ParkhouseGate: The Movie

"An emotional tour de force! I laughed. I cried. I registered to vote."

Oh, Montco! You Shouldn't Have!

Over the past few months, as we’ve tried mightily to get specifics about the sale of Parkhouse, the winning bidder’s response to the Request for Proposals has become a Holy Grail of sorts.

What was so great about Mid-Atlantic’s proposal that clearly elevated it above all others, that made it the best option so much so that according to Mid-Atlantic’s owner Scott Rifkin they were asked to increase the amount of their bid? And what does the company that has ‘no set plans’ for the 200+ acres of wide open fields really intend to do with it?  I mean, it’s one thing to talk, but it’s what’s in writing that matters. And yet Montco has remained steadfast in their refusal to release that document.

After days, weeks and months of asking for that proposal and being denied repeatedly by Montgomery County, you can imagine my excitement when last evening an email quietly appeared in my inbox from Montco solicitor Josh Stein’s office.  Was this the Mid-Atlantic proposal at long last?

Alas, it was not to be. What I received was the equivalent of a gift-wrapped empty box.  I don’t know if Mr. Stein believes we don’t know the difference between what they sent and what we asked for - the actual Mid-Atlantic Healthcare proposal - but what they provided was the Asset Purchase Agreement (APA) – minus all the detailed schedules that are the real meat of the APA  -  plus an amendment. It was accompanied by the admonition that “Given the recent announcement that the sale will not close on January 31, 2014, there will likely be another amendment; however, that document has not yet been drafted”.


'Tis the proposal we seek!

So, even though it doesn’t reveal much, I am providing the APA and amendment here and here. If the Commissioners were hoping that this release gives them some sort of credibility in the ‘transparency’ argument, well, ok….you released some papers we didn’t ask for. Thanks, but it doesn’t mean you are off the hook.

My response to Mr. Stein is captured below:

“Dear Mr. Stein,

While I am thankful that you sent me the APA and amendment, I think you will agree that these documents are fairly meaningless without the associated schedules. Please provide those at your earliest convenience as they are not exempt from disclosure.

Furthermore, again, while I am glad that at long last Montco is releasing something meaningful about this transaction, it is not what I requested which, as you surely must recall since I have requested it at least three times myself (and others have requested it), was Mid-Atlantic Healthcare’s response to the RFP. I have also requested copies of the non-winning bids which also have not been disclosed. I am yet again asking that those be provided as there are no legitimate reasons for the County to continue to withhold any of these documents.

For your reference I am again attaching the PA Office of Open Records’ second Final Determination that I have been granted in this matter directing your actions.

~ Janice Kearney”
 

There's been no response from Montco. I'm still waiting....

 

 

Montco using Open Space as a piggy bank

The following is the full text of my latest letter to the editor, which has so far appeared in the Intelligencer.

There was a time in recent memory when the term Open Space meant something in Montgomery County. It meant that land was set aside to preserve it for future generations to enjoy. It meant that the community where it was located would be protected from overdevelopment. It meant that towns and municipalities could plan their neighborhoods with intelligence and foresight.

It used to mean all of that. For thirty some years, Montgomery County has been accumulating open space for all of these reasons. In fact, in 2003 Montgomery County voters overwhelmingly (78%) voted in support of a referendum on the ballot supporting higher taxes to the tune of $150 million earmarked for the purchase of Open Space.

One bad investment later and Open Space is nothing more than a piggy bank to be raided in order to bail out the County budget. The Commissioners have tried but failed to provide a compelling reason to sell the Parkhouse Geriatric Facility. They have not even attempted to make the case for the sale of 220 acres of Open Space.

The Montgomery County Commissioners are trying to pretend that they still value Open Space by splitting legal hairs over the definition of what is and is not considered Open Space. This not only ignores the spirit and intent of the Open Space program, but more importantly, it ignores the Montgomery County Planning Commission documents that clearly define the property surrounding Parkhouse as Open Space.

I can understand the argument for privatizing the geriatric center, but there is no need to include the land if, as the County says, they simply want to get out of the geriatric business.

In August 2012, Dr. Scott Rifkin of Mid-Atlantic Health Care sent an e-mail to Commissioner Josh Shapiro to express his interest in purchasing the Parkhouse facility and grounds. Six short months later, in February 2013, the Montgomery County Commissioners took the first official step required to sell the Parkhouse by voting to issue the County’s RFI. After an evaluation of all bids was conducted by a working group consisting only of county employees hand-picked by the Commissioners, this process ultimately concluded with the Commissioners agreeing to sell Parkhouse to none other than Mid-Atlantic. As the Logan Square Studio Center began sliding towards its inevitable bankruptcy and the consequences of that poor investment began to become apparent, one must wonder if the Commissioners’ sudden interest to exit the geriatric care business was sparked by Dr. Rifkin’s e-mail to Josh Shapiro.

Dr. Rifkin himself told Upper Providence Township that the $3 million line item for the land on the County-distributed Terms of Sale distributed on October 8, 2013 is simply a place holder and not reflective of the actual value of the land. Furthermore, he told Upper Providence Township that he was asked by the County to increase his original bid because of all that he was getting. One must wonder why Mid-Atlantic, an organization that maintains it is not in the land development business, would allow the County to drive up the price on the deal based on the inclusion of land that Mid-Atlantic claims it doesn’t need or have any “set plans” for.

Meanwhile, the County continues to insist that the Parkhouse sale is a “done deal” while simultaneously refusing to release the terms of the sale because the sale has not been “finalized.”

All of this, while proclaiming at every turn that this process has been “transparent.”

There was a time in recent memory when words used to mean something in Montgomery County, too.

Lisa Mossie
Vice Chairman, Board of Supervisors
Upper Providence Township

How the Grinch sold Parkhouse

Commissioners, why? Why are you selling our open space? Why?

At the end of November, Dr. Scott Rifkin, the principal of Mid-Atlantic, contacted me requesting a one on one meeting. For a number of reasons, I thought that a meeting of this nature was a bad idea, not the least of which is that I believe that the last thing that would be beneficial for Upper Providence in a transaction that has been characterized by a lack of transparency is yet another meeting behind closed doors. I suggested instead that Dr. Rifkin attend a public meeting of the Upper Providence Township Supervisors where the public could attend as well. Citing concerns that a large public meeting would seem too much like a "political event" where citizens would get caught up in their emotions and that large public forums "lend to grandstanding and posturing," Dr. Rifkin insisted on a much smaller delegation. Dr. Rifkin was particularly concerned about the press being in attendance and insisted in more than one correspondence that the press should NOT be invited because of "political posturing and grandstanding."

As a compromise, I offered for our first meeting the Upper Providence staff meeting, which is a typically a lower-key, but still publicly advertised meeting where all three Township Supervisors would be present. I also insisted on having one or two members of the public present as well. Dr. Rifkin agreed to come to our staff meeting on December 18.

I asked for two volunteers from the community to be present at the staff meeting. Ray Emrich and Joe Haney volunteered. In the days leading up to the meeting, I heard from several additional residents who wished to be included in the meeting, but, as I explained in my responses to them, I had given my word to Dr. Rifkin that this meeting would be limited to two members of the public. As this was our first meeting with Dr. Rifkin, I thought it was of the utmost importance to establish this relationship in good faith by honoring my word and I did not want him to feel "ambushed." Our complaint, after all, ultimately is not with Dr. Rifkin, but with Montgomery County. Every member of the community I spoke with agreed that this was the best way to proceed.

Dr. Rifkin showed up one hour late for the meeting, explaining that he got lost on the way to the Township building, which is literally 1.4 miles away from Parkhouse and on the same road as his proposed $39 million investment.

Below is the update I sent to the community regarding the December 18 meeting:

-----Original Message----- From: Lisa A. Mossie To: XXXXXX Sent: Wed, Dec 18, 2013 5:04 pm Subject: Parkhouse Update

Hello Everyone,

Township staff and Ray Emrich met with Dr. Scott Rifkin today. I feel that we gained very little new information today, but did establish a working relationship with Dr. Rifkin and by association, Mid-Atlantic Healthcare. Dr. Rifkin suggested that a small committee be designated to meet on a regular basis to discuss the Parkhouse land going forward. More on that in the coming days as it takes shape. I would like to have one or two representatives from the Community included in this group.

Dr. Rifkin’s remarks centered upon Mid-Atlantic’s ability to run Parkhouse at a profit. He gave us a lot of background on his operations and the history of his company and some contacts we could call to gather information on Mid-Atlantic. He emphasized that he is not a developer. He stressed that it was important to him to have a good relationship with the Community he serves.

Dr. Rifkin gave us assurances that Mid-Atlantic has no current plans to develop the land, and he says that they are at least a year or two away from even considering doing anything with it. His immediate concern is addressing the operations and efficiencies of the senior center. Some intriguing ideas were tossed about for the land, most of which involved the preservation of the majority of it as open space. The concern I expressed to Dr. Rifkin was the public’s loss of access to the land once it comes into private ownership. Dr. Rifkin acknowledged this concern and until his development plans are finalized, expressed only one reservation regarding allowing continued public access to the land, and that was one of liability insurance, which I agree, is a legitimate concern for Dr. Rifkin once he owns the land.

When asked directly, Dr. Rifkin stated that the land was NOT critical to maintaining the ongoing operations of the senior center and that he had no plans to “flip” the land once taking ownership. I asked him if he did end up selling the land, would he consider giving he Township the right of first refusal, which he said he probably would.

Dr. Rifkin did state that the purchasing agreement with the County has been signed and that he personally saw no reason why the county would not release the terms of the sale, but he could not give us those details as it was proprietary of the County. Dr. Rifkin says he purchased the land because the County did not offer the purchase of the facility without it.

I told Dr. Rifkin that while I believe it is important that we establish the group to work with Mid-Atlantic going forward, the Township’s position is that the property is Open Space and that we will continue to fight the county to keep the land in public hands. The county and the township have both designated and assumed the land around Parkhouse would remain open space; the Township’s comprehensive plan, which has been widely recognized for its excellence, will be essentially nullified if this 220 acres of open space is developed.

Ray, please feel free to add your impressions or anything you think I may have missed.

Lisa Mossie

It came as a somewhat unpleasant surprise to me and several members of the community to have the following email arrive in our inboxes on Christmas Day:

To the Lower Providence Community

It has come to my attention that a rally regarding the Parkhouse land issues is planned for this week. This seems to be more motivated by political career building than to any attempt to solve substantive issues.

On December 18, I met with the entire leadership team of the township in a meeting. The tone of the discussions were positive and there was an open discussion of the community's interests regarding Parkhouse and the associated land. I found the discussion to be positive and the tone to be congenial and aimed at finding the best possible outcome for all parties. The elected officials as well as staff and local residents attended.

At the meeting, I made it clear that Mid-Atlantic Health Care is a provider of high end skilled rehabilitation and nursing home care. Our focus is on patients not development and that we have no set plans for the land. We also offered to meet with an ongoing committee from the community to plan together how the land is best used. We even offered to keep the land available for public use if the township could help us solve legal liability issues. I walked away from the meeting believing we had agreed on these first steps and that we would work together on these issues.

I am, therefore, somewhat surprised that a public protest is scheduled. The purchase agreement has been signed by MAHC and the County. The sale will close at the end of a very short due diligence period. The property, which was never designated by the County as permanently preserved "open space", will be privately held. As the property owner, we care deeply about our relations with the community and have held out the olive branch and asked for planning assistance and a collaborative effort. Other than political career building I can't understand the motivation of the protest organizer. I sincerely think this is an occasion where more will be accomplished with collaboration than with confrontation. I look forward to meeting with the committee discussed at the previous meeting and to working with the solicitor to address liability issues so the land can stay in use. My email is xxxxxxxxx@gmail.com for anyone who wishes to reach out to me directly for further discussion or information.

Have a wonderful holiday season,

Scott Rifkin, M.D. Managing Partner MAHC

Sent from my iPad Sent from my iPad

I received a duplicate email immediately thereafter addressed "To the Upper Providence Community." Apparently, the press-shy Dr. Rifkin also sent his letter to the local media. That evening, the Times Herald posted the following story to their website:

COURTHOUSE — A group led by Upper Providence Supervisor Lisa Mossie will plans (sic) to protest the sale of the Parkhouse facility in Upper Providence outside of the Montgomery County Courthouse Saturday at noon.

Along with protesting the sale of the facility itself, the group is also opposed to the sale of the 220 acres surrounding Parkhouse. Mossie and opponents of the sale say the area is protected open space.

The county maintains the land was never designated as open space and just went undeveloped while the county owned it.

In a letter to the residents of Upper Providence, CEO of Mid-Atlantic Health Care Scott Rifkin said he was unsure why a protest is happening when he’s done all he can to work with the township.

Rifkin also stated he has no plans to develop the land and is trying to work with Upper Providence officials to keep the land open to the public.

“Our focus is on patients, not development, and that we have no set plans for the land,” Rifkin wrote in an email to Upper Providence residents. “We also offered to meet with an ongoing committee from the community to plan together how the land is best used. We even offered to keep the land available for public use if the township could help us solve legal liability issues.”

I responded to Dr. Rifkin the following day:

Dear Scott,

If you wanted to address the residents of Upper Providence, it seems to me that a far better option than emailing people on Christmas would have been to appear at a Monday evening Township meeting as I originally suggested when you first proposed to meet . I’m not sure from whence you have discerned the motives of the rally, which was suggested and organized by one of our residents, but in Montgomery County, where the landscape is littered with the lives and political careers of those who have found themselves on opposite sides of the issues, there are far easier and safer ways to engage in “political career building” than taking on the current County administration.

That being said, I reiterate my remarks that I made to you on 12/18: The land surrounding Parkhouse that you propose to buy is Open Space and should never have been offered for sale by the County. There is plenty of Montgomery County Planning Commission evidence to back this up. I believe that the sale of Open Space by the County constitutes a breach of the public trust and I would prefer to see this land remain publicly owned.

As I recall, I told you I intended to fight for the land and even said that I hoped you wouldn’t take it personally. The rally should not be a surprise to you at all.

Lisa Mossie

Dr. Rifkin's reply to me was:

Lisa,

Thanks for the nice note. Not taking it personally.

I am working with the assumption that the sale will go through and that I will need to work closely with the township leadership to find common ground. Contracts have been signed.

I appreciate the offer to participate in a Monday night meeting but find that such meetings rarely solve issues. There are just too many folks to take the time and attention to detail needed to solve these issues. However, once we have worked together on the issues and found common ground then I'd be happy to go hand in hand with leadership to discuss that common ground with the public.

Lisa, as for the Christmas email, that may not be great timing by our folks but I don't think anyone had to open it on that day. I am Jewish and must admit that I have received many an email from some non-jewish person on a high holiday. I simply wait for the holiday to be over. I'm never offended as I don't assume that Christians pay much attention to our holidays.

I am eager to meet with you and the Township staff whenever you are ready to discuss two basic issues. One, how we keep the land open to folks who wish to use it in the next few years. Two, how we plan the possible uses over the long term. Your solicitor seemed open to a discussion of liability so we can keep the land open immediately. We obviously don't want someone hunting to shoot someone walking a dog and then be held liable. Let me know when is good to meet.

Thanks and hope your Christmas was wonderful,

Scott

Dr. Rifkin has insisted on several occasions that he is not a political man and has no desire to get in the middle of a political battle. Nevertheless, it appears that is exactly where the County has put him. The insistence that the resistance to this sale is about political career building and not about the loss of precious Open Space, and the County Commissioners' breach of the public trust in selling it, is a canard that I have heard several times. It's insulting and hurtful to the residents of Upper Providence, who deserve to have their concerns taken seriously and not spun into a media message in an attempt to pretty-up the ugly facts about this sale.

My advice to Dr. Rifkin, in this somewhat "open letter" to him, would be that he should stop taking political cues from One Montgomery Plaza. Recognize that the outrage over the County's betrayal of the taxpayers is real. When one sends an email with the subject line, "Parkhouse" on Christmas day, understand the community's emotional connection to this property, recognize that most people get their emails on their phones (or iPads) and know that they will open that email immediately.

The residents of Upper Providence understand that there would be no "issues to resolve" if the land remained in the hands of the public. Their complaint is not with Mid-Atlantic or Dr. Rifkin; it is with the County Commissioners who should never have put Open Space up on the auction block.

Evidence that the Parkhouse acreage is Open Space

Immediately following the Montgomery County Budget Hearing on December 12, the Chairman of the Montgomery County Commissioners, Josh Shapiro, stated that, with regards to the 220 acres surrounding Parkhouse,

"[T]he term open space is being used 100 percent inaccurately. It is not county-protected open space and the county is the only entity that can deem it to be open space."

Perhaps Mr. Shapiro may want to revise that "100%" estimate down. Considerably. The map below is the Montgomery County Planning Commission Future Land Use map from 2005:



The pdf below is an except from the Montgomery County Planning Commission's Comprehensive Plan dated 2005:



The map below is the 2005 MCPC Montgomery County Rural Resource Areas



The map below is the Montgomery County Planning Commission Future Land Use plan dated 2010:



Montgomery County defines their Open Space Plan on their website thusly:

Open space. Natural areas. Farmland. Scenic views. Historic properties.These important resources are essential to Montgomery County’s high quality of life.Yet, as the county is developed, these landscapes and heritage resources are lost.Our county has an abundance of beautiful and important natural assets, including rolling farmland, historic properties, scenic streams, and wooded ridges, that should be preserved for future generations.While 28,000 acres of these assets had been permanently preserved by 2000, this only represents 9 percent of the county's total area.

Recent development has put pressure on the remaining unprotected resources.If current development trends continue, more of these assets will be lost than necessary for normal growth and development. Open space and cultural resources provide recreational opportunities, improve the environment, and add to everyone’s enjoyment of everyday life.In addition, these resources have a strong economic impact, both directly through tourism and farming and indirectly by making the county a more attractive place for workers and businesses.The Open Space, Natural Resources, and Cultural Resources Plan is an important element of the county's comprehensive plan.It focuses on preserving and interconnecting critical open spaces and natural areas, expanding county trails, increasing farmland preservation, and preserving historic properties.

On Page 116 of the Montgomery County Open Space, Natural Resources and Cultural Resources Plan, Parkhouse and the Upper Schuykill Valley Park are discussed in depth:

An existing master plan for this park focuses on three objectives: protection and enhancement of the park’s significant natural resources through promotion of environmental stewardship, preservation of land necessary for park activities, and implementation of a continuous trail network centered around the park. The recent emphasis on the Schuylkill Greenway makes the park a regional hub for river recreation, environmental education, and interpretation of the agricultural heritage of the county’s river corridor. For this reason, the master plan should be updated to address the additional opportunities presented by this greenway relationship.

Upper Schuylkill Valley Park’s most significant natural feature and scenic resource is the Schuylkill River (1). The park’s location along the riverbank provides both visual and physical access to the river. Motorized boats in the Black Rock Dam Pool have caused considerable erosion of the riverbank. Boats access the river from the Pennsylvania Fish Commission’s boat launch across the river from the Upper Schuylkill Valley Park. A riparian restoration project currently underway along the river will protect and enhance the natural and scenic qualities of the park’s waterfront. The county should work with Chester County and the Fish Commission to manage use of the river and to develop additional protection and restoration strategies for the riverbank.

Upper Schuylkill Valley Park is bordered and buffered from surrounding development by farmlands belonging to the Montgomery County Geriatric Center (2). Loss of any of these lands would impact the park’s scenic views and unique agricultural character. All of the property associated with the Geriatric Center extends the park’s open space and should be permanently preserved and maintained as an example of farming practices in an otherwise suburban area.

The proposed Schuylkill East Trail, synonymous at this location with the Schuylkilloop Trail, will pass through the park and will be a spine for local connections to Upper Providence Township’s community park, the Schuylkill Canal Recreation Area at Mont Clare, and adjoining neighborhoods and corporate campuses. This more regional focus provides an opportunity to adaptively reuse an uninhabited farmstead (3) located at the lower end of the park as an interpretive facility and visitor center.

A future project called Schuylkilloop Gateway will create a river hub that is accessible to visitors of all ages and interests. Because this section of the river includes scenic ravines and bluffs, any opportunities to protect views, buffer natural resources, or enhance the Greenway in this area should be considered high priority for acquisition and protection, especially the riverfront portions of the former Malickson and Rivercrest properties, both now under development (4). In addition, properties that could fill gaps between county-owned parcels farther west along Dreibelbis Road (5) should be considered of primary importance.

On page 6 of the deed for the Puhl tract, linked below, it clearly states that "the Open Space Department and the Montgomery County Geriatric and Rehabilitation Center recommend the acquisition" of the parcel and that the "Open Space Department recommended an offer of $89,000" and "it is in the best interest of Montgomery County to attempt to purchase this property in lieu of condemnation rather than proceed through condemantion proceedings."



Finally, linked below is the Montgomery County Planning Commission review letter sent in response to Upper Providence Township's Open Space ordinance, proposing to re-zone the Parkhouse parcel as Open Space. The review letter is dated May 17, 2013. This review letter states that rezoning of the Parkhouse parcel as open space "is not consistent with current County land use planning objectives," however, it goes on to say that the rezoning this parcel as open space is consistent with Upper Providence Township's Comprehensive Plan Update (2010) and Open Space Plan (2006), both of which were reviewed and approved by the Montgomery County Planning Commission at the time of their adoption by the Township.



According to the evidence, which, I remind you, is 100% supplied by Montgomery County, the only thing that is being represented "100% inaccurately" is the that the acreage that Montgomery County Commissioners are selling is NOT Open Space.

CBS3 picks up the Parkhouse story

Story below from CBS3:

By Steve Patterson

ROYERSFORD, Pa., (CBS) – Montgomery County Commissioners say they’re in finalizing plans to sell a large nursing care facility, while opponents are getting vocal on worries about privatizing care and how the company will use the land around the site.

County officials want to sell the Parkhouse, a nursing home that houses some 500 residents, employs nearly 700 people and sits on about 200 acres of land. The deal is set at $39 million from the private Maryland company: $36 million for the facility and $3 million for the land.

“The fear is that if it goes into private hands, we wont be able to guarantee it remains this pristine space,” said Upper Providence Township Supervisor Lisa Mossie. She is leading the opposition charge for the County to provide more reasoning on their decision and more assurance about what happens when the property changes hands.

“My concern is that the motivation of this sale is not so much to privatize this, as it is to fix a budget problem that Montgomery County already has…. to plug a hole,” she said. “And when that is your motivation, then I question everything about it. You have to.”

Upper Providence Resident Sharon Gehman placed her mother in the facility 13 months ago and is now worried about how care will change when the facility becomes privatized.

“We’re being assured by the commissioners and Mid Atlantic that nothing will change,” she said. “My fear is that the quality of care will change. The staff here is exceptional and you always have to worry that when something’s being privatized, something will change. These assurances don’t feel real.”

County Commissioner Josh Shapiro says a private company will only improve care, resolve debt and ease the burden on taxpayers.

It’s a very small minority that’s misconstruing the facts purposefully to try and create hay where there is none,” he said. “At the end of the day, our residents are going to be better off, employees will be protected and the community will benefit from having this back on the tax rolls.”

The finalized date is currently set for January 31st.

Just how high are the stakes on the Parkhouse sale?

In a word: HUGE.

Since the sale of Parkhouse "pervades every aspect" of the 2014 Montgomery County budget, it's worth taking a look at the single biggest budget issue that Montgomery County faces:

Logan Square Shopping Center, aka "Studio Centre," aka "Norristown Centre," aka Giant Economic Development Boondoggle.

Back in June of this year, Natalie Kostelni penned an article for the Philadelphia Business Journal chronicling the tragic history of the Norristown Studio Centre, the too-good-to-be-true project that was going to single-handedly undo years of mismanagement and economic decline in Norristown. Like the quick fix that project promised, the County Commissioners are looking for a similar quick fix to fill the $24.5 budget hole that the project created. Kostelni's article (linked here) is worth reading in its entirety, but for a sense of scale as to how dire the County's fiscal crisis is as a direct result of this project, this passage is worth quoting at length:

The county finds itself on the losing end of the deal even though it had been warned. A March 18, 2009, memo from John F. Nugent, the executive director of the Montgomery County Redevelopment Authority, questioned why the county was committing so much money toward the project and why it would enter into an arrangement in which the county would be subordinate to the primary lender. Regardless, the commissioners signed off on the agreement.

“We were told by our experts allowing the first lender to have a higher priority than the county was needed to have the deal happen,” said Joe Hoeffel, who was serving as a county commissioner at the time and fully supported Studio Centre. Hoeffel contends that in spite of the county being on the hook, the money helped keep USM Services and its jobs in Norristown.

“There are 400 jobs and a Class A office building and a parking garage,” Hoeffel said. “That’s why I call the project a successful job creator for Norristown.”

Bruce L. Castor Jr., who was a commissioner then and currently holds the same post, also backed the project.

“I liked that the tax credit would bring glitz and glamour to the northern end of Norristown,” Castor said. “That was a Rendell thing and I thought it was a good idea.”

However, Castor said he didn’t know he was signing off on a deal that put the county funds in such jeopardy. He blames Hoeffel, a political nemesis, for the situation.

Josh Shapiro, a current county commissioner, said attempts were made to renegotiate the county’s secondary position after the fact, but that was rejected by the lender.

Bleak Future

Montgomery County District Attorney Risa Vetri Ferman is also looking into the matter. This is based upon recent public disclosures about decisions and actions undertaken by the past commissioners related to the Logan Square project, she said in an email. It is also prompted by a December 2011 report issued by a Montgomery County Investigating Grand Jury that addressed the conduct of some county government officials and employees and allegations of political corruption.

In the meantime, the foreclosure process is expected to take six to nine months and has left the county reeling. It recently put forth a bond issue and its exposure on the Logan Square debacle was listed as a liability.

Also of concern is how the situation will affect the amount the county and Norristown receive from the U.S. Department of Housing and Urban Development and its Community Development Block Grants funds. Since HUD loans were part of the funds given to Studio Centre and the project is unable to generate enough money to make payments on the loan, the payments will come from future CDBG money earmarked for the county and Norristown.

Translation: This one deal could haunt Montgomery County over the long term. The county is also dealing with the reality that it may not realize any return from the money it gave the developer for Studio Centre and even recoup any of the $24.5 million.

“We will follow whatever options and legal remedies that we have,” said Uri Z. Monson, chief financial officer for Montgomery County.

"Whatever options and legal remedies" clearly includes the sale of Parkhouse and apparently only the sale of Parkhouse. With it's $39 million price tag, that neatly fills the hole created by Studio Centre with enough left over to pay down the existing $8 million in debt on Parkhouse and the $6.23 million on outstanding contracts.

Adding insult to injury is the fact that the County must pay $528,000 in annual interest payments alone on the Logan Square loans.

A $528,000 interest payment on a redevelopment project that foreclosed in May. The county-guaranteed loan for Logan Square - better known as the former Sears shopping complex at Markley Street and Johnson Highway in Norristown - will cost the county $9.4 million through 2030.

Another failed investment in Norristown, this one in a sewer project, will cost the county $110,000 in 2014, according to Monson.

Those two projects, approved under the previous administration, have also cut into the 2013 budget. The county recently made an $8,883 payment for the sewer project, and the county Redevelopment Authority made a $363,362 payment for Logan Square.

Moody's downgraded Montgomery County's bond rating in August. Another downgrade would raise the interest rate.

It's not only in the County's fiscal best interests to plug this budget hole as quickly as possible, but it would be best for all parties involved in the original transacation to make this project disappear down the memory hole as quickly as possible.

Because, where did that $59 million go?

It did not go into paving the parking lot, I can tell you that much.

As a matter of fact, other than the renovated Sears building and the parking garage, it's difficult to see where, in fact, that money went. Montco resident Walter Interrrante filmed the "before" images back in 2007:



Here is the "after" image, taken today, 11/23/13:

On October 31, 2013, the Logan Square property was sold to the developer for $8,000 dollars.

Logan Lender, a Wayne firm, bought the two parcels for a total of about $8,000 after filing a foreclosure suit in Montgomery County Court in May against Johnson & Markley Redevelopment, a New Jersey firm led by developer Charles Gallub.

The 24.5-acre property sold as two parcels, which includes where USM, a facilities maintenance company, has offices. Together, the parcels were valued at about $37 million, reflecting Logan Lender's investment.

It's worth noting that just this year, the Montgomery County Commissioners broke ground on yet another economic development project that would, as Commissioner Leslie Richards said, "change the way Norristown is perceived."

Where have we heard this before?

The project got started with $11.5 million this year. An additional $20 million contract is slated to be awarded in August 2014 and a third $20 million contract is due to be awarded in late 2015 for this project.

Am I missing something here? If it was an economic development project that dug Montgomery County's fiscal hole, then shouldn't economic development funds be used to dig them out? Surely, the County should not be "investing" in economic development projects until it cleans up the mess from the last project.

And it certainly shouldn't be using Upper Providence's open space to do it.

Look, I get that the current County Commissioners inherited a mess from the previous Board. Lord knows, they can't sit in a meeting together for five straight minutes without reminding everyone of that. The fact remains, however, that they all ran for office with a full understanding what they were getting into. And it's more than a little troubling that many of the same names that were floating around the groundbreaking of the Lafayette Street Corridor project were floating around during that fabulous Studio Centre proposal.

Montgomery County does some things very well: Parkhouse is a five-star facility that serves the County's most vulnerable aging adult population. Since 1993, Montgomery County has preserved acres and acres of open space and farmland.

The County should not trade funds earmarked for things they do well to pay for things they do very poorly.