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New Scotland Archives — The Altamont Enterprise, October 9, 2008

As Co-Chair Kormos faces ouster,
Sphere Development weighs in: “She must be removed from CZAC”

By Jo E. Prout

NEW SCOTLAND — After months of silence, Sphere Development, LLC, the company that wants to open a large retail center at the former Bender melon farm, sent a letter to the town board calling for the resignation of Elizabeth Kormos and a ban on anti-development “propaganda.”

Also, Kormos’s attorney Peter Lauricella, of Wilson, Elser, Moskowitz, Edelman & Dicker, sent a letter to the town board this week disputing the claims of a conflict of interest on Kormos’s part with a competing developer.

In a letter dated Oct. 1, Sphere Development referred to the recent turmoil surrounding the Commercial Zoning Advisory Committee, charged by the town board to suggest ways to align the town’s commercial zoning with its 1994 comprehensive land-use plan. Current zoning of the 179-acre property at the intersection of routes 85 and 85A would allow Sphere’s proposal to be considered. But after hundreds of citizens objected, the town board adopted a commercial building moratorium so the committee could deliberate.

Two weeks ago, the five-member CZAC met in executive session and asked co-chairwoman Kormos to resign because of a possible business connection with a competing developer of the melon farm property. Kormos, who owns a real-estate and health-care consulting company, denied any wrong-doing and said that she had no conflict of interest. She wrote in a letter to the town board that the last time she had business discussions with the owner of the Bender property — MLF Enterprises — was in 1996, when the builder withdrew his interest.

Town Attorney Michael Mackey told The Enterprise last week that, according to the town ethics law, a confidential hearing must be held by the town board to determine if a conflict of interest exists. Only the town board has the authority to declare a conflict of interest, “and only after a hearing,” Mackey said.

Sphere told the town that it became aware of the mixed-use plan for the commercial area that Kormos had presented to the property owners two years ago. Gregory Widrick, managing partner at Sphere, did not return an e-mail or a phone call this week, seeking comment on the letter.

“Take a deep breath.”

“This proposal was in direct competition with Sphere’s. We are appalled that she failed to fully disclose this fact,” Sphere’s letter said. “In reality, it is now clear that she may have manipulated people in order to benefit herself personally by driving the purchase price of the Bender Mellon [sic] Farm down by removing its commercial value through a zoning change.”

Lauricella told The Enterprise that Sphere’s letter had several “factual misstatements.”

“We think it’s baseless,” Lauricella said. “She never had a contract for anything with the property. There was never a contract with the owner, so there was no competition. Sphere’s proposal is the only one on the table. There certainly is no conflict. The people at Sphere need to take a deep breath.”

Town Supervisor Thomas Dolin said that the process for discovering whether or not a conflict exists is “unusual,” particularly as Kormos, in a previous letter to the board, had waived her right to confidentiality. Dolin said that he was seeking advice from the town attorney. Dolin was out of the country when the CZAC executive session was held, he said.

Dolin, an attorney and formerly a town judge, said that the town ethics law provides “a very basic guidance as to how to proceed, and we need to flesh this out. I don’t think it’s fair to prejudge the matter before seeing all the facts.”

Dolin said that the town has reserved Oct. 22 for a hearing on alleged ethics violations, if the board determines that one is needed.

“The decision would be based on the board’s assessment of the allegations and whether or not there would be a reason to have a full hearing,” Dolin said. “It’s conceivable that there may be no basis to have a hearing.”

Lauricella said that Kormos has not received any written charges against her.

“Basic due process requires that Ms. Kormos be given written notice of any charges with adequate notice of a hearing with time to prepare a defense,” Lauricella wrote in the letter to the town board. “At this point, Ms. Kormos has not been notified by the town board of any ethics charge or investigation against her. Therefore, Ms. Kormos will not attend any hearing at this time, since nothing has been presented to Ms. Kormos for the town board to hear.”

A portion of Kormos’s letter to the board this week complained that town board member Peg Neri had e-mailed Kormos the day after the executive session and asked for her resignation before a hearing had been held.

Neri told The Enterprise this week that she was responding to Kormos’s e-mailed request to town board members, asking for their opinions of whether or not she should resign from the committee. Neri, who is also an attorney, said that she felt that the town board had a responsibility to respond to Kormos’s request. Because Dolin was out of the country, Neri responded to Kormos, she said.

In Neri’s e-mail to Kormos on Sept. 25, Neri did ask her to step down because she had “failed to disclose a business relationship with a third party who was interested in a mixed-use development on the Bender melon farm property,” she wrote. “Please know that your contributions to the committee have been appreciated.”

This week, Neri told The Enterprise that she said then that, based on the opinion of counsel at the Association of Towns, she felt that Kormos “probably should” resign.

“I have not made up my mind,” she said yesterday. “I am waiting to see what further investigation will reveal. Liz asked a question. That’s it.”

Lauricella told The Enterprise of Kormos, “She will not be voting. She’s just on an advisory committee. The town board is the ultimate decider, here. This is an advisory committee. What they say does not go. The town board can go against what the advisory committee recommends. They often do.

“As far as I know, there were no disclosures that had to be made by anyone on the committee,” he said.

Recurring accusations of conflicts of interest among CZAC members — first with planning board member Cynthia Elliott with her dual roles, and now with Kormos — may not affect the committee, Dolin said. He said that CZAC Chairwoman Roselyn Robinson told him that she would suspend the next hearings.

“If she puts things on hold, I wouldn’t blame her,” Dolin said. “If she feels she can get work done, that’s her decision. I’m just going to rely on her good judgment.”

“Smoking gun”

Separate allegations this week that Kormos, town board member Douglas LaGrange, and planning board member Charles Voss had colluded to promote a mixed-use development on the melon farm property in one of the town’s few commercial districts were denied by all three parties.

“That’s amusing. A glaring example of colossal ignorance. That is someone commenting on something of which they have no idea, throwing a lot of stuff against a wall and hoping something would stick,” LaGrange told The Enterprise.

LaGrange appointed Kormos to CZAC.

“Liz has brought more to this committee than anyone. No one has brought anything against the plan to the cap [of the retail size,]” he said. Kormos and many town residents favor a retail cap size of 50,000 square feet, which, Voss told The Enterprise this week, is still a very large building.

Kormos’s real-estate and health-care consulting company, Kormos and Company LLC, provides comprehensive market and financial feasibility studies and development services.

“She’s pulled these [data] from all over the country,” LaGrange said. He wanted a committee that would “bring as much info” to the discussion as possible, “instead of people sitting around with their opinions. Sometimes facts are tough to deal with. She has no conflict of interest.”

Allegations that Voss, LaGrange, and Kormos used maps of the property created by Voss’s employer C.T. Male are also false, Voss and LaGrange said.

“I didn’t even know Liz in the summer of 2006,” Voss said. He said that the aerial maps that he and LaGrange used for their New Scotland Hamlet Plan are available online. He also said that C.T. Male prepared maps for New Scotland for its 1994 comprehensive plan, before Voss began working there.

“I hadn’t known Liz outside the senior outreach group. But she had told me that she had developed a conceptual plan for a potential buyer,” LaGrange said.

“It’s pretty obvious. If people have any sense of community planning…and they take our comprehensive plan, 99 percent of the time, they’ll come up with the same conceptual plan. It’s hard not to read what’s in black and white, look at opportunities out there, and not come up with a similar plan. I’m just amused that someone could come up with that,” LaGrange said.

He and Voss referred to a “smoking gun” in New Scotland, saying that town residents are wondering what is going on.

“I can cite a lot of conflict of interest, and it doesn’t start with me or Chuck or Liz Kormos,” LaGrange said.

Lauricella said that Kormos did not have a formal relationship with the earlier developer.

Circus-like atmosphere

Because Sphere is under contract for the purchase of the melon farm, Dolin said, “I do think they have a right to comment” on charges of conflict of interest. He said, again, that the town would follow the process described by the ethics law to determine if a conflict of interest exists.

Sphere’s letter calls for the removal of any of Kormos’s material contributions to the town board from files and websites, claiming that the board’s decision should not be “tainted by input that is purposefully biased.”

Dolin said that no committee reports had been tainted.

“I don’t know of any advice that the committee has rendered at this point,” he said. If Liz Kormos remains on the committee, he said, “I will assume it is not tainted, because there [would be] no conflict of interest.”

Sphere’s letter also said that the town’s public meetings “take on a circus-like atmosphere and do not foster an educated debate of the issues.” Sphere asked the town to adopt a model code of conduct that would not allow “propaganda” like pins, signs, or fliers.

Dolin disagreed with Sphere’s description of “circus-like” town meetings.

“Most people have been courteous and respectful. People get passionate about this issue. People’s home values can be affected,” Dolin said.

He said that he would discuss the question of whether or not meeting attendees could wear pins or give out fliers with the other town board members.

“There is a freedom of expression concept…We’re great lovers of freedom of expression under the First Amendment. I think they’re in good taste,” Dolin said of the pins and fliers worn and distributed by members of the grassroots organization New Scotlanders 4 Sound Economic Development. Kormos helped found NS4SED.

“I think they’re expressing a point of view which is healthy. That’s the American way,” he said.

Dolin noted that Sphere has an interest, as well. In its letter, Sphere said that it is proposing “an investment of over $100 million” for the town of New Scotland.

“Sphere certainly could present a mixed-use project,” Dolin said. “Sphere, quite frankly, hasn’t presented anything. They’ve talked about a large-scale development, but it was a pretty generalized, vague project and there’s nothing stopping them from submitting a mixed-use project. They haven’t submitted anything. Given the economic climate, they might switch [from large-scale retail to mixed use.] There are a lot of assumptions here.”

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