The problem dates back to 2007, when the property was owned by one of developer Roger DeBoy’s various corporations. The city intended to widen that part of Roswell Street from three lanes to four and install a sidewalk. To do this, it needed to install a retaining wall in front of the Coke building and acquire some right of way.
The right of way in question was 4,040 square feet, or 0.09 acres, located at 358 Roswell St. between Coryell Street and Lakewood Drive. Dan Conn, the city’s public works director, said the estimate to build the wall and acquire the right of way was $413,000. But DeBoy made the city a deal: He would deed the needed right of way to the city in exchange for being allowed to build the wall the way he wanted it built.
DeBoy charged the city $305,000 to build the wall, Conn said. One of DeBoy’s corporations, Emerson Development LLC, deeded the property to the city. Trouble is, the property was owned by another of his corporations, Emerson LLC, an error Goldstein discovered when he bought the property out of bankruptcy court in December for $2.1 million.
By that time, the road had already been widened onto the property and the sidewalk had been installed. While Goldstein agreed to deed the property back to the city under the correct name, he had numerous stipulations. For one, when he would be billed for the property taxes, Goldstein said that bill should go to the city since the city has been using the property as if it owns it anyway. Haynie said he expected the taxes to be a small amount, possibly $100. But Haynie objected to the concept because when the city buys property, it’s normal for the seller to pay the taxes up to the closing day. The City Council, however, agreed to pay the taxes. State law requires elected officials who sell property to government agencies to go through certain procedures. For instance, Goldstein is required to sign an affidavit in probate court when he deeds the property to the city pledging that he complied with the law.
Haynie said Goldstein asked him to sign the affidavit also, which Haynie balked at doing.
“There’s a lot of information in there that only an elected official can swear to, and if there’s false information in there, whoever signs it can have a legal problem,” Haynie said. “It could hurt me if I signed it and it’s determined to be false.”
Tumlin said the botched deed was a result of the city handling some of its closings without an attorney reviewing the deal, something that has since been corrected. “To make sure you have (a) good title, that’s why you have closing attorneys,” Tumlin said. “And we chose to — for the small ones — not to in some instances.”
Although Haynie said the problem could be solved if Goldstein simply signed a quit claim to the property, Tumlin wanted a more comprehensive solution. Tumlin directed Haynie to contact the bankruptcy court trustee in charge of DeBoy’s LLC and ask the trustee to sign a corrective deed to make the botched deed a valid one. “We’re going to send a letter showing him where Roger gave it to us and just put the plain wrong Emerson on there,” Tumlin said. Tumlin preferred to solve the problem this way so as to avoid setting a precedent. “If you go to the city of Marietta deed page, there are a lot of little parcels, and it could be probably this has happened in one or two other cases, and if we do not assert our claim that when somebody writes us a deed that that’s a valid instrument, then that could come back and haunt us later,” he said.
Tumlin blasted Goldstein for his role in the botched deed, accusing Goldstein of trying to personally benefit from property that doesn’t belong to him, calling such action “immoral.”
“He’s going to donate that little strip of property and ask for a charitable contribution for around $400, 000,” Tumlin said.
Haynie also revealed that Goldstein made a “pre-emptive strike” by emailing the bankruptcy court trustee in charge of DeBoy’s LLC to alert him that Haynie would be contacting him, as well as to say that what Haynie intended to tell him was inaccurate.
“There’s a repetitive action here, that he looks after Philip and not the city of Marietta,” Tumlin said. But Goldstein said the only reason Haynie knows he emailed the trustee is because he copied Haynie on the email.
At the same time, Tumlin said the City Council’s minutes from 2007 show that the correct corporation did deed the property over to the city. That it was later recorded in error — an error Goldstein said he discovered before he bought the property out of bankruptcy court for $2.1 million — is simply a typo, and one that he is willing to go to court to defend if necessary. “Philip has even brought that up: ‘If it ain’t in the minutes, it ain’t correct.’ It’s even in our minutes. The intention of the parties is memorialized. And I will fight it to the end,” Tumlin said. “He was slobbering at the mouth — ‘I’m going to get a tax deduction,’” Tumlin added.
Goldstein declined to comment on the tax deduction accusation. However, he did say if Tumlin wanted to argue about the minutes, he should note where they said the DeBoy deal was approved subject to attorney approval.
The trustee ended up declining the city’s request, saying he wrote a deed and that was all that he was required to do. And that was where the matter rested until last week. Haynie was out of town for a two-week trip to Europe when … what did Goldstein drop off at this office? A quit claim deed to the disputed property. The office alerted Mayor Tumlin, who was said to be surprised.
The matter didn’t come up during Monday’s City Council work session – at least publicly, although Around Town caught up with Tumlin after the meeting.
“That’s a little clandestine just to do it in a complete vacuum. Nobody knew about it,” Tumlin said, referring to Goldstein’s quit claim deed that suddenly showed up at Haynie’s office. “You have a conversation, ‘I’d like to do this,’ and we turn it down. Then a year later he says, ‘I accept.’”
Tumlin said he wanted to review the quit claim in depth to make sure there were no strings attached.
“Before when it was about 13 pages, ‘the city was going to do this, the city was going to pay for that,’ he had all these terms. He loaded it up. This one says, ‘I’ve done all that and I’ve paid the recording fee and I’ve dealt with the court, here it is.’ I can’t speak for the man, but I would say he’s worried about liability, a skateboarder skinning his knee on that sidewalk,” Tumlin said.
The mayor said he wanted the City Council to resolve the matter within the next week or so, although currently the only council member who shares his concern is Jim King.
“The others I don’t think give a rip,” Tumlin said. “I said, ‘can’t y’all see how bad this is?’ (They said) ‘What do we care? That’s just Philip, and it’s just you to react.’”
Bank of North Georgia will have to wait until Oct. 30 to hear the City Council’s answer to its request that the city guarantee the interest payments of the Marietta Redevelopment Corporation.
Councilman Grif Chalfant convinced council members on Monday to delay the decision to give him time to negotiate with Rob Garcia, bank president.
The MRC’s executive director, Beth Sessoms, says the bank realizes the MRC would not be able to pay off the $4 million it borrowed from the bank to buy up properties across from the Hilton Marietta Conference Center if it sold those properties today, given how values have plummeted since the Great Recession.
Although he agreed to delay the decision, Mayor Steve Tumlin said does not support the bank’s request.
Tumlin said the city didn’t bail out other developers whose projects went belly up during the downturn.
“We didn’t do it for Winter, we didn’t do it for Myrick, we didn’t do it for Hedgewood. They’re an independent corporation,” Tumlin said of the MRC. “Personally, I want to keep it at arm’s length.”