Video

Why did Steve Russo appoint Cecilia Cruz and Virginia Yrun to the HOA board then remove them?

14 May

Southern Arizona Land Trust (a 501c3 non-profit) was a defendant in this $500,000 HOA lawsuit against me by Steve Russo. SALT transferred it’s Unit 5 lots to a Russo-controlled LLC — I wonder if Ceci Cruz, the President of SALT knows this? Someone gave the lots to SALT (tax deduction) out of despair. Two people in Unit 9 gave me their lots. Russo is statutory agent for SALT, his law partner Bob Schwartz who appears in this video, is more deeply involved with SALT.

In 2010, Cruz and Yrun were on all the Sycamore Vista HOA boards then next year they were not. The 2010 annual report says they were appointed 01/01/2009.

Ceci is a good friend of a friend of mine, Alison Hughes. Both are community activists. Ceci founded the Tucson/Pima County Women’s Commission, Alison was the President of the Commission. I met Alison through mutual friends and former State Representatives, John Kromko and Carmine Cardamone.

I’d like somehow to make Cecilia Cruz aware of the terrible situation Russo has put me and other lot owners in, I don’t believe she would approve!

Russo is paid $131,000. Construction kickbacks, maybe?

Russo is paid $131,000. Construction kickbacks, maybe?

Why did Russo sue me? I was in the process of quieting title to the construction assessments on my vacant lots. I sent notice to Mr. Sullivan who was CEO of Title Security Agency of Arizona and First Magnus, that the assessments he allegedly bought from the prior majority lot owner’s shell company, Western Associates had expired due to statutes of limitations. First Magnus went into bankruptcy for $1-billion (yes, billion) and was one of the causes of the housing crisis. Sullivan’s lawyers contacted Russo who allegedly bought the assessments from Sullivan. I say “allegedly” because we have no evidence any of them ever paid the HOA or anyone any money. Once Russo owned the assessments, he sued me attempting to foreclose on the assessments. Every lawyer I’ve spoken to, including the judge does not think selling the assessments is legal. There is a law against it in California. Mr. Sullivan and the prior majority lot owners were Navy SEALS, friends.

SALT website

Pima County Industrial Authority website:  (Ceci Cruz and Virginia Yrun are board members but Russo really runs it.)

Daily Star article showing Russo runs the Industrial Authority and how much money he makes doing it.

Article by someone in Ohio who doesn’t like the Pima County Industrial Authority investing in Ohio schools.

Daily Star raising question about Industrial Authority funding out of state projects.

More info on SALT, Sasse, Sorensen and the Industrial Authority.

Link to the Sparlin Complaint.

Sparlin Complaint Index:

The inept management of the Corona (New Tucson/Sycamore Vista) Project, which led to National Bank of Arizona losing $35-million, pages 53-56

Indictment against PAUL Y. SORENSEN (an employee of SALT): pages 96ff

Indictment against GREG T. SASSE (An employee of SALT): pages 85ff

How Sparlin lost money investing in Sycamore Vista (“Corona”/New Tucson): pages, 19, 37, 38, 40, 41

Western Recovery Services (managed by prior majority lot owners) had no cash and was maybe using liens on our lots as assets: pages 53ff

Building Firm Pleads Guilty to Defrauding Its Customers

6 May

“The opportunities to steal and the incentives to cheat are so huge in construction that fraud has always threatened every single building project in our city.”

New York Times, 30 April 2014

Structure Tone, one of the nation’s largest construction firms, pleaded guilty on Wednesday to corruption charges and agreed to forfeit $55 million for a scheme in which the company defrauded a roster of prominent financial institutions, law firms and ad agencies out of tens of millions of dollars.

The company arranged for electrical, plumbing, drywall and other subcontractors to falsely inflate their bills for Structure Tone’s clients, investigators say, adding millions of dollars to the cost of building office space for Bank of America; Moody’s; Bloomberg; Proskauer Rose, a law firm; and other major customers between 2005 and 2009. . . .

Image

“The opportunities to steal and the incentives to cheat are so huge in construction that fraud has always threatened every single building project in our city,” said Mr. Thacher, chief executive of Thacher Associates, which provides a monitoring service for companies engaged in construction projects. “Corruption adds many, many hundreds of millions of dollars to the cost of construction each year in this city, and that cost is passed on to the public.”

Structure Tone specializes in building office space, or interior construction, as opposed to erecting the core and shell of a skyscraper. In some instances, it acts as a construction manager for a firm, overseeing the work, negotiating contracts and hiring subcontractors, on behalf of a corporate client.

Unit 5.1 Roads

How much did it cost to build the one road in this picture? (Sycamore Vista Land For Sale, Lc is my company.)

On other jobs, the company serves as a general contractor hired to perform the work for a fixed price, or “lump sum.”

According to investigators, when Structure Tone acted as a construction manager it would tell subcontractors to raise their prices to account for unnecessary “contingencies” under an addendum known as “Rider B,” whose existence was never revealed to the client. At the same time, the executives would demand a discount from subcontractors on “lump sum” contracts.

“Rider B was the vehicle for the fraud,” Mr. Szuchman said.

Unit 5.1 Budget for Road

How are we lot owners supposed to know if this is a fair price? HOAs aren’t supposed to be putting in roads. Square footage swimming pools, buildings, roofs are all easy to estimate but roads?

How much did it cost to build these roads?

How much did it cost to build these roads? (Total 1708 feet, curb-to-curb about 25-feet; including sewer lids and curbs.) Russo says, $792,077. I think it included the little east/west cul de sac on the left.

 

Why would National Bank of Arizona lend these guys $35-million?!

15 Nov

Here’s the 2nd Amended Complaint by Derry Dean Sparlin, Sr., they dropped the Barnitt’s, who were victims too. (Morris Family Trust lost $1-million too.) Added Hadrianus Terra, LLC, which is also a defendant in my lawsuit another mutual defendant is Tucson Acquisition & Development Corporation, both affiliated with Michael N. Figueroa and Jeffery S. Utsch, who were the prior majority lot owners, Utsch was head of the HOA too.


2nd Amended Sparlin Complaint (PDF), Why would National Bank of Arizona lend them $35-million?! 

SPARLIN Complaint Index:

The inept management of the Corona (New Tucson/Sycamore Vista) Project, which led to National Bank of Arizona losing $35-million, pages 53-56

Indictment against PAUL Y. SORENSEN: pages 96ff

Indictment against GREG T. SASSE: pages 85ff

How Sparlin lost money investing in Sycamore Vista (“Corona” = New Tucson): pages, 19, 37, 38, 40, 41

Western Recovery Services (managed by prior majority lot owners) had no cash and was maybe using liens on our lots as assets: pages 53ff

Sparlin has an interest in Hadrianus Terra, I’d like to have him join our lawsuit, his lawyer has written a serious indictment against the prior majority lot owners — securities fraud! Like to also see the lot owners who lost their lots to Hadrianus and Tucson Acquisition because of the bogus Assignments (they intimidated the prior lot owners) join our lawsuit. The prior lot owner of Russo’s associate Southern Arizona Land Trust lost their lots due to despair.


List of new defendants in my case (PDF)

The Assignments of Special Assessments, which are the focus of my lawsuit are securities. From reading this Amended Complaint, it appears that Western Recovery Services had no real cash assets and from looking at the HOA budgets (See Unit 5 for 2006, page 36) it looks like WRS never paid the HOA any money for the Assignments. The budgets consider the WRS “Purchase Agreements” as liabilities — whatever that means? These budgets are very confusing to me. The HOA gave? the assessments to WRS and then WRS sold them to friends and investors, not sure if any of that money went to the HOA.


(Copied from Arizona Corporation Commission, unfortunately, they’re not in order, click right or left side of the page in full-screen to advance or go back.)

EDIT: This explains how they got the loan, they got Carl F. Pepper to apply for it. Pepper is well-known builder and real estate investor. He and Utsch are still friends and business partners. Not sure of Pepper lost any money, I think they appointed him head of Sky Island, which was the vacant lot holding company. Also involved in the foreclosure was CORONA ACRES L.L.C. and PALATINE PROPERTIES FUND L.L.C. both Figueora and Utsch entities

April 20, 2008 — Acres of empty new-home lots marked by evenly spaced power hookups lie along Camino del Toro, west of South Houghton Road in Corona de Tucson. Nearby stands a sign: “Financed by National Bank of Arizona.”

In 2005, the development group Sky Island Properties Inc., led by Carl Pepper, took out a $32 million loan from National Bank of Arizona to buy land and make improvements there. Last November, the bank took the developers to court for defaulting on the loan and had the land placed under another developer’s supervision, court documents said. Read more.
lotflipstudy2

The $22-million and $9-million lot flip was between Title Security 862 and Sky Island.

bankruptcy0001

From the National Bank of Arizona Foreclosure in Pima County Superior Court.  1338 lots cost $6,826,000 = $5101/lot. Not sure how much NT Properties paid.

Image

Unit 5 Lots Finished

11 Nov
I own a few lots around the cul de sac, eight total in the finished area. The lots where I'm standing are very much higher than the rest and have wonderful views.

I own a few lots around the cul de sac — eight total in the finished area. The finished lots where I’m standing are very much higher than the rest and have wonderful views. I’ll bet the rock wall, which is HOA property, will fill with Tumbleweeds & Desert Broom. Wonder how many dump-truck-loads are under my feet? (Prior majority lot owners said they dumped 10,000 loads of dirt on Unit 5.)

Lots in the SW corner of Unit 5 were finished sometime before September 23rd, 2013 when I went out and inspected my Unit 2 lots prior to cleaning them up. I looked through my emails and blog posts, looks like I never told anyone about this!?

Also, November 1st, when I paid property taxes, I went to Recorder’s office and verified that Russo sold 51 lots in Units 5 & 2 to DR Horton for 33,600/lot (corrected in posts below). Two of those lots sold to DR Horton (in Unit 2) belonged to the prior majority lot owners (Tucson Acquisition and Development Corporation, which is being sued for securities fraud involving this subdivision), online Recorder’s/Assessor’s records show they (prior majority lot owners) sold two lots to NT Properties for $70k, which doesn’t make sense. According to those same records, one of Russo’s shell companies, PRD Investments sold six lots to NT Properties for $180,000 = $30k/lot.

Looks like a Fishhook Barrel Cactus tagged on Unit 5

Unit 5 looking SW, March 2003 with tagged barrel cactus.

As you know, Russo has offered me and another Unit 2 lot owner $20k-$25k/Unit 2 lot so he can turn around and sell them for $33,600. I also told Russo several months ago of two Unit 2 lots for sale for $15k/ea, they were free and clear of liens. I could have bought them but knew I could not sell them. Russo bought them and did not thank me for the tip.

Lot cleanup: the HOA and Russo are unconscionable

29 Sep
Johnny helped me last year cleaning up Unit 2 Lot 313, a few months later he committed suicide.

Johnny helped me last year clean up Unit 2 Lot 131, a few months later he committed suicide. The weeds on the far right, against the wall are on a 15-foot wide HOA easement.

I paid about $10,000 in HOA dues because I was afraid they would steal my lots, I quit paying now that I realize the HOA is illegal and unconscionable. They make me clean up my lots or threaten to charge me $85/lot to do it. Johnny needed the money, I’d rather give it to him. The friend who helped me this Sunday morning (I got up at 6am) did it as a favor (he teaches children for TUSD, some of the children are very disruptive and disrespectful) but we only finished one lot before we felt too tired and he didn’t have good gloves. Got home started crying and took a tranquilizer.

Lots of sweat on my shirt

Lots of sweat on my shirt — Lot 189. Rincon mountains in the background.

Russo helped the prior majority lot owners (who are being sued for securities/land fraud) sell three lots in Unit 2 but wouldn’t help me or another person who wants to sell. Major builders won’t buy less than 10 lots . . . we have been asking Russo for several years to help us, he said twice he would help me but then this lawsuit came up where he undermined my foreclosure of the expired/unlawful assessment liens. Russo loves money, not god only a rat would do what he’s doing . . . even the prior majority lot owners did not treat me like this. (At an HOA meeting, Mr. Figueroa got froggy when I accused him of flipping lots among his shell companies to boost their assessed value.)

lotflipstudy2

I wouldn’t doubt that the prior majority lot owners and National Bank cooperated in losing $35-million developing these lots — the biggest loss in NB’s history. . . such theft was common in China:

In China, ventures may be spectacularly unprofitable, yet enrich everyone lucky enough to get a piece. Developers, for example, construct vacant office buildings as an excuse to borrow from state banks. They rake off a cut for themselves, pay bribes to the party officials who deliver the land and reward bank functionaries with sumptuous banquets and trips to Macao. Soon enough, the trophy skyscraper descends into financial disaster, but the developers, bankers and party officials have already extracted their riches, and for long afterward they will still enjoy them. “Lessons the Teacher Forgot,”New York Times, 16 May 2009.

HOA Threats, Intimidation & Extortion

27 Sep

HOA is threatening me again. God knows what they are trying to do but it’s like extortion and feels like a threat. As you know, Unit 5 consists of vacant lots, Unit 2 has only a few lots left. The prior majority lot owners agreed to help us sell our lots to builders because they knew builders would not buy from us unless we had ten or more lots to sell; current majority lot owners will not help us sell but they recently helped the prior majority lot owners (who are being sued for securities fraud involving these lots and others) sell lots they got through threats/intimidation to foreclose bogus assessment liens.

Over the years I have paid over $10,000 in HOA dues. Part of the reason I paid was I was afraid they would steal my lots. I wanted to wait until the assessment liens expired so I could clear the liens off my lots and then sell them. Upon sale I would pay the dues under protest. Some of the dues are over three years old, which means they are uncollectible under statutes of limitations.

I know several lot owners who were intimidated by the HOA and assessment lien-holders into giving up their lots. One person gave a lot to me and said, “if they come after you for the money, let me know.” Theoretically I think the lien-holders could steal everything I worked hard for all my life to collect the value of their bogus liens.

Here’s an example of how useless this HOA is (note that lots in Unit 9 and 10 will not be developed for 10 years, yet they still expect us to pay HOA dues):

Under new management.

Under new management.

This HOA is unconscionable, no one in their right mind would tolerate this. I asked them once, “what benefit does the HOA provide” and they said, “insurance.” I told them my homeowner’s insurance policy insures vacant land I own and I know no one who insures their vacant land.

I just do not know what to do!

EDIT: Lawyers said to wait until we finish litigation.

Just got more notices today for my lots in Units 7 and 8.

Causes me to think: The only other person I met who is as evil as Mr. Russo was someone who would go to the courthouse and undermine my tax lien foreclosures. I confronted the underminer and told him what he was doing was rotten. He said he undermines his friends too!

That tax lien underminer worked for the prior majority lot owners who also got most of their Sycamore Vista/New Tucson lots through tax lien foreclosure. Technically, undermining like what Russo and the other person did (Russo undermined me when I was in the process of foreclosing Mr. Sullivan, one of the assessment lien-holders) is not illegal, it’s just rotten, like the looting on Wall Street wasn’t illegal because Bill Clinton, in the last daze of his presidency signed legislation that legalized the looting.

The HOA is illegal, Dreamland v Raimey, 224 Ariz. 42, 226 P.3d 411:

Deed restrictions for residential community without common areas, containing only restrictive covenants pertaining to each lot owner’s personal residence [this is what we had before the HOA was established], could not be amended by majority vote of lot owners to require membership in homeowners’ association and imposition of assessments, and thus amended declaration of restrictions requiring lot owners to pay assessments to association was invalid.

One could also say tax lien foreclosure is rotten but you choose to not pay your property taxes . . . I did not choose to be a member of this HOA, it was forced upon me (I objected and the County forced the prior majority lot owners to sue) and its consequences (incompetence of the prior majority lot owners, dumping 10,000 truckloads of dirt on Unit 5 and liens on vacant land that will not be built on for many years, etc.) were unforeseeable.

Statements of fact

25 Sep

Something I would submit to the court if I was my own lawyer. It will probably be revised with more links added.

  1. All of my 49 lots are worth $843,200; with liens they are worth less than $0, a liability.
  2. Liens on lots are over 6-years old hence, they are invalid due to statutes of limitations. (Contracts expire in six years, A.R.S 12-548 and, liens for assessments expire in three years, A.R.S. 33-1807.)
  3. Contract says payment not due until lots are finished, lots have not been finished before statutes of limitations, any contract lasting this long is unconscionable (interest on loan and decrease in value creates negative equity). (Unconscionable contracts are invalid.)
  4. Prior majority lot owners agreed to help us sell our lots to builders. Turned out I could not sell lots to builders because they would only buy 10 or more lots at a time and small builders wanted me to subordinate the value of the lot to them so they could get a loan against the lot . . . not a good idea. Current majority lot owners have helped prior majority lot owners sell lots they obtained through threats & intimidation of foreclosing the Special Assessment Assignment liens; Russo will not help me and another Unit 2 lot owner sell our lots.
  5. Prior majority lot owners are being sued for securities fraud. The liens can be used as securities, buyers of these liens/securities were suckers. Russo made a big mistake buying the assessments from the suckers. (See also #8, below)
  6. Prior majority lot owners did not sell as many lots per year as they anticipated (or as many as neighboring developments) and went bankrupt causing National Bank of Arizona to lose $35-million, the biggest loss in the bank’s history.
  7. It is illegal in California for an HOA to sell assessments to a 3rd party.
  8. I sent one of the assessment lien holders (Mr. Sullivan) a letter demanding a quitclaim deed pursuant to a quiet title action in court, a few weeks later Russo allegedly bought the lien (not sure he actually paid anything) and then sued me.
  9. In the 1960’s and 70’s people bought lots in the subdivision as an investment, sight unseen expecting there to be roads, the Federal Trade Commission held hearings on land fraud in this subdivision and others sold by Horizon Land Company.
  10. Principle of buying vacant land is anticipating where development (roads, utilities) will be and then buy there. Someone brought electricity and water to one of my lots in Unit 4 (around the golf course, adjacent to Sycamore Vista) and never contacted me. Russo is saying I was “unjustly enriched” by the development.
  11. The people who bought the assessments on our lots made a bad investment. Those people were friends of the prior majority lot owners who are being sued for securities fraud.
  12. The HOA is charging dues on vacant lots that the current majority lot owners admit (see HOA meeting summaries) will not be built on for many, many years. (See also what the HOA dues are being spent on . . . maybe kickbacks, like attorney fees going to Russo for suing me?)
  13. There were about 40 lots excluded from the Unit 5 HOA, these lots had houses built on them in the 1960’s-70′, they did not want to be in the HOA, neither did Unit 6 or Unit 4 want to be in an HOA and they are doing fine without it.

Russo sues to steal almost $1-million worth of land from me: Abusing the court $ystem, bankrupt me

18 Sep

This article was revised . . . I made a mistake, Russo sold 51 lots to DR Horton (10 lots were in Unit 2), so each lot is worth $33,600, per the affidavit of value for sequence number 20132140169 divide by $1,715,000.00. A few of the Unit 2 lots he sold for the prior majority lot owners and a shell LLC of Russo’s (PRD Investments) that got their lots through threats or intimidation to foreclose the disputed Special Assessment Assignments.

Russo was supposed to help me and another lot owner in Unit 2 sell our lots too but reneged.

A year or so ago I told Russo that two lots in Unit 2 were selling at a loss (they were free and clear of liens) for $15k/ea. I would have bought them myself but knew I wouldn’t be able to sell them — large builders only buy 10 or more lots at a time, small builders want you to subordinate the value so they can get a loan against the lot, which is not a good idea.

Subsequent to the original Unit 5 lawsuit, I was separately served lawsuits for my lots in Units 8 and 9.

In the Unit 9 lawsuit they’re asking for a jury trial . . . no doubt this is Russo’s way of bankrupting me — jury trial will add thousands of dollars in costs. Note that the judge in Unit 5 case allowed Russo’s Motion to Join, which will cost me at least $500 to serve about 20 people. (It costs $10 to mail certified, restricted, return receipt, plus photocopy and paying someone to do it.) If judge allows joinder in Unit 8, costs of serving will be many times that amount because there are at least 210 other lot/homeowners in Unit 8.

My attorney says Russo’s lawyer asked him if I was paying cash or was he taking the case under contingency, my lawyer said “cash and she always pays on time.” That was before they asked for jury trial in Unit 9.

I could tell the jury what rats Russo (his LLCs) are for trying to steal a Million dollars worth of lots from me, how I used to be homeless, etc.

Here’s my webpage that shows where the lots are etc:

map0004

Click pic to enlarge. My lots are highlighted in yellow. The lots that were excluded from the original Unit 5 are the ones with electricity (the blue highlighter), the legal description of these excluded lots is “New Tucson Unit 5.”

map0002 Stitch

Click pic to enlarge. My lots are highlighted in yellow.

Here’s map from Google showing info on the subdivisions:

My two lots in Unit 2 are complete and free & clear of liens, they are worth $33,600 each. (Russo recently sold 51 lots in Unit 5 and Unit 2 to DR Horton for $33,600/ea.)
(All the lots except Units 5 & 2 have $12k liens, Unit 5 liens are about $72k ea, Russo recently added $16k/lot on the Unit 5 lots that he put the roads and curbs in.)
One of my Unit 7 lots is an acre, I think it’s worth $30k. Another Unit 7 lot is 1/2-acre worth $15k?
See also this blog post showing unplatted (unapproved) lots in subdivision adjacent to ours: 274 unimproved lots near Sycamore Vista sell for $6200/lot
  • So without the liens on any of my lots, the Unit 5 lots are worth 8 x $33,600 = $268,800
  • plus two other Unit 5 lots at $18k = $304,800 (Russo recently sold his lots in phase 5.2 unfinished for $18k, these two are in phase 5.3.)
  • plus two finished Unit 2 lots at $33,600 = $386,000
  • plus 36 (or 37) unfinished, platted lots with water & electric nearby, $10k each = $746,000
  • plus the two oversized lots in Unit 7 ($45k) = $791,000
  • plus two finished lot in Unit 8 (along Del Toro Road) = $33,600/ea = $836,400
I sewed (by hand) the dress and backpack. Every weekday I made a new sign and demonstrated downtown. (The twin Superior Court Judges Roylston liked me and I made many friends downtown.) One day I collected all my signs and went to the university. My pic was on the front-page of the Daily Wildcat.

Me homeless: I sewed (by hand) the dress and backpack. Every weekday I made a new sign and demonstrated downtown. (The twin Superior Court Judges Roylston liked me and I made many friends downtown.) One day I collected all my signs and went to the university. My pic was on the front-page of the Daily Wildcat, 1983.

Could this be the End of the HOA?

7 Sep

My lawyers wrote up a Motion for Summary Judgment that may cause the HOA to remove all the liens on our vacant lots and never collect another penny from us.

I also have a hearing Monday, September 9th in regards Russo’s Motions to Dismiss my counterclaims (see below). I don’t understand how the Judge could dismiss my counterclaims; if he did, he would still have to face the same arguments in my Answer to their Complaint.

Hearing is at 11am . . . I will amend this blog-post.

EDIT: After the hearing

Bottom line is: We have to join other Unit 5 lot-owners in the Complaint and join the other assessment lien-holders to the Complaint. Russo’s Motion to Dismiss was denied. . . . I think we all need to tell Mr. Russo: “You’re not going to cheat us out of our investments!”

If you have a lot in Unit 5 you will receive a copy of the Complaint and will be asked to sign an Acceptance of Service. You will then have to file an Answer to the Complaint telling the Court your side of the story. (Liens/contracts expired per statutes of Limitations, etc..)

Russo says we are being “unjustly enriched” by the improvements to our lots. Any lot will improve by development next door, that’s how Dennis Deconcini made all his money — except for the CAP canal where he had prior knowledge of the canal’s route.

 In Unit 4 (where the golf-course is), someone brought electricity and water to my lot-line without ever contacting me.

The Judge kept mentioning settling out of Court, especially since I “only paid no more than $1000″ for my lots and got them through tax liens but the prior majority owners got most of their lots for $1000 through tax lien foreclosure.

He also expressed doubt that Special Assessments can be assigned by the HOA to 3rd parties — in California, a statute prohibits an association from assigning liens:

Under Civil Code §1367.1(g) an association may not “voluntarily assign or pledge the association’s right to collect payments or assessments, or to enforce or foreclose a lien to a third party. . .” There is an exception to this rule when the association assigns or pledges the right to collect or foreclose to a financial institution or lender as security for a loan obtained by the association. (Source.) (It’s now Civil Code 5735.)

The Judge also mentioned Rule 1 of the myriad Rules of Court, which says to settle in a timely, inexpensive and just manner:

These rules govern the procedure in the superior courts of Arizona in all suits of a civil nature whether cognizable as cases at law or in equity. They shall be construed to secure the just, speedy, and inexpensive determination of every action.

The Judge made a long ruling (see below) ordering the Plaintiff to provide us with names of Unit 5 lot-holders as well as the names of assessment lien-holders, I will have to serve each of them a copy of the Complaint; hopefully, they will sign an “Acceptance of Service” form and mail it to the Court and I won’t have to spend a bunch of money serving lot-owners & assessment lien holders. You will then have 30-days to tell your side of the story or allow my lawyer to represent you.

 It’s disappointing. I’d rather the Judge denied their Motions and prepared to hear our Summary Judgment but the Judge will have a status conference in November round election time.

 I didn’t get to ask any questions of Russo about the Board Meetings, I’m not going to pay the Unit 8 assessments or dues. It’s like: the purpose of the HOA is to steal lots from you.

 Judge asked a lot of good questions and seemed to be fair about the burden imposed by having to join these other parties.

On August 2nd, PRD Investments (Russo), Tucson Acquisition (A company owned by prior majority owners) and NT Properties (Russo) sold 51 lots in Unit 5 and Unit 2 to DR Horton for $1,715,000 = $33,600 ea. (Recorder’s office Sequence number 20132140169).

 I think it would be a good idea bringing in other parties but I also think: if you want an HOA fine but leave me out of it!

 

Oh Dear, Russo (the HOA) Files 2 Motions to Dismiss

9 Jul

The Motions seek dismissal because they allege others in the HOA, who are not a party to the lawsuit will be injured if the Court rules in my favor. This issue of “joinder” was addressed in the Unit 8 vs Pima County lawsuit.

The other Motion seeks dismissal allegedly because it is barred by statutes of limitations. (This is the one with my Big Secret, lol.)

I told you who Russo was in the post below . . . here’s a little something about me: I once got a person’s house for $300 and then sold it back to him for my costs + $1000.

I bought a Tucson City Improvement District lien (Special Assessment) for around $300, sent the person a First-Class letter warning them they would lose the property if they did not pay the $300, they did not pay so the City gave me a deed to the house (link to the law). I never looked at the house except on Google — it looked good (not abandoned) so I paid the property taxes on it thinking I would do nothing until the house was abandoned or??? About a year later the occupant called me and said, “You have my house!” I said, yeah, I’ll sell it back to you,” which I did. I could have legally kicked him out! I’m sure some people would-have!

My Lawyer’s Response:

There’s no statute of limitations on an invalid contract or CC&Rs, i.e., an invalid six year old contract or CC&R does not become valid with time.

Who is Steve Russo?

19 Jun

Who is Steve Russo?

He manages all these Limited Liability Companies.

His law firm manages and makes a profit from the The Industrial Development Authority of the County of Pima:

The Authority is empowered to issue its bonds to provide funds for the financing or refinancing of the costs of the acquisition, construction, improvement, rehabilitation or equipping of a “project” as defined in the Act.

The Authority’s interest include the promotion of economic development and the development of affordable housing.

Russo and his firm have a financial interest in the work of both the Pima County IDA and the Community Investment Corp.: It acts as the attorney for both.

“We make more money if there are more deals done,” Russo acknowledged in an interview last week. However, he added, “There’s no incentive to push a deal that shouldn’t be done.”

His firm began representing the Pima County IDA in 1978, when Russo’s father, Russell, became its lawyer. Steven Russo has represented the IDA since 1987, though his partner Michael Slania has taken over most of the work, Russo said. IDA work takes up about half of Slania’s work time and a quarter of Russo’s, said Russo, who is semi-retired.

In 2008, the most recent year for which tax records are available, the Community Investment Corp. paid Russo, Russo & Slania $146,166 for its services.

Their work on out-of-state projects hasn’t prevented the Pima County IDA from doing them in-state. So far this year, the IDA has completed eight in-state bond deals, most of them for charter schools, worth $44 million.

Read more in the Arizona Daily Star, 12 September 2010.

Bonds for Charter Schools that can’t write English

This means that the tax-free bonds that Montgomery County is about to issue- are to help pay a foreign investor off. Can I sign up for that deal? And- even more confusing is that according to the article- which is clear as mud- the Industrial Development Authority of the County of Pima, Ariz is issuing them? Huh? Right on their website under the non-profit area it says:

PURPOSE

The Industrial Development Authority of the County of Pima (the “Authority”), in conjunction with Wells Fargo Bank, is committed to supporting the development and expansion of the local community by awarding low interest rate loans (“Non-Profit Loan”) to nonprofit organizations in Pima County.

via Pima County Industrial Development Authority.

Is Pima County breaking its own rules?

. . . .

I took a breath- and then dug a little deeper:

The IDA does not act as a lender but as a “conduit,” allowing a lender to issue tax-free bonds on behalf of the borrower, Russo said. The conduit role earns the IDA fees and brings money to its partner in many projects, the Community Investment Corp.

The IDA receives a $3,000 fee for each successful application, and gets a fee of one-tenth of 1 percent of the principal of each bond issue every year. That money can help the IDA with other programs it runs, such as a nonprofit loan program and a program that helps single-family home buyers, Russo said.

The Community Investment Corp. acts as the administrator of the IDA’s charter-school financing projects. For its services the corporation charges a set-up-fee of $1,000 and an annual fee of $8,000 or $12,000, depending on the size of the bond issue. That money can help the corporation’s charter-school-finance program and other activities, such as investments in local start-ups, said executive director Frank Valenzuela, also a director of the IDA.

via Financing group’s practices questioned.

When you look at the site for “The Community Investment Corp” you find a shell of a site- with pages still under construction- even though this non-profit was set up in 1996. From their “Site”

The Community Investment Corporation (CIC) was founded in 1996 as a non-profit 5O1(c)3 agency to assist small businesses and provide public purpose services. Working in collaboration with other agencies, CIC has provided investment in new and existing businesses for start up and business expansion.

Once again, smoke and mirrors. So what we have is the Montgomery County Commissioners, voting to approve a tax exempt bond issued by a development authority in Tucson AZ that subcontracts to another Tucson non-profit to administer the bond, which is floated by a Wall Street bank (like Wells Fargo) to an Ohio non-profit, for a Chicago based firm, owned by Turks to put a school in Dayton.

And we wonder why the country is about to head into default?

Read more HERE.

I have two Unit 8 lots along Camino Del Toro that are ready to build on, they are worth $35,000 once the bogus liens are removed by my lawyers.

274 unimproved lots near Sycamore Vista sell for $6200/lot

4 Jun

23 May 2013 — Petrus Partners of New York (Frank Walter, President), doing business in Tucson under the name of Crown West Realty, (Dean Wingert, VP) acquired 155 acres under an affiliate, Santa Rita Ranch III, LLC, for $1.7 million. Located off Houghton and Camino Del Toro in southeast Tucson, the seller, Arizona Equity II, LLC (Eric Abrams, manager) had platted the property tentatively for 274 residential 50′ x 110′ and 60′ x 110′ lots ($6,200 per lot). . . .

The tentative plat is under review by Crown West to determine whether it will develop or resell the property. There were no brokers involved in the transaction. OK Rihl of Crown West says several builders are eyeing this area for expansion.

Read more.

Lots are located SE of Sycamore vista and are undeveloped.

More info with aerial maps.

Better info and maps from LandAdvisors.

Here’s another one for sale by Land Advisors, Santa Rita Foothills Estates, south of New Tucson/Sycamore Vista.

Fagan Ranch Bankruptcy / $16M ~ 550-Acres

Fagan Ranch, Vail AZ (Southeast of New Tucson/Sycamore Vista)

After putting his $16 million Fagan Ranch project through a voluntary Chapter 11 bankruptcy reorganization, developer Jim Campbell hopes other owners of distressed commercial property can benefit from his experience. . . .

To avoid foreclosure on Fagan Ranch, a 550-acre development in Corona de Tucson, Campbell sought reorganization in September [2009]. The intervention of his attorney, Michael McGrath of Mesch, Clark & Rothchild, brought lender National Bank of Arizona to the judge’s court and the negotiation table. Read more.

Fagan Ranch sales PDF from Land Advisors (no price listed).

EDIT (27 June 2013) – From Land Advisors Facebook page:

Meritage Homes closed 79 – 50’x105’ platted [i.e., undeveloped] lots at Chandler Blvd. and McQueen Road in Chandler, Arizona (map-link). Seller was SMV Financial, L.L.C., an Arizona limited Liability Company. The deal was closed for $3,425,000 ($43,354/platted lot). Sales are projected to start at the end of the 2nd quarter 2014. Meritage Homes will offer floor plans ranging from 1,200SF to 3,000SF. Pricing will be released at the Grand Opening. The sale was brokered through Ryan Semro and Bret Rinehart of Land Advisors Organization in Scottsdale.

My Lawyers Respond to the HOA’s Motion to Dismiss

24 May
My lawyers have asked for suggestions for witness list, I have questions about the following:
  1. I thought our HOA dues covered lawsuits and that the HOA had their own lawyer on retainer, so why is Russo’s law-firm representing the HOA and why are we being assessed for defending my lawsuit?
  2. Isn’t what they are doing a conflict of interest?
  3. I doubt there are any private lot owners that approve of the HOA anymore . . . wonder if we should request mailing list from HOA to survey lot owners?
  4. Looks like the HOA and Russo have no defense, what are they trying to do, do they think the Judge is corrupt or are they trying to drain all my money?
  5. I wonder if we should add Derry Dean Sparlin Sr to the witness list . . . he’s the one who is suing Utsch & Figureoa, etc. for securities fraud. In his lawsuit (click link, above) they mention Sycamore Vista/”Corona”/New Tucson.

Other witnesses:

Bob Bambauer, the Tucson KB Homes Vice President who came to our HOA meeting to tell us we were being ripped off by the prior developers/majority lot owners.

Steve DeGregorio, to testify how he got permits to build on his lot. (Prior majority lot owners would always lie about our ability to use our lots “as is.”) Mr. DeGregorio has a lot in the new development in Unit 5. He is also a board member of Unit 5. He’s upset because the prior developers bulldozed his house and septic system without compensation. It’s his cabin and old Studebaker in the header-picture.

Thomas W. Sullivan, the one I sent Notice to pursuant to quiet title against the Special Assessments which are the subject of this lawsuit. This whole lawsuit developed out of me sending Sullivan a Notice pursuant to a Quiet Title action to remove the Special Assessment liens on my lots that he was assigned. I sent his lawyers a quit claim deed and a few weeks later Russo said he owns the assessments and he paid $12,500/lot. Why did Russo do this to me????

Maybe (call as witnesses) some of the original buyers who believed there would be roads and infrastructure on their lots at no extra cost.

I received a call from a man who said he has talked to Steve Russo about buying all the lots but Russo is asking for too much. The person who called is a local builder/developer. I told him how in Unit 4 (where the golf course is), someone installed water and electric to my lot and never asked me for any money. He sounded kind of stunned by that. I wasn’t . . . all it is is cheap wiring and pipe plus a few metal/fiberglas boxes, not more than a few hundred dollars worth of materials and labor.

Russo & the HOA Respond by not Saying Much

4 May

They must think Judge Cornelio (the comments on article support the Judge) is a good-old-boy and he will dismiss my case.

PDF

So Russo’s law firm represents the HOA? Two lawyers from his law-firm (none of them on the HOA Boards) respond.

Link to Russo’s website.

He wants members of Unit 5 to pay his law-firm $500/lot?? That’s what he said at the last HOA meeting. He wants me to pay $5000 for my ten lots to fight myself!
EDIT (after the hearing on the Motion): I liked Judge Cornilio’s style, he seemed very fair and asked good questions.
Video

Sycamore Vista Annual HOA Meeting 25 April 2013

26 Apr

Beginning of meeting was about impending water shortage, which can be solved by assessing each lot a portion of the $1.3-million to improve the well. ($3-million total, our share, 35% is $1.3-M) Other communities must also chip-in to get more water hookups, there are only 200 left. Much time was spent trying to figure out which lots should be assessed, should we get a loan, should current homeowners be assessed too?

There wasn’t a quorum for Unit 2 since most of the lots have homes, the majority lot owners do not have enough votes to swing things so Russo never explained why, suddenly in October 2012, $145,778.21 found it’s way into the Unit 2 HOA budget.

Most-important to me, I asked: “Are you going to help me sell my two lots in Unit 2?” Mr. Russo said he would talk to me after the meeting. He said (after the meeting) that because of the lawsuit, that can be part of the settlement, have your lawyer talk to me. I’m thinking: No, we should amend the Complaint to charge you with self-dealing.

Unit 5: Russo mentioned my lawsuit without mentioning my name. Said each lot owner was going to be assessed $500 to pay! (So I’m supposed to pay $5000 for my 10-lots to fight myself?!) Then he passed out the Judgment from when Unit 8 was forced to sue the County to get building permits. Does Mr. Russo realize that the Dreamland case, which overrules the Unit 8 lawsuit was an appellate court judgment?

Unit 5

Unit 5: Nice view from up here (looking down on four of my lots). Click pic for large panorama.

Said the 50-lots in SW corner should be ready for sale by May 15. There will be a meeting on or about the 15th to amend CC&Rs to impose assessment of $17,150/lot. He said 40 lots have an option with DR Horton. I asked for how much? He said $36,000/lot, whereas Unit 2 was $32k/lot.

Unit 5 aerial map.

Unit 7: There were several people interested in Unit 7. Russo was uncertain whether construction will begin in Unit 7 or 8.3 next.

Unit 2 took 5 years to fill, Russo estimated 3-years for Unit 5.

I didn’t bother to mention (again), “Why are we paying dues in Units 9 & 10 where development will not take place for 12 years?”

Video Guide: (The hissing sound is mostly in the left microphone.)

23:40 UNIT 2, No quorum
26:50 UNIT 5, My lawsuit, they approved a Special Assessment of $500/lot to fight my lawsuit . . . i.e., they want me to pay $5000 to fight myself! Said it will take 18-24 months to settle lawsuit.
30:15 UNIT 7,
31:29 My question about roads in Unit 5

Prior majority lot owners’ plans failed, leading to more than $32-million debt

8 Apr

From the Sparlin Complaint, page 28-29:

i. Figueroa’s representation in October 2003 that Western Recovery Services (WRS) could get by with $6 million in capital depended on two key assumptions: first, that it would focus “exclusively” on a project in the Corona de Tucson area of’ Pima County (“Corona” [New Tucson]); and second, that by 2004 it would be selling lots to homebuilders at a rate of 233 per year, generating more than $8 million in annual income that would be used to make payments on the development loan and keep that debt at a constant balance of $5 million.

ii. No Corona lots were sold in 2004, putting the project more than $3 million in the hole as compared to the 2003 budget projection. This forced WRS and its successors in interest to incur additional debt on the development loan, increasing its debt far beyond the $5 million it had planned for and requiring a much greater future rate of lot sales to compensate for the added debt service.

iii. Only 54 Corona lots were sold in 2005, putting the project further in the hole: more than 400 lots behind its builder sales projections, creating a funding deficit of $14 million and requiring further draw-downs on the development loan.

iv. Corona lot sales totaled only 89 in 2006, creating further escalating debt.

v.. On November 11, 2007, after repeated defaults on a development loan balance that had grown to more than $32 million, the National Bank of Arizona foreclosed on the entire Corona project, cutting off the only source of current revenue for the enterprise.

vi. None of the serious shortfalls in builder sales can be dismissed as the unforeseen result of adverse economic circumstances, since they occurred during favorable real estate market conditions that preceded the subsequent real estate downturn.

From an October 2003 WRS study of how they planned to make New Tucson (“Corona”) work:

Company will acquire an additional 100 lots at $7,500 per lot cash in years 2-5, from other owners in the various Units bringing the total owned lots to 1,400.

They never offered me this much and I would not have sold.

lotflipstudy2

After conducting a study of other developments in the area they concluded:

Based on the information contained in this section, we believe that a group of 4-6 national and local builders each absorbing approximately 5 homes per month, or a total of 20-30 per month, is a reasonably conservative estimate. The projections assume that the initial average lot price will be $35,000, and that the absorption rate will be 233 owned lots per year indicating a 7-year (October 2010) sellout of the entire subdivision.

A recent letter of value from Southwest Appraisal Associates, Steve Cole, MAI, has valued the completed lots at an initial price of $35,000, projected first year absorption at 288 lots, and assuming constant market conditions a five-year sellout of the lots.

By the time they got around to blading, scraping and dumping 10,000 dump truck loads of dirt on Unit 5 (2007), I knew they would never finish the whole subdivision in 5-7 years. Thus, the imposition of $6000 liens on lots in Units 7, 8, 9 & 10, would accrue quite a bit of interest, which would make the deal/contract, unconscionable.

2013 Annual HOA Meeting Announcement & HOA Budgets for 2012

7 Apr

Received 2012 annual budgets for Units 5, 7, 9 & 10S — all I received for Unit 8 was a postcard announcing a quarterly meeting on 9 April 2013 at 6pm in the Corona de Tucson Fire Department. This will be my first time at the FD.

Conspicuously missing were budgets for the Master Association (note how much money each HOA gives to the Master Association), Units 2 and 8. As you know, Unit 2 is almost full of houses, Unit 8 has developed Phases 1 & 2. (How do you like living next to a vacant lot? Russo is supposed to help us lot-owners sell to builders.)

IMG_3603 Stitch

Unit 2 Lot 131, 9 April 2013: Not much was said at the quarterly Unit 8 meeting, Russo wasn’t there. They too will have annual meeting 25 April at the Sycamore Vista Elementary School at 6:00 pm.

Annual meetings for the other Units will be 25 April 2013 at the Sycamore Elementary School at 6pm.

Attached were the minutes from the 18 June 2012 annual meeting. Russo said at the meeting:

. . . earth should be moved [in Unit 5] within the next sixty days. . . . A special assessment to owners in HOA #5 will be necessary due to projected development costs of infrastructure. Estimated amount is $10,000 per lot which will be assessed in ‘take down’ phases as the subdivision is developed. No dirt has been moved and last I heard from Russo, the assessment will be $15,000.

“Take down” means the SW corner, Phase 1, about 50-lots, eight of which are the subject of my lawsuit.

Minutes also have a Motion/question by Raquel Baranow (me), seconded by Steve DeGregorio (it’s his cabin in the header-pic at the top of this blog): “Why are fees having to be paid in Units 5, 7, 9, 10S & 10N and HOAs in existence?” No answer was given. I made a motion, seconded by DeGregorio to waive all HOA fees in #5, 7, 9, 10S and 10N. Motion did not pass.

Q: Do proceeds from litigation go towards reduction in HOA fees? A: Proceedes were deposited into a Certificate of Deposit for Reserve funds that will help defer costs of future development of the infrastructure of subdivisions.

Minutes of the meeting also said the litigation against Arcadis for HOA #5 is moving forward and majority owners are feeling confident in succeeding with receiving proceeds from the lawsuit.

Arcadis was paid $1-million by the prior majority lot owners for plans that Russo said were “garbage.” According to court records (sv ”Arcadis” or case #C20092062), this case was dismissed in 2010. Maybe they mean case #C20106206 against Innova/Pattison, which settled for $50,000, 14 march 2013.

Comparing the budgets is very confusing! Doesn’t look like the settlement money from Arcadis made it in to the budget, what do you think?

UPDATE: Unit 2 Budget and Minutes from June 18, 2012

Received the Unit 2 budget in the mail, it shows $145,778.21 added to the budget in October. . . Wonder what that was from???

Development Updates: Steve Russo

  • Home building continues at about 2.5 -3 homes per month.
  • There are 28 lots left to finish out development.
  • KB Homes is expected to take down another group of lots in July. Once this is done, NT Properties will no longer be a majority owner and expects to turn-over the Board to the homeowners with very little interference from the Developers.

There is no record of NT Properties (or their shell company, PRD Investments LLC) selling any lots to KB Homes. This meeting will be interesting.

Follow

Get every new post delivered to your Inbox.