Vallejo City Councilman Tom Bartee’s Dance with Disclosure--Part 3

9/24/09

By VIB Staff

Read Part 1 HERE

Read Part 2 HERE

Legal advisers take on City Councilman Tom Bartee’s conflict of interest

In Vallejo City Councilman Tom Bartee’s nearly five years of voting on policy issues on behalf of the Vallejo people, he has too often voted on issues where a clear conflict of interest exists. This is the third part of a report from public records obtained by VIB that compare Bartee’s downtown property holdings to his voting record.

By emails dated May 22, 2006, Oct. 2, 2006, Oct. 3, 2006, Nov. 2, 2006, Nov. 6, 2006 and June 1, 2007, it appears that ongoing discussions between the Vallejo City Attorney's Office and Councilmember Bartee were taking place regarding one or more conflicts of interest.

Specifically, on or about Nov. 2, 2006, Assistant City Attorney John Nagel forwarded a communication received from attorney Iris Yang. Yang is an attorney with the firm McDonough, Holland and Allen who had been hired as consultants to the Redevelopment Agency in June 2006. This communication is believed to have, thereafter, been forward to all City Council members.

Efforts to obtain a copy of the communication have met with negative results to date. The Vallejo City Attorney has taken the position that it is privileged, even though the privilege has appeared to have been waived by disclosure to Council members for other than privileged purposes.

Bartee’s attorney weighs in

On April 22, 2006, Attorney Daniel Healy forwarded a letter to the City Attorney of Vallejo regarding Bartee's ownership of properties in the Vallejo Central Redevelopment Project area. He stated the following:

1. Bartee and his wife acquired the Charles Hotel in 2001.

2. Bartee and his wife filed for divorce in 2004.

3. Bartee was first appointed and then elected to the Vallejo City Council and filed a FPPC Form 700 Disclosure in 2005.

4. As part of the divorce settlement, Bartee sold his interest in the Charles Hotel. He structured the sale under IRS Section 1031 and subsequently purchased property at 437-441 Georgia Street. "The net effect of this purchase was that Mr. Bartee reduced his property interests in the downtown redevelopment district from $1.5 million to $950,000.00."

5. He thereafter found "significant" problems with the property which necessitated "substantial" repairs.

6. Bartee was notified in late 2006 by the Vallejo City Attorney of potential conflict of interest under Health and Safety Code Section 33130 and 33130.5. "…wishing, to err on the side of caution, [Bartee] undertook efforts to prepare the property for sale." "As you know, state law acquires (sic) that certain property defects be fully disclosed, and often fully repaired, before a party can sell his building. Mr. Bartee over the past 18 months has in fact been completing the many repairs necessary to list the property for sale."

Healy then went with a lengthy discussion on the merits of his client's predicament in relation to the Health and safety Code Sections. He concludes that his client is taking steps to prepare the property for sale and he "…continues to recuse himself from any votes on the redevelopment agency which could be perceived as conflicting with his interests in said property."

The FPPC Form 700 utilized by the FPPC for the disclosure of property and monetary holdings by elected officials does not comply with the section of the Health and Safety Code that requires property holders like Bartee to comply with when sitting as a member of a Redevelopment Agency. The Vallejo City Clerk has notified VIB that there are no records of Bartee having ever filed the proper disclosures required under California Health and Safety Code Section 33130(a).

There are two basic requirements of an IRS 1031 exchange:

1. The total purchase price of the replacement "like kind" property must be equal to, or greater than the total net sales price of the relinquished, real estate, property. His Community Property Interest in the sale of the Charles Hotel was for a total of $1.5 million. His subsequent purchase of the property at 437 Georgia was for $950,000.00, $550,000.00 less than the IRS regulations allow for under a 1031 exchange.

2. All the equity received from the sale, of the relinquished real estate property, must be used to acquire the replacement, "like kind" property. There is certainly no requirement that the new property be located within the Redevelopment Agency project Area as has happened in this instance.

VIB has not been able to verify whether the IRS requirements for a 1031 exchange were adhered to in this case or not. Multiple efforts to meet with Councilman Bartee have meet with negative results. VIB has attempted on numerous occasions; in person at council meetings, over the telephone and via email to set up meetings where Councilman Bartee could be confronted with these allegations and have an opportunity to respond. He has failed to respond to all of these requests.

Healy's assertion that Bartee has been taking steps to repair 437 Georgia St. for resale to cure the conflict is not the law as it relates to commercial property. The general rule on the sale of commercial property is that it is sold as is and does not require the types of disclosures Healy references in the letter. In any event Bartee purchased the property as is when he bought it. If Healy's assertions were correct he would have a legal action over the seller of the property he now claims is causing him a delay in fixing the property up for sale. His assertions appear to be a delaying tactic in trying to sell the property as all property values have no doubt taken a turn for the worse in the present economic downturn.

Some Background

Empress Theatre: Most officials in the City of Vallejo view the revitalization of the downtown with the Triad Corporation Development proposals as hinging on being able to draw people for entertainment, fine dining and socialization with cafes and alcohol sales. The major linchpin of this is the revitalization of a theatre originally dating from 1912, The Empress. The theatre lies within the Vallejo Central Redevelopment Project Area on Virginia Street between Sacramento on the west and Marin Street on the east. Virginia Street is one block north of Georgia Street.

Buck Kamphausen: A local owner of two mortuaries in Vallejo -- Skyview Memorial located on the southeast side of Vallejo and Wiggins-Knipp located in the downtown area. He also owns a number of other mortuaries throughout the area in Fairfield, Marin and Oakland, along with a number of Cemeteries and is the Trustee of a number of Trusts associated with the sales and maintenance of those cemeteries.

Kamphausen also owns a number of buildings in downtown Vallejo and on Mare Island. Many of his downtown buildings house a number of antique automobiles associated with his vast collection, along with a restoration facility at the former "People's Ice and Fuel" on Maine Street . He shows automobiles through his USA Museum and also rents an office to the Vallejo Chamber of Commerce in this building. He has a share of some unknown percentage in R and M Auctions, an antique and classic car sales facility with corporate offices in Canada, Northern California Neptune Society and a deep sea diving company.

Kamphausen is well known in Vallejo as a person who supports non-profit organizations with the use of his Event Center/USA Museum.

Comments

Add New Search RSS

Hmmm...   |September.25.2009 Robert... You forgot Vallejo's biggest problem. A vampire city staff whose bloated salaries are fed by Redevelopment, building permits and the administration fee for subsidized housing so they have a vested interest in writing staff reports using "creative facts" and fudged legal parameters that are so convoluted that no volunteer non-professional commissioner or City Council person could ever understand them. Plus city staff is not bound by the Brown Act so they can make the rounds to drum up support for what they want to happen. City staff doesn't work for the citizens of Vallejo and we actually pay them.

Robert Schussel   |September.25.2009 Hmmm Vallejo is worse than many cities due to the apathetic Public,incompetent City Managers and City Councils who are more interested in protecting the GOBs than the Public. Hiddenbrooke is another example --our fire station was traded away for a fire truck. --the School was moved to a site under a potential landslide so that the Developer could build 70 homes at the back end of Hiddenbrooke on the former school land. -Al DeSilva (Economic Development Director) appraised a $500K piece of property for $2,500 as part of a landswap in hiddenbrooke.Mr. Desilva is not a licensed appraiser. -Brian Dolan (Planning Manager) was forced to admit that the City allowed Triad to get 2.5 acres of flat buildable land rezoned to residential by trading .56 acres of usable land( the remaining 4 acres are unusable hill sides.) Vallejo has a history of a small group of people becoming rich at the expense of the Citizens of Vallejo. Only by exposing it is there any possibility it can be stopped.

VHS   |September.25.2009 Thank you On Fire for that bit of information. Any backroom deal is a concern for me. Regarding the VHA bid for the Charles. I'm actually not bothered by their failure to acquire the property. So many of the subsidized housing projects end up paying no property taxes it was in the best interests of the tax payer that the VHA bid was rejected. It would be nice to know the details of the other bidder.

Hmmm....   |September.25.2009 Back room deals? GOBs? Favored developers and their attorneys? Welcome to the world of Redevelopment. Want more????

Anonymous   |September.25.2009 I'd vote for On Fire!

On Fire   |September.25.2009 VHS, Bartee's offer was the lowest bid. If my memory serves me right, Vallejo Neighborhood Housing and one other bid came in at a much higher bid, and the then seated Council, voted to give it to Bartee because he pitched it as housing for the students at Touro and that he would be a live in landlord. We all know how that ended up. The original funding for the Empress was from a special fund that was set aside for the arts. While there are arguements for both sides of this issue, it's the continued back room deals like Bartee got, Lavazzio for the Denny's property, Mandrich getting out of paying his fair share of his development fees (and the mayor making excuses for not charging Mandrich the fees because his buddy Al DeSilva, a former city employee, had made promises to cut Mandrich a deal.), the Auto Mall boys that promised to pay their share of fees and has now have gone bankrupt and never having paid a dime. The list goes on and on. This is happening right under our noses. These type of deals that give away the taxpayers money in order to pad the developers and GOB's pockets are a big part of what is wrong with this city. Mr. Bartee should have removed himself from voting on any downtown redevelopment issues or any other conflict he may have, just based on the fact that the majority of issues that he voted on were meant to improve the downtown and thereby increasing his property value. Plan and simple. The conflict of interest is just one of many things that Bartee has done to benefit himself and his buddies, based on his influence as a Council member. Mr. Healy's arguement that we should just be happy that Bartee bought and renovated property downtown is an insult to all taxpayers. Especially since his is making money of of the dealings as well. Just how does Bartee making millions on taxpayer's money benefit you or me? In reviewing the past four years, I haven't found any conflict of interest violations by anyone on council that compare to Bartee. Ozzy initially voted on the funding for Vallejo Neighborhood Housing when he first took office, and while he was their paid attorney. Wilson, to his credit, took the initiative to checked in advance and requested a ruling on any conflicts he may have. Gomes, Schivley and Sunga have abstained when there was a conflict. So why should Bartee get a pass? And this is not anything new. People have been questioning Bartee's voting record and the apparent conflict for some time. Now that VIB has brought it to light, we have the GOBs running to his defense and questioning the motive instead of questioning Bartee's actions. I imagine that they are upset for having their dirty little secrets exposed. Whether this story came out two years ago or now makes no difference in the fact that we have ongoing backroom deals that cheat the taxpayers of funding that could be paying for services that we are lacking. This needs to be sunshined so that people can make better decisions on who they vote for.

VHS   |September.25.2009 The issue that concerns me here is the original purchase price for the Charles. If it can be shown that the price was at market then the rest doesn't seem to be anything more than politically motivated blogging. I am more interested in the original sale of the Empress and the use of tax payer funds to restore the facility. The tax payers deserve to know who the principles were in this deal. Where did they live? Did they own homes and businesses in the area? What businesses were they involved with? They may have worked at the edges of the law but what about common sense and the ethical use of tax payer funds? While the Empress was being funded, Leon Singleton continued to come before the council and ask for a 20 foot longitudinal crack in his sidewalk, 4 inches wide in some spots, be repaired before someone broke an ankle. Our councils response to Mr. Singleton: the sidewalk is now your responsibility. All perfectly legal, all perfectly Ridiculous.

PSU apologist   |September.25.2009 Anon the Troll You are lower than whale feces. Please go back to the TH where unsubstantiated and false information is the norm. Marc lives in Vallejo and owns property--I guess you must have worked on the Rose Report as nothing you said was true. Marc has done a great service by exposing the GOBs and how they have exploited Vallejo.I assume that the truth makes you very nervous.

Anonymous   |September.25.2009 Oh the TH insults are bleeding over here. Nothing substantial to say? Insults. Marc/VIB have really hit your nerve, Anony. And VIB doesn't need to discredit Bartee -- Bartee does a fine job on his own with a little help from his friend Dan Healy.

Anonymous   |September.25.2009 Oh the TH insults are bleeding over here. Nothing substantial to say? Insults. Insults that only show Marc/VIB have really hit a nerve. And VIB doesn't need to discredit Bartee -- Bartee did a fine job on his own.

anon   |September.25.2009 You are right on point Dan. This is simply a hit piece designed to discredit Tom and hopefully get more votes for Gomes and the VIB ilk. When do you think Garman will get a job and stop living with his mother (maybe even buy property in Vallejo)?

Anonymous   |September.25.2009 I find these posts by Mr. Healy leaving me questioning how he ever graduated from law school and passed the Bar.

On Fire   |September.24.2009 Blah blah blah, blah blah blah. What do you expect from a criminal attorney? Mr. Bartee could have saved himself a lot of grief by 1, hiring a more competent attorney who is not in bed with the GOBs, and 2, used some common sense and better judgement by abstaining from voting on issues that violate the letter of the law, and not try to make himself be above the law. Whether or not there is any "proven" monetary gain or not, he made questionable (dumb)decisions by continuing to vote on the issues. This raises valid questions about his judgement on any issues that he may have any influence on, past present and future. Just because you are able to hire an attorney to find loop holes that enable you to go around the rules, doesn't mean you are morally correct in your actions. When you act in that manner, you run the risk of losing the trust and confidence of the people. We know that the GOB system is still alive and well and that the rules don't apply to some. What makes that even more despicable is an attorney that defends these types of actions. So I will take that haldol now, so I can forget the BS that Mr. Healy is trying to convey as being reality.

silasbarnabe   |September.24.2009 Congratulations Marc! What a terribly unprofessional response from an angry man that happens to have a law degree and passed the Bar exam. Only an emotionally unstable person would post as an attorney not a private citizen, make claims only to have to modify those claims later, lashing out instead of admitting his errors. I find these posts by Mr. Healy leaving me questioning his abilities to conduct himself in a professional and competent manner.

curious   |September.24.2009 Is no one talking about the fact that Bartee and his former wife on the Planning Commission acquired the Charles Hotel from the City of Vallejo for $200,000 and sold it a couple of years later for $3 million???? That is more than a tidy appreciation.

Anonymous   |September.24.2009 ...And? I hope you can finish that thought.

Dan Healy   |September.24.2009 Good afternoon. In part 1 of your article you contend that when Bartee was questioned about his Georgia St. building, �records show he (Bartee) failed to request a ruling from the Vallejo City Attorney's Office, yet has voted on issues directly affecting the redevelopment area containing his property. Then when the Vallejo City Attorney has told him about his conflict he has ignored them.� So now, two weeks later, after I pointed out that this allegation was completely false, you have reversed course entirely, conceding that Bartee did in fact communicate with the City repeatedly and then discussing my letter on his behalf to the City. So where in Part 3 is the admission that Part 1 was completely wrong on these points? I won�t hold my breath waiting. 1. Moving on to the substance of my letter, your article correctly states that, NEARLY THREE YEARS AGO I responded to the inquiries from the City. That response essentially ended the discussion. No findings of violations. No citations. No FPPC or City action. None. Nada. Zero. Sorry to inform you but no one in the universe other than the unnamed �VIB staff� and less than a dozen bloggers in need of Haldol actually care about this, since there was nothing there to care about. 2. You are correct that in 2006 I did advise the City that Bartee was in the process of trying to renovate and then sell the Georgia St. property. (As you correctly note, the only reason he bought the building in the first place was to complete a 1031 exchange and avoid a big tax hit.) Bartee did indeed make significant improvements to the building thereafter. Then, unfortunately, the real estate market crashed. Some of you folks are aware that the real estate market crashed, right? That crash and the credit crisis completely undermined the ability to sell these properties. 3. You turn this argument again erroneously into a discussion of disclosure, which is completely different than ownership. You claim that Bartee never �filed the proper disclosures required under H & S 33130�, which is completely incorrect, as �33130 pertains to limitations on acquisitions, not disclosures. (While disclosure is governed by �33130.5, Bartee�s Form 700 disclosure of the Georgia St. property clearly complied with notice requirements by providing adequate notice to all concerned parties.) 4. As to the 1031 exchange, you are correct that Bartee was not legally obligated to designate a target property within the same district. That wasn�t the point. The point was that (1) Bartee had to act quickly in order to avoid substantial tax penalties and (2) the net result of the 1031 exchange was a NET REDUCTION in Bartee�s ownership interest in the area. 5. While it frankly did not sound like VIB, contrary to its assertions, made a real effort to contact VIB, I know for a fact that, despite my invitation, no one from VIB made any effort whatsoever to contact ME. Your suggestion that you doggedly tried to get a balanced story before running it is 100% B.S. So let�s see if we can sum up: After alleging that you spent years and hundreds of staff hours investigating, you came up with ONE VOTE by Bartee out of hundreds, over a consulting contract for a project that hasn�t occurred, that might possibly have involved a conflict. You try to call that a �pattern�. You find one property ownership issue nearly four years old and then misstate the applicable laws to allege a legal violation � an allegation unsupported by any of the people with actual jurisdiction to enforce those things. It is obvious here that VIB has trumped up some phony claims, coupled it with some silly artwork and a dramatic-sounding title, and thrown it all together to beat up on a candidate. Then you all anonymously congratulate yourselves for a hallucination well done. I will wrap up where I started. This article by �VIB staff� has been a disgrace from the beginning. Huge factual errors that you refuse to acknowledge even as you change your assertions. Huge legal errors revealing a fundamental misunderstanding of the rules at issue here. A total failure to practice ethical journalism � no effort to give the target of your article a chance to address the issues before you raise them. Obvious bias (a failure to disclose the connections and interests of the anonymous �VIB staff� to various candidates in the race.) And all of this served up in an environment where nearly all subsequent comments are made by people two scared or corrupt to use their real names. In the end, one could certainly conclude that this is all meaningless, as more people will read the wrapper on their toilet paper than will read this blog. But Vallejo could really use media to engage the community in �intelligent discourse�, as you laughably state. It is in VIB�s total failure to live up to that mantra where you ultimately fail yourselvesas well as everyone else..

Anonymous   |September.24.2009 I found really special the typo uncovered in Dan Healy's memo to the City, where he uses "acquire" as opposed to "require". In the legal world, a typo this significant could be deadly, depending on where it is. And this isn't really a typo, the spelling is correct, it's a completely wrong word not caught likely because the reviewer relied on spell-check... Normally I wouldn't really care, its just that Dan Healy appears to be quite full of himself... And who besides me is infinitelty curious about Kamphausen? He seems to be the thread through all of this.

momster   |September.24.2009 the statements were very libel. It was smart to remove them.

Edinator   |September.24.2009 Wondering, Due to the terms of this message board I felt compelled to redact your comments. The statements you made are very serious, and VIB takes them very seriously. I urge you to contact me directly at vib.editor@gmail.com. We are more than willing to make efforts to investigate. Thank-you and I hope to hear from you. Marc Garman--Editor VIB

Wondering   |September.24.2009 So if Kamphausen is loaning all this money out, what's he getting in return? Silence. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXX Is the price of silence a loan from Buck? Hey Mikie (Wilson), Janet SoVain, Bill Needy - you all have benefitted from Buck's bucks along with (morally bankrupt) Bartee, how much did he pay for your silence?

silasbarnabe   |September.24.2009 Impressive work Marc complete with Healy's fruedian slip "acquired" instead of required.

Write comment
Name:
Email:
Website:
Title:
	Please input the anti-spam code that you can read in the image.

Powered by !JoomlaComment 3.23

3.23 Copyright (C) 2007 Alain Georgette / Copyright (C) 2006 Frantisek Hliva. All rights reserved."