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* CLP REPORT *
by IC2ITUC
[February 14, 2018, 11:24:59 PM]
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Author Topic: * CLP REPORT *  (Read 1948275 times)

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clp_lives

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Re: * CLP REPORT *
« Reply #11145 on: December 20, 2017, 11:49:00 AM »
Is it really a gift as the court agreed the lot is worth more now than prior.  Kind of hard to claim a loss if the court agrees to that valuation regardless of the trustees competency or lack there of.


In regards to the current case of the Trustees of CLP vs. Park Restoration for damages incurred as a result of the Beach Club not returned in "broom clean" condition, it seems that the Attorney(s) for the Trustee's dropped the ball by not filing appropriate motions and responses, and failed to offer facts to back their damages argument. Even the Judge was incredulous to the fact that counsel failed to offer, or even file, the appropriate responses.

Park Restoration was successful in their argument that the property post fire was worth more without the Beach Club on it. The Trustees tried to apply a faulty appraisal process by not formulating value based on a residential use. Information from their bankruptcy paperwork threw their theory into question, and the Judge rightfully penalized them for their sloppiness. PR's counsel was not too far above the Trustee's counsel in that he too tried some underhanded tactics by not providing discovery in a timely manner and attempting to introduce exhibits not submitted to the Trustees before the hearing. The court noted that this was done not once, but twice.

Interestingly, the court noted why they have approved the Flynn Lots for sale free and clear of charitable use restrictions......... because nobody filed an objection. Therefore the court has granted those without scrutiny. Maybe, if the park does try and sell the Beach Club property free and clear, a resident - or lien holder - should file an objection and force the court to hold a hearing. From my research, any resident or property owner in the immediate area can file an objection and have standing under the PA Constitution, and a hearing must be conducted.

Perhaps the Trustees should have had an affidavit from the PA Attorney General stating that it would object to any removal of the charitable use restriction on that property because it it considered "core property". Even their land use plans conflicted.

How much cash did the Trustees dole out for this representation???

In the end, the Trustees get ZERO damages awarded, zilch, zip, NADA!! But I suppose the funds raised to help replace the Beach Club are still gaining interest....... right?

Court Opinion:
Quote
For the reasons above, this Court finds that the preponderance of the  evidence is that TCLP has not proven that it incurred damages and relief  is denied as to Count I of the Complaint only. An appropriate order shall be issued in accordance herewith.

Kudos to PR for dodging that award, but keep in mind, you were found guilty of breach of contract, the Trustees and their lawyers incompetence provided a nice Christmas Gift. In the end, any award that would have been granted would not have been enough to replace the structure.

Would we have the circus continue any other way? On to the next shenanigans......

Edit Add: Forgot to mention that the Bankruptcy Court issued a modified order approving the sale of the front parking lot parcel that a dollar store wishes to purchase. The Conneaut Joint Municipal Authority did file an objection to the sale of that property, but I have not been able to read that opinion yet. Unknown what the modifications were to the terms of the sale. Stay tuned...

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gore range

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Re: * CLP REPORT *
« Reply #11146 on: December 20, 2017, 07:38:50 PM »
For the newer readers, the Trustees of CLP Inc. won their law suit against Park Restoration LLC for breach of contract damages resulting from the loss of the Beach  Club (burnt down in August '13, cause of the fire officially ruled “undetermined”)  .

The Beach Club contract stated that no matter the reason for cancellation  of Park Restoration's Beach Club lease that Park Restoration agreed to return the Beach Cub in “broom clean condition.”   

After the trustees terminated Park Restoration' Hotel Conneaut, the trustees filed suit against Park Restoration for breach of contract damages on the Beach Club lease. The trustees filed for a minimum of $628,000 in damages, and made an effort in cort claiming higher damages.

Readers can decide for themselves if the trustees' suit was a gambit to generate much need cash revenues for the board or not.

However, as reported above, the court has now ruled the trustees are entitled to ZERO damages in the case.

The bottom line is the park's  entire legal exercise to gain supplementary revenues has in fact now cost the park attorney and court fees which failed to yield the park any additional and much needed cash flow, now resulting in  the park losing even more money than their documented norm.
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gore range

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Re: * CLP REPORT *
« Reply #11147 on: December 22, 2017, 11:17:18 AM »
Turner retires as executive director of Economic Progress Alliance By Keith Gushard , Meadville Tribune-

http://www.meadvilletribune.com/news/turner-retires-as-executive-director-of-economic-progress-alliance/article_4327c562-e3a5-11e7-9cc3-976b0416597d.html

....among other things, Turner speaks to lack of community support for CLP management and how it has cost the park.... 

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gore range

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Re: * CLP REPORT *
« Reply #11148 on: December 22, 2017, 11:19:24 AM »
Conneaut Lake Park excess land sale could lead to Dollar General near park By Keith Gushard Meadville Tribune

http://www.meadvilletribune.com/news/local_news/conneaut-lake-park-excess-land-sale-could-lead-to-dollar/article_02e9a8e3-9c1a-55ee-aa4e-123fc5fc5b7c.html

....the $150,000 sale will yield “about” $100,000  for the park after real estate commission and fees associated with the sale are deducted, with the money helping pay for an expansion of Camperland and “post-bankruptcy confirmation professional services.”

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gore range

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Re: * CLP REPORT *
« Reply #11149 on: December 22, 2017, 08:21:59 PM »
....skimming thru the court filings for the Dollar General lot sale hearing-

....and not reported by the local press to local readers-

......per Allan Shaddinger, Attorney for the Conneaut Lake Joint Municipal Authority (the lake area sewer system agency),  the park has not paid its sewer bill to the Conneaut Lake Joint Municipal Authority since February –

....of 2016.
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gore range

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Re: * CLP REPORT *
« Reply #11150 on: December 22, 2017, 08:46:26 PM »
...skimming thru the court filings for the Dollar General lot sale hearing-

....and not reported by the local press to local readers-

....per Lawrence Bolla, Counsel for  the Unofficial (Ad Hoc) Comittee
of Real Estate Tax Creditors (the tax bodies)....

....the park still owes the taxing districts approximately $76,000.00 on the allowed secured claim for past due real estate taxes and attorneys’ fees.

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clp_lives

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Re: * CLP REPORT *
« Reply #11151 on: December 24, 2017, 03:55:22 PM »
You mean the Beach Club lakefront lot is not worth $35k as the Trustees tried to claim?  Hard to believe the judge did not fall for that......

 
For the newer readers, the Trustees of CLP Inc. won their law suit against Park Restoration LLC for breach of contract damages resulting from the loss of the Beach  Club (burnt down in August '13, cause of the fire officially ruled “undetermined”)  .

The Beach Club contract stated that no matter the reason for cancellation  of Park Restoration's Beach Club lease that Park Restoration agreed to return the Beach Cub in “broom clean condition.”   

After the trustees terminated Park Restoration' Hotel Conneaut, the trustees filed suit against Park Restoration for breach of contract damages on the Beach Club lease. The trustees filed for a minimum of $628,000 in damages, and made an effort in cort claiming higher damages.

Readers can decide for themselves if the trustees' suit was a gambit to generate much need cash revenues for the board or not.

However, as reported above, the court has now ruled the trustees are entitled to ZERO damages in the case.

The bottom line is the park's  entire legal exercise to gain supplementary revenues has in fact now cost the park attorney and court fees which failed to yield the park any additional and much needed cash flow, now resulting in  the park losing even more money than their documented norm.

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gore range

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Re: * CLP REPORT *
« Reply #11152 on: December 24, 2017, 04:24:00 PM »
In regards to the current case of the Trustees of CLP vs. Park Restoration for damages incurred as a result of the Beach Club not returned in "broom clean" condition, it seems that the Attorney(s) for the Trustee's dropped the ball by not filing appropriate motions and responses, and failed to offer facts to back their damages argument. Even the Judge was incredulous to the fact that counsel failed to offer, or even file, the appropriate responses.

Park Restoration was successful in their argument that the property post fire was worth more without the Beach Club on it. The Trustees tried to apply a faulty appraisal process by not formulating value based on a residential use. Information from their bankruptcy paperwork threw their theory into question, and the Judge rightfully penalized them for their sloppiness. PR's counsel was not too far above the Trustee's counsel in that he too tried some underhanded tactics by not providing discovery in a timely manner and attempting to introduce exhibits not submitted to the Trustees before the hearing. The court noted that this was done not once, but twice.

Interestingly, the court noted why they have approved the Flynn Lots for sale free and clear of charitable use restrictions......... because nobody filed an objection. Therefore the court has granted those without scrutiny. Maybe, if the park does try and sell the Beach Club property free and clear, a resident - or lien holder - should file an objection and force the court to hold a hearing. From my research, any resident or property owner in the immediate area can file an objection and have standing under the PA Constitution, and a hearing must be conducted.

Perhaps the Trustees should have had an affidavit from the PA Attorney General stating that it would object to any removal of the charitable use restriction on that property because it it considered "core property". Even their land use plans conflicted.

How much cash did the Trustees dole out for this representation???

In the end, the Trustees get ZERO damages awarded, zilch, zip, NADA!! But I suppose the funds raised to help replace the Beach Club are still gaining interest....... right?

Court Opinion:
Quote
For the reasons above, this Court finds that the preponderance of the  evidence is that TCLP has not proven that it incurred damages and relief  is denied as to Count I of the Complaint only. An appropriate order shall be issued in accordance herewith.

Kudos to PR for dodging that award, but keep in mind, you were found guilty of breach of contract, the Trustees and their lawyers incompetence provided a nice Christmas Gift. In the end, any award that would have been granted would not have been enough to replace the structure.

Would we have the circus continue any other way? On to the next shenanigans......

Edit Add: Forgot to mention that the Bankruptcy Court issued a modified order approving the sale of the front parking lot parcel that a dollar store wishes to purchase. The Conneaut Joint Municipal Authority did file an objection to the sale of that property, but I have not been able to read that opinion yet. Unknown what the modifications were to the terms of the sale. Stay tuned...



....the Keith Gushard's belated revisionist 'news reporting' on the matter in today's Meadville Tribune :D -

http://www.meadvilletribune.com/news/local_news/trustees-drop-lawsuit-against-former-beach-club-operator/article_7346c1e8-44d0-5867-9b31-5b7687aebf16.html
« Last Edit: December 24, 2017, 05:34:10 PM by gore range »
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gore range

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Re: * CLP REPORT *
« Reply #11153 on: December 27, 2017, 04:06:16 AM »
For newer readers, some background perspective on the 'dropped' Beach Club law suit. The EPACC-dominated park trustees sued Park Restoration LLC in June of 2016 to obtain monetary damages the trustees stated they incurred as a result of the Beach Club burning down (official cause of fire has been reported as “undetermined).

The park law suit argued Park Restoration violated the Beach Club management agreement lease, which in part stated, “In the event of termination for any reason, Park Restoration warrants and represents that it will vacate the premises ensuring it is in broom clean condition without damage any equipment or property.”   

This past Fall, the court ruled favorably for the park in the case with the park winning their law suit against Park Restoration. At the time the court then ordered the matter proceed to the damages award hearing phase of the case to determine the monetary amount of the damage award.

The damage award hearing was held last week on Tuesday, Dec 19. After evidence was presented in the hearing by both sides. As previously noted above last week,  the court ruled “this Court finds that the preponderance of the evidence is that TCLP has not proven that it incurred damages and relief is denied”, meaning that even tho the park initially won their law suit against Park Restoration, the park failed to prove it incurred actual damages in the damages award phase of the case,  and the park will receive no money from Park Restoration for damages in the park's now.

After expending attorney and case preparation expenses to win their suit, the result is a costly hollow-victory for the park, further adding to their continuing to grow debt.
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The Wraith

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Re: * CLP REPORT *
« Reply #11154 on: December 27, 2017, 06:09:10 PM »
Gore, do you have time to add the information on the new trustee that was appointed last week. Thanks.
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gore range

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Re: * CLP REPORT *
« Reply #11155 on: December 27, 2017, 07:56:54 PM »
re:
...information on the new trustee...

James Cessna, of Meadville.

Replaces Joseph Ledford, who is reported resigning to focus on his work as a CPA work in addition to being selected as the chairman of the Meadville Medical Center's board of directors. Ledford is currently  listed as a member of the EPACC Board of Directors.

Cessna is reported being the manager of the Youngstown/New Castle office of Environmental Products & Services of Vermont Inc. , which is involved in cleanup, monitoring and prevention of environmental hazards for business and industry.

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gore range

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Re: * CLP REPORT *
« Reply #11156 on: December 30, 2017, 08:37:48 AM »
Pertaining to the local press 'reporting' posted above regarding the park 'dropping' its law suit against Park Restoration, in the seven days since last Saturday’s Tribune 'news report',  dozens of of social media messages were received asking a host of questions regarding the article, and/or requesting informed clarification. For those patiently awaiting a reply, I apologize for the seemingly delay in responding.

The Saturday 'news report' article is posted below in
bold, black italicized font,  accompanied by the related commentary in blue font. 

Trustees of Conneaut Lake Park has dropped a law suit filed against the former operator of the Beach lub night club for an Aug 1, 2013, fire that destroyed the property.
   
The paper does not report that the park in fact previously won its law suit against Park Restoration earlier this Fall, and the case was in the final damages phase of the park's successful suit  to determine actual monetary damages to be awarded to the park by Park Restoration. As previously noted, the court ruled the park was entitled to zero damages.
 But the local press 'reports' the park is 'dropping' its suit against Park Restoration.

At its meeting this week, trustees voted to 6-0 to drop a lawsuit filed against Park Restoration LLC because the bulk of the insurance proceeds from the fire were used to delinquent taxes owed on the club by Conneaut Lake Park. Board member Joan Kozlowski was absent from the meeting.

Interestingly, contrary to the trustees' publicly stated policy of announcing trustee board meetings on the NEW CLP FB page to facilitate public involvement, confidence and transparency, there was no public announcement of a trustee meeting this week on the New Conneaut Lake Park FB page. Nor any apparent mention of where the closed, private park trustee meeting was conducted.

The paper waited four days after the Tuesday, December 19 court ruling and  until after the unannounced, private trustee meeting to then 'report' the perceptive the park board voted to  'drop' its law suit against Park Restoration. Interesting slant on the park's successful and costly law suit. Victory.

The paper does not report that in spite of winning their law suit, and after park expended unreported legal fees to  pursue the matter in court,  that the park totally failed in their effort to obtain much needed cash, and ended up with nothing but racking up even more debt, further increasing the park's continuing to grow debt.

I am not aware of  local press reporting that the park actually won its law suit against Park Restoration. And when the 'news report' does appear several days after the end of the case, the obvious spin to the local readers is the  park is 'dropping their law suit against  Park Restoration. 

Tho, if a party wins their law suit, in a sense, the party does 'drop' their winning suit. When a party wins a law suit,  unless the losing party appeals the losing decision, there is no further appeal process available for law suit victors winning their law suit. Readers can evaluate if the 'report' the park is dropping their law suit is an effort to spin the court judgment. 

The paper  'reports', “ Trustees voted to 6-0 to drop a lawsuit filed against Park Restoration  BECAUSE [capitalization emphasis mine] because the bulk of the insurance proceeds from the fire were used to delinquent taxes owed on the club by Conneaut Lake Park...”.

Factually, the park's law suit against Park Restoration was a separate case which is completely and distinctively different from the hearing regarding distribution of the Beach Club insurance funds. The Beach Club insurance case has nothing to do with the park's damages suit against Park Restoration and vice versa. 

I am not aware of any evidence documenting a cause-and-effect relationship, as the paper implies with its 'reporting', between the tax bodies' legal case to secure a portion of the Beach Club insurance funds to be applied to the park's unpaid back property taxes, and the damages the trustees allege they incurred as a result of Park Restoration's breach of the Beach Club management agreement/lease.


In 2016, trustees of Conneaut Lake Park, the non-profit corporation that oversees the amusement park operations, sued Park Restoration LLC in U.S. Bankruptcy court for breach of contract and damages. Park Restoration was operating the club under a long-terms  with trustees.
   
The suit was filed in U.S. Bankruptcy court in western Pennsylvania because trustees of Conneaut Lake Park is in chapter 11 bankruptcy.

Park Restoration had leased the Beach lub since 2008 from trustees. Trustees sought damages based on the replacement value of the night club was estimated as  much as $1,978,375, Park Restoration had taken out a $611,000 fire insurance policy on the Beach Club property even though it didn't own the property.


The article does not report the park failed to, and did not, have any insurance coverage what so ever on its own Beach Club or former Cafeteria structures prior to or after leasing the facilities. Park Restoration did take out and pay for a catastrophic lost insurance policy to cover their cost of  investments of the physical improvements added to the Beach Club/Dockside facility which were funded and made by Park Restoration.
   
Earlier this year the third circuit U.S. Court of appeals ruled the bulk of the $611,00 of the insurance money --- about $400,000 --- goes to the Conneaut School District and Sadsbury and Summit townships to cover delinquent property taxed owed on the club by Conneaut Lake Park.

In September, the paper previously 'reported' “Revenues grow as Conneaut Lake Park pays off tax debt” and that “With its more than $1 million in delinquent tax debt now paid and operating revenue growing by more than 2 "This year's been very positive and it's always going to be a struggle while we have debt obligations, but it's great to have the taxes behind us," Turner said. Earlier this month, Trustees of Conneaut Lake Park, the nonprofit corporation that oversees the amusement park's operations, paid the balance of its $1,016,028.66 in outstanding real estate taxes, interest and penalties owed to Conneaut School District, Crawford County and Sadsbury and Summit townships that dated back to 1997.”

For newer readers, the paper neglects to report to local readers that it was the elected tax bodies that are responsible for a portion of the Beach Club insurance money being paid on the park's unpaid and overdue back property tax debt.

In the approved park bankruptcy plan, the park stated to creditors and the bankruptcy court the park agreed to and would pay their $1.3 million back property tax debt by April 2017. The park failed to do so.

The paper does not report that it was the elected tax bodies correctly exercising their fiduciary responsibilities duties to the tax payers appropriately utilized state law authorized legal procedures  to secure payment of $428,000 from the Beach Club insurance policy to the park's overdue back property overdue tax debt balance in August 2017.  That action is a completely different and separate court case, completely unrelated to the park's damages suit against Park Restoration.

   
In a ruling last week, Chief Judge Jeffery Deller of U.S. Bankruptcy court for the western district of Pennsylvania found trustees of Conneaut Lake Park did not prove it had sustained a loss from the Beach Club fire.
   
The $622,000 pre-fire value of the beach club was agreed upon by both trustees and Park Restoration at a trial before Deller.
   
An appraiser hired by trustees of Conneaut Lake Park had put the value of the vacant lakefront land at $35,000 based on its size of 0.41 acres and  comparable property sales while and appraiser hired by Park Restoration testified the vacant post-fire property had a fair market value of $670,000 based on the value of $3,000 per lakefront foot.
   
Deller ruled trustees of Conneaut Lake Park presented the court “with no credible evidence on which it could conclude without speculation” that the Beach Club property's value as a vacant lot after the fire was less than its pre-fire fair market value of $622,000 with the Beach Club building.


It is interesting the park endeavored to low-ball its appraisal of its lakefront Beach Club lot “at $35,000 based on its size of 0.41 acres and  comparable property sales” is interesting.  Judge Deller had previously approved and granted sales of several park lakefront 'surplus' Flynn  .4 acre sized lots which sold for over a quarter million each is certainly telling. Readers can evaluate why the park submitted such an unrealistic appraisal to the court.

The paper 'reports' the park dropped their suit because the Beach Club insurance funds paid a considerable portion of the park's back property tax debt. Such implies the park is not desperate for cash to pay other debts and bills. The paper does not report to local county readers that the  park is has been missing paying debts bills.

The paper does not did not report that in the damage award phase of the park's successful law suit against Park Restoration, attorneys for two park creditors reported to the court the park is delinquent on the park's  previously agreed to financial obligations.

According to court filings, Allan Shaddinger, attorney for the Conneaut Lake Joint Municipal Authority (the lake area sewer system agency), informed the court the park has not paid its sewer bill to the Conneaut Lake Joint Municipal authority since February of 2016.

And Lawrence Bolla, attorney for the unofficial (ad hoc) committee of real estate tax creditors, the tax bodies, informed the court the park still owes the taxing districts approximately $76,000.00 on the park's back property debt.
« Last Edit: December 30, 2017, 10:54:16 AM by gore range »
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The Wraith

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Re: * CLP REPORT *
« Reply #11157 on: December 30, 2017, 11:05:21 AM »
I am afraid that your dissection of the article compared to what the court actually said in its order/opinion are not entirely in sync. You are correct in some of the facts presented, but you are mixing two subjects NOT discussed in the damage award phase of the breach of contract part.

The breach of contract case, which was the subject of most of the article, is a separate proceeding from the overall bankruptcy case. For those who may have questions about the proceedings, or the opinion, they should consult original documents and decide for themselves.....

Read the opinion for yourself. It makes for an interesting look inside the process and facts used to make that opinion. Why have someone else do for you, what you can do for yourself.

Link to the breach of contract opinion from Judge Deller:
https://www.leagle.com/decision/inbco20171218553
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gore range

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Re: * CLP REPORT *
« Reply #11158 on: December 31, 2017, 08:54:42 AM »
....fascinating and enlightening reading in the court's ruling-

iv. Credibility of TCLP's Appraisal

The appraisal of real property is an inexact science and perhaps nowhere is this more evident than in a case such as this where two expert appraisers utilize the same method of valuation and arrive at widely disparate values.
...
In this matter, TCLP bears the burden of proving damages. As such, the Court will first examine whether TCLP has presented credible evidence in support of its claim. Upon review of the evidence presented, the Court finds serious issues with the comparables selected by and relied upon by Glowacki in formulating his appraisal of the Property. Specifically, the lack of commonality between the "comparable" properties and the Property with respect to age of sale, location, and other physical attributes undermines Glowacki's opinion. Accordingly, the Court finds that TCLP's Appraisal and Glowacki's testimony lack credibility and the Court assigns no weight to such evidence.

Specifically, the age of the comparables selected by Glowacki for inclusion in his appraisal is troubling. Of the eight total comparable sales identified by Glowacki, five sales and a portion of a sixth (which was a compilation of sales between 2001 and 2008), were at least ten years old. Of the remaining sales, one was six years old and the other occurred four years after the effective date. To compensate for the age of the sales, Glowacki adjusted the sales price of each sale by one-percent per year.

Gillette disagreed with Glowacki's contention, credibly testifying that lakefront property appreciated at a significantly greater rate than non-lakefront property. Thus suggesting that Glowacki's use of the county-wide appreciation rate was errant. Moreover, Gillette indicated that the age of some of the sales, specifically Sales 1 and 2 (respectively referred to as "the Salvation Army Property" and "the Wald Coleman Funeral Home"), in itself warranted exclusion. The Court agrees with Gillette's criticisms and, despite Glowacki's attempts to offset the age of the comparables, finds that the age of the comparable sales weigh against a finding that TCLP's Appraisal is credible.

In addition to the age of the comparables, Gillette criticized Glowacki's selection of comparable property sales on the basis that none of the properties were located lakefront to Conneaut Lake; which again, Gillette indicated was the most improved market in the area. The Court finds merit with Gillette's criticism and what's more, is further concerned by Glowacki's failure to adjust the comparable sales prices upwards to compensate for their non-lakefront locations. …  In fact, to the contrary, Glowacki adjusted the sale price of two comparable properties, the Salvation Army Property and the Low-Rise Asst Living, downward by thirty percent to account for their "Superior/Corner" locations, ... thereby suggesting that their non-lakefront locations were more desirable. In his testimony, Glowacki conceded that he did not take into consideration the value of the lakefront location or view. He further opined, albeit unconvincingly, that the Beach Club, despite being physically located on Conneaut Lake's beach, did not actually have lake frontage due to the public's right to access the area of the beach between the former Beach Club structure and the water's edge. Of course, the documentary evidence proves otherwise. That is, the Beach Club property does have a water view and was near the water's edge. The Court is perplexed by Glowacki's logic as well as his failure to assign any value to the Property's proximity to and/or view of Conneaut Lake. Glowacki himself acknowledged in his appraisal that the area in which the Property is located is a "Resort Commercial District" and that, as of Crawford County's lakes generally, Conneaut Lake is a "revenue source for the growing summer tourism industry."

Further, that "[t]he Conneaut Lake area should continue to be an attraction for recreational purposes though the operation of Conneaut Lake Park on a long-term basis is questionable." …. As Conneaut Lake is a significant, if not the most significant, recreational attraction in the recreational area, it defies logic that the Property's close proximity to Conneaut Lake would not positively affect the value of the Property.

Even disregarding the non-lakefront location of all of Glowacki's comparable properties, Glowacki's selection of comparables is further called into question by his inclusion of properties which otherwise appear to share little to no commonalities with the Property. For example, despite the Property being located in Crawford County, Pennsylvania, two comparables, identified in TCLP's Appraisal as Sale 5 ("Dollar General I") and Sale 6 ("Dollar General II"), are located in Erie County, Pennsylvania; an entirely different market, which itself warrants exclusion of those sales as comparable. ... Regardless, no reconciliation was made for the different locations. A third property, identified in TCLP's Appraisal as Sale 4 ("Lumber Store II"), lacks any road frontage at all. Although Glowacki attempted to off-set the lack of road access to Lumber Store II by an increase in sales price of 100 percent, the properties are too different for Lumber Store II to be considered a usable comparable.

Due to these issues, the Court finds that TCLP's Appraisal is unpersuasive and unreliable. As stated above, TCLP bears the burden of proof in this breach of contract matter to establish damages by a preponderance of the evidence, to a reasonable degree of certainty. As this Court does not find convincing the only evidence TCLP presented to establish the post-fire fair market value of the Property, the Court could only speculate as to the existence of damages. Stated another way, TCLP has presented the Court with no credible evidence on which it could conclude without speculation that the post-fire fair market value of the Property is less than $622,000. Accordingly, TCLP has failed to sustain its burden.

Although this result may appear harsh under the circumstances—in that, it is apparent that TCLP was injured (but not necessarily damaged) by the loss of the Beach Club—such denial of relief in the absence of credible evidence of fair market value is not unprecedented.

It is significant that TCLP was afforded not one, but two opportunities to put forth credible evidence as to the fair market value of the Property. First, at the May 17, 2017 hearing, where TCLP was unprepared to present any evidence as to fair market value, and again at the July 24, 2017 hearing, where it presented evidence that this Court now finds lacks credibility.

Further, the Court takes note that according to TCLP's prior filings with the Court, TCLP projects an increase in revenue associated with the Property, despite the destruction of the Beach Club structure itself. According to Gillette's pre-fire income capitalization calculation, the stabilized income to TCLP under the Beach Club Management Agreement was $43,425 per year prior to real estate taxes. ... TCLP agrees with this figure. ... However, pursuant to the cash flow projections attached to TCLP's Disclosure Statement, TCLP projects income of $5,000 per month from the "Land Lease"—"Beach Club Pad Lease," for a total income associated with the Property of $50,000 in 2018, and $60,000 in each 2019 and 2020. ... Thus suggesting that the Property is, in fact, more valuable to TCLP post-fire as a vacant lot. TCLP's averments that the Property is worth only $35,000, despite projections of yearly income greater than that amount, beg the question of which is errant: TCLP's Appraisal or its cash flow projections.

Finally, the Court notes that its finding that TCLP failed to sustain its burden as to Count I does not foreclose TCLP from obtaining redress—TCLP has two remaining counts that it may pursue.


The park board has voted to stop its efforts to pursue Beach Club damages against Park Restoration.
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clp_lives

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Re: * CLP REPORT *
« Reply #11159 on: December 31, 2017, 11:33:30 AM »
Someone should clearly lose their license to appraise with this insult.


....fascinating and enlightening reading in the court's ruling-

iv. Credibility of TCLP's Appraisal

The appraisal of real property is an inexact science and perhaps nowhere is this more evident than in a case such as this where two expert appraisers utilize the same method of valuation and arrive at widely disparate values.
...
In this matter, TCLP bears the burden of proving damages. As such, the Court will first examine whether TCLP has presented credible evidence in support of its claim. Upon review of the evidence presented, the Court finds serious issues with the comparables selected by and relied upon by Glowacki in formulating his appraisal of the Property. Specifically, the lack of commonality between the "comparable" properties and the Property with respect to age of sale, location, and other physical attributes undermines Glowacki's opinion. Accordingly, the Court finds that TCLP's Appraisal and Glowacki's testimony lack credibility and the Court assigns no weight to such evidence.

Specifically, the age of the comparables selected by Glowacki for inclusion in his appraisal is troubling. Of the eight total comparable sales identified by Glowacki, five sales and a portion of a sixth (which was a compilation of sales between 2001 and 2008), were at least ten years old. Of the remaining sales, one was six years old and the other occurred four years after the effective date. To compensate for the age of the sales, Glowacki adjusted the sales price of each sale by one-percent per year.

Gillette disagreed with Glowacki's contention, credibly testifying that lakefront property appreciated at a significantly greater rate than non-lakefront property. Thus suggesting that Glowacki's use of the county-wide appreciation rate was errant. Moreover, Gillette indicated that the age of some of the sales, specifically Sales 1 and 2 (respectively referred to as "the Salvation Army Property" and "the Wald Coleman Funeral Home"), in itself warranted exclusion. The Court agrees with Gillette's criticisms and, despite Glowacki's attempts to offset the age of the comparables, finds that the age of the comparable sales weigh against a finding that TCLP's Appraisal is credible.

In addition to the age of the comparables, Gillette criticized Glowacki's selection of comparable property sales on the basis that none of the properties were located lakefront to Conneaut Lake; which again, Gillette indicated was the most improved market in the area. The Court finds merit with Gillette's criticism and what's more, is further concerned by Glowacki's failure to adjust the comparable sales prices upwards to compensate for their non-lakefront locations. …  In fact, to the contrary, Glowacki adjusted the sale price of two comparable properties, the Salvation Army Property and the Low-Rise Asst Living, downward by thirty percent to account for their "Superior/Corner" locations, ... thereby suggesting that their non-lakefront locations were more desirable. In his testimony, Glowacki conceded that he did not take into consideration the value of the lakefront location or view. He further opined, albeit unconvincingly, that the Beach Club, despite being physically located on Conneaut Lake's beach, did not actually have lake frontage due to the public's right to access the area of the beach between the former Beach Club structure and the water's edge. Of course, the documentary evidence proves otherwise. That is, the Beach Club property does have a water view and was near the water's edge. The Court is perplexed by Glowacki's logic as well as his failure to assign any value to the Property's proximity to and/or view of Conneaut Lake. Glowacki himself acknowledged in his appraisal that the area in which the Property is located is a "Resort Commercial District" and that, as of Crawford County's lakes generally, Conneaut Lake is a "revenue source for the growing summer tourism industry."

Further, that "[t]he Conneaut Lake area should continue to be an attraction for recreational purposes though the operation of Conneaut Lake Park on a long-term basis is questionable." …. As Conneaut Lake is a significant, if not the most significant, recreational attraction in the recreational area, it defies logic that the Property's close proximity to Conneaut Lake would not positively affect the value of the Property.

Even disregarding the non-lakefront location of all of Glowacki's comparable properties, Glowacki's selection of comparables is further called into question by his inclusion of properties which otherwise appear to share little to no commonalities with the Property. For example, despite the Property being located in Crawford County, Pennsylvania, two comparables, identified in TCLP's Appraisal as Sale 5 ("Dollar General I") and Sale 6 ("Dollar General II"), are located in Erie County, Pennsylvania; an entirely different market, which itself warrants exclusion of those sales as comparable. ... Regardless, no reconciliation was made for the different locations. A third property, identified in TCLP's Appraisal as Sale 4 ("Lumber Store II"), lacks any road frontage at all. Although Glowacki attempted to off-set the lack of road access to Lumber Store II by an increase in sales price of 100 percent, the properties are too different for Lumber Store II to be considered a usable comparable.

Due to these issues, the Court finds that TCLP's Appraisal is unpersuasive and unreliable. As stated above, TCLP bears the burden of proof in this breach of contract matter to establish damages by a preponderance of the evidence, to a reasonable degree of certainty. As this Court does not find convincing the only evidence TCLP presented to establish the post-fire fair market value of the Property, the Court could only speculate as to the existence of damages. Stated another way, TCLP has presented the Court with no credible evidence on which it could conclude without speculation that the post-fire fair market value of the Property is less than $622,000. Accordingly, TCLP has failed to sustain its burden.

Although this result may appear harsh under the circumstances—in that, it is apparent that TCLP was injured (but not necessarily damaged) by the loss of the Beach Club—such denial of relief in the absence of credible evidence of fair market value is not unprecedented.

It is significant that TCLP was afforded not one, but two opportunities to put forth credible evidence as to the fair market value of the Property. First, at the May 17, 2017 hearing, where TCLP was unprepared to present any evidence as to fair market value, and again at the July 24, 2017 hearing, where it presented evidence that this Court now finds lacks credibility.

Further, the Court takes note that according to TCLP's prior filings with the Court, TCLP projects an increase in revenue associated with the Property, despite the destruction of the Beach Club structure itself. According to Gillette's pre-fire income capitalization calculation, the stabilized income to TCLP under the Beach Club Management Agreement was $43,425 per year prior to real estate taxes. ... TCLP agrees with this figure. ... However, pursuant to the cash flow projections attached to TCLP's Disclosure Statement, TCLP projects income of $5,000 per month from the "Land Lease"—"Beach Club Pad Lease," for a total income associated with the Property of $50,000 in 2018, and $60,000 in each 2019 and 2020. ... Thus suggesting that the Property is, in fact, more valuable to TCLP post-fire as a vacant lot. TCLP's averments that the Property is worth only $35,000, despite projections of yearly income greater than that amount, beg the question of which is errant: TCLP's Appraisal or its cash flow projections.

Finally, the Court notes that its finding that TCLP failed to sustain its burden as to Count I does not foreclose TCLP from obtaining redress—TCLP has two remaining counts that it may pursue.


The park board has voted to stop its efforts to pursue Beach Club damages against Park Restoration.

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