The owners of an abandoned property that has frustrated city officials have been located by Toledo Free Press.

Two men with connections to 1502 Elm St. have been found by Toledo Free Press fact checker Lisa Renee Ward. Ward, operator of the political blog Glass City Jungle, has connected Harold O. Miller and Frederick Clark of Select Properties Group LLC, based out of Florida, to the property.

Citizens concerned with the abandoned warehouse at 1502 Elm St., also known as 1510 Elm St., brought their case to the city. They claim the building, where the body of Cindy Sumner was found in September, is a breeding ground for crime. The six-story building was formerly the Sam Davis Building.

Sumner, 20, was reported missing by her family Aug. 6. Sumner suffered from muscular dystrophy and multiple sclerosis, and had some cognitive disabilities. On Sept. 17, her body was recovered from the warehouse at 1510 Elm St.

The city has been forced to pay for the property because it has not been able to locate the owners of Select Properties Group LLC, which owns the building, an official said.

Bob Mossing, manager for code enforcement for the Department of Neighborhoods, said the city put tracers out and wrote the Attorney General of Florida to find the officers of Select Properties, an inactive corporation. The city knew Miller was an agent of the company, but could not hold him responsible unless he was an owner, Mossing said.

In June, the Department of Neighborhoods was in court requesting Select Properties Group, LLC to board up the building. Bench warrants for the company were issued, but no representatives ever came.

When the business failed to board up the building, the city covered the windows and doors, Mossing said.

A hearing Oct. 28 gave the city more time to locate and speak with the building’s owners, Select Properties Group LLC. Meanwhile, the city was ordered to place steel bars on all the first floor entrances and windows, after the first set of boards were torn down.

On Nov. 12, a follow-up hearing took place to give an update on the progress at the building. Judge C. Allen McConnell ruled the city’s progress in securing the warehouse was unacceptable and the city had 13 days to board up the location.

The city had to special order the raw materials to board up the building, costing about $4,000, Mossing said.

On Nov. 18, the city began placing metal bars over the 25 windows, eight garage doors and individual doors on the ground floor of the building.

“In the long run, everyone would like to just demolish the thing,” Mossing said.

The city received a quote for demolition that was $384,000.

Messy sales history

Ward said she used the Auditor’s Real Estate Information System (AREIS), to track and find the owners of the property.

According to Areis, the Elm Street property was donated on Dec. 11, 2003, to “National Heritage Foundation FBO The Sweetwater Foundation et. al” by Harold Frutiger and Deborah Rosetto, trustee.

That same day the property was sold to Select Properties Group for $230,000. However, both The Sweetwater Foundation and Select Properties had the same address at 333 S. Tamiami Trail Suite 283, Venice, Fla.

According to the fiduciary deed for 1510 Elm St., however, a 46/100 interest was granted to Select Properties Group LLC and 54/100 was granted to National Heritage Foundation for the benefit of the Sweetwater Foundation on Dec. 11, 2003. Both sales were recorded on Dec. 16, 2003.

Then on Aug. 1, 2006, Select Properties Group gave the 1510 location to The Arts Center of Toledo LLC, which had the same 333 S. Tamiami Trail address. On Aug. 3, the property was sold back to Select Properties Group for $860,000. Both transactions were recorded Aug. 16, 2006.

Select Properties Group then changed its address to 7350 S. Tamiami Trail, where a business Select Properties of Sarasota, Fla. is also located.

Confirming association

After contacting Select Properties of Sarasota, the president of the company, Alvin Rees, confirmed it had no association with Select Properties Group. Rees provided Ward with the name Harold O. Miller from the mail drop company that used the 7350 S. Tamiami Trail address.

According to the Florida Department of State’s Division of Corporations, Miller incorporated Select Properties Group with Frederick Clark on July 24, 2002. As of Sept. 26, 2008, the corporation is inactive after failure to file an annual report. Multiple businesses

Clark and Miller also incorporated The Arts Center of Toledo LLC, which was previously one of the owners of 1502 Elm St.

Miller and Clark are agents on numerous other active and inactive corporations in Florida. Between the two, more than 100 corporations have been founded in Florida.

According to the Florida Department of State Division of Corporations, the cost of filing a new corporation in the state of Florida is $70, and an additional $8.75 if the corporation would like to receive a certification.

Where are they?

According to the Florida Bar Association, Miller is listed as an attorney in good standing.

Repeated attempts were made to contact Miller, who did not respond for comment.

E-mails sent to the last known address for Clark were neither responded to, nor bounced back as undeliverable.

Holding LLCs accountable

LLC stands for limited liability company.

John Barrett, associate professor of law at UT, said the best way to understand an LLC for liability purposes is to think of it as a corporation.

“When you become a shareholder in a corporation, you own a piece of it. If the corporation is sued, the owners aren’t personally held liable for what it does. The business itself is the only thing that is finanically responsible,” Barrett said.

The LLC would be treated as a separate legal person.

Barrett said there are rare circumstances when owners of corporations and LLCs could be held accountable for the company. The law in those situations is called “piercing the corporate veil.”

Charity connection

The property at Elm Street was originally donated to the National Heritage Foundation for the benefit of The Sweetwater Foundation.

National Heritage Foundation is an organization that provides donor-advised funds. The organization had to file Chapter 11 bankruptcy, and a court declared all donor funds as assets this year.

More than 9,000 donor-advised funds and $25 million went to pay off lawsuits incurred by the organization.

Donor-advised funds are a product or fund the IRS allows to operate like a private foundation. A gift is made to the fund, and assets from that gift can be given away to charities, said Keith Burwell, president of the Toledo Community Foundation.

Burwell said an appealing aspect of donor-advised funds is operationally, they are much less expensive than a private or family foundation.

In order to avoid losing a charity’s or foundation’s funding, like what happened with National Heritage Foundation, Burwell has a few tips.

“In every case when you look at an entity that is carrying out charitable work, nonprofit or community foundation, you want individuals who have no direct interest in the outcome to be in charge,” Burwell said. “Examine how many have a direct interest in the outcome of the organization or nonprofit.”

He said the National Heritage Foundation had too many insiders on the board and no checks and balances were in place.

“When you look at the charity and when you look at the board of directors, and they are all family members, you want to put as many guarantees in place that the money will be used wisely,” Burwell said.

“In charity, as in business, if it seems too good to be true it usually is,” he said.

The Toledo Community Foundation has a 12-page process to accept real estate to make sure it isn’t something that is getting passed around or dumped, Burwell said.

While the intention for the original donation of the Elm Street property was charity-based, taxpayers will most likely end up footing the bill now, and for the demolition.

This entry was posted on Thursday, December 3rd, 2009 at 9:39 pm and is filed under City of Toledo, Community, Featured.
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