Georgetown told to ‘cease and desist’ mobile home park statements

The owner of the troubled Georgetown Mobile Estates mobile home park has demanded Mayor Tom Prather and other city officials stop making “untrue and disparaging defamatory comments” about GME, the owner and the park’s residents.

In a Sept. 22 letter to Prather and City Attorney Andrew Hartley, styled as a “cease and desist demand,” Los Angeles attorney Stephen O’Neil disputes Prather and Hartley’s claims that the owner — COMM 2013-CCRE8 Mortgage Trust — has refused to discuss efforts to correct sewage contamination in Cane Run, a tributary of which runs by the Lisle Road trailer-park complex.

“The purpose of this letter is to advise the city of Georgetown that certain public comments made to the press and in public correspondence have been untrue, misleading, incomplete and defamatory,” O’Neil wrote.

“Those false and misleading statements have damaged the owner and the trust by diminishing the value of their collateral, the park,” O’Neil wrote.

The News-Graphic obtained the letter in a Kentucky Open Records Act request filed with Prather and Hartley on Thursday. It was part of a series of email communications dating to mid-2016 between the city and attorneys representing COMM 2013-CCRE8.

Asked if O’Neil’s cease-and-desist letter will have any effect on his criticism of the trust, Prather said Friday, “None whatsoever.”

“I’ve learned that when you stand up for your community, you can expect this sort of thing,” Prather said.

Over the last six weeks, Prather has been increasing vocal about the need to tie the trailer park complex to the GMWSS lines.

Prather, as well as Scott County Judge-Executive George Lusby, have said such a connection is necessary to end ongoing problems at two sewage package plants at GME that have spilled fecal contamination into Cane Run creek for years.

But Prather ratcheted up his criticism in late August, when a Lexington consulting firm unveiled preliminary findings regarding the high level of fecal pollution and E. coli bacteria traced to GME.

The final report has not been released by the Kentucky Division of Water, which commissioned it.

O’Neil’s letter cites Prather’s criticism and also argues GME’s owner has spent about $100,000 to improve one of the park complex’s sewage package plants, which convert human waste to sludge for disposal.

The plant that received the improvement serves the former Spindletop Mobile Home Park, a section of the GME complex on the north side of Lisle Road.

O’Neil’s letter said nothing about any improvements to the package plant that serves the former Ponderosa Mobile Home Park, on the south side of Lisle Road.

O’Neil also discussed how COMM 2013-CCRE8 assumed ownership last year of GME after previous owner Danny Sexton defaulted on a 2013 $10.75 million loan that an area bank later “securitized” through the trust. Sexton currently is in federal prison on bank fraud convictions related to the loan and other loans.

While Sexton ran the park complex, the Division of Water repeatedly cited GME’s package plants for contaminating Cane Run, O’Neil noted.

O’Neil also asserts that Prather and Hartley met with Lexington lawyers representing COMM 2013-CCRE8 on St. Patrick’s Day of this year, at which the mayor emphasized the need for GME to tie onto the GMWSS lines.

(Those lines have not been extended as yet. That would involve a nearly $4 million project whose costs would be shared by the city, the county, Lexington and GMWSS, as well as a state grant and the GME tie-on fee of about $1 million.)

O’Neil also noted Prather pressed the lawyers to agree to a project to replace the nearly five-decade-old sewer lines serving the trailers within the park, a system that officials say is collapsing.

In the past, Prather has said the replacement would cost at least $1 million. O’Neil’s letter sets the cost at $2.2 million.

O’Neil also made reference to comments by Prather regarding the mayor’s desire to have the state not renew operating permits for GME’s two package plants, applications for which are currently under Division of Water consideration.

The mayor has said the permit denial could force the park’s shutdown, cutting off GME’s cash flow from rentals and spurring the owner to make necessary improvements.

“These statements are defamatory and appear to be an attempt to engage in a campaign to damage the park’s ownership, its prospects for sale [of the park] and the residents who would be forced to move,” O’Neil wrote.

“The owner intends to hold the city responsible for any economic losses and damages occasioned by the park’s closure or loss of residents,” O’Neil wrote.

This story was originally published October 1, 2017 at 12:02 PM with the headline "Georgetown told to ‘cease and desist’ mobile home park statements."