Last month the Seacoast Echo reported the Bay-Waveland School District had purchased the Old Bay Tech building on Second Street in Old Town Bay St Louis to house the district’s administrative offices and alternative school. This purchase would mark the beginning of the final phase of school district’s recovery from Hurricane Katrina and breathe new life in a building that has sat empty since the storm.
In a way that piece also encapsulates the state of the school district in 2012, which has found itself at odds with local good government activists over several issues that I will not go into on this post. That said today the FEMA funded transaction the district executed to purchase the Bay Tech building will be examined in detail because the Seacoast Echo got it wrong, which is strange considering the editor of the paper is married to the school board president. To kick-start things let’s visit with that story I linked above:
The Bay St. Louis-Waveland School District has purchased the old Bay Tech building in Bay St. Louis, hoping to turn it into a new district office and alternative school.
The building and 1.6 acres of land located at 200 N. Second Street were purchased for $580,000. According to county tax records, the previous owner was Magnolia Group LLC of Shorewood, Ill.
Now when I say the Echo got it wrong I do not mean the reporting was lazy, as I think the reporter faithfully reported everything that was said in the meeting. We need to examine another snippet though, before Slabbed tells the in-depth story:
Project Coordinator Brad Barlow said buying the building made sense for the district.
“We’ve explored many routes and found that this was a cost-effective way,” he said.
Although the project has been delayed over other projects, Ladner said, the district wanted to get the schools rebuilt first.
Funding will come from FEMA proceeds and district funds.
I’ll admit I saw this piece last month and came away thinking $580K for a building and 1.6 acres of land in old town was a bargain. That is until I learned that it was sold on June 7, 2012 by the Magnolia Group to a LLC owned by 3 local business people for $325,000, that public records show owned the property around a month before flipping it to the school district for a $255,000 profit. Let’s establish that via the Multiple Listing Service aka the MLS. I have made certain redactions to protect certain individuals that I do not believe were involved in the transaction:
Notice the MLS shows a close date of June 8, 2012. This makes sense as the seller is from Illinois and his signature on June 7, 2012 in Illinois would take a day to arrive in the Bay via courier service, thus my use of the 7th in the second preceding paragraph. The dates are important to this post thus my extra verbage pointing that fact out. So who got this deal? A Mississippi LLC called LNG Investments per the deed below:
And who is LNG Investments, LLC? The Mississippi Secretary of State has file records showing it is managed by another LLC called The Macmillan Group LLC. Additionally reinstatement paperwork on file at the Mississippi Secretary of State office lists two other members of LNG Investments in local businessmen Gerald Rigby and Lloyd Nicaud. The Macmillan Group is owned by realtor Mary Bunch and her son Lloyd Nicaud. Ms Bunch was listing agent at O’Dwyer Realty of Pass Christian for the Bay Tech Building per the MLS sheet embedded above.
Now for those of you wondering and I know we have many realtors that read us that can correct me if I am wrong but a real estate agent that sells their listings to undisclosed related parties are steppin’ out a good bit. I noted the signatures on the deed itself bear Mr Rigby’s office address though it is unclear at this point if he represented LNG at the close.
I am a curious soul, sometimes too curious for my own good but I had to learn more about this purchase as my googling indicated Ms Bunch no longer works at O’Dwyer realty. Her LinkedIn page shows that she went to work for McDonald Realty in Bay St Louis in July, 2012, which is the likely when the second sale to the school district closed.
I say the second sale was in July 2012 for a couple of reasons and I think it is clear the school district just didn’t decide one morning in June, 2012 to buy Bay Tech as governments don’t work that way. Next step was to read some school board minutes and that was easy since they are all online. The August minutes were my first stop and I noted that on pages 2 and 9 the purchase was noted. On page 2 it was part of the community input part of the meeting but the curious mention was on page 9, just after the School District came out of executive session in voting to pay Mike Garvey, Inc for appraising the property. Mr Garvey is a realtor from Hattiesburg.
The July minutes also contained another clue as the last page contains a letter dated July 6, 2012 to Bay St Louis Mayor Les Fillingame from City Zoning administrator Charlene Black confirming the suitability of the location from a zoning standpoint for use as an educational facility. Clearly this was being discussed well before that date. The zoning would be one step of an entire due diligence process that culminated with a motion made after leaving executive session on July 16, 2012 to authorize the school board attorney, Mr Ronnie Artigues, to negotiate the purchase of the Bay Tech Building. (Page 16)
You see folks the Bay Tech building flooded from Katrina and to my knowledge was never fixed. To buy it meant planning had to be done so surely we have other clues to help us hone in on a date. The June minutes have nothing of interest to note but the May 14, 2012 Board minutes contained an interesting blurb paying local architects for design work on a new administration building (Page 13). Given the payment application number and amount I imagine this was for a brand new building, not Bay Tech but for now I’ll leave that as an open question.
The documentary records from the MLS and the Deed indicate the listing agent sold the property to herself, son and her son’s business partner for $325,000 on June 8, 2012. Additionally press reports indicate the local school district bought the building less than 2 months later for $580,000. School Board minutes indicate negotiations began after the July 16, 2012.
I called Mr Bill Washburn, owner of Magnolia Group for comment and he confirmed the sale, sales price and listing realtor.
Slabbed will continue this expose on the fleecing of the taxpayers of Hancock County tomorrow as more documents related to this specious transaction are on the way.