Lawyers for Gov. Peter Shumlin and his neighbor have worked out an agreement to unwind a controversial land deal that threatened to become a political liability.
The neighbor will get his land back while Shumlin will be repaid about $30,000.
The land deal drew attention earlier this summer when Jeremy Dodge and his family complained that the governor took advantage of him.
Dodge's house and 16 acres were valued by the town of East Montpelier at $140,000. Shumlin acquired the property last November for $58,000, shortly before it was scheduled to go to tax sale. That price also included paying off the back taxes, Dodge’s delinquent child support payments, and money the governor spent to fix up the place.
Lawyer Brady Toensing represented Jeremy Dodge in the recent negotiations. He said the deal allows Dodge to buy back the land over five years.
“And the details will be worked out over the next few weeks, but it’s basically a clerical task,” he said.
Jerry Diamond is a Montpelier lawyer and former attorney general who represented Shumlin. Diamond said the $30,000 Dodge will pay represents what Shumlin spent on Dodge’s behalf, including the back taxes, the home repair and child support.
“The proposal that they accepted was to repay the governor for his actual, out-of-pocket expenses that were part of this transaction that benefited Jeremy Dodge,” he said.
Under the agreement, Dodge will have to pay interest only for the first four years, with interest and principal due in the fifth year. Diamond said the interest rate will be set at the lowest level allowed by the Internal Revenue Service.
Diamond said Shumlin is satisfied with how the situation was resolved.
“He’s pleased that Jeremy Dodge and his family are pleased, that one of the proposals that had been made to resolve this has been accepted and should be fully executed within a few weeks,” he said.
Dodge, who did not graduate from high school, was not represented by a lawyer in the original transaction. His family later claimed he was not capable of negotiating with the governor, who is also a real estate investor.
Diamond said the governor tried to get his neighbor to retain an attorney last year, and that Dodge refused.
“But you can’t force people to hire counsel. And it just didn’t happen. It’s a shame,” he said. “I don’t believe this all would have occurred later if he had been represented to begin with.”
Diamond said the negotiations with attorney Toensing were cordial and professional. Toensing, who lives in Charlotte but practices frequently in Washington, D.C., has been aligned with Republican candidates and causes. But Diamond said politics never entered their discussions in this case.