March 3, 2009 The Denison Property - An Update There's been a lot of action surrounding the Denison property lately, particularly the South Denison. Not much has actually been resolved, however. Depending on your views that could be considered unfortunate, or perhaps otherwise. Early in January, after lengthy negotiations between McClendon and a consortium of interests including The Nature Conservancy, the Saugatuck Dunes Coastal Alliance, and the city of Saugatuck, McClendon offered to sell the 171 acre Denison South property for $25 million, ultimately to be transferred to the City of Saugatuck. The deal was to be finalized by March 2nd, with neither the date nor the terms negotiable. Sounds pretty cut and dried, eh? But, as always, the devil is in the details. Among the terms were satisfactory settlement of both a tax dispute McClendon has with Saugatuck Township and a lawsuit against a family with deep roots on the Saugatuck area shoreline. There was also, of course, the small issue of obtaining funding for the purchase. You may recall that McClendon took possession of the entire Denison property early in 2006, coldly outbidding a coalition of local organizations led by Saugatuck Save our Shoreline (SOS). The DNR has openly had its eye on the property for addition to Saugatuck Dunes State Park since the park's inception. For decades, various groups have actively sought to acquire it for that purpose. Finally, in 2006, with nearly $38 million pledged for the purchase, the dream was about to be realized! But Oklahoma billionaire McClendon blithely pushed the alliance of groups aside, upped the ante to an unreachable $39.5 million, and walked away with the prize; 403 acres of nearly pristine duneland framing the only undeveloped river mouth remaining on the entire Lake Michigan shore. His intentions for the one of a kind property do not feature public use. The plot thickens... Go back a few years. Saugatuck Township began to discuss a growing desire to protect this and similar lakeshore properties from the rampant development the area was experiencing. They started to rewrite the zoning ordinances to establish a more conservative district which would, among other things, limit the number of homes that could be built on such parcels. The township helped promote the Tri-Community Survey then utilized the results to guide them as they shaped the new code. The effort of years finally resulted in a sizeable swath of lakeshore property being rezoned from the free wheeling R-3 to the fairly restrictive new R-4 Lakeshore Open Space, winning the applause of area residents and offering significant new protections to our unique and vanishing dunes, lakeshore, and riverfront. Not long thereafter McClendon outbid the conservation organizations and agreed to purchase the Denison property from the trusts holding it. He then promptly began to beat his chest about the unfair zoning change despite the fact it was in the works years before he had made any commitment. He claimed the rezoning unfairly reduced the value of the property to something well beneath his purchase price. That may have been a bit more convincing if Mr. McClendon had not just firmly established his personal evaluation of the property's worth, under the new zoning, by outbidding a bunch of folks to call it his own. South Denison and Lake Michigan from above the Oxbow.  McClendon filed appeals with the Michigan Tax Tribunal arguing the property had been devalued by the rezoning, which undoubtedly it had, but before he had any standing in the issue. His attorney, not surprisingly, stated he felt they had a very strong case. McClendon then forcefully presented the township with a consent agreement whereby he would drop his various lawsuits in return for the zoning being rolled back to the previous R-3 for a period of one year. Outcry against the proposal was deafening, but as the deadline approached no one felt confident what the board's decision was going to be. Apparently the suspense was a bit much for McClendon, because at the very meeting where the pronouncement was to be made, described in our archives, his attorney instead offered to "stay" their various suits in return for the township tabling the agreement. So much for strong cases. Meanwhile, like the good neighbor Mr. McClendon has always clearly wished to be, he is suing the Deam family for adverse possession to gain access to the Denison South via a right of way across the lighthouse property that divides it and which the Deam family has owned for generations. Appreciating this kind of billionaire etiquette must be something of an acquired taste. A favorable outcome to this suit was one of the purchase prerequisites. The one-year stay of the tax appeal expired December 31 of 2008. Brandishing the stick once again, McClendon’s attorney stated they will seek in the neighborhood of $1 million in tax refunds. However, McClendon politely offers to drop all lawsuits if the township will split the property valuation such that the undevelopable 171-acre Denison South now be considered worth 70 percent of the total and the developable 232-acre north, plus an adjoining 100 acres McClendon has since purchased, be valued at (cough) 30 percent. This was another of the purchase agreement prerequisites. Saugatuck Township supervisor Bill Wester had a problem with the idea, however. "I don’t want to queer the deal, but..." he said "I don’t think what he’s proposing for us is reasonable." Yah, it’s little hard to get your head around that kind of math. That's probably why McClendon is the billionaire. Well... Was. His fortunes have since taken rather a nasty tumble, due to a bit of over-grasping, and he is currently reduced to a mere multi-millionaire. Still, that's plenty daunting for a small community to go up against, despite a number of local attorneys having repeatedly and earnestly offered their assistance pro bono, and local groups and individuals donating about $15,000 to the cause thus far. So, where do things stand presently? The decreed date has now passed, and adequate funding could not be arranged in such a short time. The entire endeavor pivoted on a grant from the Michigan Natural Resources Trust Fund. But the trust fund board had deep reservations about the inflated price, and they were very reluctant to make an out of cycle grant. They do not formally approve grant requests till December of each year. Despite this, they passed a resolution stating they support granting between $11.6 and $15 million, at State Senator Patricia Birkholz's request, but they also suggested the purchase price be renegotiated. At the moment, it appears that the future of the Denison South is on hold. But, the price was viewed by many as dramatically inflated and the attendant terms unpalatable at best. Concerned Citizens remains convinced public ownership of the entire Denison property is still viable, however, as does Saugatuck Dunes Coastal Alliance. While times are hard for obtaining pledges, times are also hard for ex-billionaires. McClendon has recently developed the odd habit of buying high and selling low. Witness his Chesapeake shares, and now, according to the Wall Street Journal's Wealth Report, 9,000 bottles of wine from his collection which cost him an estimated $5 million. This despite a seriously slumping market. If, as the WJS reporter quipped, Mr. McClendon is feeling the need to liquidate some of his liquid assets, at a likely 30% loss, it's not unimaginable he might consider parting with some real estate as well. Return to Concerned Citizens for Saugatuck Dunes State Park Resources & Reference page. www.SaugatuckDunes.org