December 19, 2007 Saugatuck Township Public Meeting - McClendon Consent Agreement The Saugatuck Township Board was host to a packed room of some 360 people at the Saugatuck high school Wednesday evening, December 19th. The special meeting was held to allow public comment on an agreement offered by Saugatuck LLC, the new owner of the Denison property, to drop various lawsuits pending against the township in return for rolling back, for one year, the current R-4 rezoning of the property to that in place prior to the purchase. Saugatuck LLC is a corporation formed to purchase and develop the Denison land and solely held by Oklahoma billionaire Aubrey McClendon. "Pushed" may be a better word than "offered", according to many area residents who view consideration of the agreement thus far as having been something of a back room deal. They feel it was not made properly available for public review but, rather, announced very late in the negotiations with only a brief period for comment prior to being acted on. Hence the full house attendance despite the larger venue. In 2005 the township rezoned the Denison property from R-1, 2, and 3B zoning which allows relatively high density development, one single family dwelling every 1.25 acres, to the long sought more restrictive R-4 zoning which requires five acres per single family dwelling. This reduced the maximum number of residences that could be built on the property from something approaching 300 to around 80. Saugatuck LLC contends it was not properly informed of the rezoning. It claims the change occurred after it was committed to a 2004 agreement to buy the interest of the Franklin Denison Estate, although prior to the actual sale. The estate held a 50% interest in the Denison property with the balance held by the Gertrude Denison Trust which the corporation subsequently purchased in 2005. McClendon now claims the value of his investment, some $38.5 million, was significantly negatively impacted by the R-4 zoning, and he has filed a number of related lawsuits. For the first half hour or so of the meeting the crowd heard brief presentations from representatives of various environmental and conservation organizations, lead by Dayle Harrison, President of the Kalamazoo River Protection Association. "The R-4 zoning is consistent with the Tri-Community Plan worked on for more than 15 years," said Harrison. "I urge the board to stand up for the R-4 zoning." David Swan, president of the Saugatuck Dunes Coastal Alliance and co-chair of Concerned Citizens, spoke next. "The Tri-Community Plan is a splendid agreement. We should stand by it," Swan said. He observed that a large percentage of the community was unable to attend the meeting due to being out of the area for the winter and the Holidays. "Think of the crowds we’d have if this meeting were held in July, when it should have been," he said, referring to closed door negotiations taking place at that time. The crowd then heard from a number of attorneys who have offered their services pro bono to the township in defense of the various lawsuits filed against it by Saugatuck LLC. They briefly addressed some of the issues in those suits. Their consensus was the actions have no merit and can be defended, and that signing the agreement potentially constitutes an admission of improper procedure and can only hurt later in court. Saugatuck Dunes Coastal Alliance attorney Scott Howard summed up their views. "Your zoning was right when you enacted it and it still is," he said. "Stand up for it. It’s clear from the people here this community has your back." He was met with resounding applause and a standing ovation. Though the speakers were diverse, the message to the board was consistent. These suits are defensible. McClendon is attempting to sidestep correct procedure by making what should be an appeal through the proper township channels a legal confrontation. Do not cave in to his threats and sign this agreement. Stand firm on the R-4 zoning. McClendon's legal representative, Steven Neumer, had the unenviable task of presenting the countering view. He briefly recapped the basic complaints of not having been notified of the R-4 rezoning and the taxes being too high as a result of the lost value. He suggested, also, that any thoughts of donating portions of the property to conservation organizations are now less attractive due to the lower density zoning conferring a reduced tax benefit. Neumer explained Saugatuck LLC's claim that the property's tax assessment is unfairly based on the purchase price (huh?). McClendon now views this as having been too high due to the R-4 zoning. What Neumer did not divulge is why that price was offered and paid with R-4 rezoning being openly considered and discussed during the entire period of the purchase negotiations. Indeed, R-4 zoning had been actively sought by the township and various organizations for many years prior to McClendon's interest in the property and is not disputed to have been in place at the time of the sale. Neumer declared that McClendon has a deep appreciation for the Denison property, despite it being unclear if he has ever actually stepped foot on any part of it. Additionally, Neumer asserted it is McClendon's intent to respect the unique nature of the property and its value to the community, provided that does not interfere with a good solid profit on his investment. He stated that neither Saugatuck LLC nor himself wished to be involved in an adversarial relationship and litigation, although they had brought suit against the township. He stressed the agreement was designed solely to allow everyone a cooling off period. He reassured the audience there would be fewer homes on the property than anyone imagines, that "it will look like Saugatuck and it will feel like Saugatuck." Well, it's unclear if he meant this to be taken literally but, frankly, that's exactly what everybody is afraid of. A bunch of Saugatuck style houses where there should only be dunes and beach grass. Neumer, understandably, did not mention that McClendon, with full knowledge and calculated intent, outbid a number of conservation organizations which had collectively offered around $37.5 million for the property, a purchase which would have culminated decades of planning and years of active attempts to add the Denison property to the adjacent Saugatuck Dunes State Park. Interestingly, the offer of $37.5 million was established, according to Phil Miller, chair of Saugatuck SOS and chief negotiator in the purchase attempt, by the involvement of state grants which prohibited offering more than the assessed value. Ergo, the state felt the property's value was around $37.5 million at that time. Another lawyer, representing one of Frank and Gertrude's sons, Kenelm, read a letter from him hoping to clarify that, while Frank loved his property and held development there to a minimum during his lifetime, it was never his intent to see it donated to a conservancy. Further, he said the trusts were legally bound to secure the highest value from the property, although one wonders what the total cost of taxes, maintenance, and other expenses amounted to across the multi-year negotiation period, with the property finally selling for only 1 million more than the conservationists had offered much earlier in the process, not quite a 3% difference. Kenelm was also concerned that his acquiring a chunk of his father's land as a part of the deal with McClendon, the details of which are still quite murky, might lead the less charitable to suspect some dubious involvement on his part. Not the case, he insisted. However, not many years prior to McClendon's purchase, Kenelm, who had built the only structure to mar the pristine coast for miles, lost that section of the property in a protracted legal battle with his father. It's possible his dramatic reverse in fortune would lead some to question if he truly played no role in the estate's and trust's decision's to sell to McClendon. At this point the meeting was opened to public comment which was energetic and lasted around two hours. Nearly 30 people were allowed to speak and, clearly, many more would have liked to if time allowed. Of that total only four did not urge the board to stand firm on the R-4 zoning. Among those speaking was Frank Lynn of Grand Rapids who explained in impassioned tones that he and his wife often drive to Saugatuck to walk in the Saugatuck Dunes State Park. He said they choose Saugatuck because of the development on the Grand Haven and Muskegon lakeshore. Would he continue to come to Saugatuck if development took place on the Denison property? He didn't think so. It would have lost the quality they sought, and he felt there were many others like him. "What are McClendon’s motives?," he asked, "Doesn’t he have enough money?" One woman who lives near the Denison land asked, if McClendon's intentions are so modest why is he approaching all the land holders adjacent to the property and offering to buy them out, often quite forcefully. He has made overtures to owners of large parcels like the Deams, the Presbyterian Camp, Pine Trails, and Starring's dune rides. She said she thinks he has something in mind much larger than any of us has considered. A number of people asked why the roll back to the previous zoning is so important to McClendon if all he wants is a cooling off period and an opportunity to present the plans his attorney assures us will be very acceptable. Why, then, not simply present them, complete with exactly how much land will be donated or set aside for conservation? State Senator Patricia Birkholz also took the microphone during the public comment period. "This property is unique and very sensitive," she said. "Through the generosity of the former owner, we have felt the land home," musing about long walks there in years past. "It defines us," she said, then cautioned, "Changing the zoning would change the essence of this property." She concluded, ardently, "I urge you not to cave. I urge you not to cave!" After the public was heard, township attorney Ron Bultje presented his legal interpretation of the proposed agreement. "I’m glad Mr. Neumer is here," he began, "so I’m not the least-popular person in the room." After some good natured laughter, he explained his reasons for believing the township would lose no legal standing in the agreement and that it would defer or possibly eliminate the need for expensive legal action. "I recommend you enter into this agreement," he said to the board. "It poses no risk." This last statement brought quite an outburst from the gathering, some briefly coming to their feet. The board admonished them to be silent because the public comment period was over, but many argued that a particular audience member should be allowed to speak because they felt he had an important point. The board relented. Having briefly been given the floor, this man observed there is nothing in the agreement that precludes Saugatuck LLC from selling the land during the one year period, in which case the purchase would occur legally under the higher density zoning and the new owner would have a legitimate complaint regarding loss of the value of his investment, unlike McClendon. This argument appeared not to have been previously entertained because it seemed to cause a moment of consternation among the board and Bultje. In the end, though, Bultje stood by his advice. After hours of impassioned pleas the meeting came to a rather sudden and anti-climatic close when the board voted, 4-1, to table the issue until it's next meeting, January 2. Stay tuned... Return to Concerned Citizens for Saugatuck Dunes State Park Resources & Reference page. www.SaugatuckDunes.org