On December 5, 2012, the Commonwealth of PA's Secretary of Budget, Charles Zogby, delivered a mid-year report on the 2012-2013 Budget as well as prefaced a bit of what can be expected in the next year's budget process.

Identifying the State's four "cost drivers," that is, corrections, Debt Service, the Department of Public Welfare, and pensions, Zogby asserted that the Corbett Administration is looking very carefully at ways to continue its goal of reducing government spending while not introducing any new taxes at the same time as facing the reality that likely there will be reduced Federal funds coming to the State. Currently at 6%, Zogby said the Corbett Administration is over halfway to the Governor's goal of cutting administrative spending by 10%.

Zogby stated, "I think in many respects, the 13-14 Budget is going to be the most difficult budget that we've had thus far."

Videos:

Part I: An overview of the progress of the 2012-2013 Budget & a look at 2013-2014 Budget development

Part II: Working on the predicate of no new taxes

Part III: "Potentially furloughs & layoffs may be the outcome"

Part IV: "If we just fund these things, then we're talking about zeros for everything else."

Part V: "Don't expect that the State is simply going to backfill any lost Federal dollars."

by Tara Leo Auchey

photo by Natalie Cake

Pennsylvania's next Auditor General, Representative Eugene DePasquale, held a news conference Thursday questioning Governor Corbett's plan to privatize the management of the PA Lottery, especially based on the goal to settle on a contract with Camelot Global Services by December 31, 2012. "Rushing to a multi-million dollar, three decade contract is not good government."

Pointing to this push of settlement along with the lack of details of the deal put forth by the Corbett Administration, DePasquale declared, "There are way too many questions, and way too many unanswered questions."

To support his assertions, DePasquale outlined concerns about Camelot's experience, the outsourcing of jobs, and the fact that Camelot's contract does not assume the continuation of the historic growth of PA's Lottery system profits.

When asked why he believes the governor pushing for this, DePasquale said, "I do think he believes in this. Whether it turns out to be the right thing for the people of Pennsylvania, that's what we need to have the debate on."

by Tara Leo Auchey

The office of the Dauphin County Sheriff has scheduled the Capitol View office building for sale on January 17, 2013 at 10am, the upset sale price is $6,967,836.89.

From our archives:

The Story of David Dodd and the Capitol View Commerce Center

1 NOV THURSDAY @ 5:34 pm

At 1000 North Cameron Street, at the corner of Cameron and Herr Streets in Harrisburg, a large dilapidated building stands alone in the middle of an overgrown industrial lot. Rusted signs hang outside of the perimeter fence displaying messages such as DANGER. CONSTRUCTION AREA. KEEP OUT and NO LOITERING. Inside the fence, random construction parts lay around the abandoned, half-finished building neglected since the contractors ordered their workers to walk off the site in 2008.

At one time, this now deserted project was hailed as an economic leap for the City of Harrisburg. The 215,000 square foot building, known as the Capitol View Commerce Center, was applauded as a kickstart for the local economy, a job creator, and a new anchor for Cameron Street, a street grossly overlooked in Harrisburg's evolvement to a vibrant and lively city. At least this is what owner and developer David Dodd claimed as he pitched his project to the city and Dauphin County's elected officials, businesses, and residents.

The Capitol View Commerce Center was envisioned to be a place where Dodd's printing company, Advanced Communications, was to have new office space along with a state of the art printing center. Remaining space in the massive Commerce Center would be leased to other companies and businesses. The claim was that the new construction would bring a sense of prosperity to Cameron Street, while providing jobs and spurring positive development to the severely indebted City of Harrisburg. It was a superb dream for Harrisburg, but the reality of the project would be far worse.

The saga of the Capitol View Commerce Center began in 2005 when Dodd managed to convince the City of Harrisburg and Dauphin County to borrow money from the U.S. Housing and Urban Development guaranteed loan program to help fund his project. Dodd persuaded the city to borrow $3.7 million and Dauphin County to borrow $3 million. A letter to the State of Pennsylvania from Mayor Reed made a $5 million grant available to Dodd and his companies. City and County officials were more than willing to help Dodd acquire the money for this project because not only would the project stimulate economic development in the region, but also because Dodd was a well known businessman and his printing company, Advanced Communications, had been in the city for several years.

To further support the project, Mayor Stephen Reed granted Dodd a $240,000 loan from the Mayor's Office of Economic Development (MOED) program. Created by former Mayor Reed, MOED loans were a way to help businesses in and out of the city to start up and maintain their establishments.

On January 2, 2006, the Central Penn Business Journal reported that Dodd and Advanced Communications had already received $9.4 million in grants and loans from the U.S. Department of Housing and Urban Development and from the City of Harrisburg to start the project. It was claimed the construction would take ten months. Dodd stated, "I think it’s going to be quite a facelift for Cameron Street."

At the time, Dodd would not elaborate on where he would obtain enough funds to meet the estimated complete $28 million cost of construction. Though it was unknown at the time, this lack of detail was the start of the process of Capitol View Commerce Center's financial collapse.

By June 2008, all construction on the Capitol View Commerce Center stopped as the contractors told their employes to walk off the site. Contractors on the project filed liens seeking payment of $3.3 million from Cameron Real Estate LP, listed as the owner of the center in documents filed in Dauphin County Courthouse.

Contractors who filed liens against Cameron Real Estate are Herre Bros, Inc, Weaver's Glass and Building Specialties of Harrisburg, H&R Mechanical of Middletown, and Joseph Stong Inc. Fire Protection of Chester.

As the court case would later reveal, the only contractor who had been paid was Industrial Design & Construction Inc. The precast concrete contractor received $3.5 million for work on the Capitol View Commerce Center.

Industrial Design & Construction Inc. had a single shareholder, an asset protection trust called the Private Ventures Trust. The only beneficiary of the trust was David Dodd, meaning that all the money would have gone directly to him.

For a year, the project seemed completely lost. Then, on January 1, 2009, it was reported that Jacob Frydman, a New York City Investor also pursuing a deal for a long-term lease of Harrisburg's public parking facilities, was interested in buying the abandoned Capitol View Commerce Center. It was speculated that Frydman would only make the purchase if the building was completely pre-leased to the Commonwealth of PA; however, it seems no such deal was ever made. On January 9, 2009, Frydman announced he was not going to buy the Commerce Center.

After many lawsuits had been filed against him, on August 13, 2009 David Dodd filed for bankruptcy. A separate filing was also made ofor Cameron Management Inc., of which Dodd was listed as president. The filing was a Chapter 7 bankruptcy in the Middle District of Pennsylvania U.S. Bankruptcy Court in Harrisburg.

Dodd's bankruptcy hearing was scheduled to happen on September 1, 2009. However, instead of answering questions for his creditors, Dodd's lawyer, Robert Chernicoff of Cunningham & Chernicoff, PC, used the hearing to see if the media would be allowed to sit in on the interrogation. Chernicoff tried to bar the media from being in the courtroom, threatening to walk out with his client if members of The Patriot-News and The Central Penn Business Journal were allowed to stay and report on the hearing.

Dodd's examination was then delayed when the Patriot News and the Central Penn Business Journal objected to the questioning being closed to the media and the public. It was postponed to a later date.

On September 8, 2009, Dodd released a three page statement to the Patriot News blaming everybody except himself for why the Capitol View Commerce Center had failed. As published in the Patriot News, Dodd defended the decision to use Industrial Design & Construction and the payments it received. “All work was done at or below market, and we did everything we possibly could to find an outside contractor before being forced to seek a direct supplier,” Dodd wrote. “No entity that Dodd owns, or Dodd himself, received anything from IDC except for minimal rent for storage space.”

Dodd laid the blame of the failed project on the subcontractors, the city requirements and government processes. According to him, some business did not provide him with the certifications and documents that were required by the city. Dodd asserted that the city issued a directive telling him to stop paying contractors because of that precise lack of documentation. The government was at fault, according to Dodd, for being too slow when it came to payments because the processing took too long. By filing the mechanics liens against his businesses, the subcontractors added even more to the problem. Since the subcontractors filed the liens, Dodd claimed that the entities funding the project considered this to be a default, and thus, stopped paying.

“It was an impossible scenario,” Dodd wrote.

Unfortunately for Dodd and the City of Harrisburg, this “scenario” has created at least 20 mechanics liens, four bankruptcy filings, at least one civil lawsuit and an investigation by the HUD’s inspector general.

Over the next three years, many events occurred to further destroy the image of the once promising David Dodd.

On June 17, 2010, the Thompson Administration reviewed the lost revenues from the project and the figure was, in Mayor Linda Thompson's words, “astonishing.” According to the Thompson Administration, the Capitol View Commerce Center would have generated $13,000 annually in tax revenues had Dodd not defaulted. If the project had been finished and met the original assessed value, those revenues would have been nearly $800,000.

"The schools, the county, everybody has lost something they were promised," Thompson told The Patriot News, "The city alone should get over $100,000 from the building each year, and instead we get $9.50 and the man doesn’t even pay that. Shameful.”

A few months later, a court motion revealed that Dodd made false statements during his meeting with creditors and in his bankruptcy schedules and statements. It was also alleged that Dodd acted to conceal his assets.

Then, only two days after that motion was filed, the IRS seized $1.2 million from Dodd's personal and business accounts. $16,510 was seized from his Hampden Township residence, while $1.15 million was seized from brokerage accounts maintained by Wells Fargo Advisors in the name of Industrial Design and Construction Inc., the only contractor that had been fully paid by Dodd. The court document confirmed that the only shareholder of IDC was Private Ventures Trust and that Dodd was the settler and sole beneficiary.

One year later, on January 5, 2011, a grand jury indictment revealed that Dodd was newly charged with bankruptcy fraud, wire fraud and engaging in financial transactions with proceeds of illegal activity.

Additionally, the counts revealed grand jury findings that Dodd illegally sold two commercial printing presses he used as collateral in 2002 to help obtain a $1.1 million loan from PNC Bank for a real estate deal in Penbrook.

At the time of the sale, Dodd represented to the buyer he owned the presses "free and clear." Dodd, according to the indictment, also did not report the sale to PNC and hid the sale from trustees and creditors in a subsequent bankruptcy filing.

All this new information about Dodd seemed to come to a conclusion on November 15, 2011 when Dodd plead guilty to the federal charges involving the failed Capitol View Commerce Center. The plead could send Dodd to prison for decades. Dodd is required to forfeit roughly $1.15 million in assets.

Sentencing for Dodd had been scheduled for January 20, 2012. However, that sentencing was delayed and has yet to be rescheduled.

Aside from millions owned to creditors and contractors as well as state and federal governments, the Thompson Administration claims David Dodd and Cameron Real Estate owe over $300,000 to the city for the MOED loan No payments have ever been made. Per Dauphin County records, the County gave Dodd a $3 million loan that has never been paid either as well as a $1.5 million grant.

On October 31, 2012 Federal Judge Sylvia Rambo began to hear testimony during a restitution hearing. While parties realize they will most likely never be made whole, many are hoping to ultimately see a return on some of the funds lost to Dodd. Dodd is scheduled to testify on behalf of himself on Monday, November 5th at 9:00am. It is expected that Dodd could be on the stand for the majority of they day.

by Elizabeth DeKok and Tara Leo Auchey

Photo by Natalie Cake