Ward Cove Deja 'Vu
November 26, 2010
Once again, Ward Cove is the subject of a questionable purchase by a buyer who has already demonstrated that he either does not have or is not able to raise the money that he offers. He also refuses to disclose, does not keep his word and may, in fact, be just another flim-flam man looking at Ketchikan as an easy mark for his own enrichment plans. A Seattle area man, Kenneth Hopen of Hopen & Associates, a Nevada limited liability corporation, has come up with an offer that has, so far, not put a dime on the table.
Specifically, Mr. Hopen has offered to pay $5.3 million for all of Ward Cove, including the tidelands, the Connell Lake Dam and the pipeline. Unlike most real estate offers that include an earnest money of around 5% of the purchase price, which would be $265,000, Mr. Hopen offered an earnest money of only $75,000, which is 1.42% of the purchase price. That is chump change for a deal this size, an amount most sellers and real estate agents would laugh at.
More outrageously, though, Mr. Hopen has not yet even paid that tiny earnest money amount and actually had the nerve to suggest that the borough should sign the purchase and sell agreement and he would send the money in after the borough signed on . He wants a purchase and sale agreement signed so that he can tie up the Ward Cove property BEFORE he puts even a penny on the table? That would enable him to effectively prevent any other offers being made, at absolutely no cost to him, indefinitely.
Supposedly, once the agreement is signed, he has 90 days to do his due diligence on the deal, and would, according to the agreement, forfeit the $75,000 earnest money paid if he fails to complete the deal after the due diligence period. But wait! He can't forfeit money he hasn't paid, can he?
Mr. Hopen enlightened all of us with his grandiose plans to build a waste-to-fuel gasification plant in Ward Cove, an obscenely expensive (in the billions) and highly technical project that has not been accomplished commercially to date in the US. He also said he would build a fish ladder, use water from the dam for electricity, explore tide power and other forms of green energy and that all these developments would be world class . So world class, in fact, that royal families from Europe would come here to see it.
Does any of this sound familiar? Deja vu, as in Mr. Jerry Jenkins of Ketchikan Renaissance Group. Mr. Hopen presented his offer to buy Ward Cove to the borough staff, who, so far, have failed miserably in doing any kind of competent and serious due diligence on any and all buyers who make these ridiculous offers. Borough staff did not ask the hard questions about Mr. Hopen's qualifications and financial ability to buy and close the deal for $5.3 million. They did not ask or question the source of the funds to purchase Ward Cove. They did not question Mr. Hopen's experience at raising millions of dollars from investors or investment methods that have not been identified or verified as legal. Mr. Hopen may or may not be raising money from investors legally; we don't know until we do the due diligence to find out, but it has not been done and won't be done, just as it was not done with Mr. Jenkins. Borough staff, though presumably competent to do the jobs they were hired to do, are most certainly not trained, skilled or competent to perform professional due diligence, yet time and time again, staff is entrusted with the job and fails miserably. If it had been done right with Ketchikan Renaissance Group, Mr. Jenkins never would have been able to take control of Ward Cove, stiff the borough for hundreds of thousands of dollars in interest, taxes and principal payments, build a temporary mill with over a million dollars in venture capital he did not repay, hire employees he knew he would lay off, strip the borough of cash and materials salvaged from Ward Cove and leave Ward Cove trashed , looking like a WWII war zone. Simple due diligence, with appropriate questions and verified answers, would have prevented that from happening. Now, we have the risk of it happening again, all because no due diligence was done. To say the least, having raised these red flags repeatedly and publicly, I am getting downright irritable about the whole thing.
At the Nov 22, 2010, borough assembly meeting, instead of telling Mr. Hopen the deal is off because he has not made his paltry $75,000 earnest money payment, the assembly decided to give him 10 more days to pay up. Assembly members Phillips and Rotecki seemed extremely reluctant to give Mr. Hopen more time, to their credit, but they were not supported by the rest of the assembly.
For a man who bragged personally to me and my husband at the Landing coffee shop that he personally already had raised $100 million, it sure seems strange he cannot write a check for $75,000. Interestingly, the beneficiary to the Ward Cove deal, if Mr. Hopen should die prematurely (like Mr. Jenkins' partner did), is his facilitator/administrative assistant Janet Hickox, not his own children. We likewise know absolutely nothing about her, but could, conceivably, be involved in a business deal with her in the near future, as Mr. Hopen is 76 years old and clearly has some significant health issues. We emailed Janet Hickox to ask why there is a delay in paying the $75,000 earnest money on this deal, but so far she has not responded. We are not surprised.
If Mr. Hopen does not pay the earnest money due by Dec 3, 2010, the deal should be canceled. No more extensions, no more games. Mr. Hopen can always come back, with a proper earnest money offer of $265,000 and $5.3 million purchase price, a complete packet of fully disclosed and audited financial statements, business tax returns and due diligence answers to make another offer, if he so chooses.
We are waiting to see if the borough has the common sense to refuse to deal with Mr. Hopen if he does not come up with what he agreed to and owes by Dec 3, 2010. If the borough does not demonstrate this common sense, and if we as citizens allow it, we deserve all problems that will result.
Mary Lynne Dahl
About: "31 years in Ketchikan and very concerned about the future and well-being of this great community"
Received November 25, 2010 - Published November 26, 2010
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