Michigan Attorney General’s Property Holdings At Ditleff Point Become Campaign Issue
INHERITED PROPERTY: Michigan Attorney General Bill Schuette and his sisters have been selling off parcels of land on a peninsula called Ditleff Point on St. John.
CRUZ BAY — Michigan Attorney General Bill Schuette property holdings in the U.S. Virgin Islands have become a campaign issue in the Great Lakes State.
Schuette was wished good luck in his Michigan gubernatorial bid by President Donald Trump during a bill-signing ceremony on April 11 when he, Gov. Kenneth Mapp and a host of others met the chief executive in the Oval Office.
According to Crain’s Detroit Business, Schuette has quietly made multimillion-dollar real estate transactions involving inherited oceanfront property in the St. John while in office and used state employees to complete three separate transactions in February 2013 and November 2016.
Schuette, the front-runner for the Republican nomination for governor, acknowledged Thursday that he and his sisters have sold more than $7 million in property they inherited after the deaths of their mother and stepfather, Carl Gerstacker, a former chairman of Dow Chemical Co. in Midland. Schuette has repeatedly said his assets were held in a blind trust.
Vircom LLC, a Midland company registered under Schuette’s name at his home address, sold four separate parcels of land in St. John in 2012 and 2013 totaling $7.2 million. Schuette is listed in Michigan and U.S. Virgin Islands records as the “manager” and registered agent of Vircom, property records obtained by Crain’s show.
On Feb. 20, 2013, Schuette sold two parcels of land overlooking St. John island’s Rendezvous Bay for $1.8 million each, property records show. Schuette’s executive assistant, Lori Gay, and his top aide Gerald “Rusty” Hills signed both property deeds as witnesses to the land sales, according to the document.
On Nov. 16, 2016, Schuette completed another transaction granting an easement on family-owned property on the island of St. John with the help of three state employees, property records obtained by Crain’s show.
Gay notarized the 2016 transaction and the attorney general’s communications director, Andrea Bitely, and an office analyst, Dulce Cardenas, signed as witnesses to the private transaction, U.S. Virgin Islands property records show.
“Bill signed and Lori notarized the document while I was waiting to talk to him and, as a result, I signed as a witness,” Bitely said Thursday in an email to Crain’s. “If my memory serves, it was less than two minutes of our day.”
In other deals, Schuette’s Vircom sold a 1.27-acre parcel on June 12, 2012, for $1.1 million, according to U.S. Virgin Islands property records.
On March 1, 2013, Schuette sold a 13.44-acre parcel of land on St. John island for $2.5 million, records show.
Lt. Gov. Brian Calley, Schuette’s leading GOP opponent, criticized Schuette for the real estate transactions after the attorney general has publicly said for years that he transferred his assets into a blind trust before becoming the state’s chief law enforcement officer in 2011.
Schuette repeated that assertion Thursday during a gubernatorial debate at the Michigan Press Association’s conference in East Lansing after Calley accused him of “directing the purchase, transfer of millions of dollars in off-shore assets while attorney general.”
“All of my assets are in a blind trust,” Schuette said.
Schuette’s campaign later clarified that the Caribbean property and affiliated LLCs were not part of the blind trust, as Schuette and his sisters have been actively selling off the land on a peninsula jutting out of St. John’s sandy south shore.
“Bill Schuette has not violated the spirit of the blind trust that he voluntarily created to avoid potential conflicts of interest as attorney general,” Schuette campaign spokesman John Sellek said in a statement.
Schuette’s family still has a lot of prime Caribbean real estate to sell from the estate of their late matriarch, Esther, and Gerstacker, who was chairman of Dow Chemical from 1960 to 1978. Gerstacker died in 1995; Schuette’s mother passed away in 2003.
According to U.S. Virgin Island online property records, deeds were recorded Jan. 30, 2014, transferring seven properties from Schuette’s Vircom LLC to Ditleff Point Lots – Group S LLC, which is registered at Schuette’s home address in Midland.
Six of those seven properties are shown on an online map of Ditleff Point, which totals about 45.8 acres, a Crain’s tabulation shows. The seventh property is not shown or identified on the map.
The Cruz Bay Realty Inc. website for Ditleff Point lists five properties tied to Group S LLC as for sale for a total $6.48 million for 4.45 acres. Property records show Group S LLC as still owning a 0.97-acre parcel that the Cruz Bay Realty website lists as sold.
Schuette and his sisters appear to have created separate limited liability companies with their first initials for transferring the St. John property.
Ditleff Point Lots – Group S LLC is a registered corporation in Delaware, where details of the ownership are shielded from public view. Schuette’s sister Sandra resides in Connecticut.
Michigan corporation records show a limited liability company called Ditleff Point Lots – Group B LLC registered to Schuette’s home address in Midland.
Gretchen Schuette, the attorney general’s other sister, has a separate LLC registered under her name in her home state of Oregon called Ditleff Point Lots — Group G LLC, Oregon state records show.
Schuette’s campaign disclosed Thursday that the siblings also own inherited land in Colorado. Schuette has a third LLC registered to his home address in Midland called Vircom-Spring Creek LLC, according to state records.
Calley and his allies have made Schuette’s personal finances a focus of the Republican nomination for governor. A super political action committee supporting Calley aired a television advertisement recently calling Schuette a “trust fund baby.”
“Bill Schuette lied about millions of dollars in offshore transactions w/ his own signature and address,” Calley wrote Thursday on Twitter. “He will literally say and do anything to get elected and all should be concerned we have a very dishonest person as highest law enforcement officer in MI.”
Schuette’s campaign took issue with Calley “mischaracterizing” the Virgin Islands property as being “offshore” because it’s a U.S. territory.
“Calling property owned inside the United States ‘offshore’ implies something sinister — and is false,” Sellek said.
(CRAIN’S DETROIT BUSINESS)
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