I have transcribed a portion of a Woodstock Planning Board meeting so that you can read for yourself, verbatim, how incompetent these RUPCO and Planning Board people are.
In this meeting, RUPCO has to contend with the fact that I made their planned name, Woodstock Commons Limited Partnership, unavailable. So, knowing that the legal structure of the project would be changed, if only in name, the Planning Board did not think it necessary to have their lawyer present at the meeting. That was their first mistake. Their second mistake was to not wonder why the community relations director, not the lawyer for the project, did all the talking. Their third mistake was to pretend that they understood what RUPCO's community relations director was saying, because what he was saying was gobbledygook. So now we know that the Planning Board pretends to understand stuff that makes no sense, and is too proud or vain or insecure or something to have their lawyer present when legal matters are expected and necessary at meetings.
Onto RUPCO's oops, or rather oopses. What Community Relations Director Guy Thomas Kempe should have done at this meeting was read a statement that replaced the Limited Partnership name that they had no right to use with the Limited Partnership name that they did have a right to use. Instead, Community Relations Director Guy Thomas Kempe read a paragraph that replaced a Limited Partnership name with an LLC name. This CHANGED the legal structure of the project. The project is now, legally, significantly different from what it was before this new paragraph in the Final Environmental Impact Statement.
The other thing that Community Relations Director Guy Thomas Kempe did, in error, was explain the ownership structure of the project. We should not be surprised that he does not know what he is talking about, based on his first error, but it just goes to highlight how clueless he is. Community Relations Director Guy Thomas Kempe told the planning board that the Limited Partnership is a subsidiary of a subsidiary. What he meant was that the Limited Partnership is owned by the LLC which is owned by RUPCO. That means that RUPCO would own this for profit project, and that is not the case. If an LLC owns a partnership, then the partnership is by definition not a partnership, but a wholly owned entity. It makes no sense at all. Nobody on the Planning Board noticed this nonsense. Perhaps they were all tired that night...
Furthermore, Community Relations Director Guy Thomas Kempe called the project LLC the "owner" of the project, but then also called it a "holding company." Well, which is it? Again, the Planning Board didn't ask, didn't blink, and from what I saw, didn't wonder.
Community Relations Director Guy Thomas Kempe also announced that there had never been a problem, and that no entities ever understood it to be necessary to have registered the originally designated (in the application) Limited Partnership name. Well, actually, there WAS a problem, and that problem was illegal use of a name. Here, Community Relations Director Guy Thomas Kempe still denies that RUPCO did anything wrong in any way. And, the Planning Board, once again, seems to be OK with that.
To top it all off, sitting to Community Relations Director Guy Thomas Kempe's immediate right was Michael Moriello, who is, supposedly a lawyer. I mean, I think he is a lawyer, but he listened to everything as well and did not notice that a huge change of corporate structure was being proposed that night.
The change in corporate structure was voted on. Nobody seemed to notice it. Now we will see what happens. My guess is that RUPCO will call it a typo and change it like it was nothing at all.
Here is the transcript of some of the March 4 meeting:
GUY THOMAS KEMPE: There was an issue that came up concerning, um, the, ah, the name of um Woodstock Commons LLC, which we have addressed, um, and, it appeared only one place in the FEIS, on page fifteen. Um, this, these documents are tabbed and you have at that tab, the language that we, um, added. Um, and so I’m going to read that to you now.
Upon its determination that the name Woodstock Commons Limited Partnership is no longer available, RUPCO has amended all instances whereby the Woodstock Commons Limited Partnership was referred to of record before the lead agency and all other interested involved agencies, so that the name Playhouse and Elwynn Associates LLC is substituted in its place. This amendment shall apply to but shall not be limited to the Draft EIS, the Final EIS, all applications, submittals, exhibits, addenda, appendices and all other documents of record. The lead agency notes that RUPCO has been since the September 14, 2005 Woodstock Application remains the Applicant project sponsor.
We wanted to extinguish any confusion. Um, [? I catch any of that ?] both a LLC and a Limited Partnership by that name have been formed, and those articles of partnership have been forwarded to the planning board. We just wanted to extinguish any confusion about that name.
DAVID CORBETT: Thank you.
MICHAEL MORIELLO: Those, ah... Both... Both of those proofs are here in a letter that I have written, um, to the board, and, ah, my apologies for not getting here earlier but we had to get, I wanted to make sure we had the filing- - - certified copies from the Secretary of State. [??] You also have this short letter that goes along with that which addresses, I think, addresses [??] I think fairly self-explanatory...
GUY THOMAS KEMPE: Let me ask the board if there are any questions. Do you understand the relationships of these entities, these corporate entities and why they will be formed, why they have been formed, what services they provide and purpose they have?
DAVID CORBETT: Yes. My only question was that every document where the previous assumed name, WCLLC was used, in each case it’s going to be replaced by this entity.
GUY THOMAS KEMPE: Actually that’s the only place that it showed up, only once in the FEIS, um, and, um, we’ve always referred to the project and will continue to refer to the project as Woodstock Commons, however the, um, once we have approval, rather than then forming the, um, LLC, which was always intended to be the um, uh, holding entity for this um specific property, separate from segregated from all other RUPCO properties, um, we changed the name now to um match the name that was always planned for the limited partnership. So it’s really just a change in name and it only occurs one place.
DAVID CORBETT: That answers the question which I had requested of you. But part of the question was, is there any need to, or will, is there any intention on your part to create any other entity which will have a direct bearing on this project, other than this one?
GUY THOMAS KEMPE: Yeah. I think this goes to the question of why we form a limited partnership, and there may be some lingering questions about why you do that. Um, the reason that uh you do that is because you form a partnership for the entity which you must um when you are participating in the low income housing and tax credit program. You must create an entity where the investor has an ownership position if you will in the partnership of the um construction. They want them to have skin in the game, that’s the whole point of it. So we create a limited partnership, which is a subsidiary to the subsidiary of RUPCO, and you create that because you need a taxable entity to be eligible for the tax credits that come into it. It’s just that simple and RUPCO being a not for profit, we have to create- this is, this sounds more sophisticated than it really is. It’s just what it is.
MICHAEL MORIELLO: There’s also the LLC.
GUY THOMAS KEMPE: Well the LLC is the holding company for uh, for the project. The holding company being now Playhouse and Elwynn LLC will continue forever and that will be the ownership entity for the property.
MICHAEL MORIELLO: What we tried to do with that paragraph too, um David, is make what I, um, call a Mother Hubbard clause, that you know, covers everything, in that in that paragraph there. And then it’s buttressed again by the correspondence that I sent to the [?-cough-] so that everyone is clear that there’s not a problem with the name. That um, that it’s clear that this is...
DAVID CORBETT: Well the name is registered now, isn’t it? There’s no opposition
MICHAEL MORIELLO: And RUPCO has the name. The applicant, and continues to be the applicant through the process[?]
GUY THOMAS KEMPE: And you know, we’ve done it now simply to extinguish that confusion, it was not necessary to do it prior. There was no subterfuge or or um fraud involved in it. This is the typical thing that developers do. You go, you secure your approvals, and with those approvals, then, since that is when you will close on the property, you would then create the LLC to hold the property. And then with the tax credits you create the partnership, then, for the investment to come into the property. That’s just the way it’s done. Um, so, we’ve done that in advance and it’s not a problem and it was never a problem. It was never understood to be necessary for any of the entities involved here.
DAVID CORBETT: Thank you for the clarification.
GUY THOMAS KEMPE: Any other questions about that? Thank you.
Upon its determination that the name Woodstock Commons Limited Partnership is no longer available, RUPCO has amended all instances whereby the Woodstock Commons Limited Partnership was referred to of record before the lead agency and all other interested involved agencies, so that the name Playhouse and Elwynn Associates LLC is substituted in its place. This amendment shall apply to but shall not be limited to the Draft EIS, the Final EIS, all applications, submittals, exhibits, addenda, appendices and all other documents of record. The lead agency notes that RUPCO has been since the September 14, 2005 Woodstock Application remains the Applicant project sponsor.
We wanted to extinguish any confusion. Um, [? I catch any of that ?] both a LLC and a Limited Partnership by that name have been formed, and those articles of partnership have been forwarded to the planning board. We just wanted to extinguish any confusion about that name.
DAVID CORBETT: Thank you.
MICHAEL MORIELLO: Those, ah... Both... Both of those proofs are here in a letter that I have written, um, to the board, and, ah, my apologies for not getting here earlier but we had to get, I wanted to make sure we had the filing- - - certified copies from the Secretary of State. [??] You also have this short letter that goes along with that which addresses, I think, addresses [??] I think fairly self-explanatory...
GUY THOMAS KEMPE: Let me ask the board if there are any questions. Do you understand the relationships of these entities, these corporate entities and why they will be formed, why they have been formed, what services they provide and purpose they have?
DAVID CORBETT: Yes. My only question was that every document where the previous assumed name, WCLLC was used, in each case it’s going to be replaced by this entity.
GUY THOMAS KEMPE: Actually that’s the only place that it showed up, only once in the FEIS, um, and, um, we’ve always referred to the project and will continue to refer to the project as Woodstock Commons, however the, um, once we have approval, rather than then forming the, um, LLC, which was always intended to be the um, uh, holding entity for this um specific property, separate from segregated from all other RUPCO properties, um, we changed the name now to um match the name that was always planned for the limited partnership. So it’s really just a change in name and it only occurs one place.
DAVID CORBETT: That answers the question which I had requested of you. But part of the question was, is there any need to, or will, is there any intention on your part to create any other entity which will have a direct bearing on this project, other than this one?
GUY THOMAS KEMPE: Yeah. I think this goes to the question of why we form a limited partnership, and there may be some lingering questions about why you do that. Um, the reason that uh you do that is because you form a partnership for the entity which you must um when you are participating in the low income housing and tax credit program. You must create an entity where the investor has an ownership position if you will in the partnership of the um construction. They want them to have skin in the game, that’s the whole point of it. So we create a limited partnership, which is a subsidiary to the subsidiary of RUPCO, and you create that because you need a taxable entity to be eligible for the tax credits that come into it. It’s just that simple and RUPCO being a not for profit, we have to create- this is, this sounds more sophisticated than it really is. It’s just what it is.
MICHAEL MORIELLO: There’s also the LLC.
GUY THOMAS KEMPE: Well the LLC is the holding company for uh, for the project. The holding company being now Playhouse and Elwynn LLC will continue forever and that will be the ownership entity for the property.
MICHAEL MORIELLO: What we tried to do with that paragraph too, um David, is make what I, um, call a Mother Hubbard clause, that you know, covers everything, in that in that paragraph there. And then it’s buttressed again by the correspondence that I sent to the [?-cough-] so that everyone is clear that there’s not a problem with the name. That um, that it’s clear that this is...
DAVID CORBETT: Well the name is registered now, isn’t it? There’s no opposition
MICHAEL MORIELLO: And RUPCO has the name. The applicant, and continues to be the applicant through the process[?]
GUY THOMAS KEMPE: And you know, we’ve done it now simply to extinguish that confusion, it was not necessary to do it prior. There was no subterfuge or or um fraud involved in it. This is the typical thing that developers do. You go, you secure your approvals, and with those approvals, then, since that is when you will close on the property, you would then create the LLC to hold the property. And then with the tax credits you create the partnership, then, for the investment to come into the property. That’s just the way it’s done. Um, so, we’ve done that in advance and it’s not a problem and it was never a problem. It was never understood to be necessary for any of the entities involved here.
DAVID CORBETT: Thank you for the clarification.
GUY THOMAS KEMPE: Any other questions about that? Thank you.
After all is said and done, is it possible that this project will not be an affordable housing project at all, and will be flipped to a for-profit developer? Is there any public funding still being sought? Does the ownership structure suggest a flip?
ReplyDeleteGood points. But hold on a minute. The project, while it is affordable, WILL be for profit. Unimaginable, right? When they say "affordable housing" you immediately think non-profit, but that is not the case. It is counterintuitive to subsidize housing for lower income people, AND for the developers to make a profit, but that is exactly the model of this project. And the funding, once it is built, will come largely from Woodstock taxpayers. The project only has to have 20% affordable housing units to still be called "affordable," which means that the property taxes paid on the project can be close to zero. See post #51 from March 5 to see how the property taxes are assessed and why this is a big fat scam from day one.
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