Emma’s Landing: Persisting Questions about Geneva’s Low Income Housing Tax Credit (“LIHTC”) Affordable Housing Project

March 22, 2022

The Geneva Way: Always More Questions Than Answers, Last Night’s “Episode of the Secret Tapes

Dateline: Geneva City Hall, March 21, 2022:

The Geneva City Council went into another secret session last night. This time the topic was what to do with all those pesky secret minutes and tapes. For a time recently, the Council handled the required semi-annual reviews by simply not doing any reviews. The Council is very experienced in the tactic of ignoring statutes, ordinances, and municipal codes, and then cherry-picking the ones that suit its political agenda. When I questioned this lapse in the required secret meeting reviews, the reviews began again.

Last night on the Council’s agenda was the destruction of the tapes of the secret meetings that happened to occur during the time when the ordinance for Emma’s Landing was secretly under custom-fabrication to the applicant’s exact specifications in the skunkworks at First and State. When I saw this tape destruction plan, I immediately objected. As a ghosted and gaslighted citizen, I expected and received the predictable crickets’ song.

However, the procedure employed last night to dispose of agenda item 14 was improper. At about the 2:35 mark of the video of the meeting the chair properly addressed agenda item “4. AMENDMENTS TO AGENDA.” No motion to amend was offered. The disposal of an agenda item can follow several paths under Robert’s Rules. Simply skipping over the item is not one of those paths. “Item 14” addressed audio tapes vital to the transparency of the Emma’s Landing Geneva City Council legislation approved through Ordinance 2021-03 on March 8, 2021. The application for the Planned Unit Development Ordinance 2021-03 that contains the fraudulent final plat was made by the Burton Foundation on August 12, 2020. Of course, we know from the Manning-DeGroot email of Feb 25, 2020, that the plan was de-facto approved improperly in secret on February 24, 2020, or earlier. We must hear that tape to clarify the details.

Here is Agenda Item 14 from last night and the sole motion that came out of the secret closed session.

“Agenda item for March 21, 2022: 14. “OPEN SESSION TO APPROVE CERTAIN CLOSED SESSION MINUTES AND APPROVAL OF DESTRUCTION OF CLOSED SESSION AUDIO RECORDINGS JANUARY 2020 THROUGH SEPTEMBER 2020 PURSUANT TO 5 ILCS 12/2.06 (c).” [Actually, the correct statute is 5 ILCS 120/2.06 (c). But even this correct citation is incomplete in this context.]

Kosirog: “I’d like to make a motion to approve City Council closed session minutes approved for release on March 21st, 2022.  First the remaining minutes from January 22nd, 2013. Second the remaining minutes for March 4th, 2013. Third the full minutes from April 22nd, 2013. Fourth the remaining minutes from August 5th, 2013. Fifth the remaining minutes from December 2nd, 2013. Sixth remaining minutes from July 10th, 2017. Seventh the partial minutes from February 12th, 2018. Eighth the minutes from August 26th, 2019. Ninth the minutes of January 19th, 2021, and Tenth and lastly the partial minutes from September 7th, 2021.” The motion passed. The Feb 10 and Feb 24, 2020, minutes were not released.

Where are those audio recordings of the Special Meeting closed secret sessions of February 10 and 24, 2020 whose destruction was on the agenda? What, exactly, was the “use” for the “purchase of land for the use of the public body” that was cited on Feb 10 and 24, 2020, as the exemption from sunlight, transparency, and the Illinois Open Meetings Act?

Obviously, a clandestine vote was taken last night, and the destruction of audiotapes motion did not pass. But that “action” to dispose of an agenda item must be taken in an open session. If the issue was removed from the agenda, who made the motion to do so, who seconded it, and what was the tally? The vigilante insurrectionists are still occupying City Hall. Stockholm’s Syndrome is progressing to its most virulent and corrupting form. If a broken trust were so easy to repair, why are there so many divorces?

What could still be so “tip-top secret” about a contemplated land purchase under consideration more than two years ago that makes it inviolate? Release the tapes and minutes or resign.

March 21, 2022

Defund the Geneva Zoning Police

This commentary discusses two specific Geneva issues: Emma’s Landing and an unlawful secret City Council meeting. Specifically addressed are two documents, copies of which are easily accessed at www.genevanotes.com.

By the way, I cannot fathom why the low-income-housing-tax-credit (“LIHTC”) affordable homes at the “Landing” in Sterling Manor were named for Emma and not after Lucy Sterling Geneva’s first schoolteacher. But that is water over the first Geneva dam that the redoubtable Samuel Sterling built. The Sterlings also created the Geneva House Tavern, where today stands the Geneva City Hall of ill-repute.

Twenty years ago, in Klaeren versus Lisle, the Illinois Supreme Court, probably inadvertently, nearly extinguished the State’s statutory protections for individual property owners who special use permits could harm. One legal observer opined that the Court’s Klaeren ruling “…turned Illinois zoning law on its head.” Klaeren increased the significant pre-existing confusion over whether municipal zoning police power was fundamentally legislative or quasi-judicial.

Discussion of Klaeren’s Chaos

Subsequent decisions have clarified the Klaeren ruling somewhat. However, Klaren’s laser focus on procedure blinded or provided cover for the Geneva City Council (and its captive minions on the Zoning Commission) when it comes to substance. This fog-of-war has allowed the Geneva municipal zoning police (the municipal authority to zone is a police power) to abuse the individuals put most at risk by special uses. Nearby neighbors are among the persons most at risk for immediate harm. Required Special Use Standards were put in place primarily to protect them.

However, some special use zoning decisions can also harm whole classes of residents in a municipality. In the case of Emma’s Landing, the longer-term impact of higher local property taxes required to subsidize Emma’s will adversely affect current lower-income Geneva households disproportionally, as property tax is a highly regressive tax. Another entire class of people harmed by Emma’s Landing is comprised of residents living outside of the corporate limits of the City of Geneva but inside Geneva School District 304. These people, such as those in the Batavia Highlands and Mill Creek are victims of taxation without representation because they too must subsidize Emma’s Landing.

While a harmed citizen has the right to seek formal judicial relief, the keys to the courthouse are priced out of reach. Genevan Walter Stackman spent $70,000 to keep the new vinyl-clad windows in the historic district that he was induced to install by a Federal Green Energy income tax incentive of a few hundred dollars. A Geneva city official dismissed Stackman’s victory at the Appellate Court as “he found a loophole.”

The Geneva Zoning Police, the City Council, has badly, even illegally, misbehaved to the point of police brutality.

In Geneva, over the last two leaderless decades, what has evolved is an overweening devotion to Klaerenesque ceremonial public pomp but a near-total inattention to mandatory codified zoning standards. Special Use Permitting for a  Planned Unit Development is now a purely politically driven legislative process while masquerading as a due process quasi-adjudication. The plain language of the rules, i.e., the Geneva Municipal Code, is now irrelevant at best and unlawfully circumvented or ignored at worst. Political goals are determinative under this rudderless Geneva mob rule.

For example, the East Side Dunkin’ Special Use project, now well into its fourth year and under the threat of forfeiture due to unpaid property taxes, was permitted to begin construction without addressing encroachments on both Crissey and State Streets, as required to meet the mandatory Geneva Special Use Standard 8. A Geneva building permit was issued without the required IDOT permit. IDOT, not the City, stopped the project. Another recent City Council farce was simultaneously granting a Special Use and a Variance to Malone’s Funeral Home to replace a historic antebellum structure with a parking lot. Suppose a variance (permission to violate codes) is needed due to hardships created by the applicant’s prior misdeeds. In that case, a special use permit obviously fails to meet the required mandatory (“shall” means “must”) nine code standards so the permit must be denied.

My first concern is the Special Services Area for Emma’s Landing Planned Unit Development on the City Council agenda of March 21, 2022. The SSA consideration seems premature since Mr. Fritz, the Geneva Assessor, has not yet created an initial tax bill. Emma’s is unique in Geneva, and the State tax rules (see: HB2621) were altered in late 2021 for LIHTC properties. Not a single other Geneva parcel is taxed under Emma’s deeply discounted property tax paradigm.

In the material in the packet for March 21, 2022, was a copy of the recorded Final Plat of the Planned Unit Development that the Illinois Housing Development Authority required. Curiously, the IHDA copy of the required document is unsigned. That document, I believe, is fraudulent. Fraudulent because the owner of the parcel comprising Emma’s Landing on April 21, 2021, was the City of Geneva. The PUD document has a certification via a notarized and recorded signature of an individual swearing that she owned the parcel and caused it to be subdivided. Yet this signatory did not own the property then or ever, and the City Council knew this. How and why was this deception allowed?

I believe the City duped the person who signed the PUD document as the owner, for it was she who provided the small access easement as “Emma’s Way” for access to Emma’s Landing PUD. This access portion of “Emma’s Way” was a small easement through parcel number 12-08-200-064 and this ROW easement is clearly not part of the PUD parcel, which is entirely confined to 12-08-200-073, the City-owned parcel.

Some weasel of a pettifogging loophole-Louie duped the signer into thinking she was a “part-owner” of the PUD and, as such, was entitled to sign as the (part) owner (see “owner” definition below) of the PUD Plat. This is the one minute detail of this whole repugnant Emma’s caper that most infuriates me personally. The signer was the then very recently widowed wife of a much-respected Genevan who was a personal acquaintance of mine.

The signer of the PUD Plat sold the 3.4-acre parcel 12-08-200-064 to James N. Bergman on June 29, 2021, for $650,000, or $195,000 per acre. This is double what Geneva Taxpayers received from the charitable Burton Foundation. The tax bills are to be sent to James N. Bergman, c/o The Burton Foundation, Tracey L. Manning, President, 2900 Larkin, Elgin, Illinois. Look out Genevans, another ethically less-than-sterling sweetheart backroom deal may soon become known involving the same gang of suspects.

One need not delve deeply into the Geneva Municipal Code pertaining to PUDs to find the legislative treachery inherent in this fraudulent PUD Special Use document. The Geneva PUD rules begin with this: “11-9-3: – INITIATION: The owner of the property for which a planned unit development is sought may initiate a request for a special use planned unit development. (Ord. 95-28, 5-1-1995)” Also, this rule for construction applies to all provisions of the GENEVA ZONING ORDINANCE: “11-1-2: – INTERPRETATION: A. In their interpretation and application, the provisions of this title shall be held to be the minimum requirements for the promotion of the public health, safety, morals, comfort, convenience, prosperity and general welfare.”

As the sole owner, the City of Geneva unlawfully applied to itself for a PUD approval and then tried to camouflage this fact through a clumsy and vicious ruse. All the City Council’s political chips secretly and long before had been wagered unanimously on Emma. But this was not a gamble at all, for the Council, acting as zoning police, controlled the Roulette wheel. And they say racketeering is a thing of the past. Then the Council, with faked diligence and in a feigned quasi-judicial manner, considered the objections of people like myself but never applied the mandatory standards in its code before ruling against me and others.

If this was not a kangaroo’s court, it was at least its biological cousin’s the wallabies. How, in God’s Green Earth, did the City Council leap over the ownership hurdle presented by 11-9-3? The answer, the Council furtively ran around that hurdle to grab its virtue-signaling political gold medal. Then, at the end of that artificial rainbow, the pot of 3.4 million dollars in LIHTC fees and profits went to the eventual owner, the one-employee Burton Foundation. In the strange case of the feigned owner, the City Council Zoning Police acted as insurrectionists who unlawfully stormed and occupied City Hall to impersonate sworn police officers.

Now someone (probably a lawyer for the City) might claim “owner” or “initiate” could mean many things. But the rules for construction contained in the Municipal Code require the strict definition to be applied. For example, please see 1-2-2: – GENERAL DEFINITIONS: Owner: Applied to a building or land, shall include any part owner, joint owner, tenant in common or joint tenant of the whole or of a part of such building or land.

More importantly, when Herbert Hoover, Frederick Law Olmstead, and others framed the template for the Geneva Municipal Code and Comprehensive Plan almost 100 years ago, they correctly focused on the current residents’ health, safety, morals, and general welfare.

For example, these framers did not envision a scenario where an anonymous LLC (a “person” per Code definition) could become an “owner” by buying a call option from the owner for a nominal fee. This option could be made contingent on a successful application to the City for any combination of the following examples: TIF grant, sales tax rebate, waiver of permit and hook-up fees, a special use PUD containing such things as a vape shop, massage parlor, cannabis dispensary, adult bookstore, meat market, donut drive through, sports betting parlor, tavern, or even an abortion clinic all on a parcel abutting the Harrison Street School.

Second, but related, is the Council’s consideration on March 21, 2022, of whether to destroy tapes of its secret sessions. The Council secretly approved (was unanimously “comfortable with”) Emma’s Landing in early 2020 or even before. Contained in an email to the President of the Burton Foundation from the Geneva Director of Development dated February 25, 2020, is this:

“Good News, we were able to discuss your incentive request with the Council again last night. They are comfortable with a full donation of the land and capping the amount you pay in permit fees at $150,000.”

“Again last night” was February 24, 2020, when a closed secret session was held by the Geneva City Council Zoning Police . The City Council cited and invoked the “purchase of land for public use” exemption from the Illinois Open Meetings Act to go sub rosa. The gifting of public property and permit fees is explicitly not exempt from the sunshine of an open meeting.

The conclusion is inescapable that the unanimous “comfort” decision expressed by the Council Police occurred during the closed session of February 24,2020. The email passage cited above is contained in a 48-page document titled “Site Control” that I obtained via a FOIA request from IHDA. I suspect the document was provided by Tracey Manning of the Burton Foundation so as to create plausible deniability of involvement in a ruse. Of course, she threw her correspondent under the bus.

“Site Control” was required to be confirmed to IHDA before its deadline to consider LIHTC funding of Emma’s landing. In its reckless abandon, the City Council was ultimately forced to drop the secretly prearranged gift of Emma’s parcel and then ambush the community at the last moment with a steeply discounted sale from an MAI appraisal.

Please remember that the City sold to UPRR in 2019 in an arms-length transaction the least valuable residential one acre of the site (the narrow strip along the existing trackage) for $261,000. Then the City Council got a “Made As Instructed” appraisal of the remaining 6.2 acres of $732,500 or $118,000 an acre. The City Council “sold” the parcel to Burton Foundation for $95,000 an acre. The “basis” of the land sold for the steeply discounted $586,000 was set at 1.3 million dollars by IHDA for purposes of determining the Developer’s remuneration. This represents the typical Illinois “smoke and mirrors” creative approach to money laundering. This also represents the exact type of feared “personal gain” mentioned in passing by Attorney Ostfeld, who Geneva residents hired to address the Council. The comment sent the Geneva mayor into a boorish Lightfoot tirade on July 13, 2020.

 (2171) City Council Meeting July 13, 2020 – City of Geneva, Illinois – YouTube 

Geneva was one of 22 LIHTC projects funded by IHDA during its 2020 cycle. Twenty-two applications were denied. The Geneva City Council cheated to make the application playoffs. A moral community would confess to crimes committed in its name and request to be disqualified. If Geneva in the persons of its City Council lasts a thousand years, people will say this was their foulest hour.

March 10, 2022

Ambushes and Smoking Guns at Emma’s Landing: The Geneva Zoning Police Cite Fraudulent Open Meeting Act Exemption for Land Purchase, then Discuss Land Gift in Secret and by a Gambit Known as Noah’s Arking

“The Geneva Way” is a two-decade-old system whereby the Geneva municipal authorities only let an issue reach the public’s notice or the City’s posted public agenda until if and when the issue is already secretly decided. By the time a citizen hears about it, it is a done deal. The process that led to Emma’s Landing was a typical example of a favorite “Geneva Way” tactic: the ambush. An item is placed on an agenda late in the afternoon on a Friday and then is approved without discussion by 9pm on Monday. The last-minute and unscheduled “Special Meeting” ruse is also a Geneva City Council favorite form of treachery and was deployed more than once in this example.

Please examine carefully the two attached documents. Take particular notice of the “again last night” phrase in the second document. Also watch the video (link is below) from July 13, 2020, where the mayor sanctimoniously berates an attorney who asks that the Emma’s Landing train be slowed down to give citizens time to examine the proposal (during a historically unprecedented pandemic). Watch the attorney, Mr. Ostfeld, only gently and politely hinting that sometimes in Illinois quick. secret, back-room deals can obscure fraud. He was on to something.

One assistant U.S. attorney [click on:] called the Low Income Housing Tax Credit program a “subterranean ATM, and only the developers know the PIN.”

It must be noted that the “Developer’s [i.e., Burton Foundation] Fee” for Emma’s Landing according to IHDA’s undated “Common Application Spread Sheet” (circa spring 2020) was set at $1,715, 683. But this figure is only part of the story and about half the total take. The Burton Foundation had one employee: President Tracey Manning Fellhauer. (See Burton Foundation IRS Form 990 at GuideStar.org)

Burton Foundation 2019 IRS Form 990

Genevans should know that the ~$1.8mil fee paid to Burton is based on the total cost basis, including the waived permit fees and property value before the steeply discounted sales price discount. About 11% of the basis value of Geneva’s “donation” goes to Burton Foundation in the form of cash. The “basis” of the land sold for the steeply discounted $586,000 was set at $1.3 mil by IHDA. Talk about smoke and mirrors. Bryan Fellhauer, a principal of Door Creek Construction, is the General Contractor who did the cost estimate for Emma’s Landing. Fees and profits from Emma’s will total $1,370,799 paid to Door Creek. (See: IHDA 11831 Construction Cost Breakdown.) This means a total of roughly $3.4mil will go to small entities controlled by Tracey and Bryan Fellhauer. “Personal Gain” takes many forms in Illinois and cash, after a good laundering, can defy gravity by flowing uphill.

The two documents above tell a sordid tale. A secret meeting was held on February 24th, 2020, and was falsely cloaked as a discussion of a mythical land purchase by the City of Geneva. The meeting’s real purpose was to discuss gifts of public land and taxpayer cash to a private entity, the Burton Foundation. The Illinois Open Meetings Act does allow a closed session for the purpose of negotiating the purchase of land for public use. However, the only sale-of-public-land topic that can be addressed secretly is the selling price. The concept and decision to sell the public land asset must be discussed and voted upon in an open session. Obviously, a cash gift of public funds (in the form of waiving of developer fees) requires that both deliberations over the concept and the decision to make the gift occur in an open session. In this case, illegal action was taken during a fraudulent secret session. Then the decision was communicated only to the beneficiary of the chicanery: The Burton Foundation.

The “again last night” phrase suggests previous improper deliberations and decisions. On February 10, 2020, a secret topic was on the agenda of another “Special Meeting.” This topic was also cloaked by the “purchase or lease” exemption of the Open Meetings Act.

IHDA improperly accepted the red-lined second document as proof of “site control” that was required before acceptance of the Emma’s Landing application. (see IHDA document 11831_”D3_Site Control_Emmas Landing_The Burton Foundation, undated.”) The red box in the “site control” document is in the document as received by the author from IHDA via a FOIA request.

The music played during this tap dance has a certain Madiganistan RICO beat to it, similar to the soundtrack of the Illinois “Greylord, the Musical.” The band for Greylord was “The Ides of IRS.” Ironically, Dan Webb had a lead role in “Greylord,” just as he had in the more contemporary drama, “Smollett.”

“Special COW Feb 24 2020” contains this: “CLOSED SESSION ON THE PURCHASE OR LEASE OF REAL PROPERTY FOR THE USE OF THE PUBLIC BODY.” “DeGroot to Manning 25 Feb 2020” contains this: “Good news, we were able to discuss your incentive request with the Council again last night. They are comfortable with full donation of the land and capping the amount you pay in permit fees at $150,000. Third party costs will be charged at the normal rate. We will be working with our attorney on how best to memorialize this moving forward.” (The “full donation” fell apart because an IHDA application deadline was looming, and outside voices were beginning to ask how many votes were required on the council.) In July 2020 the mayor and council ignored a request for a 2-week delay made by the lawyer representing Geneva citizens because the IHDA 2020 LIHTC gravy train was scheduled to leave the station before the two weeks would be up.

Remember, during its February 2020 clandestine meetings, the Council did not discuss purchasing or leasing land “for the use of the public body.” These fraudulent sessions were discovered through a FOIA to the Illinois Housing Development Authority, and the sessions leaked approval provided the grease needed to slide through a badly tainted application for millions of public dollars.

The mayor stated on July 13, 2020 (see link to video below): “At no time did any council members, myself, or staff communicate with the Burton Foundation as to what’s the landscape looked like, what the prospects were of either passage or failure.” The truth is that the City Council approved the Emma’s Landing Project and a “full donation” of land and waived fees several months prior and informed Burton of this fact on 25 February 2020. The mayor’s boorish performance on July 13th attests to the validity of the adage “Truth welcomes questions, a lie attacks the questioner.”

The Geneva City Council must immediately explain its violations of the Open Meetings Act and release any other improper secret deliberations, communications, and negotiations that took place. An honorable group would institute measures to reverse its prior misconduct.

The mayor is on record in this video as polling the Council individually by phone, i.e., “Noah’s Arking” about these matters:

 (2171) City Council Meeting July 13, 2020 – City of Geneva, Illinois – YouTube 

This “Noah’s Ark” deceptive gambit may have been legal in Illinois (a state that is hardly the paragon of moral political behavior), but it was not ethical or consistent with transparency. “In order that the people shall be informed, the General Assembly finds and declares that it is the intent of this Act to ensure that the actions of public bodies be taken openly and that their deliberations be conducted openly.” (5 ILCS 120/1)(from Ch. 102, par. 41). Did each alderperson receive the same information during the ten private one-on-one conversations? Did each benefit from the answers to the other’s questions? How can a body “deliberate” when each member is isolated individually in a soundproof booth? Where are the transcripts from these individualized arm-twisting sessions?

The “Good news” described in the second document is bad news for existing Geneva households with below-average incomes living in homes whose property tax bills will go up on the “news.” These Geneva families will subsidize affordable housing costing much more than their own homes. The Emma’s Landing LIHTC homes are subject to minimalized tax bills that are paid through their artificially low rents. Emma’s wealthy investor-owners will be taxed by a completely different mechanism (A more detailed summary of all property tax provisions in HB 2621 is available here. The legislative language in HB 2621 [Public Act 102-0175] provides additional details.) that lowers the local school tax bill by 35%%. Taxing current non-subsidized lower-income families, including seniors, out of Geneva in order to bring new families in is also a fundamental principle of The Geneva Way.

The Geneva City Council owes the taxpayers of the Batavia Highlands and Mill Creek and all other taxpayers who live in Geneva School District 304 but outside the City an explanation as to why the City of Geneva defrauded them by increasing their school tax liability. City of Geneva residents must demand an immediate explanation of how and why improper non-disclosure of identity of interest by the developer and contractor, fake documents, unauthorized administrative approvals of contracts, and multiple Open Meeting Act and FOIA violations are allowed to remain entrenched in The Geneva Way.

March 2022

City Council Ready to Double Down on Fake Certificate of Ownership of Emma’s Landing

The motto of the current Geneva City Council Zoning Police: “Badges? We don’t need no stinkin’ badges.”

The City of Geneva is an Illinois municipality governed by an elected City Council. The mayor, the creator of the “Geneva Way,” is little more than a parliamentarian (and a poor one at that). The Council has abrogated its responsibility and has let the long-entrenched twenty-year+ mayor and his hand-selected city staff usurp its agenda. The Council gets both its information and its political agenda from the mayor.

The Council has limited powers defined by the State of Illinois based on the Illinois Constitution and enumerated State Statutes (65 ILCS 5/) Illinois Municipal Code. Among these Council powers is a duty to act in a quasi-judicial role in certain zoning matters. (The distinction between quasi-judicial administrative and legislative function seems to have baffled the Illinois legal community, much like when Supreme Court Justice Roberts conflated “penalty” and “tax” in the Obama Care case).

NOT among the Council’s powers is the right to apply to itself for a Special Use Permit (i.e., PUD) as the owner/developer of the Emma’s parcel in question. The creation of a special use for a municipally owned parcel when said use does not directly address certain specific needs of the citizens at large is not a power delegated to municipalities. Fire stations, water treatment facilities, storage for streets and sanitation equipment, police stations, and even Council meeting rooms, etc., are public uses. In the case of Emma’s Landing, the City Council’s lawful role in the PUD application was to weigh the application’s effects on all Genevans carefully and impartially by applying the standards contained in the Geneva Municipal Code.

Who may bring an application for a PUD? The Geneva Code is precise and succinct: 

  • 11-9-3: – INITIATION: The owner of the property for which a planned unit development is sought may initiate a request for a special use planned unit development. (Ord. 95-28, 5-1-1995)
  • The 10 members of the Geneva City Council were never the “owner” when the PUD application was considered. The legal entity known as “City of Geneva” was the owner. Obviously, the Council recognized the dilemma it created for itself. The proper sequence would have been to first sell via an arm’s length negotiation the City-owned parcel 12 08 200 073 to a private entity. Then the Council could proceed with the required process for approving or disapproving a planned unit development as submitted by the new owner. But Council did not follow the requirements of the Geneva Municipal Code. Rather, to “facilitate” and, crucially, to accelerate building a path to large sums of public money for a specific non-resident married couple, Council committed fraud. Council used Joy Nelson to act as the straw-owner of the parcel 12 08 200 073 that was really owned by the City. I use the Joy Nelson name for the first time here because it appears on p32 of Council’s published agenda for its March 7, 2022, meeting. I have no knowledge or belief that Joy Nelson purposely participated in Council’s unlawful scheme.
  • The IHDA Qualified Allocation Plan contains deadlines. The Geneva City Council was so anxious to signal its collective virtue that it abandoned virtue altogether. Under the cover of a public health crisis, Council looked for an express gravy train. Council did not want its favored LIHTC collaborators to miss that public money gravy train. Here in Madiganistan you do not need a ticket to ride. But if you know the right people, your boarding pass is a wink and a nod. Geneva City Council has dug itself into a deep ethical hole. Council should first stop digging. Then it should table Emma’s Special Service Area and reconsider its past improper actions. 
  • Here is the problem for current Geneva lower income households (the ones whose Emma induced property tax increases will affect the most): The Illinois Courts provide no meaningful judicial checks or balances to restrain the Geneva zoning police that are accessible to those who may be most harmed by the municipality’s abuse of its zoning police powers. Here is an Illinois Appellate Court ruling in a zoning matter (Hanlon v Clarenden Hills 2016 IL App (2d) 151233-U No. 2-15-1233).

The Village was not required to comply with the procedures set forth in its ordinances where the procedures were self-imposed and not required under State statutes; thus, the dismissal of plaintiffs’ claim that the preliminary PUD plan approval had lapsed and the judgment following trial that the Village either had followed or did not need to follow its own procedures was not erroneous. The Village’s grant of preliminary PUD approval was not unreasonable and arbitrary.”

That’s right, local zoning ordinance rules are very often optional even when the rule says something must occur or must be prohibited. A Geneva victim of zoning police brutality would need to spend about $100,000 to get her protest to the Illinois Supreme Court where Judge Ann Burke sits as Chief Judge. She is the wife of “Slow Eddy” Burke, currently under Federal indictment.

The Geneva City Council clearly has been schooled in this “Hanlon Principle,” and they all know that a Geneva zoning police brutality victim has only her own thin wallet. The City Council can dip into every Geneva taxpayer’s wallet (including the victim’s) for its legal fees and individually the alderpersons enjoy sovereign immunity (but with important exceptions). Local circuit courts very rarely overturn an action of a city council. (This may be influenced by the fact that all local elected officials, elected circuit judges included, have their snouts in the same public trough.) Occasionally an appellate court will rule in an objector’s favor. (Always remember Walter Stackman, one of Geneva’s forgotten heroes.) But a victim really must plan for a path that leads to the Illinois Supreme Court. In Illinois, a citizen can have all the justice she can afford.

Does the “Hanlon” decision cited above comply with the following? “A special use [PUD] shall be permitted only upon evidence that such use meets standards established for such classification in the ordinances, and the granting of permission therefore may be subject to conditions reasonably necessary to meet such standards.” (65 ILCS 5/11-13-1.1)(from Ch. 24, par. 11-13-1.1) “Conditions to meet” does not mean “deviations from” or totally ignoring “such standards.”

Obviously, the faked ownership document contained in Emma’s Landing PUD application does not comply with the City of Geneva Ordinance that defines who (i.e, “the owner”) may apply for a PUD.

The Geneva City Council’s perpetual first question is always “Will we get away with this?” The roots of this mindset lie in the pungent muck of despotism, the Putin-esque “democratic” doctrine.

Rodney B. Nelson, M.D., F.A.C.P.; Former Major, USAF

Previous Post:

February 2022

GENEVA HAS A CHARACTER FLAW: DISHONESTY

Fellow Genevans,

We Genevans have a fundamental problem at City Hall that is graver than any specific issue. The problem is an ethical one, not a political one.

Consider these facts about Emma’s Landing Affordable Housing project in Geneva: 1) Identity of interest creates a pathway for fraud in LIHTC housing projects; 2) The president of Emma’s developer (Burton Foundation) is the wife of a principal of the general contractor (Door Creek Construction); 3) Construction cost exaggeration is a common technique employed in LIHTC fraud; 4) When identity of interest exists a totally disinterested and independent person must perform the cost of construction estimate. See: GAO-18-637 Highlights, LOW-INCOME HOUSING TAX CREDIT: Improved Data and Oversight Would Strengthen Cost Assessment and Fraud Risk Management

Consider that Geneva Ordinance 2021-03: AN ORDINANCE (1) AMENDING THE CITY’S COMPREHENSIVE PLAN TO CHANGE THE LAND USE DESIGNATION OF THE SUBJECT REALTY FROM “OPEN SPACE” TO “SINGLE-FAMILY ATTACHED” RESIDENTIAL; (2) GRANTING PRELIMINARY /FINAL PLAT OF SUBDIVISION APPROVAL; AND (3) GRANTING FINAL PLANNED UNIT DEVELOPMENT PLAN APPROVAL TO ALLOW FOR THE CONSTRUCTION OF EMMA’S LANDING, A 45-UNIT AFFORDABLE RENTAL TOWNHOME DEVELOPMENT- THE BURTON FOUNDATION. Geneva Ordinance 2021-03 contains a fraudulent required document. The Final Plat of Subdivision is recorded and contained in the ordinance but with a fraudulent certificate of ownership (vide infra).

Consider that the Emma’s Landing Purchase Agreement, paragraph 2.03(ii) Governmental Contingency Period was altered for the benefit of the purchaser but without action by the City Council. The City Administrator made this alteration without authority. Consider that the motivation for this was to fraudulently facilitate and accelerate the application for LIHTC funds from IHDA. That process contains deadlines.

Consider that a citizen FOIA request for documents related to changes in paragraph 2.03(ii) was denied by City of Geneva based on the secret executive session exemption long after the Purchase Agreement had been signed by both parties. The negotiations were over. The need for secrecy was over. The “only” document authorizing the change in the agreement exists in at least three forms: unsigned, signed but not dated (see agenda packet for June 7th, 2021, meeting of City Council), and, in response to a recent 2022 FOIA, signed and dated January 20, 2021. Obviously, the date was belatedly and improperly added after June 7, 2021. 

In the Illinois Housing Development Authority LIHTC funding cycle of 2020 forty-four applications were received. Twenty-two were allocated millions of dollars in Low Income Housing Tax Credits and twenty-two were awarded nothing. Geneva, one of the 22 “winners,” cheated by gaming the application timing process. City of Geneva did this by creating fake and fraudulent documents, and by failing to disclose, as required, an identity of interest within the participants (one of whom being a schoolmate of the mayor).

Ironically, Emma’s general contractor/cost-estimator is the son of a former Geneva Alderman. This alderman also had been a City of Geneva employee (Electric Department Superintendent) who had been fired by a former Geneva mayor. The dispute was over (get this!) the choice between WEPCO and Com ED as Geneva’s electricity provider. The resolution of the wrongful firing lawsuit took a long time. Mayor Lewis prevailed, but it took six years for him to collect from the taxpayers the $70K he spent on legal fees. (The City of Geneva spent $40K.) What was the hold-up on the mayor’s money? The Geneva City Council was the hold-up. see: GENEVA EX-MAYOR TO BE REIMBURSED IN LAWSUIT FIGHT – Chicago Tribune

Are we really the sort of town that puts winning above sportsmanship in competition? Have we descended so far down into the political cesspool that winning at any cost, including committing fraud, is acceptable here? 

Rod Nelson

Crucial Emma’s Landing Document, the Final Plat of the Planned Unit Development, is fraudulent.

The largest Federal affordable housing subsidy is the Reagan-era LIHTC Program. The concept is simple. The application is a byzantine maze of bureaucratic twists and turns. This creates an almost impenetrable fog that can and has obscured significant fraud. In practice, the usual approach is to form an ostensibly charitable tax-exempt 501c3 “foundation.” This “developer” is a not-for-profit that invests negligible capital but can collect substantial fees from which large salaries can be paid. Then a cascade of LLCs is formed including the one where Federal Income Tax credits flow, usually to affluent corporate investors, often banks. “LIHTC” housing is also termed “Section 42” housing, as this is the applicable IRS regulation.

To keep this commentary contemporary, I looked to P.J. O’Rourke (who just died at about my age) for advice. In the Wall Street Journal of 23 September 1993, he described the Clinton Health Plan. I quote P.J. here verbatim except I substituted “LIHTC Housing Plan.”

P.J. O’Rourke WSJ 23 Sept 1993:

“But my ignorance of the LIHTC Housing Plan is of little import. Understanding government programs is like looking at photographers’ models or being run over by trucks. Form is more important than content. The bare outline of the plan is so thick, detailed specifics to come, that you can stand on it to paint the ceiling. In my copy of the World Almanac, the U.S. Constitution and the Bill of Rights occupy 4½ pages. That’s 4½ pages to run an entire country for more than 200 years and half a ream of federal regulations if I slam my thumb in the car door.”

Many questions can be raised about how the City of Geneva, the Illinois Housing Development Authority, HUD, and the IRS have handled Emma’s Landing successful application for tax credits. Here the focus is on the smoke and mirrors obscuring “City of Geneva Ordinance 2021-03, an Ordinance amending the City’s Comprehensive Plan, granting preliminary/final plat of subdivision approval, and granting final planned unit development approval related to Emma’s Landing.”

The “Planned Unit Development,” (“PUD”), a form of special use, was improperly granted by the City of Geneva to itself, the City of Geneva. An “owner/applicant’s signature” appears on the document and is notarized, just below this appears the mayor’s signature along with that of the city clerk. But the “straw owner” never owned Emma’s Landing property parcel 12-08-200-073. That parcel was sold by the City at a price far below market value to the developer, the Burton Foundation, after the PUD was awarded by the City to itself. Thus, the City-owned the property when it passed Ordinance 2021-03 and Burton did not possess the required PUD document. The alleged and duly recorded “owner” of the PUD was a recently widowed surrogate who quite possibly was bamboozled into signing the document recorded as the “Plat of the PUD” that is officially incorporated into Ordinance 2021-03.

I have repeatedly asked all the aldermen and many staff members within the City of Geneva hierarchy to explain how Ordinance 2021-03 can be valid since it contains a fraudulent misrepresentation of ownership…. all the members of cricket’s choir are still humming the same shameful song.

You can find the Kane County Recorder’s PUD, Ordinance 2021-03 and Deed Transfer documents for parcel 12-08-200-073 (Emma’s Landing) here: (enter the parcel number)

https://lrs.kanecountyrecorder.net/Search/Advanced?previous=True

A Law Dictionary defines fraud thusly, “Fraud consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or in some manner to do him an injury.” I believe, given Geneva’s particular characteristics that pertain to the tax burden on its residents, that lower income current residents, often including seniors, will be particularly harmed by the subsidies they will be forced to provide for Emma’s Landing. Property tax is a particularly regressive tax that disproportionately affects lower income households.

Ordinance 2021-03 is a willful and deceitful device invented to unlawfully advance a public policy. If you happen to be a Geneva resident and have stumbled upon this essay, please ask your aldermen to explain the signature in the Ordinance that misrepresents the ownership of the Emma’s Landing property. If you get such an explanation, please let me know!

Rod Nelson

ps: Some further background is provided below. Many other “irregularities” pervade the LIHTC application.

https://www.geneva.il.us/AgendaCenter/ViewFile/Agenda/_07062021-1788 This link will take you to the Agenda Packet for the July 6th 2021 Meeting of the Geneva City Council. See pages 8-11 which include the signed PUD Plat. The Mayor and City Clerk represent that they signed the document on February 22, 2021 as “accepted and approved.” The Plat was “Made For The Burton Foundation.” Did the document even exist on 22 Feb 2021? If it did, the mayor and clerk were the first to sign (two months before the “owner”) and before the surveyor certified the plat was accurate and that no surface water problem would be created. The Final Plat of Emma’s Landing was certified by the Kane County Recorder on April 28th, 2021. Even the invalid 60-day extension had expired in March. The Final Plat that the City approved was not granted to Burton and it was not timely recorded.

Below the reader will find a letter dated January 15, 2021, from Burton Foundation to “City of Geneva, Attn: Ms. Stephanie K. Dawkins, City Administrator”. The letter is annotated as “accepted and agreed” by the City Administrator for a requested 60-day extension of the 180-day Governmental Contingency. This 60-day extension expired on March 19th, 2021. Given the controversy and intense public interest surrounding this issue and considering the provisions of the Illinois Municipal Code 65 ILCS 5, the contents of this letter are disturbing. Only the City Council is empowered to pass, repeal, or amend any act of the Council. I cannot find any evidence that an amendment to extend the Contingency Period was ever considered, much less passed in an open session. The “deal” for “that property” described in the below letter expired on January 18th, 2021. The 60-day extension was not authorized by the City Council, the only entity with authority to amend the original agreement.

https://justthenews.com/accountability/watchdogs/sunlax-irs-oversight-leads-over-15b-questionable-low-income-housing-tax

Lax IRS oversight leads to over $15B in questionable low-income housing tax credit claims. Just-the-News awarded last week’s Golden Horseshoe to the IRS for a lack of oversight that led to $15.6 billion in questionable Low-Income Housing Tax Credits (LIHTC) on more than 68,000 claims, according to an audit report by the Treasury Inspector General for Tax Administration (TIGTA). The above link describes the deplorable situation and contains a link to the TIGTA report. The LIHTC program has so many Illinois and Federal governmental agencies involved that the program escapes virtually all oversight from any level, starting with the City of Geneva.

An Open Letter to a Geneva Mayor and an Alderman about Municipal Insurrections

Dear Mayor Hiram McChesney and Alderman Francis H. Blackman: [I have addressed this to Geneva historical characters of high moral standing in keeping with Forrest Crissey’s tradition established in his Tattlings of a Retired Politician, Thompson and Thomas, Chicago. 1904. But this letter is not fiction.]

I call your attention to the Emma’s Planned Unit Development and the Reverter clause in the Emma’s Landing Purchase Agreement.

First, The Burton Foundation is required to satisfy all of the conditions under provisions of Title 11, Chapter 9 and Chapter 16 of the Geneva City Code and receive approval of a final planned unit development (PUD) plan and plat for an affordable housing project compatible with the R-7 Residential District and the Sterling Manor Planned Unit Development (Ordinances 1991-30 and 2013-13) prior to the land ownership being transferred to the Burton Foundation. The proposed development required Annexation, a Comprehensive Plan Amendment, Preliminary and Final Plat of Subdivision Approval, and Final Planned Unit Development Plan Approval.

Burton never received approval of the PUD plat. The PUD plat is a fraud – I cannot think of a kinder word to describe it, though many cruder terms come to mind. If it were an honest mistake, the Mayor and City Council knew about it since at least June 7th, 2021, when I described it during public comment on the “Reverter.” They have not acknowledged any mistake – too late now. Premeditation must be assumed.

Second is the “Reverter.” Sorry to say, I do not think a single member of the Council understood the reverter. In addition, the agenda packet about the reverter contained a slipped-in a copy of the letter from Burton to Dawkins asking for and receiving a 60-day extension of the “Governmental Contingency” period included in the purchase agreement between City and Burton. This unauthorized extension had nothing directly to do with the reverter. Dawkins, on her own “authority,” agreed to the 60-day extension, apparently by email on Jan 15th, 2021, the day she received the request. I raised this on June 7th, 2021, and the mayor sanctimoniously called me a liar and off-topic. THE 60 DAY CONTINGENCY EXTENSION LETTER WAS IN THE REVERTER PACKET – the issue under discussion! The city made it part of the topic by raising it.

The City Council essentially put a gun to its own head (and to the heads of all Genevan’s objecting to Emma’s folly) by extending the reverter. The fundamental question Cui Bono? should have been asked. Burton requested the last-minute reverter extension!!! The fairy tale invented by Burns, Sandack, and Dawkins about taxpayer protection from the big bad wolf puts Mother Goose to shame. The reverter expired when Burton put the first shovel into the ground. AND, the reverter required the Council to grant all the permits before the expiration date under the threat that Burton gets all its money back and walks, leaving Geneva looking like the dunce it often plays on Youtube TV. Today, if Burton walks away from Emma’s house of sticks, where is the brick house reverter protecting the taxpayers?

The various States treat reverter clauses in LIHTC differently. Missouri prohibits them completely. Virginia allows them but only when they require the property be returned (reverted to seller/donor) if the land-use changes from affordable housing to anything else. Illinois, as usual, comes up empty. Historically, the first “reverters” caused land donated to Churches to revert to the donor when the Church goes out of existence.

Stockholm’s Syndrome is endemic at City Hall. This chronic affliction takes hold when the keeper of the participation gate lacks a moral compass. Statutes and Ordinances are cherry-picked to be enforced or ignored to fit an agenda. Something even more sinister is invoked when even this fails: the usurpation of the rule of law by issuing unlawful decrees such as the Emma’s PUD, sworn loyalty oaths be damned. Vigilantes acting unlawfully under the guise of elected or appointed office are insurrectionists, not public servants.

A small-town City Council sitting down with “Iceberg” Bergman (Mannings’ mentor) for a game of LIHTC is more tragedy than comedy for the taxpaying ticket buyers. You would have had a slight chance playing three-dimensional chess with Bobby Fischer, but he died in 2008.  I reflect on Burns’ June 7th comment to a hearing attendee about herding cats. A decent City Council needs a cat or two to counterbalance the flock of sheep.

Best,

Rod “The Wraith” Nelson

ps: Everyone looked at me on June 7th (figuratively, I was remote AND wearing a mask though not because of Covid) like I had three eyes when I described the reverter as a “free put option gifted to Burton.” But I did not invent the concept. You can bet Iceberg and P. Quigley, Esq., know such “risk-mitigating” “puts” like the backs of their hands.

See: “Review Part 4: Direct and Indirect Gifts of Real Estate

There are various options for accepting other than a binary yes or no—transfer of ownership is not the only way to complete the gift. A small but not insignificant proportion of nonprofits utilize a supporting organization to receive the property. They can also employ more complex, risk-reducing legal strategies, such as creating a put option, utilizing an agent, or working through an LLC. 

Finally, the nonprofit can outsource the gift to another public charity that will liquidate the real estate within a donor-advised fund.” book.pdf (charitablesolutionsllc.com)

Was Identity of Interest improperly bypassed to get the Emma’s Landing LIHTC Funds?

The Emma’s Landing sponsor, owner, and developer is The Burton Foundation. Tracey Manning Fellhauer is the President of Burton Foundation. (99+) Tracey Manning | LinkedIn Door Creek Construction is the General Contractor for Emma’s Landing. Brian Fellhauer is Tracey’s husband and is an officer of Door Creek Construction. Bryan Fellhauer Phone Number, Address, Public Records | Radaris Disclosure of Identity of Interest is required by HUD and IHDA to qualify for LIHTC funds. Emma’s Landing requested LIHTC funds and certified that no Identity of Interest existed among participants. Fraud in LIHTC frequently occurs during the construction cost estimation phase when padded estimates increase developer fees and general contractor profits.

Based on information that is available in the public domain I conclude that the safeguards built into the IHDA Qualified Allocation Plan were deliberately bypassed and ignored by City of Geneva and IHDA. No one from either agency has been willing to discuss this concern. I am not the only citizen who has raised this apparent impropriety. Even the appearance of governmental impropriety undermines trust. In this case that appearance is crystal-clear.

“Identity of Interest” shall mean the existence of any of the following conditions:

– When one or more of the officers, directors, stockholders, members, or partners of the Owner is also an officer, director, stockholder, member, or partner of any other Participant;

– When any officer, director, stockholder, member or partner of the Owner has any financial interest whatsoever in any other Participant. P7 IHDA 2020-2021 QAP

In cases where there is an Identity of Interest between a Sponsor and Project general contractor; between a Sponsor and the Project architect; or between the Project architect and Project general contractor; the Construction Cost Breakdown must be completed by an independent third-party construction cost estimation firm according to the Authority’s Standards for Construction Cost Estimating available on the Website. see: P51 IHDA 2020-2021 QAP

2 thoughts on “Emma’s Landing: Persisting Questions about Geneva’s Low Income Housing Tax Credit (“LIHTC”) Affordable Housing Project

  1. Geneva has long been a beautiful community, the kind of place that people (singles and families) would want to live. I recall, circa 1977, hearing a senior clerk at the Geneva post office comment that the property taxes were getting so high that it was making it difficult for him to live in Geneva, especially in retirement, with a diminished income. I was much younger in 1977 and noted his complaint, but did not dwell upon it. My perspective in 2022 is different, very close to that postal worker. Anything that puts a higher tax burden on those least able to pay, for the benefit of a corporation or wealthy individuals is questionble both fiscally and morally.

    Like

  2. Tom, as you well know, Emma’s Landing is sequestered between a retention pond, a RR ROW soon to have a third track even closer to the buildings (think noise and air pollution), a brownfield of roofless buildings and abandoned vehicles, and a wide strip of land that signals isolation, not inclusion. The site is in no way walkable. Property tax revenues are governed by a completely different statute (35 ILCS 200/10-235) than the one that applies to all other Geneva homeowners. A similar Burton project in South Elgin, Water’s Edge, pays to Elgin School District 46 for all its 55 units combined less than the average single-family Geneva homeowner pays to District 304 for one home. Schools get 70% of property tax dollars, 90% of Geneva 304’s budget comes from local taxes. Geneva was one of 31 towns in Illinois deemed deficient in affordable housing by the State. Illinois’ toothless feel-good “mandate” that provided no State funding has been ignored by many of the accused municipalities. By the start of 2021 only 6 of the 31 affluent communities had created the required (310 ILCS 65/1) documents. The criteria set less than 10% affordable as the trigger point. Geneva’s report card was based on the 2013 American Communities Survey which did not actually survey Geneva but assigned Geneva a score based on extrapolations from other communities. The actual data were gathered over the five-year period preceding the report. Before 2013 geneva had 7.7% affordable homes the fifth highest among the 31. 22 of the 31 were below 4%. Had the Batavia Highlands, which is in the Geneva School District been counted as Geneva, Geneva would not have made the list. The subsequent decade until now saw stable inflation and historically low mortgage rates. Affordability thus increased. The low rates will reverse now and inflation has reared its ugly head. Existing lower-income Geneva homeowners will face affordability headwinds while the City of Geneva cranks higher its already fast-spinning utilities blower caused by its disastrous decision to go to coal as its favorite long-term energy source. Geneva desperately needs new leadership. Vouchers for rent/mortgage and food should go directly to the needy without having to go through the LIHTC tollbooth first. Too many hands are dipping into the LIHTC cash drawer.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s