The City of Hartford sold a property to the Spanish American Merchant's Association for $1, only to have the organization then sell a piece of the land for $500,000 to Hartford Hospital and some want to know why that happened.
The Spanish American Merchant's Association sits in the heart of Hartford's Park Street District and their mission is to help stimulate and create business in the capital city, especially among the Latino community. But a recent land deal between SAMA, the City of Hartford and Hartford Hospital has some residents asking questions.
"When I first found out about it, I was like this is just bizarre. How does a city facing a $70 million deficit next year give away a piece of property?" city resident and blogger, Kevin Brookman said.
That property is located at 95 Park Street. It's SAMA's main office building. About a year and a half ago, SAMA bought it and the and land it sits on for $1. According to documents, SAMA turned around the same day and sold a piece of the land to Hartford Hospital for $500,000. Hartford Hospital needed that land in order to build a parking garage.
The quit-claim deed , signed by the Mayor, shows the city was well aware of the land's value and Hartford Hospital's desire to buy it from the city. Instead of selling the property for the $500,000 though, city leaders sold it for $1, allowing SAMA to collect the hefty sum.
"It's not a half million dollar gift. What's important to recognize is that $500,000 is specifically designated for repairs on the building, which the city had failed to recognize or failed to appropriate funds for over the last two decades," said the Mayor's chief of staff, Jared Kupiec.
Kupiec says the agreement specifically requires SAMA to use that $500,000 to make essential safety repairs to its headquarters and the surrounding grounds that the city had neglected while it owned the building for nearly two decades. According to a city- summary of SAMA's lease agreement though, SAMA, not the city, was responsible for "all repairs of every kind." A majority of repairs were never made though, until the city approved a sale that netted SAMA half a million dollars.
"These monies have gone toward elevator repair, roof repair and electrical work," said Kupiec.
According to SAMA, more than $239,000 has been spent on those repairs. Yet, the city confirms they don't have copies of any receipts showing the amount spent for each improvement.
"As a matter of fact, the city of Hartford has requested documentation for any modifications that area made to the building," said Kupiec.
The Troubleshooters requested those receipts and an interview from SAMA leaders, but we were told to speak with their attorney instead.
"I don't know why you need the receipts and everything, unless there’s some feeling they didn't spend the money the way they said. If that were true, I would presume the city would crawl all over them," said Sydney Schulman, SAMA's attorney.
Meanwhile, Kupiec insists the deal served a greater purpose for the city and taxpayers.
"Ultimately that building which was previously non-tax paying, is now a taxable property and there will be additional revenues that will be received for the city of Hartford," said Kupiec.
But a quick check of tax records shows SAMA has paid property taxes to the city since buying the building for $1.00. They've also appealed the city's assessment of the building. As it stands now, they owe more than $26,000 in taxes. Not only that, but because SAMA is a non-profit, they can apply for a property tax exemption, meaning they may never have to pay another property tax bill again.
"We agree that something is owed. It's a question of how much and what is owed and will be paid shortly," said Schulman.
But collecting money from SAMA hasn't been easy for the city in the past. Emails between a city finance employee and the executive director for the Office of Young Children show SAMA has a "continual pattern" of ignoring city bills, even though the city has worked with the group and established payment plans for them.
In addition, even though the city maintains SAMA is not allowed to use any of the $500,000 it collected from Hartford Hospital to pay outstanding city bills, emails again show SAMA did just that. Thirty-two thousand dollars is now sitting in an escrow account for back rent SAMA owes on a city parking lot. It's in escrow because SAMA is also disputing that bill as well.
"All of a sudden, out of the blue, the city says you haven't paid rent. When were we supposed to pay rent? Don't you need some kind of agreement? The only thing they point to is an agreement from long ago for 11 months. Then it becomes a legal dispute," said Schulman.
And there's more. The Troubleshooters also discovered the sale of 95 Park Street was unlike many others in the city for several other reasons. As noted by Councilor McDonald, a public hearing on the sale was held just 7 days after it was first brought to council, instead of the required 15 days. Not only that, he says it was never sent to the planning commission as required by state law.
In an email interview with NBC Connecticut, Councilman McDonald wrote "my concerns were that proper procedures were not followed in the sale of the building to SAMA. The proper procedures were not followed, but according to corporation counsel there was no way to fix those problems after the fact."
McDonald wasn't the only councilor to question the sale either. Raul Dejesus Jr. had some concerns as well. Despite repeated attempts for answers, he says he was told to "forget about it." Emails between the city's chief counsel and COO show that both questioned Dejesus' mental health when we continued asking questions anyway. In them, they write "Is he unstable? I mean this is monomaniacal" followed by a response that reads "I think he has problems."
The Mayor's chief of staff says the apparent issues with the sale are not indicative of a break down at city or a questionable deal.
"If it were one of many examples, than I would be concerned because that means there is a systematic flaw. If this is one example where potentially one item of many or one variable of a very large equation wasn't followed to a "T" or the "I" wasn't dotted, no I'm not concerned because we're all human and we all make mistakes," said Kupiec.
But some residents say the city has more explaining to do.
"It doesn't change what happened and it doesn't change the fact that we gave away $500,000," said Brookman.