Ownership of the NC Real Estate Industry by the NC Legal Industry Out of Control

Commissioner accuses county manager of sweetheart home deal By PETER J. HOVANEC -- MONROE (March 19, 2005)

The latest bout in the ongoing dispute between Union County Commissioner Stony Rushing and county manager Mike Shalati came to a head Monday night when Shalati defended himself, yet again, against a number of allegations.

Shalati took the podium near the end of Monday's meeting to respond to allegations of impropriety, which Rushing sent to various investigative organizations, as well as numerous county residents. While Shalati contends that he had to defend his professional reputation, Rushing said he just wants the truth to come out.

"We need someone from outside Union County to look at these allegations, look at these actions and tell us if there is a problem," Rushing said.

The crux of Rushing's case stems from the condemnation of property for a developer and the lack of adequate notification for that property owner as well as the county's payment for that property. The property owners were offered $827 for their property for a sewer easement, but eventually, through litigation, was awarded a $40,000 sum.

While Rushing is critical of the way the county handled the situation, Shalati said county policy was followed which stated the property owner would be offered $1 per foot for the easement. He added any higher amount would be a result of the condemnation proceeding or court order approved by the Board of Commissioners.

Rushing's mid-February letter also alleges no reimbursement was paid by the developer to the county, an allegation Shalati countered by offering a $39,000 check from John Weiland Homes for the condemned property.

Rushing's alleges impropriety by Shalati and former board Chairman John Feezor, who is also a vice president of John Weiland Homes. Rushing questions whether Shalati received favors from Feezor and Weiland Homes, in the form of a reduced home price, for his part in the condemnations.

Both the condemnation and Shalati's home purchase from Weiland Homes have been called into question by Rushing.

Rushing questions the $395,000 purchase price, and the subsequent county tax valuation of $470,000 for the home only months later.

Shalati does not dispute the price at the time of purchase. He said two months after the purchase, he had a contractor come to his home and finish 626 square feet of an unfinished third floor.

"I hired a contractor to finish the third floor recreation area by installing insulation, Sheetrock, lighting, carpets, painting and HVAC," Shalati said. "This increased the house's heated space by an additional 626 square feet."

Shalati added that Phil Every with the Union County Tax Assessor's Office said the $395,000 purchase price represented a roughly $102.89 per-foot price and compared to the 22 other dwellings sold in that subdivision in 2002, seven had a lower per-foot price. Every also reported that Shalati's home was built in 2001 but did not sell until late 2002. "Only two other homes were similar in the regard," Every wrote.

Along the lines of the home purchase, Rushing questions the financing by John Weiland Homes, and the signature of Feezor on Shalati's deed.

"John Weiland Financing, who financed the first mortgage, is totally separate from John Weiland Homes," Shalati said. "Most builders these days can provide mortgage financing."

Shalati added that since Feezor is the vice president of John Weiland Homes, he signs all the deeds and it was not just his deed that was signed.

Yet another allegation Rushing brought forward was Shalati's refinancing in July 2003 of the home for the amount of $550,000.

Shalati supplied a property appraisal report that shows the value at $520,000. He said in addition to the third-floor renovation, an irrigation system as well as an alarm system have been installed on the property. He also said a county property revaluation also increased property values in that area.

In his final allegation, Rushing questioned the use of county attorney Don Perry for the closing on the 2003 refinance.

Shalati countered by saying Perry is one of the best closing attorneys in the county, who handled Shalati's closing on his first home in 1985.

Shalati adding the continued stream of allegations and charges by Rushing have no merit and is just a way to smear his name and give half-truths to the public.

Rushing said it is not a personal thing. He added that he just wants the people of Union County to see what is going on in the county and wants someone from outside the county to review the information and determine if there is a conflict.

"If Mike and the rest of the county has nothing to hide, then why won't they join with me in some type of outside investigation," Rushing said. "It just doesn't make sense."

While Rushing sent his letter to the likes of the Institute of Government, John Locke Foundation, the FBI as well as others, he has yet to find an organization to champion his cause.

After Monday's back-and-forth between the two, Shalati received a "vote of confidence" from four of the five commissioners in the form of a vote.

-- Peter Hovanec can be reached at (704) 261-2223 or via e-mail at phovanec@theej.com.

I would certainly not come to the aid of NC legal community, but in this particular issue, I don't see where they have anything to do with the article you listed. Unless you paint a broad stoke of Home Builders and the Real Estate industry being one and the same - thus under the control of the Legal industry in your perspective - I don't see it.

In the article you cite, Commissioner Rushing takes a flawed policy on sewer easements and turns it into a case of innuendo in the absence of fact to attack the county manager, trying to draw the listener to the conclusion of another corrupt bureaucrat. It's McCarthyism plain and simple.

The commissioners attack being couched in know fact of lawsuits involving the sewer easements, banks on that creditability to support his complete lack of it in what is the most likely case of a personal vendetta.

The reader doesn't have the context of the previous history between the two men and should therefore reserve judgment, especially since hdrabon has characterized the article as 'derisive' of the commissioner -- which it is at that. The reporter had a reason to write with such a tone.

One more thing (that is besides the fact that I grew up here and have about 50 years of Union Co. NC history upon which to draw) -- The following, taken from Charlotte.com, is another take on Stoney Rushing's "battles" with other county leaders. The last line of the article says it all, per people I have known for a long time, and who grew up with the man. HDR

Posted on Thu, Mar. 31, 2005

County officials clash over policy
Manager says questions about easements, his home a waste of time
JEN ARONOFF
Staff Writer

A long-running dispute between Union County manager Mike Shalati and commissioner Stony Rushing has flared up again, with Rushing's criticism of the county's water and sewer line easement policy.

At commissioners' meetings, in an e-mail and on his Web site, Rushing has implied possible connections between the price and assessed value of Shalati's house and condemnations for sewer easements.

Shalati has defended his record, denied any wrongdoing and says Rushing has been conducting "a McCarthyist witch hunt" that is wasting county time.

"This stuff -- it's a lie, it's untrue, and it needs to be put to bed," he said. "If there's an issue, we have laws and agencies that deal with this stuff. That's the proper way."

Though Rushing has clashed with the county manager in the past, he says his current campaign is not the result of a personal feud.

"This isn't Rushing vs. Shalati," he said. "This is taxpayers about to go to court to get a decent value for their property."

But where Rushing sees the county working to pay property owners less than their land is worth, others see politically motivated mudslinging -- particularly in that commissioners have significantly revised easement acquisition policies since the events Rushing is complaining about took place.

"This is grandstanding at its finest, and that's all it is," said commissioner Hughie Sexton. "This was never an issue until (Rushing) found a way to use it to get to the county manager."

Rushing and former commissioner Clayton Loflin sparred frequently with Shalati in the past, and Rushing repeatedly called for Shalati's resignation last year.

In June, Rushing urged the board to fire Shalati. Now, he says he'd still like to see Shalati go.

"I wanted him to quit," Rushing said. "There was enough to fire him before."

Commissioners unanimously approved the condemnations in question in November 2002. Rushing has said Shalati helped facilitate the process because the sewer lines were intended to serve a John Wieland Homes development.

Shalati's house is in another Wieland subdivision, and former commissioners Chairman John Feezor, who left the board in 2002, is vice president of Wieland Homes.

Feezor, however, was out of town when the condemnations were unanimously approved, minutes show, and recused himself on similar matters in the past.

Shalati has no direct role or influence over easement acquisition, public works officials say. County tax appraisal records show nothing markedly unusual about the purchase price or subsequent appraised values of his house, tax officials say, which he bought in October 2002 for $395,000.

That's less than its assessed value at the time, $408,539 but not out of line considering the home had sat empty for more than a year and had an unfinished third floor, said Phil Every, the county's real property appraiser and GIS data manager.

"His price was a little better than most, but that's the nature of the beast," Every said. "If I sold five identical houses, it wouldn't be for the same price. It's not unusual at all for properties to be sold for less than their assessed value."

Since purchase, the house has appreciated -- and has been assessed -- in a manner consistent with other properties in the neighborhood, where values increased about 15 percent between the 2000 and 2004 appraisals, according to county tax records.

Shalati's dealings regarding his house don't appear improper, and there's no reason he should have said anything about it to the board, said David Lawrence, a professor of public law and government at UNC Chapel Hill.

"I see nothing wrong with it, so I see no reason to say anything about it," he said. "If one of the county commissioners owned a grocery store, I still think the manager could buy groceries there."

Commissioners would have to approve a budget amendment to provide money for an investigation Rushing has called for, but they appear unwilling to do so. At their last meeting, they voted 4-1 in support of Shalati, and they have previously declined to look further into Rushing's concerns.

Board chairman Richard Stone called Rushing's campaign "smoke and mirrors."

"This type of behavior has zero value to our board," he said. "It is serving as a total distraction from good business."

Other commissioners say they have yet to see any proof of wrongdoing.

"All I've seen from Mr. Rushing is just accusation after accusation, with nothing of substance to back it up," Sexton said.

Rushing, however, vows to continue, saying he's standing up for people affected by the county's eminent domain policies.

"If I have people coming to me and saying they're scared, somebody's going to have to put me in the ground before I roll over on this," he said.

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