Veridea Group responds to Cambensy AG letter

MARQUETTE — Marquette area real estate developer Veridea Group LLC fired back Friday against allegations made by Rep. Sara Cambensy in a letter to Michigan Attorney General Dana Nessel last week.

In her letter to Nessel, Cambensy asked the Attorney General to potential conflicts of interest and misuse of public funds in a real estate deal for the former site of UP Health Systems – Marquette hospital between the Northern Michigan University Foundation and the Veridea Group.

The founder and CEO of the Veridea Group, Bob Mahaney, is also a member of the NMU Board of Trustees.

In a Thursday letter addressed to Nessel, Detroit-based law firm Honigman, representing Veridea Group, responded to allegations made by Cambensy.

“The allegations in the (Cambensy’s) Request are without merit and reckless. As you review the Request and the allegations contained therein, there is little doubt in my mind you will conclude all of the allegations are false,” the letter said. “No law was broken or avoided and any fiduciary responsibility/ obligations of a public official was not breached.”

The letter responds to four of the allegations in Cambensy’s request to Nessel.

The first regards the alleged conflict of interest between Veridea Group and the NMU Foundation.

“Mr. Mahaney fully complies with the Board of Trustees’ Conflict of Interest Policy and annually submits a conflict of interest statement and regularly discloses any potential conflict of interest discovered between annual submissions,” the letter says. “Throughout this process, Mr. Mahaney has regularly provided the NMU Board and its legal counsel with updates on his and Veridea’s involvement in the project.”

Veridea’s letter also addresses possible misuse of state and local public funds to the developer.

“All public funds -whether state or local–have been reviewed and approved by public bodies and are subject to public audits and reviews. Veridea has had no involvement in the procurement of public funding outside the city of Marquette brownfield request,” the letter said. “Veridea will not receive any public funds. All public funds are being used by the city of Marquette and NMUF to demolish the blighted property.”

The third point of discussion revolves around the NMU Foundation’s transfer of the property for an undisclosed, limited equity stake.

“This allegation fails to comprehend the nature of the state and local programs regularly used for brownfield redevelopment. The value will be determined at a future date by an independent appraisal.”

The final portion of the letter addresses the allegation that other developers were excluded from consideration.

“The allegation of the exclusion of other developers is obviously and patently false,” the letter reads. “The MGH campus has sat largely vacated since 2019 when the new hospital opened its doors. LifePoint has undertaken two national sales efforts, held by nationally-recognized firms. There have been five years for other developers to acquire, demolish and redevelop the MGH campus.”

Veridea also sent out a press release Friday, in which it continued to address Cambensy’s letter.

“Had these funds not been awarded to this project, the community would have lost $20 million of needed funding and 20+ acres of blight would remain indefinitely in the heart of Marquette,” the release said. “Securing this type of funding requires collaboration and commitment. It is not collusion or a ‘scheme’, as Ms. Cambensy suggests. It is a smart use of available economic development tools that will greatly benefit the surrounding neighborhood, the city of Marquette, NMU and ultimately the Upper Peninsula.”

NMU Board of Trustees Chair Steve Young also released a statement regarding the allegations Friday, specifically regarding the termination of former NMU President Fritz Erickson.

“Rep. Cambensy further incorrectly asserts that Dr. Erickson’s termination was tied to his concerns about a conflict of interest in the pending development project. This is a false assertion that Dr. Erickson, himself, has stated for months.” Young said in the release. “Dr. Erickson is fully aware of the reasons he was fired. The termination followed his failure to comply with clear direction from the board, provided to him on multiple occasions in the months leading up to his termination.”

Rep. Cambensy also released a statement Friday.

“While I appreciate Veridea being willing to give a statement to the public regarding their views on my letter to Honorable Michigan Attorney General Dana Nessel, I believe the AG’s office will handle the investigation fairly based on the questions that were asked. The attorney general is the lawyer for the State of Michigan and when public legal matters arise, they render their opinion on matters of law. They also provide legal counsel for the legislature, and every state legislative office is allowed to ask the AG for opinions on behalf of their constituents,” Cambensy said in the release. “It is disappointing that Veridea Group and Marquette City Commissioner Jenn Hill have released statements that allege personal attacks against myself, my office, and my intentions for simply asking questions about this project on behalf of my constituents as their state representative.”


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