MARION—The existence of a TIF (tax increment financing) District is, simply put, to aid in developers’ creation of growth in blighted areas of a municipality.
TIFs help improve tax income over the long run as regards property taxes, because they help restore viable business and improve overall tax assessment in developed areas. This way, in the future, when the district ceases its function (there is a 23-year cap on TIF districts), the properties within it create a better tax base for a municipality.
However, TIFs do not give the TIF District rights to steamroll over property owners in areas of the district. There are remedies in place if a taxing body (which a TIF District is) wishes to acquire property; eminent domain has its own styling in a court of law, and a taxing entity can take up an ED case before a judge and ask for the system to sort it out.
This isn’t the case in a Marion TIF District, however.
Court documents and bank statements show that a Marion businessman, part of a TIF District in partnership with another Marion businessman, has done just that: steamrolled right past the legal remedies available to a taxing entity, and, presenting himself as something he is not, skipped right to foreclosure on a property he does not own, has not petitioned the court to acquire by eminent domain, and worst of all, has involved others in his scheme.
The situation is so massive that it will take several publications to lay it out. But in this issue, Disclosure will start at the beginning of the nightmare that began a year ago in August for one Faith Ann Colborn and her husband, Bob, when Doug Bradley, of Marion Heights, LLC (in partnership with Lynn Holmes) filed a Complaint for Foreclosure under a Chancery suit in Williamson County, attempting a land-grab that, according to decisions made by the court thus far, he was wrong to begin.
Bradley, though, opened himself up to scrutiny when he began the land-grab.
In investigating the case, Disclosure has discovered potential misappropriation of funds within Williamson County and the city of Marion that are breathtaking in their magnitude.
Through FOIA, documents have been obtained that show there’s a massive shell game going on in Williamson County and Marion city government.
And the next several issues will expose it.
Faith Park
Faith Ann Colborn, who goes by Ann, is a real estate agent in Williamson and surrounding counties and a well-known and well-respected member of the Marion community. Hailing originally from Harrisburg, she is married to Bob Colborn, who himself is originally from Wabash County.
The Colborns purchased a mobile home park consisting of 2.76 acres at 2000 Princeton Avenue, Marion, in March of 1994, to create monthly income as well as to serve as a retirement package for herself and her husband. They named the area Faith Park, after her first name.
In November 2001, Colborn refinanced a mortgage on the park with then-Union Planters Bank/now Regions Bank. Their monthly payments were $4,000, and they made them on time and in full, religiously.
Unfortunately, in 2009, the area experienced an “inland hurricane” that many across Williamson and more southerly counties in downstate Illinois will remember well. This storm inflicted thousands of dollars of damage on Faith Park. The Colborns had insurance coverage, but due to the type of damage, their insurance covered only a third of the damages.
They paid thousands out-of-pocket to put the mobile homes back in livable condition after trees fell on and around the mobile homes. The area was declared a National Disaster by President Obama, so devastating was it.
Due to that devastation, along with a very weak economy, Colburn set up an interest-only payment plan with Regions Bank in 2011.
Offer to purchase turned down
In February 2012, J. David Thompson, a real estate broker in Marion, called Colborn representing two developers, Doug Bradley and Lynn Holmes (Marion Heights, LLC, aka The Hill) wanting to purchase half of the mobile home park.
The park is located to the direct south from the STAR Bond Project which has been underway in Marion for the past three years.
Not the first shovel of dirt has been broken to this development in the area; it is currently being utilized for a corn crop.
Colborn told Thompson that they were not interested in selling Faith Park, much less one-half of the park.
But, Marion Heights LLC, along with the city of Marion, had placed half the land the Colborns own in TIF—without the Colborns’ knowledge and without mandatory notification, something that’s required by law to be done before the placement of the property in a TIF District.
This, of course, made the land much more valuable.
The Colborns learned eight months after the fact that their property had been so placed in the TIF District.
At the very minimum, Faith Park is now worth $2 million.
As a reflection of this, Bradley and Holmes typically collect 99 percent of the property taxes collected on a commercial entity; the TIF life span is the aforementioned 23 years, but is extended beyond that in many instances.
Crossing state lines
On July 2, 2012, documents show that Bradley traveled to Indianapolis and went to Regions Bank, where he purchased the entire mortgage note. One Art Cutler at Regions in Indy facilitated the sale of the note.
Bradley then, through Marion Heights, LLC’s attorney Ron Osman, made an immediate demand to Colborn for payoff for close to $300,000, which exceeeded the true payoff by $24,000.
Colborn, stunned, could do little but protest the numbers. She said she’d never heard of such a thing as someone going to merely purchase a bank note, then coming into ownership of a property in such a way, and questioned the legality of the maneuver.
She was slapped with the Chancery suit upon protesting, this being filed in Williamson County circuit court on August 15, 2012.
The suit, on the surface of it, sounds ominous for the Colborns: It presumes that everything about the purchase Bradley made of the previously-existing bank note was done above-board, was perfectly legitimate, and that he had every right to do it.
The problem with that premise is…it’s wrong.
Legitimate-looking suit
The appearance of the Chancery suit–its surface appearance–looks good: Bradley claims that Marion Heights, LLC (a limited liability corporation, or, a business) was filing to foreclose a real estate mortgage and note and joined Colborn in the filing.
It listed the Marion Heights, LLC, as a “successor” to the mortgage, as if Colborn actually went to Regions Bank in Indianapolis WITH Bradley and sold him the mortgage.
It noted the 2001 refinancing previously mentioned as Colborn having done, with then-Union Planters Bank/now Regions Bank.
It also listed that on July 11, 2012, the mortgage was filed in the office of the Recorder of Williamson County under Marion Heights, LLC…again, as if this were all approved by Colborn and done with her complete knowledge (it’s since been established that the recorder’s office knew nothing of the subterfuge going on with the purchase of the bank note in Indianapolis).
Then the suit lists as a “current unpaid principal balance of $262,322.38” as of July 19, 2012; along with interest accrued through August 15, 2012, $25,747.17, interest accrued at default rate through that same date on interest and late fees $208.57, title expenses, court costs and attorney’s fees accrued through that date of $2,554 and late fees of $1,265.52, with a total to repay “account” in full through August 15, 2012 with interest accruing at $90.91 per day of $292,097.64.
On a bill that didn’t exist
All of this was being claimed against, effectively, a bill that didn’t exist.
It was being claimed against a contract that Ann Colborn didn’t sign (the sale of a mortgage).
It was being claimed against something that she hadn’t been made aware that had happened at Regions Bank, despite what Bradley made it appear to be in some very legitimate-looking court filings.
Bradley had not only gone to pay off the mortgage Colborn owed, but was now coming after her for the payoff, PLUS other dollar amounts that he apparently believed he could get from her, and all of this was done in the effort to absorb her land, which he had surreptitiously and incorrectly placed in a TIF District that he owned.
Had Bradley merely paid off the mortgage and proceeded with untenanting the property in order to “develop” it as he saw fit under the TIF District, Colborn might have been so taken off guard that Bradley could have accomplished more with it, getting the property to the point that Colborn might have “given up” and relented, allowing him to do what he wished with it.
But the demand for money was the final blow…and so Colborn began investigating how it all happened, and filed a response in Williamson County court protesting the very act of the purchasing of the mortgage.
Not a debt collector
In her response, Colborn showed that the payments made on the note up until the July 2012 purchase of it by Bradley were made by her.
She explained that the arrangement she had made with Regions, after the inland hurricane damage to the trailer park, was to pay “interest-only” on the note.
This is a perfectly legitimate way to handle a large note such as the one she was carrying: banks often do this for their clients; as long as the interest accrued on the amount owed is paid monthly, they’re fine with it. The assumption is that when the mortgage-holder gets done with the other financing issues they have (such as storm repairs in this case), they’ll begin to make the full payment again. This keeps the note from falling into default status.
A licensed, certified debt collector can rightly, after notice to the mortgage holder, go purchase a debt that is and has been in default.
The problem came, therefore, in the fact that Bradley isn’t a licensed, certified debt collector.
Available records with the state of Illinois prove this; Bradley even advised, in a phone call with Disclosure, that he has never been registered as a debt collector.
The second in the series will appear in the October issue of Disclosure, avaliable October 2.