Questions raised about ‘irregular’ property sale from town to former mayor
A retired lawyer from Greater Napanee is raising questions about an irregular property sale between the Town and its former mayor, Gordon Schermerhorn.
The Town listed the property, 32 Oke Rd, for sale through public tender in April 2019. Interested buyers were asked to present their offers in sealed envelopes by 3 p.m. on April 26, 2019. Schermerhorn was awarded the property for his offer of $10,100, while a second bid for $32,500 was left literally on the table. Schermerhorn sold the property 79 days later for $100,000. He had left his post as mayor only six months earlier, in October of 2018.
The Oke Rd sale is one of several recent or proposed municipal property sales which have garnered greater scrutiny due to the appearance of preferential treatment. “The wheels are coming off,” says Hubert Hogle, a retired municipal lawyer who was present on the day of the sale.
Hogle, now a director of the Greater Napanee Ratepayers Association (GNRA), has begun publishing information on the transaction on their website and Facebook page.
According to Hogle, the municipally-owned property at 32 Oke Road was listed for sale by tender in April 2019, in a small ad in The Napanee Beaver.
The building had been abandoned in 2005. The town had tried unsuccessfully to sell it in 2014 and 2018, to recuperate the lost property tax. Hogle said the current value of the property is estimated at $176,000.
In 2019, 32 Oke road was one of 23 parcels of municipally-owned land deemed “surplus properties” to be sold off.
“On February 26, 2019,” Hogle said, “James Ward and Alex Adams of Rogers and Trainor Commercial Realty Inc., Brokerage made a detailed powerpoint presentation to council, regarding the sale of surplus properties.”
Hogle said that on March 12, 2019, council received a proposal from Rogers and Trainor to sell the 23 properties. Three of the properties were in the process of being offered through a sealed public tender process, including Oke Rd.
“It is not clear how or why those three properties were selected for special treatment,” Hogle said.
On the date of the sale, Hogle said two sealed tenders were submitted. One came from Ripal Patel, owner of Camden Variety, for $32,500. The other from a numbered company, 5006616 Ontario Ltd, signed by Gordon Schermerhorn for $10,100.
“Both tenders had certified cheques for the full amount,” Hogle said. “I attended to view the tender opening as did Mr. Patel. Mr. Schermerhorn was not present.”
Hogle said Brandt Zatterberg, the General Manager of Community & Corporate Services for the Town of Napanee, and an assistant, were present to open tenders.
“At 4 p.m., Mr. Zatterberg picked up Mr. Patel’s tender, stated that it had been received at 3:04 p.m and then set it back on the desk unopened,” Hogle said. The tender was four minutes late, according to the advertised terms fo the sale.
“[Zatterberg] did not return the tender. In fact, according to Mr. Patel, he kept it until after the sale to 5006616 Ontario Ltd had closed before returning it.”
Hogle said Mr. Patel’s bid arrived late because of a delay at the bank. The decision to refuse Patel’s late bid is inconsistent with previous municipal decisions, he said.
“On March 10, 2020, our fleet manager reported to council on two bids received for the supply of light vehicles,” Hogle said. “[Both bids] were delivered late by 10 minutes, but due to the weather we allowed both to be submitted.”
Hogle said the Town was under no legal obligation to accept either tender.
“In my view,” Hogle said, “they should have rejected both and called up [another interested party], who had attended Town Hall a year earlier to offer to buy it for $60,000.”
The Town completed the sale to 5006616 Ontario Ltd. for $10,100 on May 27, 2019. In July, 5006616 Ontario Ltd re-sold the property to Chips Custom Machining Ltd, owned by John Hoy, for nearly ten times that price.
Hogle said that the procedure for the sale of surplus properties is laid out in detail in the Sale of Land By-law 07-59, passed in 2007. The bylaw requires that all tenders, quotations or offers be presented to Council in closed session for deliberation, unless Council gives direction to staff to negotiate the sale within certain terms, or approves an alternate method of sale.
Hogle submitted an application under The Freedom of Information and Protection of Privacy Act to find out if any of these requirements had taken place. If so, he asked to know when, and for copies of any related reports, minutes or resolutions.
“Clerk’s answer: No record exists,” he said.
Hogle is calling on Napanee Town Council to release the agenda, reports and minutes of the closed sessions dealing with the sale of 32 Oke Rd.
The Kingstonist reached out to Napanee Mayor Marg Isbester and CAO Raymond Callery for comment.
“My only comment now would be that it will be discussed as a council at our upcoming meeting,” Mayor Isbester said. When asked whether the discussion would take place in open council or a closed session, the Mayor did not respond.
In the mean time, Hogle said he also plans to make an appeal to the Privacy Commissioner, but that it is on hold due to the pandemic.
“I fully expect that tax dollars will be used to pay the Town’s lawyers to oppose the release of further information,” he said.
Samantha Butler-Hassan is a staff writer and life-long Kingston resident. She is a news junkie and mom who loves reading and exploring the community.
This article has been made possible with the support of the Local Journalism Initiative.
This is really well-written, thank you for your reporting!