interests and prohibitions against receiving gifts or other things of value.
Without these basics, trust cannot exist.
CONCLUSION
Based upon the evidence gathered during the course of our
investigation, the Grand Jury, as a group of citizens, has been increasingly
concerned about the path that Gwinnett County government is on. We have
seen decisions involving millions of dollars made with little or no information
or for the most venal reasons.
As interested citizens we have carefully considered our decisions and
recommendations. It is now up to the elected leaders of Gwinnett County to
carefully consider these recommendations and implement those they believe
would best serve the public interest.
In many ways, Gwinnett County is still a great place to live, work and
raise our children but in order to remain great, changes must be made.
In addition to the publication of presentments, we recommend that a
copy of these presentments be delivered to:
Mr. Charles Bannister, Former Chairman, Gwinnett County Board of Commissioners
Ms. Shirley Lasseter, Gwinnett County Board of Commissioners
Mr. Bert Nasuti, Gwinnett County Board of Commissioners
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Mr. Mike Beaudreau, Gwinnett County Board of Commissioners
Mr. Kevin Kenerly, Gwinnett County Board of Commissioners
Mr. Daniel J. Porter, Gwinnett County District Attorney
Honorable Dawson Jackson, Chief Superior Court Judge, Gwinnett Judicial Circuit
Honorable Michael C. Clark, Superior Court Judge, Gwinnett Judicial Circuit
Honorable William M. Ray, II, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Karen E. Beyers, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Ronnie K. Batchelor, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Melodie Snell Conner, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Debra K. Turner, Superior Court Judge, Gwinnett Judicial Circuit
Honorable R. Timothy Hamil, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Tom Davis, Superior Court Judge, Gwinnett Judicial Circuit
Honorable Warren Davis, Superior Court Judge, Gwinnett Judicial Circuit
Karen Thomas, County Attorney
Steve North, Department of Support Services
Phil Hoskins, Department of Community Services
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Lynn Smarr, Department of Water Resources
Brian Allen, Department of Transportation
Glenn Stephens, County Administration
Done this 22d day of October, 2010.
By the Grand Jury
MAYDEL MASSELLI-MONTERO, FOREPERSON
JANICE N. MCCLOSKEY, CLERK
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ORDER
The within and foregoing Report and Presentments of the Special Purpose
Grand Jury, having been presented, it is ordered that the same be filed with the
Clerk of this Court and spread upon the minutes thereof.
It is ordered that the Report and Presentment of the Special Purpose Grand
Jury be published in the Officiai County news media, The Gwinnett Daily Post, as a
legal notice, at least one time with costs to be paid from the general funds of
Gwinnett County.
This day of October, 2010.
HONORABLE MICHAEL C. CLARK
SUPERVISING JUDGE
GWINNETI COUNTY SUPERIOR COURT
GWINNETI JUDICIAL CIRCUIT
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