Fate of ARA Rescue by Retirement Board in the Hands of the Appraiser

Dear Editor,

This letter to the editor is written to hopefully answer why the Attleboro Contributory Retirement System (CRS), is exploring the idea of a possible investment in the Industrial Business Park (IBP), owned by the Attleboro Redevelopment Authority (ARA).

I take full responsibility as the lead proponent for initiating this idea and would like to share with you my involvement in this investment idea, as Chairman of the five-person Attleboro Contributory Retirement System.

I regret however, this initiative occurs during an election year and that The Sun Chronicle has denied my request that they print in their entirety, our Letter of Intent of June 23, 2011, and our press release of June 28, 2011.

Upon reading in the local press the decision and order of Judge Richard Moses of the Bristol County Superior Court ordering the ARA to liquidate some of its assets to satisfy debt owed to its creditors, a situation which I viewed created a possible investment opportunity for the CRS, I contacted my fellow board members with an idea of exploring the possibility of purchasing the assets of the ARA.

All of my fellow board members while skeptical of the idea, but keeping an open mind, supported exploring the possibility, reserving fmal judgment until all the facts were known. I then contacted the ARA and discussed the idea of purchasing their assets.

It was suggested that the ARA property in the downtown area be eliminated from consideration, and that if we were interested in ARA assets, only consider the IBP. Several meetings occurred with representatives of the CRS, ARA and the City, where it was suggested that if an investment was to occur by the CRS, it would be more prudent as a mortgage rather than a purchase.

The ARA stated that the present value of the IBP was between $7 million and $9 million, with total liabilities of the ARA at approximately $4.2 million. This equity and value of between $2.8 and $4.8 million makes this possible investment worthy of consideration, and is why I brought this before the full Retirement Board at our June 23, 2011 meeting.

The Attleboro Retirement Board has unanimously endorsed exploring the idea of a possible investment in the IBP, and has executed a Letter of Intent.

I do not dispute that the news surrounding the IBP is more negative than positive. I disagree with our local press when they attempt to label this possible investment as a "Bailout" or "Rescue". If equity and value is substantiated through an appraisal and our due diligence of the IBP, who better than the City of Attleboro, its employees and taxpayers, to benefit?

If equity and value is not substantiated, the CRS will not and can not consider the IBP as a possible investment.

I fully agree with the Chairperson of the ARA and Mayor that there is no down side to exploring this idea. While I respect their need to sell newspapers, the attempts by the local press to sensationalize this idea while refusing to print in their entirety our Letter of Intent and Press Release which provides the conditions and details of our idea, is inexcusable.

I renew my previous request to the Sun Chronicle to please print these documents.While this idea is considered "out of the box thinking", this is not the first time the CRS has explored alternative investment opportunities.

In 1995, the Resolution Trust Corporation (RTC), a division of the US Treasury, closed Old Stone Bank in Providence, RI. Old Stone Bank held a mortgage on the Locust Valley Golf Course which had been foreclosed upon.

With the RTC in control ofthe Locust Valley Golf Course, we discussed with them the purchase by the CRS. We then traveled to Boston and met with our State oversight agency; at the time The Public Employment Retirement Administration (PERA), who discussed the necessary steps we would need to follow as part of our due diligence, including a Home Rule Petition! Special Legislation. Because of the length oftime needed to secure all necessary approvals, the RTC was un-willing to delay the sale, which necessitated us to abandon the idea.

On the subject of a Home Rule Petition! Special Legislation; Home Rule Petitions/ Special Legislation is reserved and utilized when special circumstances warrant special consideration.

During my tenure on the Attleboro Retirement Board, the City of Attleboro has sponsored a Home Rule Petition! Special Legislation three times on three separate retirement issues. The most recent was for Water Department employee Jeffrey Burgess who tragically lost his life in the performance of his job.

Also, to allow our former Fire Chief Ronald Churchill the ability to work one additional year past the legal retirement age of 65. Additionally, a Home Rule Petition! Special Legislation was provided to a member of one of our Public Safety Departments to provide for a retirement benefit. All three situations involved special circumstances which required the Home Rule Petition! Special Legislation considerations.

The current portfolio of approximately $100 million of the CRS is diversified across five asset groups professionally managed by nine managers. While we value every cent of every dollar; if we proceed with this idea, our maximum exposure in this investment would represent 4 cents on the dollar.

If we proceed with this investment idea, based on the appraisal and satisfaction that this investment represents the best interest of the retirement system, it would provide a local investment which would be closely monitored and collateralized by a physical asset. Our system is respected as one ofthe best operating systems in the state. In 2010 the CRS realized a 16.15 percent return on our investments, placing us number three in ranking out of 104 retirement systems. This great return is the result of hard work by our board, staff and consultants. Our return on investments has consistently been in the upper rankings of retirement systems. We take our fiduciary responsibilities very seriously; we know how to make money! I ask you consider our history and support our performing our due-diligence. To date, no retirement funds have been expended or are planned to be expended, exploring this investment idea.

I can assure everyone that if the appraisal does not substantiate equity and value, or after performing our due-diligence this idea is not in the best interest of the CRS, I will become the lead opponent to this idea and will be joined by my fellow board members who will abandon this idea immediately! 

Gary Sagar, Chairman 

Attleboro Retirement Board