Griffin Realty will be marketing and generating bids for Bloomington’s 3rd Street police station, in connection with a notice of sale approved by the board of public works in the last week of September.
According to the professional services agreement that Bloomington mayor John Hamilton was expected to sign this Monday, Griffin Realty will be paid 4 percent of the gross proceeds from the sale of the police station.
If the building sells for the minimum of $3.2 million in the notice of public offering that amount would mean $128,000 for the former deputy mayor, Don Griffin’s firm.
News of the pending contract signing was conveyed to the board of public works by Bloomington corporation counsel Beth Cate at its Monday noon (Oct. 23) work session.
Cate was updating the board, because the contract with Griffin Realty had originally appeared on the board’s Oct. 9 meeting agenda. But the board voted to remove it from the agenda at the administration’s request.
In Cate’s final legal analysis, which she conveyed to the board this Monday, the board was not actually required to approve that kind of contract. So she was there in part to let the board know the real estate services contract would not appear on this week’s Tuesday agenda.
It was at the work session on Oct. 9, the day before the board would have voted on the item, when two of the three board members raised concerns, which made it hard to be sure if the contract would have the two votes it needed on the three-member board.
At the Oct. 9 work session, board member Elizabeth Karon said she did not feel comfortable participating in the vote the following day, and would be recusing herself. That’s because when she was the executive assistant in the mayor’s office, and Don Griffin was serving as deputy mayor, Griffin was her direct supervisor.
Karon also noted that Griffin had recently been “a city employee at a very high level.” She continued, saying: “It feels like there’s someone who had a lot of information about this project at one point, who is now no longer employed by the city, and suddenly is getting a contract to sell.” She added, “And I’m not suggesting any impropriety, but I am uncomfortable.”
Board member Jane Kupersmith asked Cate whether the appearance of a conflict of interest had been addressed in the city’s review of the circumstances. Cate indicated in her response to Kupersmith that she thinks the appearance issue was adequately addressed. Cate reviewed with the board a memo she had written outlining the factors that had been considered.
Cate’s memo indicates that current deputy mayor Larry Allen had recused himself from the selection process for the work that Griffin eventually won—given that Allen had served as treasurer of Griffin’s recent unsuccessful mayoral campaign.
Cate’s memo describes how Griffin Realty was the lowest quote in response to an invitation sent to six firms besides Griffin Realty. Those firms were: ReMax; FC Tucker; Cushman Wakefield; Marcus Millichap; JLL; and Colliers/CBRE.
The city received just two bids, one from Griffin Realty and one from another unnamed firm which quoted a commission that was 5 or 6 percent, which was higher than Griffin’s 4 percent.
Cate’s memo says that others who were invited to quote declined to participate because the scenario did not include a long-term leaseback of the property and a corresponding stream of lease payments. That payment stream had been the potential appeal of the deal to the clients of those firms, according to Cate’s memo.
On Oct. 9, Karon questioned whether the board even needed to approve the kind of contract the administration wanted to sign with Griffin Realty.
Cate responded by saying, “Well, to be honest, we wondered whether we really had to bring it to you.” Cate added, “But we wanted to, in any event, because we wanted the process to obviously be fully transparent to the board and to the public.”
This week on Monday, when Cate told board members that they would not, in fact, be asked to approve the contract, Karon indicated she was a little uncomfortable—given that the item had been put in front of the board in the first place, but then taken off the agenda.
Karon told Cate, “If you are OK that the board doesn’t need to approve it, then we certainly don’t need to approve it.” Karon seemed content that Cate’s appearance at the work session was enough to ensure that it had been made clear that the board was not required to approve the contract and that the ethics issues had been reviewed.
Board president Kyla Deckard did not comment. Kupersmith told Cate said she appreciated the additional detail in a second memo.
Before the board’s Monday noon work session (Oct. 23) Cate had sent a second memo with an analysis of additional statutes. Among them was IC 35-44.1-1-4(b), which makes it a Level 6 felony punishable by 6 months to 2.5 years in prison, and up to $10,000 in fines, for a public servant to knowingly or intentionally have a pecuniary interest in, or derive a profit from, a contract or purchase connected with an action by the government entity served by the public servant.
Griffin has not been deputy mayor for about 10 months. So that statute does not apply to him, according to Cate’s memo.
For other statutes, Cate’s memo states, “Nor, as noted above, is Mr. Griffin’s earlier involvement in the Showers West acquisition relevant here, because that is a separate contract.”
The purchase of Showers West by the city was a project led by Griffin as deputy mayor. Showers West is the western portion of the same former furniture factory building where city hall is located. The city’s plan is for the police department to move to Showers West after it is renovated.
That’s why the 3rd Street police station is no longer needed as a police station. And it is why the city is especially keen to get as much as possible for the sale of the building—because the proceeds of the sale are part of the plan to pay for the Showers West renovations.
The contract for the real estate services to sell the police station is possible only because of the purchase of Showers West. After the Monday work session, The B Square asked Cate about the idea that there is relationship between the Showers West project and the real estate services contract that the city is now signing with Griffin, even if the contracts are separate.
Cate indicated that while the two deals can be analyzed as having a kind of relationship, that relationship is not relevant to any of the statutory analysis. She also said that in no way was there some kind of plan to create an opportunity for Griffin to benefit from the sale of the police station, by setting up a purchase of the Showers West, and a move of the police department into that building.
Reached by The B Square, Griffin confirmed that he would be personally handling the work that is called for in the contract to help get the police station sold. The notice of sale says that bids, which have to be at least $3.2 million, will be accepted for 60 days from Oct. 13 until Dec. 12.
The work that Griffin will do, under terms of the contract, includes marketing the availability of the property and generating bids for the public bidding process.
He will also be listing the property with these listing services: Costar/Loopnet, Indiana Commercial Real Estate Exchange (ICREX), and Indiana Regional MLS (IRMLS).
Griffin will also be alerting commercial brokers in the state and country through networks like Indiana Commercial Board of Realtors, IREM (Institute of Real Estate Management), CCIM (Certified Commercial Investment Member), SIOR (Society of Industrial and Office Realtors), among others, according to the contract.
Legwork that is described in the contract includes actively prospecting through databases of active clients who are looking for real estate, using various means of modern communications.
Griffin is also supposed to market the property through Facebook, Instagram, Linkedin, and Twitter.
Griffin attended the first part of the Oct. 10 board of public works meeting, when the contract appeared on the agenda for a vote. But Griffin had to leave the meeting before the item on real estate services for the police station sale was reached on the agenda, when the board voted to remove it.
The board had gotten bogged down with the appeal that Bloomington resident Joe Davis was making at the meeting about a notice of violation for allegedly keeping “garbage” on his South Washington Street property. Davis’s appeal has been put off until November.