FULTON & MONTGOMERY COUNTIES – An FMCC nursing student and an Amsterdam landlord have filed a motion in state Supreme Court to stop the sale of the Fulmont College Association’s three dormitory halls for $1.1 million, alleging the undisclosed sole real estate broker for the deal is past FMCC board chairman Michael Sampone, and the multiple listing service the association claimed to have used to market the property “does not appear to actually exist.”
The court motion alleges the FCA’s petition to the court for permission to sell the three dorm buildings is fatally flawed because using Sampone, who was also a past director of the Foundation of FMCC, as the sole broker representing both the buyer and the seller in the deal, violates New York state nonprofit corporation law and the bylaws of the Fulmont College Association, the nonprofit corporation which owns and operates the dorm halls on behalf of Fulton-Montgomery Community College.
“There is no evidence this inherent conflict of interest was ever disclosed to the Fulmont board of directors or the Fulmont members,” reads the court filing.
The motion to block the sale was filed by Teresa Monroe, of the Monroe Law firm in Albany, on behalf of her clients Bianca Alicea of Amsterdam, a nursing student at FMCC since 2017, and William Petrosino of Amsterdam, a “long-time area resident and the owner of a substantial number of rental properties in the area.”
On April 16 the FCA filed a petition in state Supreme Court in Fulton County seeking to sell the three dormitories to Amsterdam-based Dan Vann Properties for $1.1 million, substantially less than the $11.3 million the U.S. Department of Agriculture loaned to the FCA in 2010 for the purposes of purchasing and renovating the 1980s vintage Fulmont Hall and Montgomery Hall for $4 million and then building from scratch the 144-bed Raider Hall for $7.1 million in 2012.
FCA Board President Gregory Truckenmiller, who was also recently named the ninth president of FMCC, Monday said the dorm buildings have been empty due to the coronavirus pandemic, but had been trending down in occupancy since the administration of President Donald Trump in 2017 began clamping down on foreign student visas. The reduction in visas reduced FMCC’s foreign student total from a high of 160 down to 47 for 2020, costing the college millions of dollars in tuition revenue and greatly reducing the number of foreign students living in the dorms.
Truckenmiller said the FCA’s annual debt service payments to the USDA are $770,000, which was unsustainable with the dorms empty. The USDA has agreed to forgo the approximately $10 million in outstanding debt in exchange for receiving all of the $1.1 million from the sale, minus broker fees.
Truckenmiller could not be reached for comment Saturday evening. Sampone did not respond to attempts to contact him via social media.
The FCA’s court filing indicated the “Pyramid Brokerage Company of Albany” solicited interest from a host of local organizations and companies to sell the dorms, but got only one taker – Dan Vann Properties for $1.1 million.
Monroe’s motion to block the sale of the properties alleges the FCA’s narrative of how the properties were marketed is fraudulent.
The lawsuit claims the property was marketed through a multiple listing service that cannot be found and does not appear to actually exist. The sales contract evinces an intent to keep the sale of the property a secret (unless disclosure was necessary under the law) … all of these issues led to a sales price significantly below the property’s appraised value and resulted in a transaction that is not fair and reasonable to the corporation or its members, nor does it further the purpose of the corporation.”
Monroe argues the sale of the three dorms was never properly approved by the Fulmont College Association’s board.
According to the lawsuit: “The Petition is fatally flawed as to Fulmont Board authorization because: (a) Petitioner failed to convene a quorum of its entire board, (b) failed to obtain the required number of votes from the board of directors for approval of the sale, and (c) failed to ensure the makeup of the board was in compliance with the corporate bylaws at the time of the vote.”
The suit contends that “just seven directors attended the meeting for the vote on the sale, one short of a quorum and not enough to give the board the authority to vote.”
According to Monroe’s court motion, the FCA’s bylaws require it to have, among other directors, six student directors, three FMCC faculty members and five directors from the FMCC administration, but is currently made up of just two students, three faculty members, and five directors representing the administration.
“With just two of the six required directors from the student membership of Fulmont, the current board does not have the authority to approve the sale on Petitioner’s behalf,” reads Monroe’s court filing.
Monroe also argues the sale of the three dorms violates state nonprofit law by failing to be “fair and reasonable” to the interests of the members of the FCA and that the FCA did not exercise due diligence in selecting a purchaser or negotiating the terms and conditions of the sale due to these three arguments:
• the sale price is well below the appraised value of the property
• the sale is to an entity that has “no experience managing multi-family properties and that offers a tenant application that potentially exposes the entity (and FMCC and Fulmont) to liability under the Fair Housing Act.”
• The FCA hired a former board member of the FMCC Foundation, Michael Sampone, as “sole broker,” while failing to insist on basic marketing efforts, and negotiating a one-sided commission agreement that obligates Fulmont to pay Sampone and his company a $77,000 commission, even if the sale ultimately falls through.
“Because the Property was not marketed in any traditional way, investors including objector Bill Petrosino, who lives and works in the community, never knew the FMCC dorms were up for sale,” reads the court filing. “Mr. Petrosino owns and manages a company that is one of the largest landlords of multiple-family properties in the area, and he actively searches for opportunities like the one posed by the sale of Fulmont’s dorms. He has for more than 30 years purchased and managed many dozens of apartment units in multi-family properties (including large apartment complexes) in Montgomery County and has a reputation as a fair landlord and a good steward of the properties he owns and manages.”