Duncan, Gary | Testimony transcript 11-20-13)

8/12/2019 Duncan, Gary | Testimony transcript 11-20-13)

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Transcript of the Testimony of Gary Duncan

Date:November 20, 2013Volume:I

Case: In Re: Joplin Critical Investigation

Printed On: December 1, 2013

Holliday Reporting Service, Inc.Phone: 417-358-4078

Fax: 417-451-1114Email:[email protected]

Internet:


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Gary Duncan In Re: Joplin Critical Investigation

417-358-4078Holliday Reporting Service, Inc.

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IN RE: JOPLIN CRITICAL INVESTIGATION

SWORN STATEMENT OF

GARY DUNCAN

Taken on Wednesday, November 20, 2013, from 3:59 p.m. to

4:22 p.m., at the law offices of Juddson H. McPherson, LLC,

626 S. Byers, in the City of Joplin, County of Jasper,

State of Missouri, before

SHARON K. ROGERS, C.C.R.650,

a Certified Court Reporter and a Notary Public within and

for the County of Jasper, and State of Missouri.


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Gary Duncan

In Re: Joplin Critical Investigation


Page 2

APPEARANCES

MR. THOMAS E. LORAINE

Loraine & Associates, LLC

4075 Osage Beach Pkwy., Suite 300

Osage Beach, MO 65065

[email protected]


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Page 3

S T I P U L A T I O N

IT IS HEREBY STIPULATED AND AGREED that this Sworn

Statement may be taken by steno-mask type recording by

SHARON K. ROGERS, a Certified Court Reporter, and

afterwards reduced into typewriting.

It is further stipulated that the signature of the

witness is hereby waived, and that said Sworn Statement of

said witness shall be of the same force and effect as

though said witness had read and signed Sworn Statement.


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Page 4

I N D E X

Page/Line

DIRECT EXAMINATION BY MR. LORAINE . . . 5-4

E X H I B I T S

(sic) - typed as spoken

(ph.) - phonetic


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Page 5

1 GARY DUNCAN

2 Having been first duly sworn and examined,

3 testified as follows:

4 DIRECT EXAMINATION BY MR. LORAINE:

5 Q. Mr. Duncan, we've chatted a little bit in the

6 hall here. I'm doing some investigation and

7 as I understand it you're the present

8 Chairman of the 353 Planning Development

9 Corporation?

10 A. Yes.

11 Q. And you've been on board in that particular

12 capacity for six months?

13 A. There abouts, yes.

14 Q. So your involvement with the development of

15 the mechanisms with the 353 and how it ties

16 in with Wallace-Bajjali and all of that was

17 in place before you came?

18 A. That's correct, before I went onto the JRC.

19 Q. So you're really not familiar with how all

20 that developed?

21 A. Not from the perspective of the 353.

22 Q. All right. Let me ask you have you ever been

23 a Councilman?

24 A. No. Nor will I be.

25 Q. I see. What is your historic connection with


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1 the City?

2 A. I've lived here since 1975. I've been on a

3 couple of City committees way back, and then

4 because of my work I just wasn't very

5 involved, I didn't have the time. I was on

6 the CART committee when it was formed by

7 virtue of my job which was President and CEO

8 of Freeman Health System.

9 Q. What is that?

10 A. CART?

11 Q. Well, let's go through, what is your Freeman

12 Health System? What is that?

13 A. Freeman Health System is a three hospital

14 health system plus a large community mental

15 health center that covers this region.

16 Q. And that was all here before Wallace-Bajjali

17 entered the picture?

18 A. It's been here for years. And I retired from

19 that at the end of December 2011 and so my

20 membership then on the CART stopped and my

21 successor because the Freeman rep on the

22 CART.

23 Q. Tell me what the CART is.

24 A. I don't know if I can tell you what the

25 acronym is, but it's the organization that


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1 came out of the tornado to bring citizen

2 involvement into what we should do in the

3 City in terms of development. Anything from

4 how should the street development go, what

5 projects should be done, what do citizens

6 really want to see changed as we're building

7 Joplin back is sort of the gist of it. There

8 were the usual suspects, the CEOs from the

9 utility company, the banks, the hospitals and

10 so forth that were there, politicians both

11 local and state, and to try to come to some

12 consensus about what we ought to do, but it

13 was kind of a citizen deal. It was kind of

14 interesting. So it's kind of a blueprint,

15 but not a guideline of what people would like

16 to see, so I was involved with that.

17 Q. No money, though? They don't have any money?

18 A. No.

19 Q. How do they even meet? Do they have

20 facilities to meet?

21 A. They just meet at a restaurant meeting room

22 or something like that. Somebody has given

23 enough money to meet and have coffee and

24 donuts, but I think that's just coming from

25 the businesses that are involved in it.


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1 Q. So that's pretty much a voluntary

2 organization? It has no real legal impetus

3 or force behind it?

4 A. I can't answer that, but it's certainly not a

5 part of the City. I mean if it is maybe it's

6 51Z3, I have no idea, but it doesn't have any

7 legal standing in the City as far as I know.

8 Q. It would be kind of like advisory?

9 A. Yes.

10 Q. So from the standpoint of the redevelopment

11 of the area you've certainly been involved on

12 that aspect of the CART, but as far as the

13 353 since August?

14 A. July, probably.

15 Q. What is your observations? Do you have any

16 knowledge of how City Manager Rohr fits into

17 the operation of the 353 Corporation?

18 A. Just by observation at the meetings. I've

19 never had a conversation with him outside the

20 meeting and he says almost nothing in our

21 meetings. Occasionally if Wallace-Bajjali is

22 there and maybe there's a question or

23 something he might say something, but I can't

24 think but once or twice he even made a

25 comment in that meeting.


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1 Q. As far as Wallace-Bajjali, do they have any

2 persuasive abilities with 353, or does that

3 work? Do they work for you or do you work

4 for them, or tell me how that connection is.

5 A. Okay. They were hired by the City, they have

6 a contract with the City, and they go out -

7 they have formed what they say are the 19

8 projects and they've sort of put those in

9 sort of a chronology and I guess doability, I

10 suppose. So they come to the 353 and say

11 we're going to buy land for this project, and

12 really I think the first project was just

13 like individual parcels because there was a

14 thing called, I don't know these acronyms,

15 Joplin Housing something, something, where

16 hopefully we can sell those individual bases

17 and they get a break of about $30,000.00 if

18 they come into it. They have to meet income

19 guidelines and that sort of thing so I think

20 initially before I got on it there was a lot

21 of individual properties for homes to be

22 built. And then the project began for a

23 nursing home at 26th and McClelland/Maiden

24 Lane, then a project at 26th and Connecticut.

25 Most of the land has been purchased since


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1 I've been on has been for the 26th and

2 McClelland, which is the nursing home project

3 with Wallace-Bajjali and O'Reilly's out of

4 Springfield, O'Reilly Automotive, I guess,

5 and they also do nursing home type, I guess

6 senior housing kind of things. So we've been

7 buying land out there and then we were buying

8 land at 26th and Connecticut. Most of that

9 was bought by the time I got on.

10 Q. Is that for the show or theater or whatever

11 it is?

12 A. Theater/library combo, and then loft over

13 retail, and a grocery store allegedly.

14 Q. Who sets the priorities on these 19 or 20

15 projects? Is it Wallace-Bajjali?

16 A. I can't tell you that from my experience on

17 the 353. From attending City Council

18 occasionally I think the City sort of

19 approves them as they go. In other words

20 they approved the whole package, but nothing

21 was improved. They have to bring everything

22 back.

23 Q. Somebody is driving this.

24 A. Wallace-Bajjali is driving it.

25 Q. Wallace-Bajjali. Is the City Manager part of


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1 that driving factor?

2 A. (Shaking head)

3 Q. You don't know?

4 A. I don't know. I think so, but I'm not in

5 those meetings and I don't attend

6 Wallace-Bajjali meetings.

7 Q. I'm trying to figure out how this all relates

8 is what I'm trying to do.

9 A. The City Manager obviously was strong in

10 getting a master developer and having gone to

11 some of the Council meetings just because I

12 was interested even before I was on 353

13 Wallace-Bajjali, Dave Wallace made a lot of

14 presentations to the City Council, to the

15 CART group all over, and usually Mr. Rohr is

16 there. And it's pretty obvious that he's

17 supportive of what Wallace-Bajjali is doing.

18 If he wasn't he wouldn't be here probably.

19 Q. Your observation is they're working very

20 close together?

21 A. They're working together, yeah, absolutely.

22 Q. What's the financial situation of the 353 as

23 we speak?

24 A. We have lots of assets and no cash. Assets

25 being land. I forget how many parcels, I'm


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1 not really sure, it's about 80, I think, but

2 I'm not sure on that. There are other

3 revenues that will be coming in off tax

4 credit relatively soon, by the end of the

5 year, but we've used the 8 million dollars

6 that was - when the bonds were let by the

7 City based on the TIF and what the TIF would

8 support, the taxes from the TIF would support

9 they thought they were going to raise bonds I

10 think, I don't know 22 million or something,

11 but a total like 42 and they couldn't raise

12 it all at once because you don't have a tax

13 that's coming in until you get stuff built

14 then if you generate the taxes. But it ended

15 up out of TIF bonds we had about 8 million

16 dollars, so there was a million borrowed from

17 8 banks by the 353. It was a deal the banks

18 all put together. So we used that money to

19 buy land. When the TIF bonds came in we got

20 the 8 million and we paid them back.

21 Q. Totally?

22 A. Totally. Because it was just swap for swap.

23 And then in the process we have borrowed

24 another 3 million to complete some deals.

25 Q. From whom?


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1 A. From Arvest Bank. And then when the tax

2 credit money comes in from the State of

3 Missouri, which will be between now and the

4 end of the year, that loan will be paid back.

5 Q. So right now you're in deficit, but you have

6 some plan of escaping that?

7 A. Yes, absolutely.

8 Q. Now what about on a going forward basis? Can

9 you afford to purchase the land at an

10 indiscriminate time frame? As much land as

11 somebody wants you to purchase?

12 A. I don't think so.

13 Q. So it's a matter of dollars?

14 A. Oh, yeah, it's a matter of dollars and it's a

15 matter of what basically so far has been

16 generated to the TIF through the taxes, sales

17 tax and property tax.

18 Q. Are any of these taxes setting? Do they end?

19 A. There's a 23 year time line on it.

20 Q. From today going forward?

21 A. Not from today. Probably the TIF, I'm not

22 sure of the date, it would have been late

23 last year, I think.

24 Q. Okay. So we've got 22 years?

25 A. It could finish early.


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1 because we replace people. And I don't know

2 if it's within 3 to 5 to 7 or what, but right

3 now I think there's maybe 6, but anyway it's

4 6 or 7.

5 Q. No City officials sit on that board?

6 A. They don't sit on the board. They sit in the

7 meeting.

8 Q. Who are those City officials other than the

9 City Manager?

10 A. We have a Council representative. When I

11 went on it was Mr. Scearce because Mr.

12 Rosenberg had had some health issues, but Mr.

13 Rosenberg is the actual rep and he's there.

14 And then Troy Bolander who is over

15 engineering, planning, that side of it.

16 Q. So he's actually a City engineer of some

17 sort?

18 A. Well, he's not an engineer. He's over those

19 departments, the Street Departments. Then

20 there's a couple of his staff are usually

21 there that are planners that help write

22 grants and blah, blah, blah, blah, blah.

23 Tony Robyn, I think that's the way you

24 pronounce it, is a City employee, reports to

25 Mr. Bolander, and he actually does the


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1 agendas and gets the minutes out, blah, blah,

2 blah, and then there's a stenographer there

3 that actually just tape records the

4 proceedings.

5 Q. Will you be in charge of - I mean who is

6 looking over the fact that we don't want to

7 go into deficit spending with this company?

8 Who is doing that?

9 A. We are.

10 Q. You?

11 A. Well, the board.

12 Q. Okay. The board. And you report directly to

13 the City on that, the City Council on that

14 matter? Or is that incorrect?

15 A. I'm going to answer you I want to think about

16 that for a minute. We could very well come

17 up, if they brought in a land purchase, we

18 could say we're not buying, period and the

19 Council would back it. I don't think the

20 Council would overrule that. In fact, a

21 couple of Council members said you've got

22 more power than you think you've got, which

23 is scary. But we literally make the decision

24 on land. Now if we said no there could be a

25 lot of arm twisting, I suppose, but


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1 technically if we say we're not spending the

2 money then it doesn't get spent.

3 Q. So you really have some control then, you

4 believe you have some control over what is

5 purchased?

6 A. Yes. I'm sorry, there's one other person

7 there from the City, the City Attorney is

8 always there.

9 Q. Now I had complaints from the City Attorney

10 that he's not been involved in a lot of the

11 Wallace-Bajjali meetings, but you don't know

12 of that?

13 A. Yeah.

14 Q. But he is in yours?

15 A. Yes, and he's very helpful. Because we have

16 a lot of technical stuff that we're looking

17 at in terms of real estate contracts and all

18 that and none of us are real estate attorneys

19 so he's very helpful.

20 Q. So you don't have independent counsel, you

21 rely on City counsel?

22 A. We don't have independent counsel. I suppose

23 we could get it, but we don't have money to

24 pay them. No.

25 Q. All right. Do you know of anything that you


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1 should tell me in regards to Mr. Woolston's

2 involvement in real estate purchases and

3 being on the Council?

4 A. No, because I couldn't tell you who the

5 realtors are either for the buyer or seller -

6 well, for the seller.

7 Q. Who picks the title company?

8 A. Wallace-Bajjali.

9 Q. You probably are authorized to do that?

10 You're the buyer?

11 A. We could, yeah.

12 Q. Why don't you?

13 A. Well, first of all it came up right as I came

14 on the Council, because the person that has

15 been bringing this up and I went on at the

16 same time.

17 Q. Who is that person?

18 A. Phil - he's a former Councilman and former

19 Mayor. Phil Stinnett.

20 Q. Phil Stinnett?

21 A. Phil Stinnett. And he brought up the title

22 issue that there was an unfairness about the

23 title issue, and that being that one of the

24 major title companies in town, his words,

25 were not being used and it was directed at


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1 Wallace-Bajjali. And no one else really had

2 an issue with it because we couldn't have

3 told you what title company was being used.

4 And this last meeting we had, which would

5 have been the second Tuesday of this month,

6 we decided that if the buyer or the seller

7 does not have a title company they want to

8 use then Wallace-Bajjali will rotate. Well,

9 then the issue of course becomes who are the

10 really local type of companies and who

11 aren't. Well, that's just a maras. Because

12 we've got a couple of big title companies

13 that aren't necessarily locally owned

14 anymore, but everybody uses. So we said the

15 City, you tell us who are the qualified,

16 certified, or whatever they call them title

17 companies and just rotate them. Now in that

18 last meeting the company that was at issue

19 had been used, they came up on a real estate

20 contract which was pointed out, so I don't

21 see there's a big hairy issue. Because the

22 problem is a lot of times --

23 Q. Let me tell you what the problem is. One of

24 the problems is title companies have

25 different rates, okay? Say, for example,


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1 their standard rate might be $4.00 per

2 thousand and you've got a 30 million dollar

3 deal. If you pay $4.00 per thousand your

4 bill is X amount of dollars.

5 A. Right.

6 Q. If you have that either bid ahead of time or

7 you have it negotiated you might have a

8 substantially less bid which then might be 88

9 cents a thousand. Well, the different of

10 $3.20 per thousand goes to extra cost to the

11 City. Why would that not be an issue?

12 A. Well, we had this discussion with the City

13 Attorney in the meetings and part of the

14 problem is that, I'm telling you what I

15 heard, I'm not telling you because I'm a

16 realtor, but part of the problem is when

17 you're doing a development like this where

18 you have a lot of continuous pieces of

19 property you're trying to buy you run into a

20 lot of issues and so one of the things you

21 run into people who absolutely want to use a

22 title company. Give you an example, we had a

23 deal with one of the local hospitals that was

24 going to give us land. Well, one of the title

25 company guys is on their board. They want to


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1 use --

2 Q. Sure. That's because there's money involved.

3 And the only thing I'm pointing out for you

4 to think about through the 353 Corporation is

5 how do I save money, and one of the things

6 you can do is have projects bid and the buyer

7 is usually in control of. That's typical

8 title work and I used to own a title company.

9 I mean it's typical title work for the buyer

10 to say who I'm going to pay my commission to

11 to get this. It has to be a reputable

12 company obviously because you don't want them

13 to go belly up on you, but assuming they're a

14 reputable company, authorized to do business

15 in Missouri, you can either bid it or give it

16 out on a rotating basis and let the chips

17 fall where they want. But to save bucks you

18 can bid it. And if you bid it and it comes

19 in at a buck a thousand as opposed to 4 bucks

20 a thousand you've saved $3.00 per thousand

21 for the end purchases which is your company,

22 the 353.

23 A. Uh-huh.

24 Q. Seems to me to make sense. I just point that

25 out because I don't know that you're aware of


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1 that, but those issues have already arisen

2 here.

3 A. They have, I'm sure, and in the discussions

4 we've had the City is there, the City

5 Attorney is there, actually the City Finance

6 Director is at all of our meetings, so

7 they've been involved in those discussions.

8 They don't even bid out for a year, they go

9 kind of piece by piece by piece. Well, we'd

10 be going nuts if we did that. And there was

11 discussion of, well, let's throw a bid out

12 for a year and that's it. Well, the argument

13 is, yeah, but what if we've got a seller that

14 says, huh-uh, I want to use this person

15 because they're on my board or whatever, then

16 you hang up the deal. I mean there's been a

17 whole discussion around that. And I don't

18 know that it isn't that anybody doesn't want

19 to save money or play favorites. We've tried

20 to come down to say make it as amendable to

21 the title companies as we possibly can

22 because we don't need realtors or title

23 people out there working against us.

24 Q. Absolutely.

25 A. It's tough enough. Once people kind of get


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1 the drift of what you're buying it's amazing

2 how the prices go up.

3 Q. Yeah, I'm sure that's true.

4 A. So there's all of that in there. But

5 certainly I don't care who they use and as

6 I've told them you want to bid it I'll vote

7 to bid it.

8 Q. I just mention it because it's come up in

9 these discussions and I'm looking why money

10 isn't being saved. That's one of the things

11 I'm looking at and there's not enough money,

12 you know, so why we wouldn't want to save

13 money? That seems to be reasonable to me. Is

14 there anything else that you know about any

15 of these issues that I need to chat with you

16 about?

17 A. I don't know about City Council issues period

18 because I'm not involved in that. The

19 Woolston thing, I have no idea. I couldn't

20 tell you who the realtors are on those land

21 contracts I've looked at.

22 Q. I suspected that was true, but I wanted to

23 talk to you anyway and I want to follow all

24 leads.

25 A. Yeah, we're more interested in the appraisals


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1 and what we're paying and that kind of stuff.

2 Q. Absolutely. Thank you, Mr. Duncan, I

3 appreciate your help.

4 A. You're more than welcome.

5

6 (SWORN STATEMENT CONCLUDED)

7

8

9


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Duncan, Gary | Testimony transcript 11-20-13)

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Transcript of Duncan, Gary | Testimony transcript 11-20-13)