published Saturday, December 18th, 2010

Rival buyer questions East Ridge land purchase


by Chris Carroll
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    Staff photo by John Rawlston/Chattanooga Times Free Press - The City of East Ridge has purchased this building, formerly the site of the Hungry Fisherman restaurant, and the 19-acre tract of land it is located on. East Ridge Flea Market owner said the Community Trust and Banking Company favored the city in the transaction and did not give him a chance to make a higher bid for the property.

An attorney representing a Chattanooga businessman says Community Trust and Banking Co. discriminated against his client and favored the East Ridge City Council in a recent land deal.

"Why the bank felt they had to keep these negotiations secret is a mystery," Phil Lawrence said last week.

Officials at Community Trust and Banking Co. declined to comment. Ken DeFoor, one of the bank's prominent shareholders, would not speak on the record for this story.

On Dec. 6, the East Ridge City Council debated 13 minutes before voting to buy 19 foreclosed acres for $340,000, not including environmental tests, structural inspections, utility repairs and soil examination. The meeting occurred three days after officials announced its time and date in the bottom-right corner of the city's website.

Businessman C.H. Chen wonders about what happened behind the scenes. He owns the East Ridge Flea Market, a few hundred feet from the property in question. Chen said he wanted to demolish the building and pave a parking lot for his business.

The site is surrounded by a dilapidated fence, grown up with shrubbery and littered with broken glass from the building's windows. Councilman-elect Jim Bethune recently called the lake-bound property "useless swampland."

At the Dec. 6 meeting, East Ridge officials didn't seem to have a clear vision for the property -- depending on which councilman had the floor, it might be right for weddings, fishing, business conventions or other uses.

On Dec. 1 -- two days before East Ridge officials announced the pivotal meeting -- Lawrence submitted Chen's "low ball," $300,000 offer. Both men said Community officials never contacted them after that.

"The bank never said anything to me, never encouraged me to bid higher," Chen said.

But for six weeks, the bank communicated Chen's "interest in the property" to East Ridge, according to City Attorney John Anderson.

"[The bank] gave my client the opportunity to make a decision based on the bid and before they went back to the other party," said Anderson, who insisted that he never told Community his client's identity.

Chen said that had the bank kept him in the loop, he would have offered at least $350,000.

"Would he have paid more than that? Probably," Lawrence said. "He never got the opportunity. I don't know why the bank favored East Ridge."

In a telephone interview, Anderson forcefully denied knowing the identity of any other potential buyers -- he said the bank never told him -- but former Mayor Mike Steele indicated a prior knowledge.

"Do we really want another 19 acres devoted to the flea market?" he told a reporter hours before the Dec. 6 meeting.

Contact staff writer Chris Carroll at ccarroll@timesfreepress.com or 423-757-6610.

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hadassah said...

This whole thing really begs some questions about the City of East Ridge. For instance, where in the minutes of the meetings did the council vote to negotiate the purchase of this property by City Attorney John Anderson? If Mike Steele participated in these negotiations as indicated by his prior knowledge of Mr. Chen's interest, shouldn't he have told Mr. Anderson that the City had not authorized these negotiations? Hold it, as the attorney for the City, wasn't it Mr. Anderson's job and duty to follow the rules and only negotiate for a $350,0000 purchase after being authorized by the City Council? Does Mr. Anderson and his firm represent Mr. Defoor or his bank like he does Mr. Steele his partner Mr. Armour and the City? Get rid of all the back room deals East Ridge.

December 18, 2010 at 9:14 a.m.
GARRS said...

I love to see a millionare get screwed when trying to lowball someone, usually someone that has less enough.

Then cry because they were willing to pay more. Theres a few big shirts around N ga, that I would give something away, rather than sell to them to help them proffit. All men included in this statement, are all privy to nearly killing me in the 90's

December 18, 2010 at 4:45 p.m.
cefinchrist said...

It's quite obvious that there are some things going on here that the general public is unaware of. 'Backroom Dealings?'. We really shouldn't be surprised. Or even offended. It's just the nature of business. That's not to say that it is right. It isn't. But, it is what it is. And anyone who has been slighted in the deal could, with a good lawyer and deep pockets, make a case in a court of law. But at what cost and to what end? Why not rather, put that effort into learning how the wheels turn, or who is turning the wheels and work at putting yourself in a better position to buy.

It's an excellent story for local media, if they are willing to get their hands dirty, digging for the truth. It's not going to be a great surprise to find out that some one profited unfairly in the transaction. The same old story with a new cast of characters. I've seen it...

December 18, 2010 at 8:32 p.m.
Allison12 said...

Yes indeed, the Mayor had prior knowledge that the Flea Market was seeking the property, and of course the other commissioners and City Attorney were aware. They are caught, and the attorney is not being truthful. oopsy.

December 18, 2010 at 8:56 p.m.
xsiveporsche said...

Ken Defoor again. Try looking a property he developed caled Vaden Village and how he and his brother screwed it up.

December 18, 2010 at 10:23 p.m.
TwinkleTN said...

The people of East Ridge had an opportunity to vote for Marc Gravitt but they chose to put Larry Sewell back in office and elect Brent Lambert as the new mayor. If the Country Music Channel will bring back the Redneck Wedding Show maybe East Ridge can get a few episodes for weddings held at the new building.

December 19, 2010 at 12:03 a.m.
hadassah said...

Citizens just need to connect the dots here...

December 20, 2010 at 8:11 a.m.
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