The road improvements greatly benefited the Oakeses, who invested $10 million in the Galleria building, their new headquarters at 8534 Yankee St.
In her application for the state money, Shery Oakes said the headquarters would house four Oakes Companies: CESO Inc., CESO Testing Technology, TesTech Inc. and Design Homes and Development Co.
The ownership of TesTech is at the heart of a federal investigation into whether the company illegally benefited from a government program that gives disadvantaged companies a leg up in winning lucrative government-funded contracts. A Dayton Daily News investigation found evidence that David and Shery Oakes owned or controlled TesTech even as Sherif Aziz won disadvantaged status and millions of dollars in public contracts for the firm. Aziz says he is the sole owner and president of the firm since he founded it in 1997.
The Oakeses control Yankee Partners LLC, which owns the land and Galleria building. Aziz shares ownership in Yankee Partners along with multiple other real estate ventures with the Oakeses, according to documents obtained by the Daily News.
The Oakeses have not commented and Aziz has denied wrongdoing.
Montgomery County spent nearly $867,000 to widen and improve 1,150 feet of roadway in front of the Galleria building, which opened in 2007. That cost included $20,075 the county paid CESO Inc. for engineering work. The Oakeses charged Washington Twp. $267,500 for the perpetual easement needed to improve the roadway and infrastructure.
That easement was paid for with an Economic Development/Government Equity grant that the county awarded to the township. The award, according to a county commission resolution, was based, in part, on a pledge that the Oakeses would create 50 jobs in three years and possibly 100 jobs.
The state’s $400,000 roadwork grant was given specifically to assist with economic development and the creation and retention of jobs. State officials demanded an explanation of why employment had dropped to 109 as of October 2009.
Montgomery County Assistant Administrator Joe Tuss said he told state officials that the job pledge fell short due to the economic downturn. He said he is unaware of how many people now work at the Oakes Companies and the couple’s attorney did not respond to a request for information on current employment.
“There has been no further monitoring of the project (by the state),” Tuss said.
The roadway improvements helped put a new commercial building on the tax rolls, and thus benefited the larger public and not just the Oakes companies, Tuss said.
“I think there are many projects that we do where we invest in public infrastructure that benefit more than just the business,” said Tuss. “With the exception of the economic circumstances that impacted their (job) pledges, they did everything they said they were going to do. They made the investment, they built the building and they moved into it.”
The Galleria is currently valued at nearly $4.5 million by the Montgomery County Auditor.
Montgomery County Engineer Paul Gruner said the couple’s desire for a better road in front of their headquarters meshed with the county’s long-term plan to improve Yankee Street from Ohio 725 to Austin Boulevard.
Gruner, who was appointed to his current job last year, said he does not know how the Oakeses’ CESO Inc. came to be awarded the 2004 engineering contract.
“Whether or not it is a conflict of interest is a legal/ethical matter,” said Gruner, saying state law doesn’t give much guidance on the award of professional service contracts for less than $25,000.
“At any rate, I would very likely consider it a potential conflict of interest if this came up today,” Gruner said.
Contact this reporter at (937) 225-7455 or lhulsey@DaytonDaily News.com.
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