FOX19 NOW Investigates: Casino tax dollars wasted - Cincinnati News, FOX19-WXIX TV

FOX19 NOW Investigates: Casino tax dollars wasted

LAWRENCEBURG, IN (FOX19) -

A FOX19 investigation into a $218,000 taxpayer grant in Lawrenceburg has uncovered backdated invoices and an admission some spending records don't reflect reality.

In January, we started looking in to how Lawrenceburg spent millions of gambling tax dollars over the past decade. What we found were some successes and some failures.

Our review of the grant agreements found the city handed those tax dollars off with few options for the city to recover those dollars when projects failed and when the city uncovered the grantees weren't upholding their end of the deal.

The Tressie's Firehouse project was signed in September 2011 after the city's redevelopment commission approved the $218,000 grant for a private developer to convert the building into a restaurant. The agreement required the developer to open by October 2012.

As of today the building never opened and was sold in April to a new owner.

So, what went wrong?

THE AGREEMENT

On Sept. 12, 2011, then-president of the Lawrenceburg Redevelopment Commission, Tony Abbott, signed the grant agreement between the city and Tressie and Tim Denning's T-N-T Food Brokerage, LLC. The Dennings asked the city for the money to turn the city's more than century-old firehouse into a restaurant/bar.

The Dennings, in their grant application—which was signed by Ms. Denning—told the city the total project would cost $340,000 to finish and the Dennings would provide $102,000 of “personal investment” to complete the Tressie's Firehouse.

In an August 8, 2011 proposal to the city, Ms. Denning offered to pay $5,000 for the property as long as the city provided the $218,000 grant. LRDC commissioner Tony Abbott confirmed the Dennings paid the city $5,000 for the property and on Sept. 12, 2011 the deal was done.

The Dennings outlined their repair expenses in a business plan submitted to the LRDC. The plan showed the following repairs and cost to justify the approval of the $218,000 in tax dollars:

  • Total demo, framing, finish trim estimate: $72,420
  • Total paint and brick repair estimate: $26,325
  • Total electric estimate: $69,350
  • Flooring: $5,320
  • Plumbing: $38,640
  • Total HVAC: $26,960

The plan also showed the Dennings planned to hire nine full time employees, three part time employees, an accountant, an attorney and a part time consultant. The consultant role would be performed by Tim Denning, the plan stated.

The Denning plan showed it would take a total of $239,015 to open the business. With the Dennings' $102,000 of “personal investment,” the project seemed to have enough financing to finish the job and cover the Dennings' $340,000 estimate.

The agreement required the Dennings to be open and operating by Oct. 1, 2012.

THE COLLAPSE

By the summer of 2012, the city of Lawrenceburg began to grow suspicious over the spending and progress of the Tressie's Firehouse project, according to LRDC commissioner, Tony Abbott. The suspicions came after the city saw $145,803 paid to Howard Excavating—a company owned by Tim Denning's cousin, Ryan Howard, Abbott said.

We tried to interview Ryan Howard for this report, but Mr. Howard declined. We did question him during a phone call on May 21 where Howard confirmed being interviewed by investigators, but said the investiagtors told him to keep the meeting confidential.

The other concern was invoices submitted to the city by the Dennings that showed $1,200 weekly payments to Mr. Denning for consulting work. The invoices showed Denning was working as a full time consultant on the project, earning $30 an hour, although the business plan showed Denning would only do consulting work on a part time basis or “hands on as needed.”

“I personally don't believe that somebody receiving a grant that they should pay themselves to be a general contractor, or whatever,” Abbott told FOX19 in a May 22 interview.

Before the grant ended, the Dennings went back to the city for more money, claiming they'd underestimated the total cost to rehabilitate the Old Firehouse, according to Tim Denning.

“We didn't have enough money to finish the project,” Denning told FOX19 in a May 26 interview on his front porch. “We thought we could do it initially with the amount of money that we had,” Denning explained.

The problem, according to Denning, was they found major structural repairs inside the firehouse after construction started on the project. Those unexpected repairs, Denning said, drove the total repair cost for the project to as high as $600,000.

FOX19 tried multiple times to reach Tressie Denning to include her side in this report, but calls to all available numbers and messages to Ms. Denning's known email addresses were never answered.

In July 2012, the LRDC voted to stop the funding, three months before the deadline written into the grant because the city saw the project was headed for failure, commissioner Abbot told FOX19.

“We granted money to fix a building up and that was supposed to be overseen. Somehow, it wasn't overseen properly until it was too late,” Abbott said.

The city's Tressie's Firehouse file shows multiple letters from the Dennings, trying to negotiate a settlement with the city.

THE DENNING SETTLEMENT

In two separate letters to then-city attorney, Joe Votaw, Tressie Denning offers the city a deal for both sides to settle the Tressie's Firehouse project. The initial letter went to Votaw on August 12, 2012 and included a list of expenses the Dennings claimed to have invested into the project.

The grant agreement required the Dennings to turn the building over to the city of the terms of the agreement were not upheld. The agreement allowed the Dennings to recoup their personal investment in the project.

The August 2012 Denning letter included a total of $130,161 of personal investment, but did not include an itemized list of personal expenditures.

A second settlement letter went to Votaw on Oct. 13, 2012 with updated Denning expenditures totaling $134,840. This letter included an itemized list of expenses the Dennings claimed on the project. This time, Tressie Denning included a note that she also sought attorney's fees and that total was not included in the $134,840.

The Denning investment included, among various other expenses:

  • $69,200: Tim Denning consulting services
  • $26,880: Tressie Denning's “time invested in project”
  • $5,000: purchase price of building
  • $261: Spring 2012 property taxes
  • $248: Fall 2012 property taxes
  • Legal fees “to be determined…”

The Dennings' time on the project totals $96,080. The Dennings actual expenditures claimed in the letter total $38,760 when the time investment isn't included in the total.

The city did not agree to the Denning settlement, instead Lawrenceburg filed a lawsuit against the pair on May 14, 2013.

BACKDATED INVOICES UNCOVERED IN FOX19 INVESTIGATION

During our review of the Tressie's Firehouse file inside Lawrenceburg's City Hall, we found 55 separate invoices showing $1,200 weekly payments to Tim Denning. The invoices were from a company named “The Restaurant Consultants Company,” and signed by Mr. Denning.

The invoices show Mr. Denning is president of the consulting company.

The invoices describe Denning's services as “Manage all details associated with converting the old firehouse building into an operating restaurant/bar.” Denning charged $30 an hour for his services and the invoices showed he spent 40 hours a week on the project.

The Denning consultant invoices total $69,200 for his services between August 2011 and August 2012.

In an interview with FOX19 on May 26, Denning denied ever actually being paid the dollars he claimed on the invoices, “That money was never paid to me,” Denning said, “That was what I was asking the city to pay me for after the project failed. The contract said they would pay me for the time and money invested, but that never materialized and instead, they turned it into a lawsuit.”

“So, you're saying those invoices that are contained in the city's file that show you paid yourself as a consultant, $1,200 a week, those were made up,” FOX19's Jody Barr asked Denning. “Those were made to support my time after the project was dead,” Denning explained.

“I was claiming to be paid for those services. That was part of what I was instructed to do,” Denning said.

Denning said he was told by then-city attorney Joe Votaw to make up the invoices, showing the time Denning spent on the project to help the Dennings in their settlement negotiations with the city.

On May 29, we called to ask Votaw about Denning's allegations. Votaw denied he ever instructed Denning to fabricate invoices.

“That did not happen,” Votaw said in a phone interview. “I did not tell them to fudge anything,” the former Lawrenceburg city attorney told FOX19.

Votaw denied advising the Dennings on any of the negotiation elements contained in the 2012 letters.

Our investigation found the company Tim Denning invoiced his consulting work through does not exist. A search of the Indiana Secretary of State's Office records showed no registration for “The Restaurant Consultants Company,” which Denning claimed to be president of.

We asked Denning about that discrepancy when we interviewed him on May 26, “Your consulting company you claimed to have been working for at that time, being paid for that time, that company never existed,” Barr asked Denning. “No, no,” Denning responded.

“Why would you make that up,” Barr asked, “Because I was considering making a restaurant consulting company,” Denning replied.

Just seven months after the final Denning negotiation letter, the city hired a local attorney and sued Tim and Tressie Dennings' T-N-T Food Brokerage, LLC for breach of contract and wrote in the complaint, “The parties have been unable to agree on the new amount of money invested by TNT…”

Commissioner Abbott told FOX19, the backdated Denning invoices was part of the reason the city brought the lawsuit.

On Dec. 17, 2014 the city and the Dennings agreed on a settlement and the city agreed to drop the lawsuit with prejudice, which means the city can never take actions against the Dennings in the future.

The settlement required the Dennings to pay the city $1 and both sides would agree to settle the issue with neither side able to file future claims against the other.

LRDC Commissioner Tony Abbott told FOX19 that was the only option the city had left, “In the long run I think it's the right thing because we'll have a working restaurant there that our citizens can go to.”

POLITICAL VENDETTA ALLEGATIONS INVOLVING THE DENNING GRANT

During a Sept. 10, 2013 employee grievance hearing before the Lawrenceburg Board of Works, Tim Denning accused Lawrenceburg Mayor Dennis Carr of trying to use him to gather information on three of Carr's supposed political opponents.

Denning's accusations were under oath, spoken in front of the body where Carr was seated.

Denning testified that he had three separate conversations with Carr regarding gathering information on former Lawrenceburg Police Officer Doug Taylor and council members Jane Pope and Mike Lawrence.

“He felt three members of the council were working against him,” Denning testified. “I was asked to do some things to split that team up,” Denning said.

“On three different occasions we had conversations where the mayor stated that he felt like he couldn't get anything accomplished because the council was split,” Denning testified.

Denning claims Carr offered to help secure additional tax dollars for the Tressie's Firehouse project if Denning would help carry out the alleged vendetta.

“He indicated he wanted to get rid of Doug Taylor, Jane Pope and Mike Lawrence,” Denning testified. “And he wanted to use a criminal prosecution to do so,” Denning's attorney Richard Butler asked during the testimony. Denning answered, “Yes” to that question.

Denning testified that when he told Carr he would not participate, Carr used his political influence to have the LRDC stop the Dennings' funding.

At the end of Denning's testimony, the hearing judge, Leslie Votaw, asked if the board had any questions. Carr leaned over to his microphone and said, “I have none, your honor.”

“I don't agree with those allegations, but it's in a federal lawsuit and I can't comment on it,” Carr told FOX19 during a May 21 interview inside council chambers.

Carr initially declined an on camera interview for this report, then agreed to talk to us with the understanding he couldn't discuss the details of the allegations because of a federal lawsuit against Carr and other city officials. The lawsuit was brought by Doug Taylor.

“Does not agree mean no, that these are false,” FOX19's Jody Barr asked Carr. “I think they are. I don't agree with them. I don't recall anything like that,” Carr replied.

Mayor Carr also denied ever interfering with the Lawrenceburg Redevelopment Commission's decision to stop funding the Denning grant or promising his support to Denning.

Denning declined to discuss the allegations during our May 26 interview with him.

“As much as I'd love to answer that, Mr. Barr, there is a lawsuit involving that entire fiasco,” Denning said. “As much as I'd like to tell you what it is, I can't do it,” Denning explained.

The federal court docket shows Denning and Carr's names on witness lists in the Taylor federal case.

The city's current attorney, Leslie Votaw, told FOX19 the city believes Denning “perjured himself” during his testimony on Sept. 10, 2013, but admitted the city had no evidence to support charging Denning. Votaw also confirmed the city never investigated Denning's claims and there was no criminal investigation into whether Denning committed perjury.

MOVING FORWARD

After the Dec. 17, 2014 dismissal agreement, city attorney Leslie Votaw told FOX19 the Tressie's Firehouse issue is over, as far as the city's concerned. A new owner purchased the building in April and plans to spent $170,000 of his own money into opening a restaurant in the historic building.

“To be honest with you, I was a bit shocked,” the new firehouse owner JD Davis told Fox19 when asked about his impressions of what he saw inside the building when he purchased it in April.

Davis is a Lawrenceburg-based developer. “I can be honest with you, I have rehabbed other properties in Lawrenceburg and I don't know where the money would have been spent here because it's not present on site,” Davis said.

We toured the firehouse on April 29, just days after Davis purchased the building.

Davis said he will not use any tax dollars on the project.

“We're really starting from ground zero with no HVAC, no plumbing, no insulation, no heating,” Davis said. “It gives us the opportunity to start fresh—from scratch—so we're not having to try to fix what might have been here before. Very little has been done into the interior of this building,” Davis said.

When we visited the site in April, there was no heating and air installed in the building, nothing to indicate a kitchen area had been established, no plumbing, no sewage or grease trap installed and the fire suppression system had not been connected.

Davis plans to open a restaurant and bar with a game room at the site, which he expects to open in the next six months.

The city's attorney told FOX19, there is no plan to investigate the Dennings' spending and considers the Tressie's Firehouse project closed.

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