Council Member Says Non-Disclosure of Lease with Developer Was “an Oversight”

Tuesday, July 25, 2017, 2:10 pm
Alice Dreger

ELi learned last night that the non-profit business which East Lansing Councilmember Susan Woods runs, the East Lansing Film Festival, is a long-time tenant of Ballein Management, the local family real estate company partnering with Harbor Bay Real Estate to build a $132 million redevelopment project in partnership with the City of East Lansing.

Woods did not disclose this when voting on the Center City District project, including on the $58 million tax increment financing deal supporting the project. She tells Eli this was “an oversight” on her part.

The East Lansing Film Festival (ELFF) is a non-governmental, nonprofit corporation. Woods is a member of the organization’s Board of Directors and is paid to run ELFF as its Executive Director. The Film Festival’s office is located on the second floor of 220 Abbot Road, in a building outside of the Center City District project area but one recently rehabbed on the first floor and exterior by the Balleins as a result of plans for the Center City District redevelopment.

In response to questions from ELi, Woods says that she does not receive a discounted lease rate from Ballein Management, nor, she says, are the Balleins donors to ELFF. According to Woods, for the office she rents from the Balleins on Abbot Road, “I pay the going rate, $200 per month for the past nine years.”

I asked Woods today, “Can you explain why you didn’t disclose this financial arrangement between your business and the Balleins when you voted on their project? Dan Bollman disclosed and also formally recused himself from Planning Commission on Center City because of a similar arrangement between his business and the Balleins.” Bollman, who serves on the Planning Commission, is owner of east arbor architecture, a firm that uses lower-case for its name. (Disclosure: Bollman and east arbor architecture have been donors to ELi.)

Woods responded, “I didn't think of it. That was an oversight.”

The City’s ethics ordinance and the City’s grants to ELFF:

As a member of City Council, Woods is required by the City’s ethics ordinance to sign an annual ethics disclosure statement indicating whether she is “an officer, director, member, partner, trustee, or employee of any corporation, company, partnership, business, trust, or other entity of any kind which is doing business with or licensed or regulated by the City.”

As Executive Director, Woods is employed by ELFF, currently at the rate of $31,200 per year. But Woods has steadily chosen not to list her employment with ELFF on her annual disclosure forms, even though the City of East Lansing’s Arts Commission regularly provides grants to ELFF.

Woods has told ELi these grants do not constitute a form of “doing business” with the City.

Earlier this year, following questions from ELi, for the first time Woods disclosed on her annual form that “East Lansing Film Festival receives a grant from the EL Arts Commission.” But she again elected not to disclose on the form that she is employed by the Film Festival, or that she runs it, or that she is on the Board of Directors.

City Council approves the funds the Arts Commission uses to make grants to ELFF and other local arts organizations, and Woods serves as Council liaison to the Arts Commission. In the most recent round of Arts Commission grants, in October 2016, ELFF was awarded a grant of $2,500 to fund ice sculptures for an ELFF event.

Woods is not a voting member of the Arts Commission, but she does participate in discussions of the annual grants. As a member of Council, she also, as noted, approves the budgets that allow for the grants.

The City’s ethics ordinance states:

“No City official or employee of the city shall participate, as an agent or representative of the city, in approving, disapproving, debating, voting, abstaining from voting, recommending, or otherwise acting upon any matter in which he or she or a relative has a direct or indirect economic interest without disclosing the full nature and extent of their interests. Such a disclosure must be made before the time to perform their duty or concurrently with that performance. If the city official or employee is a member of a decision-making body or advising body, they must make the disclosure to the chairman and other members of the body on the official record.”

This has not been happening at Arts Commission or at City Council.

Woods says, if re-elected, she’ll be more active with recusals:

In a follow-up to asking her about her office lease with Ballein Management, I noted to Woods by email today that she has not actively disclosed or recused herself when Council has discussed and voted on budgets for Arts that lead to grants made to ELFF by the City.

I also noted that she has used her Council chair to advertise ELFF events (including those with admission charges profiting ELFF), and that she has also negotiated for ELFF while literally in her Council chair. For example, when MSU was negotiating a contract with City Council to obtain management of Scene MetroSpace, a City-owned arts venue, Woods sought assurances from MSU’s representatives that she could still use the space for ELFF receptions.

I then asked her by email today, “Under what circumstances could you see yourself actively disclosing (in real time) or recusing yourself because of potential conflicts of interest between ELFF and your Council position?”

Woods responded, “I mention the ELFF events at the City Council meeting because the City founded the film festival back in 1998, it has [East Lansing’s] name and it supports the film festival in more ways than just the grant.”

She said, “I also mention the Art Festival, the Jazz Festival, the Folk Festival as events for our citizens. That is the only reason I do it.”

She added, “I will be more active in my second term (if I get elected) to recuse myself during the budget talks.”

We have previously reported that Woods has not disclosed significant sums and numbers of donations from landlords when voting on business they have had before Council. Such disclosure is specifically required by the City’s ethics ordinance under changes enacted by the current City Council.

Why Bollman disclosed and recused:

Asked today why he recused himself from voting at East Lansing Planning Commission on the Center City District proposal, Dan Bollman responded, “I disclosed the relationship because I was obligated to and I recused myself because it was the appropriate thing to do. As you indicated, 'east arbor architecture' had a direct landlord-tenant relationship with Ballein Management. What's more, we were operating in the building under consideration for redevelopment.”

Bollman added, “While the choice to recuse myself was my personal decision, the matter was considered and unanimously supported by the remainder of the Planning Commission each time I requested recusal.”

At every meeting where Planning Commission was reviewing the Center City District proposal, when the matter came up on the agenda, Bollman made a formal disclosure and requested recusal. In each case, the Planning Commission voted unanimously to accept his request for recusal, and he stepped away from the Commission’s table to take a seat with the audience, until the next agenda item came up.