Village officials probe hotel backing

Gwen Chamberlain
The recently opened Hampton Inn by Hilton.

Penn Yan Village officials are reviewing information related to investment in and the development of the recently opened Hampton Inn on Keuka Lake.

Mayor Leigh MacKerchar confirms that he, Village Attorney Ed Brockman and another trustee have met with Village Planning Board Chairman Clifford Orr to discuss the potential conflict of interest that arose when Orr invested in the development, and in the fact that Orr had not disclosed his interest in the project to village officials.

As of Sept. 6, the issue had not been discussed by the village board, but a special board meeting with an executive session has been called for Wednesday, Sept. 7.

MacKerchar says after meeting with Orr and reviewing information Orr provided, he is confident there was no egregious intent in Orr’s investment in the $10.7 million project.

Mackerchar says the Village Planning Board gave its approval to the hotel project on Feb. 2, 2015, and Orr was not aware of the investment offering until a month later, in March.

“I’m satisfied he had no ill intent,” said MacKerchar, later adding, “It (the investment) should have been disclosed. The only thing that was done outside the village ethics code is the disclosure.”

The mayor says the village board needs to “pay attention to the nuts and bolts of the code of ethics.”

Orr says he “feels terrible.” and adds, “I don’t believe I did anything illegal. I may have done something I regret.”

According to MacKerchar, the investment did not exceed a 5 percent limit noted in the village code. The village code does permit investments that don’t require more than sporadic recusal and abstention, or that don’t impair a person’s independence of judgement.

Penn Yan resident Robert Hawley, who has been closely watching the hotel development project, and raising concerns about various issues, says Orr’s failure to disclose the investment is a violation of New York State General Municipal Law, and is a Class A Misdemeanor.

Hawley has opposed the hotel project, plans for extending the Outlet Trail across land in front of a family member’s restaurant near Red Jacket Park, and the pending development Iversen’s interests are planning on the nearby former Penn Yan Marine Property.

Orr has served on the planning board off and on since the 1980s, working with at least seven village administrations. He says he does not recall ever being asked to file any disclosure forms.

Orr says his investment is “everything opposite a conflict.” In the document he prepared for village officials, Orr wrote, “It has been my mission since our very first master plan over 20 years ago to concentrate on getting public access and development along our outlet from Red Jacket Park and Indian Pines to Seneca Lake. This is the ultimate reason I continue to volunteer to be a member of our planning board. My contribution was based on this passion, and I was actually proud to contribute. I never tried to hide this investment, and, in fact, I felt at the time I was contributing to the betterment of our town.”

Chris Iversen, principal in CN Iversen Family LLC, says Orr is one of approximately three dozen Class B members whose investments totaled $2 million of the $3 million equity in Keuka Lake Hotel.

Iversen says he believes Orr’s investment was taken out of a sense of civic responsibility and for the economic benefits to the area.

In an email to The Chronicle-Express, Iversen added, “Due to its high development costs and low projection of investment return, New York State saw fit to award the project a significant grant in order to facilitate its construction. Without such development incentive and the civic mindedness of its investors, this property would have remained undeveloped for the foreseeable future, which would have been a loss for the community.”

Orr did not disclose how much he invested. He says he initially declined the offer, but later agreed when some other investors encouraged him. He said he opened a bank line of credit at 4 percent interest to make the cash investment, which he expects will return at about 6 percent over 10 years.

The project first came before the planning board in October 2013, when CN Iversen Family LLC applied to subdivide the land and for site plan approval. The site plan was approved with contingencies by a 5-0 vote of the planning board members. As chairman, Orr refrains from voting unless his vote is needed to break a tie. The planning board’s final approval was documented in the minutes of the Feb. 2, 2015 planning board minutes, but additional notations to the plan were approved on May 4, 2015. Those notations were made to give more detail for contractors reading the plans on items already approved by the Planning Board.

Iversen says the project employed approximately 150 construction workers over a year, and is presently employing approximately 30 local residents.

“(It) will be paying property taxes and will attract visitors who will add millions of dollars to our local economy. Thanks go out to Mr. Orr and the others like him for their faith and hope for Penn Yan’s future,” he emailed.