An aggrieved development firm is accusing a longtime Allentown School Board member of having a conflict of interest with a nonprofit planning to buy the district’s vacant McKinley Elementary School property.
Cortex Residential asserts school board member Charlie Thiel’s role as board president for Ripple Community Inc. presents a problem — an assertion rejected by the district’s solicitor.
However, Cortex claims Ripple’s connection with Thiel allowed the nonprofit to block the firm from trying to buy the McKinley property in a sealed bid process after the former partners split ways in July.
Under the Public School Code, there are three main ways districts can sell unused buildings, including by sealed bid, public auction or private sale with approval of the county’s court of common pleas. An exception allows districts to sell property to charitable organizations.
In August, the Allentown School Board voted to rescind its sealed bid process and sell McKinley to a charitable organization instead. Thiel voted for that motion, along with a similar one regarding vacant Cleveland Elementary School.
Since the votes, the district decided to enter negotiations to sell McKinley Elementary to Ripple, and Cleveland Elementary to Community Action Lehigh Valley.
Steven Williams, Cortex’s attorney, has taken issue with Thiel’s participating in the McKinley vote because of his role on Ripple’s board of directors.
Williams asserts Thiel should have recused himself to avoid a conflict of interest under the guidelines of the Public Official and Employee Ethics Act, which warns public officials against using their office or any confidential information for monetary gain for themselves, their families or a business they are associated with.
Jeffrey Sultanik, an attorney for the district, said Williams is “dead wrong” in his interpretation of the act, noting Thiel and Ripple won’t make any financial gains from a planned affordable housing project at the former school property.
“A nonprofit by its very nature doesn’t incur profits,” Sultanik said. “It’s not a legal conflict of interest under state law.”
But Stuart Knade, chief legal officer for the Pennsylvania School Boards Association, said a nonprofit could be regarded as a business by the Pennsylvania State Ethics Commission. He cited Rendell v. Pennsylvania State Ethics Commission, which went before the state Supreme Court in 2009.
“It’s somewhat fact specific,” Knade said. “It may depend on what the nonprofit does and how it does it.”
Knade said he can’t comment specifically on any potential conflict of interest in regard to the Allentown School Board and Ripple, but said districts concerned about conflicts should always consult a solicitor.
Sultanik said Thiel’s vote did not affect the outcome of the August resolution because it had support from the majority of the board, which voted 7-1 to sell McKinley to to a charitable organization.
Thiel said he recused himself from all conversations with school board members and Ripple representatives about the McKinley property before Ripple Executive Director Sherri Brokkop Binder and Community Action Executive Director Dawn Godshall sent a letter to the school board in late June prompting the change from sealed bid to direct negotiations with the nonprofits.
But according to a statement from the district, Thiel did not recuse himself from discussions regarding the sale of the property until August.
Thiel said he spoke to Ripple representatives about the McKinley property in the past, but said those conversations only included publicly available information about the site. He did not have any conversations with the solicitor about whether or not he should participate in the August vote, he said.
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“The decision had nothing to do with who would receive the property,” Thiel said. “I wasn’t advised to stay away from the vote itself.”
School Board President Nancy Wilt said she did not discuss the August vote with the district solicitor either, but did discuss Thiel’s role on both the school board and Ripple’s board of directors.
She said the solicitor advised that Thiel is not legally required to recuse himself from discussions; however, Thiel decided to do so anyway.
“We’ve done what we can to make sure ethically the district can move forward with no conflict,” Wilt said when asked about Cortex’s claims.
According to a district statement, Thiel will not vote on the potential sale of the property when the time comes.
Tom Smith, director of facilities services for the district, is also on Ripple’s board of directors. He has also disengaged from any conversations about the McKinley property, he said. Smith is leaving the district for another position by the end of 2022.
Morning Call reporter Jenny Roberts can be reached at 484-903-1732 and jroberts@mcall.com.