June 14, 2006
Supervisor Hosts Illegal Meeting to Sell Property
For at least the third time, The Independent-Traveler Watchman discovered that the Riverhead Town Board was holding an executive session on a discussion item that should have been discussed in open public session.
After last week's executive session, this paper learned that the town board members engaged in a dialogue about a written offer from Pulte Homes to purchase 755 acres of town-owned, recreationally-zoned property at Enterprise Park at Calverton for approximately $90 million.
The company is looking to construct an 18-hole golf course, complete with 500 residences, and a 50-acre hotel/conference center. Other components of the proposal include a donation of land to the town's ambulance district for an ambulance barn and the construction of a new recreation center for the west end of town, which will be charged back to the town.
While it is true that real estate dealings can be conducted behind closed doors, they can only be held in private when a public discussion would adversely affect the sale price.
The New York State Law on open government reads that the board may enter into executive session on "the proposed acquisition, sale or lease of real property or the proposed acquisition of securities, or sale or exchange of securities held by such public body, but only when publicity would substantially affect the value thereof."
That would not, however, be the case for the Pulte Homes discussion since the town board has talked about the price of the property in public session several times in the past, and negotiated with the companies only after their initial offers were made public.
Most noteworthy was a deal proposed by Staten Island Developer Kenneth Wilpon.
Pulte Homes has yet to appear publicly via a qualified and eligible sponsorship hearing, and no official authority by the board has been granted to enter into negotiations, yet the town has already started using its resources to negotiate.
"This is a higher price than others have offered and we are trying to decide if we should continue negotiations with them," Cardinale said of the reason why the meeting was held in private.
But, Bob Freeman, executive director of the state's committee on open government wasn't buying the explanation. "The board only could have [gone] into executive session if publicity would affect the value of the land. Given the past, I don't see how publicity would affect the value of the property." He added, "And if they wanted to sell something, it would probably be best to let as many people know as possible what the offers are. Maybe they will get a better one."
He pointed out that in some cases the state has put excess property up for sale on eBay.
Councilman Ed Densieski agreed that the price would not be affected and said that a letter sent to the town from Pulte, which indicated what the company was willing to pay for the property, was not marked confidential. "Nowhere did it indicate," noted Densieski, "that their offer was not to be discussed in private. It is an offer to buy public property."
Councilman John Dunleavy, meanwhile, was unsure of the reason for entering into executive session and said he'd have to look into it.
When asked what she thought, Councilwoman Barbara Blass was also uncertain as to why the discussion took place in private, but figured it was because it dealt with contract negotiations. "It wasn't my call, but it is my understanding that the discussion involved contract negotiations," she said. Contract negotiations, however, aren't necessarily permissible in private unless a rigid set of circumstances is met.
When pressed further, the councilwoman indicated that perhaps the town board should, from now on, ask for the town attorney's opinion before going into executive session.
This is not the first time that the town board has made a similar mistake regarding executive session. In June 2004, The Traveler Watchman learned that the town board unanimously decided not to provide Blues Management Association, a group contracted by the town to run its Business Improvement District, with $35,000 in support services, such as police protection, for an expansion of the Blues Festival.
When asked why that discussion was held in private, the supervisor first responded by saying that it was related to contract negotiations and that discussions of that nature could be held in executive session as provided by the New York State Law on open government.
However, according to Freeman, nowhere in the law is there a provision that allows a governmental body to go into executive session on contract negotiations.
When reminded of the law, Cardinale said he had spoken with the town attorney and was informed that the matter was discussed in private not because it related to a contract, but because of issues related to the security of the public. According to Freeman, however, who said that you can only go into executive discussion on public safety matters if the information will imperil the public's safety, not enhance it.
Cardinale was also caught hosting an illegal executive session in October 2004 during budget talks. The town board held a closed-door discussion on providing a six percent raise to 13 elected officials. At the time, the supervisor said he was unaware that the discussion should have been held in public and ensured that it would not happen again.
The Traveler Watchman broke the story after learning of the meeting and subsequently was awarded by the New York Press Association for its reporting on the topic.