Deputy Mayor Addresses Allegations
By Stephanie Mariel Petrellese
 

Ed Keating, member of the executive committee of the Committee to Save St. Paul's, made several allegations of impropriety against Deputy Mayor John Mauk at the Feb. 7th meeting of the Garden City Board of Trustees.

The following are Keating's comments:

"Mayor Bee, members of the Board, tonight you have on the agenda a proposed Memorandum of Understanding with AvalonBay. As I understand it, it represents the next step toward a contemplated agreement for the redevelopment of St. Paul's by AvalonBay. We have nothing against AvalonBay itself. But we have to wonder whether the course you are about to undertake is truly in the best interest of the Village, or whether it is simply a deal that's good for AvalonBay and good for certain other companies that I will mention.

Before you vote on the matter, I'd like to make you aware of a few facts that we discovered that you may not know. Each is supported by reputable documentation that we'd be pleased to share with you.

Did you know:

- that Mr. Mauk's employer, CB Richard Ellis, has a well-publicized history of brokering the sale of AvalonBay properties, typically a few years after AvalonBay completes construction of a given development?

- that an affiliate of CB Richard Ellis, known as CB Richard Ellis Global Real Estate Securities, owns nearly 300,000 shares of AvalonBay stock, an investment valued at more than $28 million?

- that more than 200,000 of those shares were acquired during calendar year 2007 (during the very time period when the AvalonBay proposal has been under active consideration)?

- that this investment in Avalon-Bay stock represents nearly 12 percent of its stock holdings in S&P 500 companies?

- that AvalonBay filed an 8K statement with the SEC yesterday [Feb. 6] claiming it had an option for "Development Rights" in Garden City for an "estimated" number of 160 homes?

Mr. Mauk, have you told your fellow trustees about any of these facts? Is it just a coincidence that at the very same time you have been pushing for an AvalonBay development, an affiliate of your employer has been buying AvalonBay shares by the bushel? Does AvalonBay know something we don't about the estimated size of the planned development?

Quite frankly, these are trouble-some questions. The public deserves answers and full disclosure by Mr. Mauk. In view of these ties between AvalonBay and Mr. Mauk's employer and its affiliate, I really don't see how he can lead this Board's St. Paul's Committee. The Memorandum of Understanding is a flawed document legally, in my view, for reasons that will become apparent later in this meeting. But regardless of those flaws, and regardless of what transpires later, I'd hope that the Board and its counsel will think long and hard about the appearances of conflict that seem to be presented by the facts."

Mayor Peter Bee refused to comment on the allegations or the possibility of changes in the composition of the Mayor's Committee. Although the document was prepared by outside counsel Barry C. Ross of Bryan Cave, LLP, Village Counsel Gerard Fishberg has denied any legal flaws in the MOU. (See related article "Board Takes Next Step With AvalonBay" in this week's edition of The Garden City News.)

Brad O'Hearn, Village spokesman, provided the following response to The Garden City News:

"While some of Mr. Keating's information may be correct, the inferences and conclusions he draws from them don't make a lot of sense when examined in the proper context. Other information that Mr. Keating cites is just plain incorrect.

Mr. Mauk's employer, CB Richard Ellis (CBRE) is the largest commercial real estate services firm in the world, with over 24,000 employees internationally. The company is headquartered in Los Angeles, and investment decisions are made out of the Los Angeles corporate offices. As a salaried attorney in CBRE's Tri-State (NY-NJ-CT) Legal Department, Mr. Mauk has no involvement in investment decisions, or in any other workings of the company at the corporate level. He reports that his compensation is not contingent on any specific company investment, transaction or assignment. He doesn't receive stock options, and he doesn't stand to benefit, financially or otherwise, from any of the company's investment deci-sions, except to the extent that any employee benefits when his or her company makes sound business decisions.

AvalonBay, a Real Estate Investment Trust, is one of the major domestic developers of rental apartment complexes. Given the size of the two companies and the nature of their activities, it would probably be surprising to learn that they did not have some business dealings with each other. None of these broader activities, however, have anything to do with Trustee Mauk or are influenced or affected by any of his activities with respect to St. Paul's. If Mr. Keating has proof to the contrary, he should provide it.

In his attack on Mr. Mauk, Mr. Keating's questioned whether Garden City residents were aware that AvalonBay filed a statement with the SEC indicating that it has development rights in Garden City for an estimated 160 homes. This is a quintessential example of Mr. Keating's sloppy research and willingness to try and tarnish Mr. Mauk when nothing is there. The development cited by AvalonBay happens to be at Mitchel Field. It frequently uses a Garden City address, but is actually located in East Garden City and in the Uniondale School District. And, contrary to Keat-ing's conspiracy theory mindset, the statement has absolutely nothing to do with any plans for St. Paul's.

Trustee Mauk's employment by CBRE is well known to Village Counsel, to his fellow Trustees and, generally to the public at large. Village Counsel has, in the past, determined that there is no conflict of interest and no violation of the Village's Code of Ethics as a result of Mr. Mauk's employment or activities, nor, in the past, has there been anything requiring any further public disclosure. There is nothing in Mr. Mauk's background or behavior that would constitute an improper conflict with respect to his involvement in making a decision regarding the possible redevelopment of St. Paul's."

Dennis Donnelly, president of the Eastern Property Owners' Association, was angered by Keating's comments at the meeting and offered his support to the deputy mayor.

"Although debate is a great thing on St. Paul's, and I think there should be plenty of debate still to come, I think the personal attack, not on an East trustee, but on Trustee Mauk tonight by Mr. Keating was totally out of order and certainly lends nothing to the discussion of how this comes out in the end," said Donnelly. "And I think he is owed an apology for what was said."

Mauk responded to The Garden City News:

"I appreciate Mr. Donnelly's statement, but I would be surprised to ever receive an apology from Mr. Keating. Approximately three years ago, other members of Mr. Keating's group, known as the Committee to Save St. Paul's (CSSP), tried something similar in an effort to prevent me from working to find a solution for the St. Paul's Main Building that was not what they favored.

Now that the Village is close to presenting the public with some realistic options for redevelopment, I'm not surprised that the CSSP is up to its old tricks again. If they can get me out of the picture, I think they believe they will have an easier time of getting a redevelopment of St. Paul's that they like.

Maybe they are right, but, after years of trying, they still don't have a workable plan, and they haven't solved the problem of how to pay the cost without imposing an excessive burden on the taxpayers. The AvalonBay proposal solves both of those problems, and if the CSSP truly wants to save the building, I think they would be wise to give the public a fair opportunity to consider the AvalonBay options."