By Michael R. Moser
A cross-section of Cumberland County citizens empaneled on the grand jury reviewed 115 pages of city of Crossville documents and meeting minutes, 927 additional documents from Crossville City Councilman Pete Souza, 22 separate investigative reports and 21 exhibits from the Tennessee Bureau of Investigation and listened to testimony from TBI Special Agent Billy Miller and Souza before concluding there was no evidence of wrongdoing on anyone's part.
The 12 members of the grand jury and its chairman signed the report, and issued the following statement:
"After hearing from the above witnesses (Miller and Souza) and reviewing the evidence duly presented to the grand jury, it is the opinion of the grand jury that no crimes have been committed by any current or former city councilmen, the city attorney or anyone associated with any of the above land transactions and this matter should be closed."
For months Souza has made public statements and claims against sitting members of council, City Attorney Kenneth Chadwell and others, saying he had evidence of wrongdoing by many in and associated with city government.
Targets of Souza's attacks centered around the purchase of the airport property, the old First National Bank (also Union Planters Bank) building that now serves as Crossville City Hall on Main St., and property identified as "interstate property."
The airport property was purchased in February 2011 from John Donnelly and family for $680,000 and was financed over a three-year period. Randy Buttons did the original appraisal of the property, placing the value at $250,000.
A revised appraisal was done by Buttons setting, the value of the property at $500,000. Both appraisals were dated June 30, 2010.
During Miller's investigation, he received a statement from City Recorder Sally Oglesby that the revised appraisal was actually received by the city on July 27, 2010, and was performed when former city manager Curtis Adams contacted Buttons and asked him to consider additional comparable sales.
The grand jury report goes on to state that there have been no additional appraisals on the property that would indicate the $500,000 appraisal was flawed or inaccurate. It was noted, however, that Buttons was subsequently sanctioned by the Tennessee appraisal board for submitting an original appraisal and a revised appraisal.
The grand jury concluded on this issue, "There is no proof that any monies were diverted to any individuals and there is no proof of any criminal activity relative to the purchase of the airport property by the city of Crossville by any individual."
Also investigated was the city's purchase of the old bank building from Halstead Property Development, LLC, a corporation owned by Joe Looney and Kenneth Chadwell. In 2005, Halstead Property Development purchased the bank building. In 2005, the stock of Halstead Property Development was sold to Crossville attorney James E. Thompson and Johnnie Reeves Jr.
The property was encumbered with a mortgage of $1,311,000. In February 2008, at the request of the lender, the property was appraised for $2 million. On March 13, 2008, an additional deed of trust to the same lender in the amount of $400,000, and additional collateral was given as security for the loan.
On March 16, 2011, the city of Crossville received an offer from Halstead Properties (Thompson and Reeves) to sell to the city the old bank building for $2.9 million. After negotiations, the price of $1.9 million was agreed upon and the purchase was completed on March 30, 2011, with ten percent being paid down and the balance at closing, which took place April 14, 2011.
The grand jury found, "There is no proof that any monies were diverted to any individuals and there is no proof of any criminal activity relative to the purchase of the "bank building" by the city of Crossville by any individual."
Concerning the interstate property, the grand jury report states the Interchange Park property (located north of I-40 off Hwy. 127 N) was acquired by Hatteras Properties and Millard V. Oakley (Oakley is the primary owner of Hatteras Properties). Negotiations were ongoing between Hatteras and the city and, on April 12, 2012, public discussions were held and a resolution passed.
Because city attorney Chadwell had previously represented Oakley in unrelated issues, the city voted to hire the firm of Bass, Berry and Sims to represent the city in the acquisition.
Mayor J.H. Graham III made a motion authorizing the issuance, sale and payment of land purchase capital outlay notes not to exceed $1.8 million with interest rate of 3.45 percent including any recommendations approved by the state Comptroller's office for the 89.11 acres.
As a result, the city received a letter of intent from Oakley and Hatteras Properties that stated the property value was $3,875,700. By virtue of a gift deed, acreage valued at $2,075.700 would be transferred to the city with the city purchasing the remaining acreage for $1.8 million, due on closing.
The property had been appraised by Charles R. Smith and Royce Burgess on March 31, 2011 for $3,875,700 and in October 2011 by Sam Pipkin for $3,225,000. Pipkin issued a second appraisal in the amount of $3.3 million.
Wrote the grand jury, "There is no proof that any monies were diverted to any individuals the sellers and there is no proof any criminal activity relative to the purchase of the "interstate property" by the city of Crossville by any individual."
Reportedly, Souza appeared before the grand jury for over an hour to present his case and allegations before the grand jury reached its conclusion.