Last week’s post on the questions raised by real estate deeds and other public records surrounding the FEMA funded purchase of the old Bay Tech Building on Second Street from 3 politically connected local business people unfortunately contained more questions than answers. Today I think we can answer those questions and peg the exact date the flip to the School District occured but first let’s visit with that first post Court documents raise questions about Bay-Waveland School District’s purchase of the old Bay Tech Building so everyone is on the same page:
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.
Implied but not said in that first post was the selling agent, Ms Mary Bunch did not notify her client she, along with her son and her son’s business partner were the purchasers of the property. I would like to clear that up by stating Mr Washburn tells Slabbed he was not notified of the clear ethical conflict inherent to the transaction.
Today we need to nail down how this whole deal went down and to do that we must talk about the Bay Waveland School Board listing the old Second Street Elementary for sale. For our readers that are from out-of-town the following map will show the two properties in question in relation to one another because they are within “spittin’ distance” of each other:
The old Second Street Elementary (SSE) is important because while the school building and gym have sat vacant since Hurricane Katrina the central offices of Bay Waveland Schools are located in a temporary trailer complex on the grounds of SSE at the back of the property. This is important because after trying for a few years to turn SSE into an artist village etc the School Board decided it was best to sell the property. To nail down the dates we need to visit with February 13, 2012 school board minutes (page 7) to find out the architect fees I mentioned in the first post on this topic were for a brand new central office. Going back farther in time we find that on April 12, 2011 the Seacoast Echo reported the district decided to sell the old SSE building. Additionally published reports indicate the School board advertised for proposals for the realty listing of same and the successful low bidder was John McDonald Realty, which then listed the property for sale.
Our readers will remember that the listing agent for the owner of the Bay Tech Building, Mary Bunch worked for O’Dwyer Realty when the sale of the Bay Tech Building to herself, son and her son’s business partner was consummated in June, 2012. Per her LinkedIn page she left O’Dwyer for employment at McDonald Realty in July, 2012. Clearly hindsight indicates she knew something was to happen regarding a new central office and for that let’s visit the March 12, 2012 School Board Minutes (pdf page 7):
Continuing our review of the School Board Minutes I noticed the June 21st meeting minutes contained a blurb (page 12) authorizing the superintendent to sign the sales contract on SSE:
The sale of SSE necessitated the immediate need for a central office complex. By this time 14 months had passed since the School Board decided to put the old SSE on the market yet board minutes from the Spring of 2012 indicate the design work for a new central office was still in progress having only recently begun by that time. This may indicate management simply did not manage this very well, being caught with their pants down mid design or it may indicate something more sinister but we do not have enough information to make that determination just yet. What we do know what that a few weeks before on June 8, 2012, the owners of the Bay Tech Building were duped into selling at a loss and major discount to the original asking price of the building. The taxpayers have been asked to foot the bill for the difference.
Slabbed has obtained the deed for the second sale of the Bay Tech Building to the school district and it is dated August 7, 2012. Sources familiar with the transaction indicate to Slabbed that the district was represented by realtor Regan Kane at this sale. Kane is also Ms Bunch’s employer. The close was handled by Butler Snow Attorney Ronnie Artigues who is the school board attorney. Representing LNG Investments was Gerald Rigby:
Folks I’ve been over meticulous with this post for a couple of reasons I will not go into here but I wanted to let the documents speak for themselves. Bay St Louis is a very small town in the scheme of things and information of the type that would lead to a specious transaction such as the one I’m illustrating would not be a state secret by any stretch. A major question in my mind is when did the following the following people find out about the shit house nature of the deal:
- The Bay Waveland School Board
- Superintendent of Education Rebecca Ladner
- School Board Attorney Ronnie Artigues
- Broker Regan Kane
- Broker Avra O’Dwyer
- Appraiser Mike Garvey, Inc
Finally we need to talk about that appraiser Mike Garvey Inc. and the report they issued in August, 2012. I’ve had a fair amount of experience with commercial appraisals through time and it does not appear there was enough time between the date the school board gave Mr Artigues permission to negotiate (July 16, 2012) and the date the transaction closed on August 7, 2012. Worth noting is that appraisal report was evidently the topic of an executive session at the August School Board meeting which tells me that document will be key.
Stay tuned folks because I’ll be covering this topic until all the questions are answered.
I’d like to clarify that sources familiar with the second sale indicate that while Regan Kane represented the BWSD he did not earn a commission on that sale.