Deal Breaker CONTINUED...

Opinion Article by Editor Kathy McIntyre

Last week the Gateway News ran a story about Commerce City Manager Jerry Flannery and the house that he is living in for free in Reunion, courtesy of the taxpayers. The story started when newly elected Commerce City Ward 3 Councilmember Jadie Carson asked to review and be given an explanation of all the city manager’s contracts. We have obtained additional information from another public information request that we will start this week’s story with. We will then attempt to summarize the beginning of the story for you. It is complicated. We have spent several weeks now already attempting to sort it all out. So don’t give up, it will never make sense.

This week’s public information request was for the appraisals that were used to calculate the value of the house in Reunion that the city bought for Flannery and its alleged loss and the house in Arizona that Flannery owned and its alleged loss. Shocking as this was, we were able to pick up two appraisals at city hall, one for each house. New problem though, the appraisal for the house in Arizona was done in August of 2005 and the appraisal for the house in Reunion was done in March of 2009. Everyone knows that in the current market, a recession folks, an appraisal even two months old would be rejected. So it really does not even matter what these two outdated appraisals say. They are completely irrelevant in September 2009 when the council voted to pay out $72,000 of your money in cash to cover losses on real estate for Flannery???????

If the curiosity is too much, Arizona appraised at $480,000 in August of 2005 and Reunion appraised at $365,000 in March of 2009. For the life of me I cannot figure out how any of this is relevant to anything. Flannery bought his house in Arizona in 2002 for $216,000 and he had never even heard of Commerce City, Colorado at that time. In 2005, he still had not heard of Commerce City, Colorado. So why do we care? Because we bought him a $450,000 house in Reunion in 2007 when he came to work for us and no one ever checked to see if he could afford to pay for it.

And he hasn’t, even though we were told in numerous versions of contracts that he would pay us back when he sold his house in Arizona, which he did in October of 2009 for $305,000. Why does it become the taxpayer’s problem that he didn’t get what he thought it might be worth? Anyway, even if it was our problem, no one bothered to do an appraisal on the house in Arizona at the time that we all got involved in the sale and its alleged loss in September of 2009.

And don’t we need to do an appraisal on our house in Reunion at the time that Flannery decides to buy it from us? And when we do our appraisal, then if we lost money because our house is no longer worth $450,000, then I think we should all go to city hall and tell our council that we never really wanted to buy a house in Reunion in a volatile real estate market, but we will all have to just accept our loss at that time. Why would we pay cash out in September of 2009 for an alleged loss that no one has incurred yet? Flannery now says that he will buy the Reunion house in September 2011, so let’s do an appraisal then and sell it to him then for what its worth then, maybe it will increase in value, who knows? Anyone have a crystal ball handy? Flannery will only be able in September 2011 to get a mortgage for what the house is appraised at so someone, anyone, tell me why $72,000 paid to Flannery now?

So one more time, why did we give Flannery $72,000 in cash, for what loss, for whose loss??? I am more confused every day with every new document and every new email. Hope someone takes some responsibility at city hall and explains to the tens of thousands of Commerce City taxpayers why we lost $72,000 for no reason.

Also, the interest rate on the contract now where no payment needs to be made until September 2011 is .34%; it had started at no interest, then went to 2.9%, and then landed at .34%. Some pretty great mortgage interest rates. Taxpayers are additionally paying the property taxes and the insurance on their Reunion house that Flannery is living in for free. One other strange thing is the house on the county records went from Shea Homes to Flannery in August of 2007 to the City of Commerce City in August of 2007 and then finally back to Flannery in November of 2009. Why? No liens or mortgage holders recorded?

Well are you tired of the story? We are. We will watch now to see what happens and if we finally do get any answers we will let you know. If you are concerned at all maybe it would be good to contact your city council member or mayor.  On our home page we have a link to the Commerce City website where you can get information to contact your council members and mayor. You do have the right to speak on Monday nights at city council for three minutes, but they have been instructed not to answer you back so it’s like talking to a wall. Or the mayor tells the city manager to contact the citizen speaking later, so maybe you could get the opportunity to ask the manager personally why?

As you pay your real estate taxes and house insurance, remember you are paying the city managers too. And he makes over $170,000. Sorry.


Wes, N. Range said...

I wonder what my house was worth back in 2005?

Yuri said...

so they let him take the house in AZ when housing market was at its highest because of a bunch of crappy loans given out and the market was booming and then take the reunion house when the bottom fell out and then took out the language of having to pay back when the house in AZ was sold. It is enough to make your eyes bleed.

Gateway, difficult story, thank you for breaking it.

Anonymous said...

story is getting too difficult and complex for most citizens to understand. Still very interesting.

Kathy McIntyre, Gateway News said...

Communication to the Commerce City Council and Staff from the Gateway News:

Good evening,
Last week I requested and received the appraisals that were used to calculate the $72,000 that was paid to the city manager. I was either given the wrong appraisals or I am more confused then ever. I would ask that someone please explain to me why an appraisal from August of 2005 was used for the Arizona house and why an appraisal from March of 2009 was used for the Reunion house. In the very best real estate market conditions, appraisals that old would never be used to value a house. In the current market conditions, even appraisals that are over a month old are rejected as no longer being relevant. Furthermore, in August of 2005, Perry VanDeventer was our city manager in Commerce City. The job was not even open if I remember rightly, so why was I given personal papers of Flannery in a public information request from a time period when he was not even an employee of the city yet? Also, Mr. Gehler said in his prior email that the $450,000 was given as part of an offer to recruit Flannery to accept the position in Commerce City. This is not true. No offer of a house or a loan for a house was ever made to Flannery prior to his employment in Commerce City. Last point, you cannot calculate any loss or any gain on any house until it is sold. Since the city decided to immerse the taxpayers in the real estate "game", then the day that Flannery gets a mortgage on the house in Reunion is the day that the appraisal should be done and the value calculated for his purchase and our gain or loss. And no matter how it is looked at, he bought his house in Arizona for $216,000 and sold it for $305,000. If he made improvements to it since 2002, that is his business, not our loss.

Thank you,
Kathy McIntyre
Gateway News

Irene, Commerce City said...

good job gateway, i was getting lost in all the details, but it is becoming more clear to me that we have some major issues in our city.

Anonymous said...

In the past lenders would accept an appraisal done as far back as six months to be a valid appraisal for the assessment of property value. Unfortunately these are some very unpredictable economic times and we have been seeing the values of homes fall consistently in reaction to market conditions.

The reductions in price have been pretty significant in certain parts of the country. For this reason don't be surprised if a lender requests a new appraisal even if the previous one was done only one or two months ago. Within that short period of time the value of your home could have changed dramatically.

Chad Askins, Commerce City Resident Brighton Shopper said...

you got to be kidding me!!!!!!!!!!!

so we are paying him because his dream didn't come true!!!!!!!!!

Anonymous said...

so unfair.

Sans said...

This is wrong on so many levels. He has got to be the ONLY guy in America that is getting protection from the housing market.

So wrong.

Lets all remember, he made a profit, we are just paying him because it was not the profit he thought he was going to get in the 2005!!!!


he can also pay his own taxes and insurance!

170 grand, enough to make your head hurt

Anonymous said...

not right. so unfair.

Ollie, Northern Guy said...

i am sorry too

Anonymous said...

I know from doing taxes, that if you buy a property for say
put into it (to fix or improve) $70,000.
your investment basis is now $170,000.
If you sell it for $225,000, your profit is not $125,000.
But $50,000 minus realtor costs.
Just an FYI

Anonymous said...

Has the city manager recieved a yearly performance bonus on top of all the tax funded bonuses?
Did those who voted for this actually see him poop gold or something?
Was John Elway’s initial contract even that good? I want to see evidence that we have benefited from this guy.

DeeDee said...

if your paying 50K on a 225K house for fees, you are getting ripped off!

KD, Reunion said...

The typical commission is 7% to sell.

Curious in Reunion said...

I think your try to say that the city manager bought the house for 216,000 and then put more money into it to make it much more, around 480,000? and then sold it at a lost for 305,00? I seriously doubt it!

If this is true, the city should have told the public this instead of hiding behind closed doors all of the time.

Casper said...

GOD DAMN!!!!!! what did the city get Flannery for his Birthday!!!!!!!!!!!!!!!!!!!!!????????????????????????

Lionel B. said...

your all negative bastards!

don't you know the City Manager of Commerce City is TOO BIG TO FAIL!

Shirely, Core City said...

hey Gateway News,

This should be a CSAP math question for the High School kids.

One of those paragraph math questions.

If a city manager buys a house for $216,000 and then takes a mortgage out for $265,000 and then moves to Reunion and gets into a contract for $450,000 at a rate of 2.9% for 9 months and then has a rate of .34% until Sept. of 2011 and has to pay no taxes and insurance........How much do the tax payers get screwed?

Randy M. said...

not fair, people are getting frustrating. The salary should have been enough.

I would like the council to come up with some goals and past achievements the city manager Flannery has accomplished.

Anonymous said...

The manager has done what the council requested with the annexation of the northern area. Just an FYI

Randy M. said...

Yes, he did annex the North, but that was a long time ago. I am talking more recent.

Kathy McIntyre, Gateway News said...

The following is the Public Information Request of correct appraisal of Arizona House:

This is a public information request for the so called "fire sale" appraisal done on the Flannery home in Arizona, address is 2697 North Sandstone Way, Flagstaff, Arizona 86004-7633. I want to see the appraisal done during the time frame of the months preceding the September 1, 2009 revision of the Flannery contract regarding the house in Reunion that he currently resides in with his family located at 10960 Unity Parkway, Commerce City, Colorado 80022. It should be dated in 2009, most probably in the months of June, July, or August, but I will want to see all appraisals on the Arizona house from 2009 that were used to calculate the value of the Arizona home of the address mentioned above. My last public information request regarding this appraisal was fulfilled with an appraisal from August 2, 2005, which I am sure was just an error on your part. I understand how confusing all of this is. So I am asking with more detail this time around.

Additional: In regards to this public information request, I have reason to believe that the appraisal was for about $325,000, but do not know for sure. Just thought this added information would help you select the correct appraisal(s).

Thank you,
Kathy McIntyre
Gateway News

Mr. Pritcher, Commerce City, CO said...

now I am really confused, your saying there is a mystery "fire sale" appraisal? Why didn't the city just give you the correct one in the beginning?

Or does it even exist?

We are going to be the biggest joke in the state!

Fred A. said...

my god, this is so complicated you need a phd to figure out what the hell they did.

vickey, commerce city said...

okay enough already end it!

Anonymous said...

citizens are sick of it. We need to move forward

Anonymous said...

We get it Gateway, your smart, your all about getting to the bottom of it. We all know the story now. Let it go!

Anonymous said...

council bad, wont do it again, move on!!

Anonymous said...

Since that home is really owned by us tax payers lets's have a bbq and play some volleyball there this weekend.

Anonymous said...

Why doesn't the city of Commerce City staff or council respond with something, anything, someone? They paid $450,000 for a house for the city manager. He lives in it for free from August 2007 until September 2011, the city pays the insurance and the taxes on the house every year, it goes from zero interest to 2.9% interest to a final prize of .03% interest. Doesn't matter cause he's not paying anything anyway. He says he will pay the city back when he sells his house in Arizona. He sells his house in Arizona for a profit and does not pay any money to the city because meantime after he knows he had sold his house in Arizona the language in the contract is changed to say he doesn't have to pay the city when he sells his house in Arizona and the contract is extended due to the fact that he can't sell his house, but he already did sell his house. Technically he has not bought his house in Reunion because he has never paid a dime towards it, so why did we give him an additional $72,000???? Gee city council give us a break, ANSWER THE QUESTION IT IS OUR MONEY!!!!!!!! The $450,000, the interest lost on that bad loan you made to him, and the $72,000!!! Did you ask any of us if this is what we elected you to do? Make bad, very bad real estate deals??? And how did any of you ever think that changing a contract time after time after time was a good idea? Contracts are supposed to be binding, not changed because somebody signed it knowing full well they were lying about being able to uphold their end.

Kathy from Gateway News said...

There is an appraisal for the Arizona house that the city manager owned that was done in August 2009 and the value is $300,000. So it was sold for $305,000 at that time. It was bought for $216,000. Where is the loss?

Wes, N. Range said...

AL RIGHT BBQ AT FLANNERYSSSSS, maybe we can get some of those great HOT DOGS they give us at outreachs

Anonymous said...

looks like story is winding down. Too bad, Jerry is still here. HA HA!

Monica, Commerce City said...

Commerce City doesn't care, they are used to getting screwed by government. We love being the victim!

Yuri and Marcus said...

YEAH Gateway, why such a big deal, after all its only money, Obama will print more.

Anonymous said...

what time is bbq at flannerys? does anyone have real estate for dummies book you could bring along?

Kathy McIntyre, Gateway News said...

Email back from the Commerce City Attorney Bob Gehler:


According to the receipt from the City Clerk’s Office, three appraisals totaling 51 pages were provided to you on March 27, 2010:

1. The 2005 appraisal on the Arizona house was sent only to show the value of the Arizona house before the disaster in the real estate market occurred in Arizona . It showed a value of $480,000 at that time. It was not used in formulating the City Council decision in 2007. (10 pages)

2. The 2009 appraisal on the Arizona house showed a decreased value of $300,000 that the Arizona realtor used for the sale of the Arizona house. (21 pages)

3. The 2009 appraisal of $365,000 for the Commerce City house is the value that the City Council relied upon in arriving at its decision in 2009. (20 pages)

I believe item 2 is the appraisal you are requesting in your most recent records request. If you need another copy, please inform the City Clerk’s Office.

As a point of information, the Commerce City loan is secured by a mortgage of $450,000 plus interest on the Commerce City house.

Robert R. Gehler
City Attorney
City of Commerce City
7887 E. 60th Avenue
Commerce City, CO 80022
(303) 289-8130
(303) 289-8133

Gateway News said...

The Commerce City Council and Staff have a right to their own opinions.

Anonymous said...


I hope you guys know that some council and city staff are bad mouthing you.

Yuri said...

Gehler says: "As a point of information, the Commerce City loan is secured by a mortgage of $450,000 plus interest on the Commerce City house."

I have a question,
If the Reunion house is under a mortgage, what bank is it with and what is the interest rate?

Are we the taxpayers paying an offset of interest?

Casper said...

Is the city holding the title on the Reunion house?
How is 305,000 from appraised 300,000 and a base of 216,000 a loss?
Even with the 260,000ish second, I still don't see the loss?


Anonymous said...

I think it is Realtor fees. those will kill you!

Anonymous said...

I am so sick of all of this.
It's a contract, dumb or not it is a CONTRACT.
Why do a few of you want to focus on anything negative you can.
How can we ever move forward if a few want to always put a spot light on the poorer decisions that are made.
Mistakes are not always, plots or anything devious, just errors.
My G__, we have improved so much, but lets not focus on that!!
Gateway, stop stirring the pot.

Anonymous said...

story is so old. It is so yesterday's news!

Anonymous said...

stir the pot??, more like shaking the hell out of it!

Wes, N. Range said...

should they let it go?

Anonymous said...

Jadie, might of talked about it, but the Gateway News won't let it go!

Casper said...

Wait! didn't Council Women, Jadie Carson bring this up?

Anonymous said...

no one cares anymore

Anonymous said...

dead story!

Anonymous said...

It can't be changed now. It is a contract.
Let's move on!!

Wes, N. Range said...

contracts are re-negotiated everyday, maybe city manager should. It would be a good public relations move.

Anonymous said...

I have a feeling that many of the "postings" on here, telling people to move on, are from the city manager or the deputy city managers. It is in their best interest only to move along. Meanwhile, they keep their high salaries and car allowances while the citizens get screwed!

Derrick Keys, Commerce City Resident, Brighton Tax Payer said...

I know the story is dying, I still want to know why they gave the city manager 72 grand for housing decreases.

City manager too big to fail?

Why protect a man making 172,000 a year from the housing down turn, what makes him so special?

Why are we bending over backwards for this so called "talent"?

What has he done for us lately? And I do not want to hear about the annexation of the north, that is great, but that was a long, long loooong time ago!

These are the questions I still have, and I will get answers eventually.

Anonymous said...

Gateway Lost and City Wins!
Flannery still here and no one cares about his sweet deal!

Sans said...

until the city council stops treating the city manager like a friend and more like a employee, we will never mover forward.

I have a voice and I will use it to promote the fair and right things to do as a city.

I am a citizen of Commerce City, I may have not been here as long as some of you, but I do want the best for the entire city and I am tired of spinning our wheels and just sitting in the mud while other cities are taking off.

And anyone who read the Deal Breaker series and doesn't shake their head in dis belief is just as out of touch with today's economic situation.

And I do not want to run for a political position, I want the people I voted for to act fairly and smart. Something I thought I would get...Now I know I was 100% wrong.


Anonymous said...

Sans, it is not an issue if no one else cares except for you

Anonymous said...

Sans, my bet is you are an grudge holding ex-employee.
I figure some of the others complaining the loudest are also, or part of the Rene supporting NASCAR people, who hate this staff.

Not liking ALL that goes on in the planning of the city, as I do, will not make me trash our city, or cause it continued harm by ALWAYS highlighting the negative.
No doubt you have faults, have made mistakes. Should those be the focus of all you do??
It is time to move on (or away) literally for you and figurativly for this subject.

Anonymous said...

I don’t think it’s fair to slam this Sans person. There are many council members who appear too reticent on this subject. Until we see tangible evidence that the city has gained more than we gave the city manager there will always be questions. I am not a fan of the bullocks, the fartz or carz club, tbcc nor any of the anti north groups in their arduous attempts to halt the paradigm shift from the days of the good ole boys. Paul's leadership brought this city so far ahead and he still has my support.

C_City Voter

Anonymous said...

TBCC have you received any answers to any of your questions that you have presented to the mayor or city council? Please do not stop asking and please do not give up. We have to take our city back from the idiots that are running it now. We must elect good mature responsible people to office in November 2011 and fire the current city manager and staff. We need to move our city forward. This is not about positive or negative, it is about cold hard reality.

Anonymous said...

HEY THERE C-C VOTER how do you support mayor paul natale when nothing has happened here since he became mayor to create one job or improve education or bring anything that people in the north need, like parks, food, police? name one thing! all it has been is a big waste of money on houses, trips, payoffs to city manager, what a joke

Anonymous said...

This city is being rebuilt in its entirety from what it was prior to Paul, city council and the current city management office. If you’ve lived here for a while then you know:
Despite the income from the refineries and other industry, even with a very small number of citizens very little was done to improve the city. The neighborhoods in what’s being called the historic areas were dilapidated, aging with many living in squalor. Families who lived here since the beginning were moving out as quickly as possible due to inaction. The school district went to he!!: The city could have pushed for intervention before things got this bad but too many lacked the proper experience/education. Nepotism and cronyism was rampant. Pay to play government? Wonder how many families got rich off city contracts? How many employees are truly qualified in their position? Have you noticed that we’re no longer only known as the stinky city off I-270? Did you notice how well we’ve done while the rest of America went into the toilet? This is meant only as an observation: Please, look at the big picture and stop letting covetous deliberation prevent you from seeing our growth.

C_City Voter