Just yesterday we were singing the praises of our sources, and once again we want to say a big thank you, this time to the extraordinary researcher Mary McConnell, who tipped us to some very interesting new documents in the ongoing saga of attorney Ken Dandar.
In March, we reported the amazing news that Dandar miraculously managed to get out from under a million-dollar judgment against him awarded to the Church of Scientology under bizarre circumstances.
It all goes back to 2004, when Dandar was involved in the settlement that ended a wrongful death lawsuit against the church brought by the family of Lisa McPherson, who Dandar was representing. Scientology claims that as part of that deal to end the lawsuit, Dandar promised never to bring another lawsuit against the church. But five years later, he did just that, helping Victoria Britton try to get her day in court over the disturbing death of her son, Kyle Brennan.
Dandar ended up in an utterly strange tug of war, with the original McPherson court telling him to drop his representation of Britton or be fined, and the federal court handling the Britton lawsuit telling Dandar he couldn’t abandon his client. And even though Dandar did eventually hand over Victoria’s lawsuit to someone else, the McPherson court fined him a million dollars for supposedly going against his 2004 agreement, payable to Scientology.
Got all that? It’s crazy, we know. Well, Dandar fought that judgment in numerous ways, all of which frankly seemed like longshots. But in March a Florida state appellate court decided that Scientology had gone about things wrong procedurally. Because the 2004 McPherson suit had been settled and dismissed, its court wasn’t in a position to award new damages, even if Dandar was in violation of the 2004 agreement. If Scientology believed that Dandar was in violation, the church should have initiated a new lawsuit, rather than try to revive a dismissed one. And so the appellate court wiped out the million-dollar judgment, much to Dandar’s relief.
Since then, a couple of things have happened. Naturally, Scientology appealed that decision because it appeals everything. It has asked the state supreme court to review the appellate court’s decision, and we have a copy of the brief the church submitted. It’s pretty technical, which is usually the case with appeals, and it asks the state supreme court to look at other rulings that have gone differently on similar subjects, asking the court to reconcile what appears to be an inconsistency in the application of law.
Still with us? Dandar, meanwhile, answered that filing with his own brief, sticking up for the appellate decision, naturally, and accusing Scientology of being cute with the facts of the case. He argues that the appellate court enforced the correct case law in the correct way.
Meanwhile, as we wait for the state supreme court to rule on that appeal (and the court is currently on vacation until near the end of the month), something else interesting happened back down in the original state court that had settled the Lisa McPherson lawsuit and then, under retired Judge Crockett Farnell, saddled Dandar with the ruinous million-dollar judgment.
Judge Farnell issued an order not only acknowledging the appellate court decision wiping out his previous judgment, but he went even further: He not only vacated the judgment, but even asked the court clerk to have it expunged from the record.
It’s as if Scientology’s attempt to ruin Ken Dandar never happened.
Dandar, recognizing an opportunity when he saw one, then attached Farnell’s order to a motion to the state supreme court, asking it to dismiss Scientology’s appeal as moot. How, after all, could Scientology appeal a case that didn’t even exist any more?
We find that pretty clever, and, we hesitate to say it, somewhat Scientological in its cunning!
When we called Ken Dandar to ask him about his new filing, he said he didn’t want to make any public statements until the state supreme court returns from vacation and makes a ruling. Hey, we’re curious about that outcome too, and we’ll let you know as soon as it happens.
— Scientology’s appeal brief to the Florida state supreme court
— Ken Dandar’s response to Scientology’s appeal
— Ken Dandar’s motion to dismiss (attached: Judge Farnell’s order expunging Scientology’s previous victory)
Our money man on Scientology’s latest real estate purchase
You may have caught the news at The Real Deal that Scientology had recently purchased a 185,000-square-foot warehouse in the City of Commerce (near Los Angeles) for $32.5 million. Scientology was already the tenant in the building, where it has one of its state-of-the-art printing and packaging facilities.
We know what you’re thinking. With so many overpriced, underused real estate boondoggles to David Miscavige’s name, had the Scientology leader made another blunder? We turned to our money man, John P, who explained to us that in this case, the church may actually be making a shrewd move. Here’s what he sent us…
While I am not a commercial real estate expert, I have worked and managed plenty of people who are, so I have some general idea how to look at a deal like this. The first thing you do when analyzing a commercial real estate deal is to figure out what they are paying in dollars per square foot. The Bridge Publications facility is 185,000 square feet, and the cult paid $32.5 million. That works out to $175 per square foot.
The building was built in 2008, so it is relatively new and is in much better shape than a lot of the real estate stock in the City of Commerce. The Bridge Publications building has a fairly ornate frontage, which makes it more valuable than older buildings with less “curb appeal,” because the Bridge facility could be used as a corporate headquarters by a future tenant. It’s also literally a stone’s throw from an on-ramp to Interstate 5, a major highway giving easy access to tens of millions of customers within a few hours’ drive. That would make the building particularly valuable to a warehousing operation that distributes goods customers actually want.
Importantly, the Bridge building has much higher ceilings than most older warehouse/manufacturing facilities. High ceilings these days are increasingly essential for warehouses using automated picking equipment, because the higher the ceiling the more goods per square feet you can stock and you are thus much more efficient — the picking equipment doesn’t have to move as far to pick an item, so the time to pick an order drops substantially. I am guessing based on the picture in this article that the ceiling of the Bridge facility is at least 32 feet, which is reasonably attractive, though some buildings are now going up with 40-foot and higher ceilings. I have heard of old warehouses that are otherwise in fine shape but with 20-foot ceilings that are being torn down and rebuilt; the cost savings from higher density are that significant.
I looked at one commercial real estate listing site and, while I could not find anything of that size for sale in the City of Commerce, I found a couple of buildings in the 20,000 to 60,000 square foot range that are somewhat comparable. Prices for those buildings, which were built at various times starting in the 1960s, range from $125 a square foot to $225 a square foot. The $175/square foot that Scientology paid is well within the range of somewhat comparable facilities that I was able to track down. Thus, as a result, the transaction seems to make economic sense for the cult. It’s not a boondoggle like some of the Ideal Org sites or the Super Power building in Clearwater.
I will take a wild guess here, but given that they took occupancy of the building in 2008, it is likely that the lease was up for renewal in 2018. Scientology may have gotten indications from the owner that they were either going to sell the building or, more likely, they were going to raise the rent significantly. It is possible that Scientology would be nervous that any new owner might take issue with them and raise the rent significantly to get them to move, though I think this is relatively unlikely. Typically, an owner selling a building will raise the rent slightly before selling it and will sell the building only when it’s full, to maximize the sale price. If the rent were raised too fast, the landlord would be stuck with an empty building, which is a much bigger problem in commercial real estate than it is in residential, because it takes much longer to find a new tenant and complete a build-out of the interior before the flow of rent payments starts to come in.
I’d be willing to bet that commercial real estate in that neighborhood could rise from around $8 to $12 per square foot per year especially given the high ceiling and proximity to the freeway. I think we’ll be seeing a lot of competition to set up one-hour or two-hour delivery from Internet retailers like Amazon or bricks-and-mortar retailers like Home Depot, and the Bridge Pubs facility would be very attractive to a company like that.
Given that Scientology has lots of cash on the balance sheet that’s probably not making them that much interest, it probably makes more sense to use some of that cash to buy the building than to spend probably $1.6 million to $1.8 million per year on lease payments for a business that’s probably not pulling in more than $4 million to $5 million per year (not counting the brief bump from republishing Battlefield Earth over the last couple months). With that lease burden, they’re probably losing money. But once they own the building, they can essentially pull enough cost out of the equation so that Bridge becomes somewhat profitable on revenues that continue to decline, since they have minimal labor costs due to the pittance each staff member makes. They also have few variable costs: they’re not exactly spending a lot of money on paper because so few people are actually buying any books so those printing presses are mostly silent.
Thanks for that analysis, John P.
Bonus items from our tipsters
Among the photos from inside Scientology’s new ‘Ideal Org’ in Harlem, we found this glass mural somewhat interesting and mildly disturbing…
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Our book, The Unbreakable Miss Lovely: How the Church of Scientology tried to destroy Paulette Cooper, is on sale at Amazon in paperback and Kindle editions. We’ve posted photographs of Paulette and scenes from her life at a separate location. Reader Sookie put together a complete index. More information about the book, and our 2015 book tour, can also be found at the book’s dedicated page.
Learn about Scientology with our numerous series with experts…
BLOGGING DIANETICS: We read Scientology’s founding text cover to cover with the help of L.A. attorney and former church member Vance Woodward
UP THE BRIDGE: Claire Headley and Bruce Hines train us as Scientologists
GETTING OUR ETHICS IN: Jefferson Hawkins explains Scientology’s system of justice
SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts
Other links: Shelly Miscavige, ten years gone | The Lisa McPherson story told in real time | The Cathriona White stories | The Leah Remini ‘Knowledge Reports’ | Hear audio of a Scientology excommunication | Scientology’s little day care of horrors | Whatever happened to Steve Fishman? | Felony charges for Scientology’s drug rehab scam | Why Scientology digs bomb-proof vaults in the desert | PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | Scientology’s Private Dancer | The mystery of the richest Scientologist and his wayward sons | Scientology’s shocking mistreatment of the mentally ill | Scientology boasts about assistance from Google | The Underground Bunker’s Official Theme Song | The Underground Bunker FAQ
Our Guide to Alex Gibney’s film ‘Going Clear,’ and our pages about its principal figures…
Jason Beghe | Tom DeVocht | Sara Goldberg | Paul Haggis | Mark “Marty” Rathbun | Mike Rinder | Spanky Taylor | Hana Whitfield