State Auditor Adam Edelen said Tuesday that the audit of the troubled parking garage wrap project was an extremely complicated endeavor that revealed three key elements that waylaid the project: "Rick Kelley worked every angle available to him; the Millses were out of their expertise" and there was not enough oversight, according to Edelen.

The audit released Tuesday found overspending on the project of $9.7 million, resulting in a $4.5 million deficit, and determined the downtown wrap project, formerly known as Hitcents Park Plaza, was plagued by poor oversight and numerous, often contradictory, agreements.

Edelen announced in June that his office would conduct a special review of the commercial wrap on two sides of the parking garage in Block 6 of the Tax Increment Financing district that has been by hit a series of financial and legal troubles this year. Contractors filed liens on the property in February for money they said they were owed for their work, and county government and the Warren County Downtown Economic Development Authority subsequently sued the contractors and Mills Family Realty, which was removed as the wrap’s developer, to settle the liens.

The audit cites potential conflicts of interest in the project with Kelley. The Bowling Green businessman, former owner of Mariah's restaurant and a consultant on the project, was “involved in several different consulting roles related to the project ... which gives the appearance that he was in conflicting roles ... " according to the audit.

Kelley said Monday he felt parts of the audit were "unfair" and painted a false picture of his involvement in the project.

The audit also criticizes the selection of Mills Family Realty as developer "even though it had no experience with construction project management."

Clinton Mills of Mills Family Realty Monday acknowledged that MFR "was not the right pick" to act as developer, but that the company was hampered by the complexity of the project.

The audit's first finding was that the project was plagued by a lack of oversight by government agencies, a theme that permeates the report.

Warren County Judge-Executive Mike Buchanon said Monday "In hindsight, it was easy to see" the potential problems, and said the county has already addressed many of the concerns outlined in the report.

Edelen said the audit was "certainly among the most complicated and detailed policy reviews we've ever conducted. The complex financial arrangements made it incredibly complicated. We had a team working on this exclusively" since the summer, Edelen said.

The outgoing auditor said the review wasn't pushed out before Edelen's term ends at the end of the year. Edelen, a Democrat, was defeated by Republican Mike Harmon in November's general election.

"The time it took was dictated by the scope," he said, adding that he was glad his administration was able to finish it before his term ended.

"It would have been unfair to push this on another auditor," Edelen said.

He said the audit contains lessons that reach beyond Bowling Green.

"This isn't important just to Bowling Green and Warren County," he said. There are many TIFs all across the state and "all are experiencing some difficulty."

Edelen called Bowling Green a "boomtown," and said during a period of growth, "it's incredibly important that oversight is keeping up." He called the audit "a roadmap for tightening the ship."

Many audits contain a response section where the subject of the review can answer criticisms. Edelen said the complicated nature of this project precluded that.

"Given the variety of entities involved, where do you begin to get a response? You can't get just one set of responses," he said.

Bowling Green Mayor Bruce Wilkerson said Monday he was "disappointed" in one aspect of the audit: "They didn’t tell us what we were asking for.” Namely, if there was an illegal use of bond funds.

"It was well established that many resources were used outside their scope. If there were any criminal aspects uncovered, we could have made a referral to a law enforcement agency," but that wasn't the case here, Edelen said.

Warren County Commonwealth’s Attorney Chris Cohron said in a text message Monday his office would be reviewing the audit.

Warren County is slated to issue $30 million in revenue bonds next month to pay a settlement with the contractors, pay off existing bonds and complete the other two sides of the wrap – now called Stadium Park Plaza – with Bowling Green Hot Rods owner Jerry Katzoff replacing Mills Family Realty as the developer.

— Follow city government reporter Wes Swietek on Twitter at twitter.com/BGDNgovtbeat or visit bgdailynews.com.

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(4) comments

toot

Someone needs to pay with money or jail time or both. Our roads are full of pot holes and they are giving away money.

BigBadWolf

Doug Gorman + Mike Buchanan = Captain Kangaroo and Mr. Greenjeans

pls3320

I can not believe that the audit found no crimnal activity.

They Call Me Bad News

The incompetence of the Mills isn't a crime. It's stupid, but it's not a crime. They should have bailed out of the project when they first realized that they were in over their heads instead of trying to tough it out. I can appreciate their efforts because I feel that they were sincere, but it became evident to them that they couldn't handle this long before it became evident to everyone else.

Rick Kelley? It's not clear that he did anything illegal, not to say that he didn't take advantage of some of the more complicated language in the agreements. Maybe he didn't understand them, but seeing how he "worked every angle," it's clear that he had every intention of getting the most out of what he thought the agreements meant and what he figured he could get MFR to think the agreements meant.

Really, Kelley would deserve a benefit of a doubt if his response to the audit stuck to the points of contention without being filled with stupid arrogant BS and laughable attempts to paint himself as a victim.. The one sentence summary is "BG would be nothing if not for me and stop picking on me." He claims he sold a business with $3,000,000 in annual revenue for only $50,000. He brags about it. The only reasons to do that are stupidity (and I doubt he's that stupid), insanity (who knows?), or you expect to get something on down the road (and I bet we have a winner!).

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