Secretive Manipulation Voids Grassdale Sales Contract


Board Minutes document that the contract which Jeff Randol signed on December 30, 2019 for sale of the Grassdale parcel was never approved by the FDRPC Board. The staff worked on this Agreement for more than a year before discussing it with the Board. Following months of Board due diligence with Blue Water, that company was never a party to the Agreement which has now been assigned to Sun Communities. There is no record that the assignment of this Agreement was discussed with the FDRPC Board.

 

 

Sale Expressly Contingent on Board Approval

The Real Estate Purchase Agreement for the Grassdale sale was “expressly contingent upon the approval and consent” of the FDRPC Board as stated below:

 

Section 9.15 Approval of Board of Directors  This Agreement is expressly contingent upon the approval and consent of the Board of Directors of the Seller.


However, FDRPC staff were secretive and manipulative in providing the Board with information during the tortured course of this Agreement. In March 2018, without official Board authorization, Randol executed a Memorandum of Understanding with Chris Castagno to represent the Fort Corporation as a realtor with a commission schedule designed for a major land sale. In October, Castagno delivered a Memorandum of Understanding with Blue Water.

 

 

 

 

A year after Castagno was hired, the Blue Water deal was officially introduced to the Board of Directors. At the April 2019 Board meeting, three Blue Water staff presented a PowerPoint on the Campground proposal.

The next month a few Board Members visited Blue Water’s Massey’s Landing Campground in Millsboro. On July 10, 2019, the Blue Water Team was back and the minutes included a discussion of more extensive and detailed plans than were presented earlier.

Contract Discussion at December Board Meeting

A FOIA response stated that the contract was approved at the Board meeting on December 3, 2019. However, the minutes of that meeting reveal that a majority of the board refused to approve the contract raising five issues which they wanted addressed.

The Grassdale sale was seller-financed with the Fort Corporation extending a $2.6 million loan to Todd Burbage and the purchasing group. The board members’ most prominent issue was a request for Burbage’s financials and tax records to ensure that he “remains financially able to back the note”. Randol ignored this and other board concerns when he signed the contract less than a month following the December board meeting. 

Another FOIA response revealed that the contract document was never finalized and remains incomplete, lacking more than one third of the 14 Exhibits including an Approved Site Plan, Permits, and Utilities which were all “TO BE ATTACHED”.

This contract is also missing virtually all of the due diligence documents. The cover letter from the Fort Corporation Counsel stated, “FDRPC does not have a record of the actual due diligence documents which were provided to Blue Water, and further notes that many of the items/documents listed…either are not in FDRPC’s possession or do not exist.”

Who is the Purchaser?

Bluewater was not a party to the Agreement Jeff Randol signed on December 30, 2019. The only mention of Blue Water in 116 pages of contract documents is a “c/o Blue Water Development Corporation” as part of the address for Rig Acquisitions LLC. Of course, Todd Burbage provides some continuity as a “principal” with both Rig and Blue Water.

Section 8.1 copied below from page 24 (electronic PDF pagination) of the original December 30, 2019 Agreement addresses “Remedies” for FDRPC. The final sentence states, “Additionally, in the event of any default by Purchaser hereunder, Seller hereby agrees to provide written notice of such default to Sun Communities, Inc. (“Sun”) pursuant to the notice provisions herein and Sun shall have the right to cure such default on behalf of Purchaser.”

Based on the Campgrounds portfolio presented on the Blue Water website, Todd Burbage has at least two partners in the Campgrounds industry: Sun Communities and Kampgrounds of America. We have no information about franchise relationships or ownership structure of the 25 Campgrounds presented on the Blue Water website which now include Fort DuPont.

The original contract language quoted above indicates that Todd Burbage selected Sun Communities as his Fort DuPont partner. This assumption is validated by the Second Amendment signed on August 11, 2021 which stated:

This Second Amendment identifies “Sun Fort DuPont RV LLC”, a Michigan LLC as the “Assignee/Landlord which is owned or controlled by” Sun Communities Inc. At the FDRPC Board Meeting on August 11, 2020, the same day this Amendment was signed, FDRPC Counsel, Richard Forsten, gave an update on the “Blue Water Agreement” for the Board listing four points (a-d) below.

In this brief statement, Mr. Forsten mentions Blue Water four times, but never discloses that this Second Amendment assigned the Agreement to Sun Communities. In FDRPC minutes, Blue Water is referred to more than 40 times, but there has been no mention of Sun Communities which has been the Fort’s Campground partner since the original Agreement was signed.

Following months of due diligence with Blue Water, FDRPC staff switched horses in mid-stream without official notification to the Board of Directors.

Unwinding a Void Contract

Jeff Randol apparently ignored the concerns expressed in Executive Session on December 3rd. He lacked the authority to execute this Agreement on December 30th because the contract document was incomplete and the Agreement had never been approved by the FDRPC Board. Without that approval, the Agreement for the Grassdale sale is not a valid contract.

Opponents of the Grassdale sale have been advocating for unwinding or reversing an Agreement which was already signed. Learning that the Agreement was never appropriately completed and executed changes the situation.

Some unwinding would still be required. Funds would need to be returned to the Purchaser and other arrangements would need to be reversed. Potential legal liabilities should be reduced because the contract was never valid.