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State Auditors say JRC Overpaid for Properties:Call Councilman Woolston's Role, Conflict of Interest

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State auditors are referring the actions of city councilman Mike Woolston to law enforcement authorities.  And Auditors say the Joplin Redevelopment Corporation  failed to do  due diligence and use  independent appraisals on some  properties it purchased with the help of Woolston.

 Auditors say Councilman Woolston had a definite conflict of interest with his role as a real estate broker in the buying of at least sixteen properties by JRC from Four State Homes, a company owned by Charlie Kuehn.  Commissions of $11,436 dollars were paid to the realtor/broker firm for which Woolston worked.

The properties were then sold to the Joplin Redevelopment Corporation or  JRC at inflated rates. Up to thirty-nine percent higher than the original purchase price.  

For example Four state homes purchased a residence on Delaware for thirty-five thousand dollars selling it to the JRC for more than one hundred sixty-five  thousand dollars.

The JRC obtained independent appraisals on only five of the sixteen properties prior to purchase. And didn't’t  document its reasons for purchasing the five properties for approximately $360,000 more than the appraised values obtained after they were under contract.

 "They didn’t dicker the price," says current JRC chairman Gary  Duncan. He wasn't on board for those purchases, but says price differences do occur when buying groups of properties.

Duncan says, "When you’re trying to aggregate all that into a big  retail center,  the farther down you get buying those properties the more expensive it’s going to get."

And he says there was pressure on the old JRC board.

He says,  "I think city executive leadership  and Wallace Bajjali were pushing hard to get it done. I think  the sense was the  sooner  we get done, the  sooner break ground,  build. It’s a  group of volunteers that  used to do tax kind of things."

Duncan says the new  members of JRC pushed  Wallace Bajjali to buy back the Coke building and halted extensions for the 20th and Connecticut properties.

Duncan says, “We said, you buy it or else. Well the ‘or else’ was he packed up in the middle of the night. So I think JRC did a good job of holding Wallace  Bajjali’s feet to the fire when it really counted.”

Auditors say because Council member Woolston  was part of the CART group planning redevelopment,  and was  aware of the properties the JRC was considering buying for redevelopment,  he may have used this information for personal gain. Woolston acknowledging his role was being questioned  previously said,  "I’ve waived the fees. I've abstained on all the votes I was told I should abstain. So I don't really know that there's anything else that I could have done."

But Auditors  say  he did not abstain from voting on  the Hope Valley TIF, a development involving Kevin Steele.  Woolston co-owns a realty company with Steele but auditors say Woolston didn’t disclose that during the vote. 

While auditors don’t have authority to look into bank records they referred the conflict of interest to law enforcement authorities. Woolston earlier announced he had been contacted by the FBI but maintains he acted ethically.

Woolston said, "I don't feel I’ve done anything wrong. I've done everything I thought I could to avoid the issue and avoid the problems. And I think once they've looked at it and get the documentation that they want, they'll determine pretty quickly that there's nothing wrong."

Auditors cited the home rule charter addressing conflicts of interest. And noted that  any violation of this subsection renders the contract or sale void, and any Council member violating this section thereby forfeits his office or employment.

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