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April 21, 2008

The Mayor's Land Transactions with Dale Mabee

Here's the technical details on the Littlefield-Mabee Land Scandal.

The Chattanooga Downtown Redevelopment Corporation (CDRC) received proposals from developers in August 2006 on Lots 1, 2, 3 and 4. The CDRC awarded the bid to a LLC, where Dale Mabee is the Chief Manager. Subsequently a contract was executed and closing occurred where the following questionable transactions occurred.

Option on Lot 5
- Land was NOT included in the RFP and has never been competitively bid.
- No request for this lot in RFP response by Mabee
- Contract includes a no cost option to purchase
- Option for 4 years, or longer. In theory, Mabee could delay the completion of the project indefinitely and the option would be extended until 365 days after the completion of that final unit.
- Option price is only 5% higher than original parcel price if purchased by 2010- after that the increase is only 2% per annum.

Loan to Mabee
- Mabee's response to the RFP makes no mention of requiring financing from the CDRC.
- The Contract executed by the CDRC calls for the City (CDRC) to finance the majority of the cost of Land.
- Per the deed of Trust, the amount of money loaned to Mabee is $735,992.
- Per the Deed of Trust the loan is interest free unless sponsibility for the easement falls to the City or Mabee slips on the schedule, and then the interest is only 2% per annum.
- Neither Mabee nor his partners have any personal liability.

Access Easement
- Mabee is not required to purchase all of the land needed for his development. An access/utility easement has been created to serve his development of the 22 townhomes.

- Roughly 6,000 sf of land does NOT have to be purchased. This area provides access for the development. Land value estimated at $96,000.

- Per contract, the upkeep and maintenance responsibility for the easement falls to the City or future owner of lot 5.

- While Mabee is responsible for making necessary improvements to the access easement/alley, there are no standards or minimum requirements for those improvements.