RTC developer has financial issuesPublished 10:56am Thursday, February 23, 2012
The CEO of the company hoping to redevelop the Regional Treatment Center has had legal issues related to financial payments, according to a public records search by The Daily Journal. These issues factored into the Fergus Falls City Council’s decision to ask developer Geitso Export Management for a $5 million deposit to supplement demolition funds if a project falls through.
The records search of the Minnesota court system reveals that Geitso’s CEO and president Atul Wahi has been accused multiple times of not paying money owed to various entities. Included in the records are multiple eviction cases filed against Wahi and his wife, Dimple, for not paying rent. Three of those cases were filed by the same plaintiff over a period of eight months in 2003 and 2004, alleging that the Wahis did not pay rent on what appeared to be the same residential property in Eden Prairie.
Though those cases did not result in a legally-binding eviction, records indicate that two others did. These were filed against Wahi and his information technology company, WiseSoft, in June of 2008 and January of 2009.
WiseSoft also had a judgment against it in 2004 for more than $22,000, but The Journal was not able to obtain the specifics of why the ruling was filed.
Wahi told The Journal that the claims against the eviction cases were false, and he and WiseSoft did not have the inclination or wherewithal to contest the cases at the time.
“We weren’t evicted; we left,” he remarked.
Though he said he would be happy to provide the council with more information about the eviction claims, Wahi did term them “my private life” and said he would not submit to such questioning in open session.
In addition to his civil cases, Wahi was convicted for speeding in Hennepin County in 2009. He was fined $83 but did not pay it. Court records report that his driver’s license was suspended in May of 2009 for failing to pay the fine, and it appears that his driver’s license remained suspended until very recently (a request for its reinstatement was sent to the Department of Public Safety on Feb. 2 of this year). Wahi did eventually pay the fine, but only after the fine was sent to a collection agency.
In a court case that has not yet been concluded, Wahi is accused of driving with a suspended license when he was pulled over in October 2011 by a Minnesota state trooper. According to trooper notes filed with the citation, Wahi allegedly told the trooper he knew his license was suspended, but he needed to get to Fergus Falls.
For that case, Wahi was granted a public defender. Though defenders can be assigned at the discretion of a judge, they are usually only granted if the defendant has a low amount of assets or income (the guidelines for a single person with no assets, for example, is a maximum of $1,134 in gross monthly income).
Wahi hopes to get the driving after suspension charges dismissed. He said he did not know his license was suspended, as his family had changed addresses and did not receive notice of the suspension.
City Attorney Rolf Nycklemoe and City Administrator Mark Sievert said the city was aware of Wahi’s court history, but they noted that Wahi had not submitted any of this information as part of the financial information section of his RTC development proposal. Wahi’s history was one of the items discussed by the council in its closed session during the Tuesday council meeting.
However, said Nycklemoe, that was not the only reason the council requested the $5 million in what he termed “earnest money” from Geitso, along with a request that Geitso submit more detailed financial information and plans. The amount of information Wahi did give, Nycklemoe said, was not in line with how much information the city had requested from developers, and it wasn’t enough to assure the council that Geitso could complete the plan.
“Even if he had a squeaky clean record, we still (would request his) financial information to give the council that comfort level,” said Nycklemoe.
The knowledge that Wahi has civil suits in his past is not necessarily a deal-breaker. The city council, noted Sievert, wants to give Wahi and Geitso every opportunity to make the project work, which is why the council requested more information rather than discarding the proposal when it failed to meet the original requirements.
“That doesn’t necessarily preclude us from dealing with an individual,” Sievert said of past legal troubles. “People make mistakes, and people can have court (cases) for many different reasons.”
Alderman Jay Cichosz said that the city’s requests for financial assurances from Geitso were to protect taxpayers from the cost of dealing with the RTC if Geitso’s multi-use development plan, called “The Global XChange Village,” fell through.
“Obviously, someone’s financial wherewithal is important if they’re going to finance a multi-million dollar project at the treatment center,” he said. With the council’s request for more financial information from Geitso by the end of March, he added, “we’ll know relatively shortly” if the company can do the job.
Alderman Stan Synstelien agreed.
“Whoever the developer is, I think he needs to be someone we can depend on, at least to the best of the knowledge that we have,” he said.
“We don’t want to put the city in jeopardy at all,” he added.
Though WiseSoft would be a tenant of The Global XChange Village, said Wahi, it would not be involved in management. That would be handled by Geitso, which has a clean slate.
“Geitso is the one that submitted the proposal, and Geitso is a completely different corporation with no records on it,” Wahi said.
He also commented, that, if necessary, he would cede ownership of the company to his wife Dimple if the council wished to deal with someone with fewer financial questions.
“They can take whatever they want into account,” Wahi said of the council members. “It’s their decision. We have presented the project, and it’s however they want to proceed.”
The council knows that finding a reuse for the RTC is an important issue for residents, Sievert reiterated, and that public concern and support for a solution is kept in mind as the council works with Wahi.
“(We’re) trying to give it every effort to be successful that we can,” he said.