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| State Sen. Mick Mulvaney, R-Indian Land, and his campaign staff walk across Main Street in Lancaster before a press conference. |
The ad, called "Flipped," makes numerous implications without giving him much to categorically deny, says Mulvaney. However, he says it is harmful not only to his reputation but to others as well.
"This is getting a little out of control, by the way," he said Thursday, Oct. 7.
"This is the type of thing that has to stop in this race," said Mulvaney, a state senator from Indian Land whose district includes parts of both Lancaster and York counties.
"It's one half-truth and innuendo after another," Mulvaney said of the ad and an old letter to the editor of a Lancaster County paper that attacked him.
Mulvaney said he doesn't like the attacks but expects them. But he said it is out of hand because others are now also being attacked.
Mulvaney said a Spratt volunteer said at a recent event "they know" Mulvaney bought off Lancaster County Councilman Rudy Carter, who has in the past defended Mulvaney's involvement in the deal.
Carter, a Democrat, also attended Mulvaney's press conference and said his father told a man's good name was his best attribute.
"Mick's been a friend of mine for a long time. John's been a friend of mine for a long time. I think the world of both of them," he said. "But if John Spratt knows some of his campaign people made comments like that, than John and I have a problem."
Mulvaney said it is going too far.
"This is my life, this is my family, this is how I provide for my wife and family, and I am being accused of some of the most heinous thing you can do in business, which is to be unethical," he said.
A reporter with the Associated Press and some Spratt campaign staffers arrived late and were not allowed into the crowded but not packed room at a Lancaster law firm where Mulvaney held his meeting. While the Spratt staffers were barred, a couple of representatives of the York and Lancaster county Democratic parties, as well as a Democratic campaign staffer from Columbia armed with a digital camera to record the proceedings, arrived on time and were allowed in.
The Lancaster County land deal had been in the works since 1999, which Mulvaney said was the major evidence that the property had not been "flipped," as the name of the ad says.
Flipping in real estate happens over a short period of time, sometimes with property being sold twice the same day.
Spratt's ad says Mulvaney made a $7 million profit selling the failed 500-acre development near Indian Land.
Mulvaney said he sold the land in 2005 and showed select reporters two tax forms from 2005 and 2006. The total annual income listed on the records for those years was millions less than what Spratt alleges in his ad. Mulvaney did not allow reporters to copy the forms and requested they not write down the specific figures.
Mulvaney said the forms were the S-Corporation filings for one of his LLCs.
Spratt's ad says Mulvaney secured $30 million in bonds to develop the land. Mulvaney did get permission from Lancaster County to issue bonds in that amount, but those bonds were never sold. When he sold the land to later developers, they scuttled much of the plans, including the zoning he had done for it, and revamped the overall plan. Lawson's Bend LLC got its own bonds, and those bonds are in default.
So Spratt's ad, which says the project failed despite the bonds Mulvaney got, is not factual in that regard.
Mulvaney's development would have had apartments, more homes so a higher density. The homes would have been cheaper homes. The new developers wanted to sell fewer but higher-end homes.
The land development never materialized as either Mulvaney or the second team envisioned, he said. He blames it entirely on the collapse of the housing market.
The ad also says Mulvaney vouched for the new development team and made a promise to stay involved. The ad says Mulvaney's "partners" had defaulted on a land deal in North Carolina to the tune of $72 million right before Mulvaney vouched for them to Lancaster County Council. Mulvaney said he didn't know about that failure of one of two partners, but it is easily understood and explained.
He said IBM pulled out of a research park in the N.C. Research Triangle and it ruined the park, but the company was a sound one business with ties to Sara Lee and PYI/Monarch Foods. Parts of the land company are still in business, he said.
Mulvaney said he dealt primarily with the other partner, GS Carolina, which he said is a strong business still in the area. It has another development of the size and scale of Edenmoor that is still under active development north of Charlotte.
Mulvaney said he wanted to "bid" to remain the manager of the development process, but "that never happened." He said he hasn't talked to the company official he most dealt with for at least two years.
Mulvaney denied making $7 million selling the land, but refused to answer direct questions about how much he spent to assemble the land, first for his own development company, nor how much he made when he sold it in 2005.
"Our business is private," he said. "We don't disclose our profits. I own 3.33 percent of the entity that owned this land."
He assumes that critics of his involvement have taken deed stamps for the 12 purchases he made to assemble the property and subtracted those totals from the totals on the deed stamps from the three sales he made to Lawson's Bend.
That would be a gross number, however.
"That would be like looking at the raw materials on a car and saying that was the cost of the car," he said.
He would not detail how much he spent assembling the land. In addition to the purchase prices, he would have had to pay legal fees on the purchases, pay filing fees for zoning issues, and pay for staff time.
He admitted releasing the exact figures might demonstrate what actually happened, and said he would speak to reporters off the record. During that conversation, he showed the two tax forms, but they did not have a gross total for his purchases or for his sale to Lawson Bend.
He had earlier said that kind of information is never released in his business.
"It just isn't done," he said.
The ad, by innuendo, blames Mulvaney for all that has happened to the development since. But he said his company never turned over any dirt on the project or did any land preparation.
Any of the work done in the development was done by his successors on the project. About 50 homes, soccer fields and an EMS station have been built. The bond obtained by the second developers paid for the fields and the EMS station.
But sidewalks are in need of repair, as is the EMS station. There is runoff from cleared tracts of land going into a nearby creek.
Mulvaney said Lancaster County taxpayers are not on the hook, neither for his $30 million bond, because it was never issued or sold, nor the later bond Lawson's Bend obtained. The bonds are not general obligation bonds, Mulvaney said. The residents in Edenmoor pay a "special assessment" on their property tax bill, above and beyond their regular county property taxes.
Had the development succeeded, thousands of households would be paying the "assessment," but instead, about 50 or so families now in the development are on the hook.
Mulvaney said the development should have been foreclosed on. He said that is how such failed developments normally proceed. But the banks holding the liens on the property are refusing to foreclose because of the collapse of the housing market and the freeze on credit and financing the country has been experiencing.
It's a case of regulatory gridlock, he said.
Mulvaney's campaign released copies of deeds for the purchases and the sale, along with a timeline of the transactions. See related post.
The Spratt campaign released a compact disc with records it says establishes that the ad is true.
The general election is "35 days away," Mulvaney said at the time of the Thursday press conference.
Mulvaney has created a website to respond to the Edenmoor ad.
Here's raw footage of the press conference, in three pieces.
Part 1
Part 2
Part 3
1 comment:
If Mulvaney wants to win, why not totally disclose his dealings?
The idea that either Spratt or Mulvaney is entitled to that sort of privacy while running for a position of public trust is absurd.
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