Last night, there was a special hearing at Ypsi City Hall, during which our Mayor, Mayor Pro-Tem, Police Chief, and Economic Development Director were all questioned under oath about their recent trip to China, and what, if anything, they knew about the funding of the trip, which, contrary to what they’d told the public, really wasn’t provided by an undergraduate Chinese student group at Wayne State University. Following, after brief a bit of background, are the five things I’ve continued to think about after watching them provide testimony.

The Background…

At some point this past fall, Troy-based, Chinese-American developer Amy Xue Foster, after making a formal bid to purchase approximately 37 acres of Ypsilanti’s Water Street property, offered to take a local delegation to China, ostensibly to discuss Chinese architecture, help sell the idea of an Ypsilanti development to Chinese investors, and meet the other members of the development team who would be helping to bring her vision for a 1,600 unit “International Village” to reality. This offer, according to a May 24 email by City Attorney John Barr, as reported by the Detroit Metro Times, would have been both unethical and illegal under City statue. “Members of City Council have traveled overseas in the past, but only at their own cost,” Barr’s email stated. “If a city employee or mayor or council member wanted to go to China, it would be OK if they paid for it themselves, but if the developer paid, it would be unethical and illegal under the City code.” Council Member Dan Vogt, according to the Metro Times, then wrote in response, “I agree it would not be ethical if they or someone on their behalf paid. I also am not clear why it would be useful.”

Fortunately for the developer, and the four individuals who would be taking the trip to China, though, an alternate source of funding emerged. On September 11, Ypsilanti Economic Development Director Beth Ernat sent an email to members of City Council, alerting them to the fact that the Wayne State University Chinese Student and Scholar Association (CSSA) had come forward with the funds necessary to send the entire Ypsilanti delegation to China. This, as you might imagine, raised quite a few questions, as it didn’t seem to make much sense that a student group would have that kind of money, or, more to the point, an interest in the redevelopment of an Ypsilanti brownfield, but the tickets were purchased and Mayor Amanda Edmonds, Mayor Pro Tem Nicole Brown, Police Chief Tony DeGiusti, and Economic Development Director Beth Ernat left for Beijing ten days later. [They left on September 21, and return on October 2.]

Then, while in China, the Metro Times published a story in which a representative of the Wayne State University Chinese Student and Scholar Association, through a WSU press officer, confirmed that the money used to fund the trip wasn’t actually theirs, as had been reported, but had been given to them by a representative of Amy Xue Foster’s development company. In response, members of the Ypsilanti delegation in China, communicating through City Manager Darwin McClary, who had not gone on the trip, said that the funds, while they might have passed through the hands of the developer, in fact originated with the Chinese consulate in Chicago. This, according to Edmonds last night, was something that she had actually been made aware of prior to having left for the trip, but, for various reasons, hadn’t shared with either the other members of City Council or the John Barr, the city’s attorney. [More on this in a while.]

But that wasn’t the end of the story. In a follow-up article, the Metro Times reported that, according to a representative of the Chinese consulate in Chicago, they were not involved in the funding of the trip, and never sent money, either through Xue Foster’s company, or directly, to the student group at Wayne State. This, as you can imagine, left many of us thinking that the developer, in all likelihood, had sought to fund the trip herself, in violation of the City ethics rules that had been explained to her, first obscuring her role in funding the trip by funneling the money through the student group, and, then, when discovered, claiming that the money had actually been from the consulate. And, this, for what it’s worth, appears, at least based on what has been said over the past week in various forums, to be the unanimous opinion of those on Council who did not go on the trip.

And that brings us to last night’s meeting, during which the our members of City Council that weren’t invited on the ten-day China trip, attempted to find out what members of the delegation might have known, and when they knew it.

Following are my major takeaways. They are admittedly incomplete. Hopefully, however, you’ll find some value in them… if not as convincing arguments, at least as invitations to dialogue on what is an admittedly complex issue.

1. There is no way we can move forward with International Village…

I’m sure some will disagree, but, having now sat though over 15 hours of meetings on International Village, I don’t see how it can possibly go forward, at least with this developer. As I outlined before, I had serious reservations about the International Village project before the delegation even left the country, but, now that it’s evident that a good number of our City Council members feel convinced that the developer deliberately lied to us, I don’t see how anyone could vote to go forward with the deal.

On October 3, as you may recall, Councilwoman Lois Richardson was already saying that “any trust or faith” she had in the developer had already been “shattered,” and this was before we even knew that, in all likelihood, the money hadn’t come from the consulate, but from the developer herself. [Richardson said the use of the Wayne State Student group to launder the money proved to her that Amy Xue Foster was “not going to be honest with us.” And, she went on to say that, in her opinion, this wasn’t the kind of group she thought the City should be doing business with.] And, yesterday, it sounded like both Ernat and Edmonds were coming to that same conclusion. Ernat, when asked what she thought of the prospect of going forward with the project, given what we’ve learned, said “(It) makes me very concerned.” And Edmonds, when asked essentially the same question, acknowledged that she “would have very real concerns about working with anyone who misled us” in such a way.

I’d be curious to know what others thought, but I did get the sense, however, that Edmonds wasn’t shutting the door completely, saying that there were still “unanswered questions,” and implying that we still didn’t know enough to walk away from the deal. Furthermore… and maybe I was just reading too much into it… Edmonds noted at some point that she wasn’t quite certain what Xue Foster may have said to her during a phone conversation about the funding of the trip on September 19, as the Chinese developer was speaking in “broken English.” While I think it’s unlikely at this point, this did make me wonder if, perhaps, we could see the developer attempt to excuse her actions as having been the result of a simple misunderstanding due to the fact that English is her second language.

As for my initial concerns about the project, which I alluded to above… I was troubled by the fact that the developer didn’t seem to have any relevant experience, as well as the appearance that the development was being pursued more as a means to take in Chinese capital, by way of the EB-5 visa program, than to satisfy any critical market need in Ypsilanti. [While I think there’s a great deal of potential for development on Water Street, I haven’t seen any evidence that our city of 21,000 people needs 1,600 more housing units… especially ones renting at a rate beginning at $1,200 per month for 800 square foot apartments. It seemed to me, as I’ve expressed in earlier posts, that the developer was more interested in having a big project, which would allow her to take in $500,000 each from several hundred Chinese investors, who in turn would each get a United States green card, than she was in creating something that would be sustainable over the long term.]

2. Our elected officials need to be more transparent…

Regardless what you might think our City officials may have known about the funding of the trip before leaving the country, I suspect that most would agree that this whole thing has proven beyond a shadow of a doubt that we have a transparency problem at City Hall. Not only don’t we, the citizens of Ypsilanti, know what’s going on, but, according to members of Council, even some of them don’t know. Councilwoman Richardson expressed a few times last night that she didn’t even know we had a delegation going to China until late in the summer, when Ernat, during a town hall meeting, mentioned it in passing. And, Edmonds, when later asked by Richardson how the members of the delegation were chosen, was unable to provide an explanation, saying that she thought word had gone out to see which members of Council might have been interested. Whether true or not, it’s easy to see how people in the community might have the impression that Edmonds planned the trip in private, choosing those closest to her to accompany her. Again, I’m not saying that’s definitively what happened, but, given the exchanges last night, and the long history of dysfunction on Council, one can certainly understand how the citizens of Ypsilanti might be left with that impression.

And, for what it’s worth, it certainly didn’t help matters much that certain members of Council actively worked not only to push through the purchase agreement before the trip, but quash discussion, repeatedly attempting to kill the idea of a public hearing… This, I think it goes without saying, does not instill a sense in the electorate that they’re being heard and taken seriously.

3. I’m still not clear on the timeline…

The timeline of events is still confusing to me. And, if I had the time, I’d try to plot it all out here, using the documents that have been made public thus far, as well as the statements that have been made by members of Council… As I don’t have the time right now, though, I just want to note three things that have come to light over the last week, all of which would figure prominently on this timeline.

First, while I don’t believe Edmonds acknowledged it in her October 6 statement, it would appear that she knew on September 19, two days before leaving the country, that the money for the trip didn’t actually originate from the student group at Wayne State, as we’d all been led to believe. According to her testimony under oath last night, Edmonds said that she called Xue Foster prior to the special September 19 City Council meeting at the Freighthouse, and asked her directly where the money for the trip had come from. Xue Foster, she said, told her that the money had actually come from the Chinese consulate, and was just channeled through the Wayne State group. When Councilman Murdock asked Edmonds why she hadn’t brought this to the attention of Council, Edmonds said that she was just focused on getting through the meeting, which went until 1:30 AM that night, getting some sleep, and “getting out of town.” [The delegation left for China two days later.]

Second, there was apparently a LinkedIn exchange between Edmonds and a representative of the Chinese student group at Wayne State in which she asks where the money funding the trip had come from, and he responds by naming Xue Foster’s development group. Edmonds says that she didn’t open and read his response until returning back to Michigan, and I have no reason not to believe her, but the fact that she was inquiring about the source of the money suggests to me that she at least had a feeling that the money wasn’t really coming from an undergraduate student organization that just wanted to help Ypsilanti out. Furthermore, this is just one more piece of evidence suggesting that the money did not come from the Chinese consulate, but from Xue Foster’s company. [Hopefully the firm we hire to conduct the official investigation will be able to trace the funds back, starting with the cashiers check that was sent to the travel agency to purchase the tickets.] …Here, for those of you who haven’t seen it yet, is the exchange between Edmonds and the student representative of the WSU club.

Third, there was quite a bit of discussion last night about when the tickets for the trip were actually purchased. According to some of the materials made public thus far, it looks as though they may have been purchased on September 5, as there appears to be a reservation number referenced in an email on that date. And, if true, this would appear to run contrary to Ernat’s September 11 email noted at the beginning of this post, which alerted Council to the fact that the Wayne State University Chinese Student and Scholar Association (CSSA) had just come forward with the funds necessary to send the entire Ypsilanti delegation to China.

4. The City needs to do a better job of vetting those we do business with…

While being a first-time developer shouldn’t necessarily keep anyone with a good idea from being heard, it’s still somewhat perplexing to me that we let this go as far as we did, given the fact that Xue Foster not only hadn’t ever done anything even remotely similar in the past, but didn’t even really have an office to speak of… just an address at what’s been described to me as an “LLC farm” in Troy. While she certainly had money at her disposal, and she was able to assemble a fairly credible team of hired guns to take on the various tasks that needed to be addressed, I would have thought that Council would have done a better job of vetting. When, as someone pointed out last night, Herman & Kittle proposed building a single apartment building on the Water Street site, members of Council drove to Indiana to look at units that the company operated there. In this case, though, there was nothing to look at, as the development group hadn’t actually done anything before. So, instead, a group of people representing the City traveled to China to apparently look at buildings that “inspired” Xue Foster. That alone, I would think, would have raised a few red flags.

5. How about cider and donuts on Water Street…

I don’t know if anyone cares what I think, but here’s what I’d suggest we do next… If I were in a position of power at City Hall, I’d immediately rescind the purchase agreement with International Village LLC, pending the results of the investigation. Then, before the weather turns cold, I’d try to attempt a hard reset by inviting everyone in the community out to Water Street for cider and donuts. And, once people were there, I’d apologize profusely, vow to be more transparent, and officially initiate the process of drafting a Community Benefits Statement, outlining what we, as members of this community, would expect from a developer looking to put something on Water Street. And, as an act off good faith, I’d announce a special commission, which would include both young renters, as well as older homeowners, to help draft the statement… I think, really, that’s the only way forward at this point… Like someone said at the meeting on the 19th, there are going to be other developers in the future. Ypsi is too close to Ann Arbor, Ann Arbor is growing too fast, and we have too interesting of a community. We need to be ready for this eventuality. And we can’t afford to be caught off guard again. Everyone needs to feel as though they are part of this decision. Water Street is, after all, a community owned asset, and, while we can’t possibly make everyone happy, I can’t help but think that we can do better than we did this time out. So that’s what I’d recommend… I don’t necessarily want anyone to lose their job over this. I just want a recognition of the fact that we handled this poorly, and a promise to move forward more thoughtfully in the future… Like I said before, I don’t think this plan looked good in the first place, so I don’t really think we lost out here. In fact, I think we likely dodged a bullet. So now let’s take what we’ve learned and move on.

And, here, thanks to Cami and Scott Fussey, is video of the entire hearing, in three parts.

[If you feel like you still want more, check out these previous posts on the International Village development; My thoughts on International Village, With the Mayor and Mayor Pro-Tem having left the room, Ypsi City Council votes unanimously to pursue a formal investigation into their recent trip to China, Who really paid for Ypsilanti city officials to visit China?]