Post by racnprncss on Dec 31, 2009 20:15:19 GMT -5
www.timesargus.com/article/20091231/NEWS01/912310343/1002/NEWS01
BARRE — About a week after a city councilor accused him of a conflict of interest, Mayor Thomas Lauzon recused himself twice during Tuesday's regular meeting, and also provided city leaders with a detailed breakdown of his involvement with the Frost Heaves.
During the meeting, Lauzon, who owns several properties around Barre valued at nearly $5 million, stepped down when a property he is involved with came up as part of a discussion about the former police station.
Then, when a discussion about the contract for the Frost Heaves' rental for the Barre Auditorium came up, Councilor Paul Poirier, who raised the initial concern about Lauzon's potential conflict of interest with the team, asked Lauzon to step down and sit in the audience.
Earlier this month, Poirier said the mayor had violated the recently approved conflict of interest policy by defending a plan for a "corporate skybox" for fans at the Aud. Lauzon acknowledged publicly that a perceived conflict might be present, and apologized in an article in The Times Argus.
Poirier told the paper at the time he was seeking an explanation of Lauzon's involvement with the Premier Basketball League team.
That explanation, minus dollar figures of Lauzon's financial investments in the team with his
wife
Karen, were distributed to councilors on Tuesday night.
In his two-page letter to the City Council Lauzon stated, "I have been an enthusiastic fan and supporter of the Vermont Frost Heaves since their initial season three years ago. "
Lauzon goes on to detail how he became an owner of the team and what that means.
"In July of this year, I was approached by (former owner) Alex Wolff regarding my interest in furthering the team in central Vermont. While Alex's support and commitment to the team had not changed, the demands of a high travel career and a young family required that he re-prioritize some of his activities. Alex asked me to accept the role of managing member of Bump in the Road Enterprises, LLC.
"During several subsequent conversations, I inquired whether one of the original investors would be more appropriate in this role. It was explained to me that Alex had discussed that possibility with several of the initial investors, but that none were willing to commit to this extent to the organization or the position."
Lauzon explained that Bump in the Road Enterprises LLC is a Vermont limited liability company, made up of members "who have invested funds in the organization."
"Generally speaking, the member interest is held on a pro rata basis commensurate with that members' investment as a percentage of the total investments made by members," he wrote.
In effect, the managing member is an investor who manages the limited liability company, and is "charged with keeping the books and records of the company, setting a budget, and communicating with the members. The managing member essentially has final and sole decision-making authority over contracts and management issues."
"(Alex) thought of me because of the past support I had given the Frost Heaves, my commitment to Barre and what he characterized as 'my ability to get things done.' I'm sure the fact that no one else wanted the challenge had something to do with it as well."
Lauzon said he took on the "assignment" given the following conditions:
He would serve for a limited period of time.
His length of service would be dictated by the length of time required to solicit a group of central Vermont residents to serve on an investment/management board.
He would have authority to base the team in Barre.
He would have authority to move the player housing from Chittenden County to Barre.
He would have authority to make changes to the business model at my discretion.
He would have authority to pursue an ownership model that would eventually transition ownership to the fans.
Wolff accepted the conditions.
Then Lauzon outlined what appears to be a series of decisions to help position the struggling team better for the season that opened last weekend.
Over the next few months, he said he analyzed "historical financial information and spoke to several potential members of the planned central Vermont investment/management board. "
"Based upon my analysis, it was apparent to me that the existing business model, given the level of expenditure, simply wasn't sustainable long-term. In addition, the likelihood of long-term success was further threatened by the current economic climate."
"Early on, Karen and I made the decision that we would not solicit additional investors until the beginning of the season. The main reason for that is that we felt it was important to move the office, move the housing and implement the changes to the business model first. Part of the business model that we developed was that we would fund the team until the beginning of the season," he wrote.
He said by October, he had reworked the business model to "what I believed was a more reasonable and sustainable level and transferred the franchise assets to VFH Management, LLC."
At the same time, former head coach Will Voigt took a job as the coach of the Bakersfield Jam of the NBA Development League.
"It's a testament to the organization's reputation that word spread quickly and the Frost Heaves received many inquiries regarding the head coaching position," Lauzon told the councilors.
The team then hired Jeff Strohm as coach.
Lauzon said he will meet with several central Vermonters about investing in VFH Management LLC.
"It would be our intention to divest ourselves of our ownership interest by approximately Jan. 15, 2009. We will not divest through sale," he said.
"We will divest by giving our ownership interest to those who make a commitment to the Frost Heaves, with the condition that the team remains based in Barre and that ownership is ultimately made available to the fans.
"While we are not entirely comfortable with our accelerated divestiture and are a little apprehensive about the ultimate effect, the recent events and controversy have Karen (Lauzon) and I concerned that my continued involvement could serve as a distraction for the Frost Heaves and their management team."
Members of the council did not make any public statements in response to Lauzon's letter or the details of his involvement with the team.
BARRE — About a week after a city councilor accused him of a conflict of interest, Mayor Thomas Lauzon recused himself twice during Tuesday's regular meeting, and also provided city leaders with a detailed breakdown of his involvement with the Frost Heaves.
During the meeting, Lauzon, who owns several properties around Barre valued at nearly $5 million, stepped down when a property he is involved with came up as part of a discussion about the former police station.
Then, when a discussion about the contract for the Frost Heaves' rental for the Barre Auditorium came up, Councilor Paul Poirier, who raised the initial concern about Lauzon's potential conflict of interest with the team, asked Lauzon to step down and sit in the audience.
Earlier this month, Poirier said the mayor had violated the recently approved conflict of interest policy by defending a plan for a "corporate skybox" for fans at the Aud. Lauzon acknowledged publicly that a perceived conflict might be present, and apologized in an article in The Times Argus.
Poirier told the paper at the time he was seeking an explanation of Lauzon's involvement with the Premier Basketball League team.
That explanation, minus dollar figures of Lauzon's financial investments in the team with his
wife
Karen, were distributed to councilors on Tuesday night.
In his two-page letter to the City Council Lauzon stated, "I have been an enthusiastic fan and supporter of the Vermont Frost Heaves since their initial season three years ago. "
Lauzon goes on to detail how he became an owner of the team and what that means.
"In July of this year, I was approached by (former owner) Alex Wolff regarding my interest in furthering the team in central Vermont. While Alex's support and commitment to the team had not changed, the demands of a high travel career and a young family required that he re-prioritize some of his activities. Alex asked me to accept the role of managing member of Bump in the Road Enterprises, LLC.
"During several subsequent conversations, I inquired whether one of the original investors would be more appropriate in this role. It was explained to me that Alex had discussed that possibility with several of the initial investors, but that none were willing to commit to this extent to the organization or the position."
Lauzon explained that Bump in the Road Enterprises LLC is a Vermont limited liability company, made up of members "who have invested funds in the organization."
"Generally speaking, the member interest is held on a pro rata basis commensurate with that members' investment as a percentage of the total investments made by members," he wrote.
In effect, the managing member is an investor who manages the limited liability company, and is "charged with keeping the books and records of the company, setting a budget, and communicating with the members. The managing member essentially has final and sole decision-making authority over contracts and management issues."
"(Alex) thought of me because of the past support I had given the Frost Heaves, my commitment to Barre and what he characterized as 'my ability to get things done.' I'm sure the fact that no one else wanted the challenge had something to do with it as well."
Lauzon said he took on the "assignment" given the following conditions:
He would serve for a limited period of time.
His length of service would be dictated by the length of time required to solicit a group of central Vermont residents to serve on an investment/management board.
He would have authority to base the team in Barre.
He would have authority to move the player housing from Chittenden County to Barre.
He would have authority to make changes to the business model at my discretion.
He would have authority to pursue an ownership model that would eventually transition ownership to the fans.
Wolff accepted the conditions.
Then Lauzon outlined what appears to be a series of decisions to help position the struggling team better for the season that opened last weekend.
Over the next few months, he said he analyzed "historical financial information and spoke to several potential members of the planned central Vermont investment/management board. "
"Based upon my analysis, it was apparent to me that the existing business model, given the level of expenditure, simply wasn't sustainable long-term. In addition, the likelihood of long-term success was further threatened by the current economic climate."
"Early on, Karen and I made the decision that we would not solicit additional investors until the beginning of the season. The main reason for that is that we felt it was important to move the office, move the housing and implement the changes to the business model first. Part of the business model that we developed was that we would fund the team until the beginning of the season," he wrote.
He said by October, he had reworked the business model to "what I believed was a more reasonable and sustainable level and transferred the franchise assets to VFH Management, LLC."
At the same time, former head coach Will Voigt took a job as the coach of the Bakersfield Jam of the NBA Development League.
"It's a testament to the organization's reputation that word spread quickly and the Frost Heaves received many inquiries regarding the head coaching position," Lauzon told the councilors.
The team then hired Jeff Strohm as coach.
Lauzon said he will meet with several central Vermonters about investing in VFH Management LLC.
"It would be our intention to divest ourselves of our ownership interest by approximately Jan. 15, 2009. We will not divest through sale," he said.
"We will divest by giving our ownership interest to those who make a commitment to the Frost Heaves, with the condition that the team remains based in Barre and that ownership is ultimately made available to the fans.
"While we are not entirely comfortable with our accelerated divestiture and are a little apprehensive about the ultimate effect, the recent events and controversy have Karen (Lauzon) and I concerned that my continued involvement could serve as a distraction for the Frost Heaves and their management team."
Members of the council did not make any public statements in response to Lauzon's letter or the details of his involvement with the team.