Editorial: Vermont A.G. Should Probe NewVistas Property Transfers

  • Curt Albee, left, of South Strafford, and Lisa Carlson-Freitag, of South Strafford, listen to debate on the New Vistas development during Strafford Town Meeting Tuesday, March 7, 2017. Four Upper Valley towns, Strafford, Sharon, Tunbridge and Royalton, voted to not support the 5,000 acre development proposed by David Hall. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Valley News — James M. Patterson

Published: 5/31/2018 10:09:52 PM
Modified: 5/31/2018 10:10:05 PM

Say what you will about David Hall — the wealthy Utah engineer who has been buying properties around the birthplace of Mormon prophet Joseph Smith to create a sustainable, 20,000-resident planned community in the White River Valley sometime in the distant future, part of a massive project called NewVistas — but the guy’s a quote machine.

“In my crazy mind, two-thirds of Vermont would be wilderness and one-third would be the farms that are occupied, and you’d have 20 million people in Vermont,” Hall told Bloomberg Businessweek in 2016.

“I’m not running for office and I’m not trying to be a missionary, so I don’t care what people think,” he told The Associated Press later that year.

If Vermonters think they have democracy, “they’re nuts,” he told The Boston Globe in 2017. Local government in the state, he said, is “a bunch of little dictatorships and fiefdoms.”

Hall for a time wisely engaged the Montpelier-based PR firm Ellis Mills Public Affairs, but his problems have expanded beyond public relations. At Town Meeting last year, 93 percent of voters in Royalton, Sharon, Strafford and Tunbridge — the towns where Hall has spent some $6 million over the last two years hoovering up more than 20 parcels of land totaling around 2,000 acres — registered their opposition to NewVistas. In April, the group formed to quash his vision, the Alliance for Vermont Communities, succeeded in getting the Vermont House to pass a resolution urging Hall to discontinue the project. (For good measure, a copy of the resolution was sent to the governor and attorney general in Utah, where Hall plans a similar project in Provo, near Brigham Young University.) Even the Mormon church has panned his plans.

More seriously for Hall, the alliance has alleged that, on Dec. 30, 2016, his nonprofit NewVistas Foundation, which had been buying the Vermont properties, illegally transferred them to his for-profit limited liability company, Windsorange LLC, which he established just eight days earlier. The alliance has called for the Vermont Attorney General’s Office to investigate.

We are in favor of such an investigation — and soon — because not only is the concept of charities and the integrity of nonprofit law in Vermont at stake, but Hall’s futuristic vision is creating real problems for real people right now.

As argued by the alliance’s legal counsel, the property transfers were illegal because tax-exempt organizations such as the NewVistas Foundation generally are barred from engaging in acts of “self-dealing” and “private inurement” that benefit insiders. In this case the insider is Hall, who is one of three directors of NewVistas Foundation (his wife and son are the others), and also the director and sole member of Windsorange LLC.

On behalf of the alliance, attorney John B. Kassel of the Burlington law firm Dunkiel Saunders wrote a letter to Vermont Attorney General TJ Donovan stating, “The gratuitous transfer of millions of dollars of real property by a private charitable organization to a for-profit limited liability company … violates the most basic legal principles governing the management of nonprofit organizations in Vermont.” In short, Vermont law requires that the money, property and other assets of a nonprofit, tax-exempt organization be used exclusively to advance charitable purposes. Kassel suggested remedies including declaring the transfers void, returning the properties to the foundation, and imposing fines or other penalties “to deter similar violations of Vermont nonprofit law in the future.”

Meanwhile, Hall’s actions have started to warp the White River Valley real estate market. As Valley News staff writer Rob Wolfe has reported, some buyers may be staying away, wary of what could be coming, while others may have been prompted to sell, perhaps before they had planned to, again because of the uncertainty Hall has injected into the market. And on Button Hill Road in Tunbridge, where Hall has bought at least six properties, a neighborhood is already changing. Jane Huppee, who lives there and who is a member of the alliance, said his purchases have had an immediate impact. In a recent meeting with the Valley News editorial board, Huppee said both property values and “community integrity” are at risk — in part because some of her longtime neighbors have sold their properties to Hall and left, only to be replaced by renters she doesn’t know.

“We are living with this situation today,” she said.

Hall, who is in his 70s, has lots of money. His father helped develop the synthetic diamonds used in industrial drills, grinding tools and other applications. In 2015, Hall sold the drilling equipment company his father founded, and which Hall had run for 40 years, for more than $100 million. He pumped that $100 million into the NewVistas Foundation, plans to spend at least $150 million more, and said he expects the project to carry on after he dies.

Shortly after his plans came to light, in early 2016, Hall told Wolfe, “My ideas are too far out for most people.” Readers of this page know we have nothing against far-out ideas. We do, however, object to outsiders upending entire communities while behaving as though the rules don’t apply to them. An investigation by the Vermont attorney general is long overdue.

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