Mayor wanted to keep UE land away from local developer

The University Estates lawsuit that has been kicking up controversy in the city of Athens for almost two years was dismissed without prejudice last May in U.S. District Court.

In that case, a deposition by Athens Mayor Paul Wiehl recently acquired by The Athens NEWS reveals that the mayor was hoping to keep a large tract of city property out of the hands of local developer Brent Hayes.

The dismissal of the case came at the request of UE developer Richard Conard, who filed the suit against the city and City Council President Bill Bias in the summer of 2009. Conard sued after the city signed a memorandum of understanding with Asset Resolution and its affiliate, Silar Associates, agreeing to purchase the mortgage note on more than 600 acres of UE's mixed-use development site off of Ohio Rt. 682 and Armitage Road. Frost dismissed the case "without prejudice," meaning that it can be re-filed at a later date.

Similar to testimony given by Bias in his deposition, Wiehl revealed that he too was hoping to make sure Hayes didn't gain control of the land.

Bias testified that Hayes had a deal pending with Silar to purchase the note for $1.2 million. He said he was led to believe that this deal would go through quickly if the city did not act immediately.

"They led me to believe that they had a deal with... Mr. Hayes, and that if City Council could not produce an ordinance letter from the bank saying that, yes, we have the wherewithal to do and emergency clauses and everything else... that they were going to sell it to Mr. Hayes," Bias said in his deposition.

Bias was asked in the deposition why the city would authorize $2 million to protect the wellheads, instead of dealing with Hayes and potentially paying $1 million for the same protection.

Bias said city officials were worried that Hayes might clear-cut forest on the remaining acreage of UE property, potentially threatening the city's water supply within 30 well-field acres.

"There were concerns because Mr. Hayes had clear-cutted – clear-cut other areas around our city, whole hillsides, and we did not want that to happen," Bias said. "There were concerns that Mr. Hayes and his operations – other places in the county had major EPA litigation going on – those concerns – you can't take 30 acres here and with everything that flows into it totally protect it."

When asked if Bias personally liked the proposal from Hayes, he said, "Probably not." Further, Bias said that the Hayes option (buying 30 acres from the developer) was never explored.

In his testimony, Wiehl said that he had understood that the proposal by Hayes was never explored because Hayes had not secured the property note from Silar.

Wiehl testified that he was aware of Hayes' history with the clear-cut hillside as well as Bias' testimony about it.

Wiehl was asked, "Is that consistent with your view, that you really didn't want to do business – land business with Mr. Hayes because of the way he treated prior Athens County properties?"

He responded, "I would have preferred not to, yes."

"And for those reasons?"

"Yes."

"You didn't think he was a good steward of the land, essentially?"

"His track record is questionable," Wiehl said.

In an Athens NEWS article following the Bias testimony, however, Wiehl suggested that in negotiating to obtain the UE site, the city wasn't motivated by any desire to keep it out of Hayes' hands specifically.

"It wasn't so much that it was Brent Hayes," he said at the time. "It's like a flower bouquet at a wedding. The thing goes up. The bridesmaids all get around. Usually, they're not trying to push somebody out of the way. They're just trying to catch it so it doesn't fall to the ground."

At that time, last summer, eight months before he gave his deposition, Wiehl said that city officials didn't know what could possibly happen to the land and wanted to make sure that whatever happened, it was protected from damage.

"It wasn't so much about getting in front of somebody, but making sure that we were in the mix," he had said.

For his part, after Bias gave his deposition in July 2010, Hayes had said that he was approached about the opportunity to buy the note in March 2009. He said a number of different things could have happened if he had bought the note, including his possibly working something out with UE for the company to pay off the arrears on the mortgage. The last resort, he said, would have been to foreclose on the note. But had it come to that, Hayes said, he needed to have found some potential use for the property.

At the time, Hayes said he approached city Service-Safety Director Paula Horan Moseley as a courtesy, to tell her about his talks with Silar regarding the site. He said he approached the city in good faith, and asked Moseley if, in the worst-case scenario of foreclosure, the city would have any interest in buying the portion of the property where the wellheads are located.

He said he gave Moseley a ballpark purchase price of $700,000. Bias's deposition, Hayes said, confirmed some suspicions he had already had that they city did an end-run around him on the matter.

"We spent a lot of time and money doing due diligence on the purchase of this note, and in that deposition it admits that they knew we had a deal," Hayes said. "They went in front of our deal, knowingly It's unfortunate really. Like I said, what's the upside now?"