NORRISTOWN >> Montgomery County Commissioners Joe Gale and Val Arkoosh sparred at a recent meeting after Gale accused Arkoosh of continuing a tradition of “pay-to-play politics” in Montgomery County by catering real estate decisions to benefit her campaign donors.
Arkoosh, the board’s chairwoman and a Democrat, categorically denied the allegation saying Gale, the only Republican on the three-person governing body, doesn’t have any evidence to support his charge and doesn’t understand the process.
Redevelopment and investment
The tense exchange played out before and after a 2-1 decision (which Gale voted against) at the June 15 meeting to approve a Local Economic Revitalization Tax Assistance application to ELON Development Company, for the 50-unit Montgomery Park Senior Housing complex at 1301 Powell St., Norristown, located on the former Montgomery Hospital site.
The four-story, 42,000-square-foot project totaling $14.5 million is a collaboration with the Einstein Health Network. The facility will house 50 affordable one-bedroom units for seniors ages 62 and older. The project will be the first phase of redeveloping the former hospital’s site, which has already been subdivided.
LERTAs are awarded to promote redevelopment and investment in deteriorated properties. The developer must show improvement to the property that would trigger a property reassessment, according to Lee Soltysiak, deputy chief operating officer. ELON applied for a 10-year LERTA, meaning the facility’s property taxes would gradually increase each year from the current base rate to the new reassessed rate in the final year.
Norristown Borough and Norristown Area School District had already signed off on the project before the board gave it the final OK.
Gale objected to the deal, saying it wasn’t fair to property owners.
“It’s very hard to tell the property owners across Montgomery County that have been whacked with a 21 percent tax increase over the course of two years that we’re authorizing tax abatements to developers,” he said. “And I don’t think that’s fair to the average resident that’s faced with that burden.”
The Montgomery Park project was just the latest example of a pattern of “sweetheart deals” the county made dating back to 2013 that benefited campaign donors, Gale said. Arkoosh was taking a page from the playbook of her predecessor Josh Shapiro, the former commissioners chairman, a Democrat and current Pennsylvania attorney general, he said.
In addition to the project in Norristown, Gale mentioned four other board decisions dating back to 2013 which he took exception to given they benefited campaign contributors:
• At the Feb. 2, 2017 meeting, the board unanimously voted to award developer Kevin Silverang special tax exemption for a project in the Borough of Hatboro. Silverang’s wife, Claudia Silverang has donated $2,500 to the joint Shapiro/Arkoosh campaign account and a total of $14,500 to Shapiro’s campaign committee. The Hatboro project converted the abandoned complex into an 85-unit apartment complex, with approximately 1,500 feet of commercial, retail/restaurant space. Hatboro Township and Hatboro-Horsham School District both approved the LERTA request before the commissioners signed off. The township gave the OK on July 25, 2016, and the school district did the same on Sept. 19, 2016. The county also received letters of support from the township, the school district and the Montgomery County Planning Commission.
Silverang is also the beneficiary of a sale/leaseback agreement in which the county sold its Human Services building to him for $17.5 million and then agreed to leaseback the building for $34.5 million in rent over the course of 15 years. In that situation, the county no longer wanted to be the landlord of the building when it was only using a small portion of it. The county felt it could save money on maintenance costs to sell the building and lease back a portion of it. It made more sense in the long run to sell it and Silverang just happened to be the highest bidder. County policy says to sell to the highest bidder, regardless of who it is, according to the county.
• At the Dec. 1, 2016 meeting, the board voted 2-1 (Gale dissented) to award Westrum Development Co. special tax exemptions as well as a tax forgiveness of $40,000 owed in county taxes (in addition to forgiveness of more than $750,000 in taxes owed to Norristown School District and Municipality). At that meeting, Michael Clarke, the solicitor of the Norristown Area School Board, urged the commissioners to vote for the project. Michael Clarke has donated $2,500 to Arkoosh’s campaign account, Gale said. However, the borough and the Norristown Area School District already signed off on forgiving the more than $750,000 in liens held against the property. The county’s vote to forgive the roughly $40,000 owed to it was the last step in a deal that was a condition of a new developer in purchasing the property. County deputy Solicitor Josh Stein said at the time the county generally abides by the desires of the elected municipalities and school boards.
• Gale also echoed complaints he made during the Sept. 15 commissioner’s meeting when he suspected political favoritism in the contract for North Hills Manor and Crest Manor projects undertaken by the Montgomery County Housing Authority. The winner of that contract, Pennrose Properties LLC, was a campaign donor to Shapiro and Arkoosh, as well as former commissioner Leslie Richards, also a Democrat. The county chipped in about $1 million of the project’s roughly $17 million budget. Yet former Solicitor Raymond McGarry and Joel Johnson, executive director of the Montgomery County Housing Authority, each previously verified that the authority’s board worked independently of the commissioners when awarding the contract to Pennrose.
• Gale lastly recycled a complaint about Shapiro’s relationship with Israel Roizman and Roizman Development. The developer donated heavily to Shapiro’s campaigns over the years. In the campaign finance reporting cycle ending April 2, 2013, Israel Roizman had donated $22,500 to Friends of Josh Shapiro. On April 4, 2013, Shapiro participated in a 3-0 vote to provide Roizman Development with a low-interest loan of $937,103 from the county’s Affordable Housing Trust Fund for an age-restricted development in Whitemarsh Township.
“The original loan amount was approved for $937,103,” Soltysiak said previously. “The project came in under the original budget and they ultimately only spent $750,000 of that amount which will be paid back according to the terms of the loan.” According to Pennsylvania’s Ethics Act, Shapiro voting on the loan did not constitute a conflict of interest.
“There is no prohibition from accepting a campaign donation from an individual and then participating in a motion or some type of action that would affect that donor unless it can be determined that there is an arrangement,” said Robert P. Caruso, executive director of the State Ethics Commission, previously.
Caruso was not commenting specifically on the circumstances of the April 4, 2013 vote, but on whether the Ethics Act requires a public official to abstain from votes involving donors. Caruso went on to explain that if someone believes an arrangement has been made, they can file a complaint to the commission.
To Gale, each of these actions weren’t isolated incidents but a pattern of abuse of the process, he said.
“I feel as the minority commissioner I have a moral obligation to point out the shameful behavior,” Gale said. “I think it’s wrong. I don’t think it’s fair to the average citizen that’s burdened with a 21 percent tax increase over two years and it has to stop. I certainly hope moving forward it has to stop.”
“He has no evidence”
Arkoosh “categorically rejected” Gale’s accusations of pay-to-play politics saying the contributions were not tied to projects or votes and added Gale’s accusations demonstrated his lack of understanding of the process.
Since 2012 the county has been run under several ethics policies, which is listed on its website. Policy states every public meeting, request for proposal and bid must be advertised. The county also established a website for any vendor to view who would like to apply for a project. Companies interested in submitting a proposal are asked to fill out a disclosure form that includes whether or not they have ever contributed to any commissioners’ campaign. That information is publicly available, along with all campaign finance documents. A committee that reviews all of the proposals sees those disclosure forms as well. The disclosure information is not a factor taken into consideration one way or the other. From there proposals are divided among teams of staff members, who score the projects and pick the best bids, depending on the project. Sometimes the winning proposal has to be the lowest cost. In most cases, the county has a responsible contracting policy, so the winning bids are the ones that meet the most criteria, even if it’s not necessarily the lowest bid.
“By the time it gets to us, the decision has been made,” Arkoosh said. “We don’t actually pick. It’s gone through a very objective process.”
Regarding LERTAs, it’s county policy that the commissioners always vote last on projects after a municipality and school district approve it, she said. If one of those governing bodies voted no on a project, the county wouldn’t even consider it.
The LERTA approved at the June 15 meeting had already been approved by the school district and the borough, she said. The county was the last government entity to vote on it.
“So if you’re implying that campaign contributions to me somehow influenced the vote of the entire Norristown School Board, the entire Norristown Borough Council, you just simply don’t understand how this process works,” she told Gale.
The properties benefitting from tax abatements would not otherwise be developed without the assistance, she explained. The project in Norristown will turn an empty lot into needed affordable housing to assist seniors, and after the first year, more tax revenue will be coming into the county. Without the LERTA assistance, these types of projects would not happen.
“I don’t think you understand this process,” she reiterated to Gale. “I don’t think you understand what it means to be a commissioner that looks forward in terms of doing the best for Montgomery County.”
When Gale called on Arkoosh to address the fact that many of the developers behind these projects made contributions to her campaign, she said she’s the commissioners chairwoman.
“It’s completely understandable that people choose to give to my campaign,” she said. “Perhaps they like the way this county is being run, which is not something that you have contributed to. All you do is sit there and throw stones at people. These individuals may have decided that they think this county is moving in the right direction.”
Shapiro’s office declined to comment for this story other than to stand behind Arkoosh’s statements.
Board Vice Chair Ken Lawrence Jr., also a Democrat, likewise supported Arkoosh saying he’s never seen evidence of pay-to-play politics and was disappointed by Gale’s comments. He called on Gale to show him real proof of his assertions.
While Gale freely made his comments during the public meeting Thursday, he refused to offer any real evidence of pay-to-play politics during the closed door press conference with the commissioners and staff afterward.
He insisted that when he would bring up transparency issues in the past, the press conference would turn into “a big fiasco.” He felt the press conference should be open to the public and proposed doing so previously but his colleagues would rather have it in a closed setting.
Arkoosh, meanwhile, said she felt the reason Gale wasn’t willing to offer any hard evidence against her was much simpler.
“He has no evidence because there is no evidence,” she said. “All of my campaign finance reports are public as is the case for any of us. They’re required to be public. You can look at all of my contributions.”
The amount of dollars Gale referenced during the meeting was a considerably small fraction of her entire contributions, she said.
“There has never been a contribution that I have accepted from anyone that was in any way tied to any promise of a vote, any implication of a promise of a vote or even the request for a vote,” she said. “Again I categorically reject his insinuations. He has no evidence.”
Lastly, Arkoosh said she found it ironic that Gale will criticize deals that will lead to further development then take credit for the development afterward.
“He can’t have it both ways,” she said. “He can’t take credit for a very positive economic environment here: the fact that people are moving to our county, the fact that businesses are moving to this county. He can’t take credit for all these things and then turn around two days later and imply there’s been some sort of pay-to-play when it absolutely does not exist.”