Arp Not Guilty, Kind Of

The long awaited outcome of the Doyle Arp investigation is over. Guess what, Arp did bad, but not really, but kind of, but it's been too long, bla, bla bla. After reading the report of the special prosecutor/investigator, D. Michael Dunavant, it's kind of hard to tell if he was investigating crimes or trying to sell property in Rarity Bay.

According to Mr. Dunavant, at the end of his more than 10 month investigation, he found "there is not a reasonable likelihood of conviction" against anyone but he did make "an onsite visit to view the Rarity Bay development property in question, and found it to be a stunningly beautiful and impressive community" "with picturesque views of the lake and the Smoky Mountains." His words not mine.

The outcome of the investigation is disappointing but hardly surprising. You can read the report yourself and make your own decision about the investigation but a couple of clichés come to mind for me. Lipstick On A Pig, Making Chicken Salad from Chicken poop, lemonade from lemons.   

Click Here To Read Full Report PDF

DA: No charges after Rarity probe

Former Loudon mayor won't be prosecuted, DA says after probe

By Hugh Willett
Former Loudon County Mayor Doyle Arp may have violated state law when he reduced tax assessments on properties owned by developer Mike Ross and then destroyed the records, but he won't face prosecution, according to a special investigator assigned to the case.

In a letter to Tennessee Bureau of Investigation Agent Jason Legg, West Tennessee District Attorney Mike Dunavant said he has made a decision not to prosecute the subjects of the investigation for reasons including lack of evidence and the statute of limitations.

Arp, who declined to run for a second term as county mayor in 2010, served as property assessor for several terms before being elected county mayor in 2006.

In October 2008, 9th Judicial District Attorney General Russell Johnson asked TBI to investigate whether Arp improperly reduced tax assessments on Ross-owned properties. Dunavant, who represents the 25th Judicial District counties of Fayette, Hardeman, Lauderdale, McNairy and Tipton counties, was asked to investigate the case in February.

Arp, Ross, Johnson and Dunavant could not be reached for comment.

Although prosecution will not be forthcoming, Dunavant's letter did not exonerate Arp for reducing the assessed value of hundreds of lots owned by Mike Ross at Rarity Bay and Rarity Pointe by as much as $11 million or for the destruction of public records associated with the reductions.

Although the tax assessor is authorized to use his judgment and sole discretion in arriving at property values, "it would appear that Arp engaged in a once common and accepted practice of 'developer discounting' for the benefit of Ross," Dunavant said.

"The practice is strongly discouraged by state officials as discriminatory," he wrote.

According to Bobby Lee, an attorney with the state comptroller's office, a series of judicial rulings in the 1980s determined that the practice of assessing the property of a developer at a lower rate than that of a private property owner is illegal.

Ross formed his Rarity Communities development company in the early 1990s, which spawned a series of Rarity developments in East Tennessee.

"It is unclear from the investigation the exact reason or justification for Arp's downward valuation of Ross' Rarity Bay parcels during that time," the letter said.

Dunavant said he tried to interview Arp for the investigation but was unable to do so.

The only possible offense would be "official misconduct," a Class E felony, and prosecution of the offense would require proof of how Arp benefitted from the improper actions, Dunavant said.

"The only possible circumstantial evidence of personal benefit to Mr. Arp is the employment of his son Rick by Ross in early 2005," Dunavant said.

"But, there is no evidence that Rick Arp was hired based upon any actions taken by his father in his official capacity as Loudon County Property Assessor," the letter continues.

The statute of limitations on official misconduct is two years, making Dunavant "time barred" from seeking prosecution because the alleged activity occurred in May 2005. "Also, the applicable statute of limitations may be tolled due to the active concealment of the crime by the defendant, until its discovery," he said.

The investigation uncovered that Arp ordered the destruction of the modified tax records, an act described by Dunavant as "contrary to office procedure and state law." Such an offense has a one year statute of limitations, he said.

Dunavant also said he does not plan to prosecute either Ross or his associate at Assurance Title, Tracy Riedl, for altering closing documents. The investigation uncovered a number of closing documents where the value of the price paid for the land was "xx'd" out and a much higher value was substituted, he said.

"While it is unusual for these corrections to occur with such frequency as to related properties and developers, it is unclear whether the correction of the affidavit of value constituted a false statement," Dunavant said.

Loudon County Commissioner Bob Franke, whose district includes Rarity Pointe, said he was disappointed the investigation took so long.

"After all this time, this is what they come up with? Then they say the statute has run out. I'm disappointed," Franke said.