}

Sunday, April 10, 2016

HERE'S THE LEASE: Record-Eagle Story Neglects Key Fact...The Actual Lease!

Today's Record-Eagle story about the Grand Traverse Academy's expansion, a building constructed on the school's grounds by MDN Development, LLC, the development arm of its management company, Full Spectrum Management, lacks one key element: the lease.

The entire document, which I obtained weeks ago via a Freedom of Information Act request, is published below.

ONE-TIME PURCHASE OPTION: If you'd only read the Record-Eagle story, you would never know that, according to the terms of the 20-year lease, the lessee (the Grand Traverse Academy) may exercise an option to purchase the building, fixtures and premises from the lessor (MDN Development/Noss) only one time: on February 1, 2019 for a sum of Three Million Nine Hundred Thousand Dollars ($3,900,000).

That's right, as I reported on March 16, it's a one-time option. Somehow, the Record-Eagle article missed that key fact. 

The monthly rent for the first year is $30,000, rising to $38,000.  In addition, the rent escalates right along with any interest increases in the underlying mortgage.

If the school is unable to purchase the building from Noss in February 2019, and continues to lease the building through the 2036, total lease payments could exceed $8.5 million dollars. 

The 20-year term of the contract, and the financial obligation it imposes on the Academy, appear excessive when considering that the use of the facility is to house a charter school whose budget is derived largely, if not entirely, from public funds.

In addition to the above-market monthly lease rate ($30,000 per month, then levitating like a séance table to $38,000 monthly by the contract's second year), the lease contains a Purchase Option clause, with a price tag that delivers quite a punch. 

The “lessee (the Grand Traverse Academy) may exercise an option to purchase the building, fixtures and premises from the lessor on February 1, 2019 for a sum of Three Million Nine Hundred Thousand Dollars ($3,900,000).” 

The approved lease contract also states that the two parties “agree that the 2019 purchase price represents an arm’s length transaction which reasonably balances the purchase price with the loan and associated risk to the lessor.” 
 
More on this later.

5 comments:

  1. Now correct me if I am wrong but Mark Noss, the guy who is the business entity for GTA and former board president for Ingersoll, COLLECTS all the money from the state, is saying he is paying for the building. Sounds to me like the taxpayer money is paying for the building. He is also building it on Grand Traverse Academy's land not owned by Noss, and Noss is charging them an exhorbitant price and the school is paying the builder????(obviously paying for the building themselves by paying off the builder) and then paying 38,000 a month to Noss after it is built. Then has a one chance in hell to buy the building. Otherwise his lease runs to 2032. Holy cats these guys are ripping you off.

    GtA doesn't hold the money from the stae Noss does, he collects all the money that comes into the school. Where are they going to get the money to buy the building? They aren't even charging Noss money to build it on their land. And they get the chance to buy it, but in all reality are paying for it through the money from the state. This is highway robbery. Isn't this almost exactly what Ingersoll always does. Oh right he wrote up the deal for Noss. Well I'll be damned these people in TC must be pretty crazy to let this deal go through. These guys are going to hurry this deal through before anyone can challenge it.
    Who are partners in Noss's building construction company? INGERSOLL, LYNCH, HABERMEHL AND HARGER? I think me smells a rat!

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  2. You are correct. Mark Noss manages the millions of dollars in state and federal payments flowing into the Grand Traverse Academy, and was board president during the years Steven Ingersoll walked away with millions.

    In fact, Noss was there on May 20, 2013 during a meeting with Ingersoll, Kaye Mentley and attorneys from the Thrun Law Firm when Ingersoll admitted owing $3.5 million to the GTA. Noss helped cover up the truth, but it still came out.

    Strictly speaking, the school is not paying for the building, Noss and his MDN Development are paying for the construction the names of his investors/partners.

    The lease begins in 2016, and runs through 2036.

    If the school is able to buy the new building from Noss, it gets only one chance in 2019.

    Otherwise, the GTA is locked into the lease, with no additional opportunity to buy the building.

    Although the construction budget is unknown at this time, the school will pay roughly $8.5 million dollars to MDN Development over the life of the lease if it doesn't purchase the building.

    If you're looking to get a straight story from anyone on the GTA board or the school's superintendent, think again.

    Superintendent Susan Dameron, referring to Noss, was quoted by the Record-Eagle: "He’s not making any money off this deal in any way shape or form," she said.

    Ask yourself this: how does she know?

    If she has a construction budget, then release it.

    If not, Superintendent Sue should be prepared for more questions -- from the feds.

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  3. I have a real problem with all this moving of money. If money is given to a public charter school then all that money should be in the school's bank account not Noss's. Funny how the state has let these schools design these crafty ways to mismanage state, federal and taxpayers money. Time for some change!

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  4. And what did Susan Dameron, superintendent of Grand Traverse Academy say, Mr. Noss is not making any money off this deal. Hahaha I call bullshit on that one. I bet Noss is laughing all the way to his off shore accounts! Please Traverse City people look into this and stop this because it is your tax money that she paying for all this and it is going into their personal accounts!

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  5. Doesn't it say in the fine print somewhere that Cleland is going to be lurking in the basement of this new addition? I wonder if his new bungalow will be rent free? Oh well, either way, I know since Lynch and Noss have got to be two of the investors in this scam, they'll hook Cleland up with some new stalking equipment and a couch at least.

    The more new information regarding this new addition becomes public, the more I am inclined to believe that Lynch and certain BCA/GTA board members are taking a little slice of the pie here and there from this. This lease agreement/scam is absolutely sickening and it is just like these crooks to cook something up like this. It just shows you that people like Noss/Lynch/Ingersoll could really give two shits what people think about them as long as their pockets are bursting at the seams with sweat wads of cash that came off of the backs of hard working tax payers. It's ok guys, keep ripping off the blue collar guys to ensure your kids can drive a Lexus at 16 yrs old. After all, that's what really matters in life.

    ReplyDelete

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