GOP calls for suspended sales

State investigation sought over land deal involving former city engineer

TROY >> Republicans on the Troy City Council are calling for a moratorium on the sale of properties foreclosed on by the city after questions about the purchase of a vacant, city-owned lot by a former city official.

GOP council members are also asking the state Attorney General’s Office to look into the 2015 sale of a lot on Cemetery Road to then-city engineer Andrew Donovan. In a letter to Attorney General Eric Schneiderman obtained by The Record, the council members object to Donovan, who they say told city officials he planned to build a home on the lot, now trying to sell the property for nearly 20 times what he paid for it.

“The former city engineer purchased land on Cemetery Road with the stipulation that he would build a single family house on the 1.85 acre site,” read the letter, which was signed by council President Carmella Mantello and fellow members Mark McGrath, Kim Ashe-McPherson, Jim Gulli and John Donohue. “This never happened.

“We are requesting you to investigate how a Troy City Engineer could purchase a parcel from the city and then be free to sell it approximately 18 months later at a price of $65,000 for a potential profit of $61,500.”

According to county property records, the lot at 226 Cemetery Road, which sits between Oakwood Cemetery and the Uncle Sam Bikeway in Lansingburgh, has an estimated market value of $55,300. Donovan purchased the lot from the city for $3,500, with the council approving the sale and another, unrelated one by a 6-1 vote — then-council member James Gordon voted against the

sale, while colleagues Gary Galuski and Anastasia Robertson were absent.

Officials said the city takes proposals about twice a year to sell buildings and vacant lots it forecloses on for nonpayment of property taxes. The city is actually in the midst of one of those sales, with proposals being taken on about 110 such properties until Aug. 1.

The list of available properties includes mostly vacant lots, but the city is also looking to sell the former Leonard Hospital on New Turmpike Road, the one-time Church of St. Jean Baptiste on 2nd Street, the former God House of Prayer Full Gospel Church on River Street and a vacant gas station on Northern Drive, as well as one-, two- or threefamily homes throughout the city and apartment buildings on 5th and 6th avenues in Lansingburgh.

To address the problem immediately, the council majority wants to temporarily halt the current sale, as well as suspend the practice of selling city-owned properties to city employees.

“We need to examine the process and determine what safeguards we can implement to deter the obvious questionable sales and past practices,” McGrath, R-District 2, said in an email thread among council members also obtained by The Record.

Mantello said in that email thread she would be willing to offer a resolution at the council’s next regular meeting on Aug. 4 to institute

the moritorium.

“[T]his is temporary until we can research and get a grip on the process and codes,” Mantello wrote. “What safeguards can we put in to ensure this cannot happen again (i.e. No city policy makers should be sold city property, overhaul review committee, and other issues)?”

Proposals to purchase any of the properties must be made on an application available of the city’s website at www.troyny.gov and must include not only a proposed purchase price, but also the planned use for the property and any improvements to be made. A committee normally reviews all proposals and forwards its recommendations to the City Council, which must give final approval to any sale of city-owned surplus property.

The committee makes its recommendations based on what it considers the best use of the property, highest long-term tax return for the city, plans that include owner occupancy or local ownership, probability of the owner completing proposed improvements and maintaining the property, and overall benefit to the surrounding neighborhood. However, the council members pointed out in the letter to Schneiderman that the committee includes employees from the city’s Code Enforcement Bureau, of whom Donovan was their direct supervisor.

Donovan was hired as city engineer in June 2014, but resigned abruptly in April, with that position yet to be filled by Mayor Patrick Madden.

A successful proposal does not come without legal

strings, however. Bidders approved by the City Council have five days after the closing of the sale to secure any buildings, 30 days after closing to begin any needed repairs or improvements to a property and six months after closing to complete any repairs. If those conditions are not met, the city may take back the property through a reverter clause included in the deed.

Republican council members questioned Madden’s decision to waive the reverter clause earlier this year despite the fact that while Donovan had cleaned up the property, he had not followed through on his plan to build a home there.

“This sale is only possible because the Troy Mayor terminated the city’s right of reentry to 226 Cemetery

Road,” the letter states. “This termination is only authorized upon a certificate of compliance submitted by the bureau of code enforcement.”

But Madden said Tuesday he had little choice but to waive the clause because Donovan had met the conditions. The mayor did say, however, that he would like to see the city take steps to toughen that clause to ensure that any property it sells is put to the use the applicant spells out.

“That’s the part of the process that could be approved,” Madden said. “I think we need to look at the language in the reverter clause.”

Madden said he doesn’t object to the council taking a look at ways to improve the process, just as previous councils have done.

“The process of selling foreclosed properties has gotten better under each administration ... [but] it’s not perfect,” he said. “There are ways we can make the process better. We’re certainly open to that.”

However, the mayor said he would not favor a complete ban on city employees making an offer, saying that would treat those workers differently from other city residents.

“That might be overkill,” he said. “There are conflicts of interest and then there are perceived conflicts of interest. I think we can legislate out the conflicts of interest without too much problem.”

McGrath is also asking for information on other

city-owned properties that were the subject of sales, including the purchase of a building at 205 5th Ave. in October 2015 by Christine Lozo, an employee in the city assessor’s office, whose bid of $5,000 was well below a $22,000 offer made by former Republican mayor Harry Tutunjian. McGrath also wants more information on the sale of the former Vanilla Bean bakery on 4th Street to local businessman and Little Italy neighborhood leader Rocco DeFazio for $5,000, which was unanimously approved by the council at the same meeting at which it approved Donovan’s deal.