Quoted from DemocraticVoiceOfReason

... step by step Schenectady ... continues its Renaissance.

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Buyer's past missed in sale
Sale of foreclosed site to rehab [b]contractor with criminal past [/b]a concern
Times Union  Copyright 2013 Times Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
By Lauren Stanforth
Published 9:25 pm, Tuesday, January 8, 2013

SCHENECTADY — The city has chosen as its first contractor for its major building rehab program a man who was previously convicted of stealing from his employees' pension fund, and then went to prison for failing to pay back taxes owed to the federal government.

The city has agreed to sell a foreclosed three-story brick apartment building at 14 Myers Alley to a company called Regeneration Construction, run by Gary Pappas and his wife, Lynn, for $13,000. It's the first building to be put into Mayor Gary McCarthy's Home Ownership Made Easy in Schenectady program, the mayor's largest initiative to turn the city's blighted housing around.

The city has foreclosed on hundreds of properties, and wants to enter into agreements with contractors to have them purchase the homes for minimal money, rehabilitate them and then sell them.

Pappas said he would invest $75,000 in the property, and he would live on the first floor and renovate the second floor as a rental property.

But what City Council members said they didn't know when they voted Dec. 10 to give Pappas the property was that he pleaded guilty in Colorado in May 2004 to embezzlement for taking money from the employee benefit plan at his business Pro Auto Parts Inc., and for keeping federal payroll taxes. He was sentenced to three years' probation, 10 months of home detention and to pay $65,778 to the Internal Revenue Service and $13,917 to his victims. But in 2006, a federal judge sentenced him to 18 months in prison after he had failed to pay restitution and for falsifying information to his probation officer.

A news release from Mayor Gary McCarthy's office touting the Myers Alley deal said that Pappas is a native of Rotterdam, and that his wife is a native of Colorado. They are returning to Schenectady "after living out West for the past 18 years," the release said.

Attempts to reach Pappas or his wife were unsuccessful. On Tuesday, a man who was working at the Myers Alley building, who identified himself as a relative of Pappas, said Pappas was "in a meeting" and that he would pass on a message to him. No one was home at the Palm Avenue house in Rotterdam where the Pappases registered their Regeneration Construction LLC with the state. That LLC was set up in June.

"Our desire is to help Schenectady continue its turnaround," Pappas said in the city's Dec. 10 news release.

Some City Council members say they were wary of Pappas, peppering him and Building Inspector Eric Shilling with questions in a meeting before the Dec. 10 vote.

They were assured that his background checked out.

Then some City Council members were emailed last week by an ex-wife, who was married to Pappas when he was indicted, and another woman about his past. When they brought up the concern to Shilling, who is running the rehab program, they engaged in a back-and-forth email conversation over the next 24 hours, which concluded with Shilling saying he talked with Pappas and believes Pappas took the fall for his ex-wife and that he is turning his life around.

Shilling reiterated his confidence on Tuesday, saying the Pappases are "two of the most faithful and giving people I've ever come across," and showing documents the Pappases had to submit to bid on the Myers Alley building. Four contractors bid on the project, and Pappas had the lowest bid. The Pappases had two letters of recommendation from people in Colorado who said Gary Pappas oversaw renovations in their home as part of his last job with Grateful Heart Construction.

On Tuesday, McCarthy said no one knew about Pappas' past before receiving the emails. "The bank letters all checked out and that's what you worry about if someone has assets to do these projects," the mayor said. "We believe he's fully capable and going to complete the project."

McCarthy and Shilling also emphasized that the city has invested no money in Pappas' project. If Pappas does not complete the renovation in 120 days, he will give up the right to own the property.

City Councilman Vincent Riggi said council members would have never voted to give the home to Pappas if they knew about the previous conviction and prison time



Read more: http://www.timesunion.com/local/article/Buyer-s-past-missed-in-sale-4177603.php#ixzz2HTLACFhk

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Summary



ID Number:  20061472284  
Name:  Grateful Heart Construction, LLC, Delinquent May 1, 2011  

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Principal Street Address:  1525 W Parkhill Dr, Littleton, CO 80120, United States  
Principal Mailing Address:  

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Status:  Delinquent
Form:  Limited Liability Company  
Jurisdiction:  Colorado  
Formation Date:  11/19/2006  
Term of Duration:  Perpetual  
Periodic Report Month:  November  

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When they brought up the concern to Shilling, who is running the rehab program, they engaged in a back-and-forth email conversation over the next 24 hours, which concluded with Shilling saying he talked with Pappas and believes Pappas took the fall for his ex-wife and that he is turning his life around.

Quoted from Dirt2

Anyone know any of the names of the others supposedly lining up for these projects? I worked in the building supply industry for over 30 yrs, couldn't name a contractor who would get involved in this. Who assured the council of the background check? Looks like not too good of a job.

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Rehab project is a scratch
Schenectady apartment deal in urban renewal effort ends as contractor's past revealed
By Paul Nelson
Published 7:40 pm, Thursday, January 10, 2013

SCHENECTADY — The city's latest attempt at urban renewal is off to a rocky start.

Earlier this week, the first contractor selected under Mayor Gary McCarthy's program to rehabilitate blighted properties bailed out amid revelations that he served prison time for not paying federal back taxes and stealing from a pension fund.

City Councilman Vince Riggi expressed anger Thursday that city officials had apparently not properly vetted Gary Pappas before agreeing to sell him a foreclosed apartment building at 14 Myers Alley.

"The process was sloppy," said Riggi. "We want to ensure that people who get involved in this program are going to be able to pay the taxes."

Councilman Carl Erikson echoed those feelings.

"I think the shock is we didn't know," he said, noting he believes that city officials conducted a financial but not a criminal background check on Pappas.

McCarthy initially said during a phone conversation late Thursday that Pappas was still involved with the city's Home Ownership Made Easy in Schenectady program.

He called back later and said Schenectady Building Inspector Eric Shilling had informed him that Pappas had dropped out of the project because "there wasn't support for him from the City Council."

Asked about emails Pappas reportedly sent to city officials, McCarthy dismissed them as "old stuff" even though he acknowledged he hadn't seen the correspondences.

The mayor also insisted that the governing body had access to a file containing financial information about Pappas, including bank letters certifying he was in good fiscal standing.

Riggi disputed that contention and said the only paperwork he had on Pappas was a standard form letter from Trustco Bank.

Despite the Pappas debacle, McCarthy said he remains committed to the housing program and that they will "as best as we can" put safeguards in place to weed out contractors with questionable backgrounds.

"We will dust ourselves off and move on," he said, noting that renovating distressed properties can be a risky and challenging proposition.

The city has foreclosed on hundreds of properties, and wants to enter into agreements with contractors to have them purchase the homes for minimal money, rehabilitate them and then sell them.

In Pappas' case, he was scheduled to invest $75,000 into a foreclosed three-story brick building at 14 Myers Alley, live on the first floor and renovate the second floor as a rental property.

The city had agreed to sell the structure to a company called Regeneration Construction, run by Pappas and his wife, Lynn, for $13,000. It would have been the first building to be put into McCarthy's program.

But what the council didn't know when they voted Dec. 10 to give Pappas the property was that he had pleaded guilty in Colorado in May 2004 to embezzlement for taking money from the employee benefit plan at his business Pro Auto Parts Inc., and for keeping federal payroll taxes. He was sentenced to three years' probation, 10 months of home detention and ordered to pay $65,778 to the Internal Revenue Service and $13,917 to his victims.

But in 2006, a federal judge sentenced him to 18 months in prison after he had failed to pay restitution and for falsifying information to his probation officer.



Read more: http://www.timesunion.com/local/article/Rehab-project-is-a-scratch-4184433.php#ixzz2HgRsDopH

Quoted from benny salami

Nobody wants property in tax crazed Schenectady. As soon as this first name was released everyone started laughing. As usual the TU finds out the truth about the amazing turn around under McCheese and his rubber stamps.