Update: On April 2, a Douglas County judge dismissed a lawsuit brought by a neighborhood group challenging the sale of a senior center they gifted to a nonprofit less than two years ago.
The ruling clears the way for PACE, the Omaha nonprofit whose former director was convicted of fraud, to sell the longtime South Omaha senior center after receiving it for $1 in 2022.
District Court Judge Tressa Alioth found Corrigan Neighborhood Inc. lacked standing to challenge the sale after gifting the property and related rights to Police Athletics for Community Engagement in May 2022. It also gifted the property with no limitations on its use or restrictions on any sales, the ruling found.
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An Omaha nonprofit that recently saw its former director convicted of fraud conspiracy is trying to sell a longtime South Omaha senior center for $500,000. It’s doing so less than two years after it was given that same building for $1.
An Omaha nonprofit that recently saw its former director convicted of fraud conspiracy is trying to sell a longtime South Omaha senior center for $500,000 nearly two years after it was given the building for $1.
Police Athletics for Community Engagement, which has connected thousands of Omaha kids to organized sports, received the Corrigan Senior Center in May 2022 promising to continue senior programming while adding after-school activities for kids.
Then the FBI raided the building a few months later and donors, like the City of Omaha, pulled funding, contributing to a $1.8 million drop in annual revenue, according to PACE reports.
The nonprofit couldn’t afford to maintain the building and decided to sell it after the original owners declined to take it back, said Lance Jones, PACE board chair.
But the original owners say they never received a genuine offer and now see little reason to trust PACE.
“It was a huge betrayal,” said Lisa Clapp, who manages senior apartments on the same block and served on the board that gifted the center to PACE.
On March 5, the Corrigan Neighborhood Association filed an injunction seeking to stop the sale. The association’s lawyer Dave Pantos, called the situation a “gross violation of the Nebraska nonprofit act” and said it has endangered the future of the senior center.
If the center closes “it would just be heartbreaking,” said Jeanette Gaudreau. The 72-year-old has been coming to the senior center for 10 years, first for a part-time job serving lunches and now for the free music, bingo and crocheting.
Corrigan is one of few senior centers in South Omaha and a “stand-up” model for other facilities, said Douglas County Commissioner Mary Ann Borgeson, who helped run senior programming at Corrigan for 30 years.
“That’s what I think I’m most upset about,” she said. “A gift they were given, that one of the biggest, main reasons for its existence is the senior center and for that not to have the value it’s had for years and years and years … that hurts.”
Anchoring the community
The collage of black-and-white newspaper clippings show men in dark suits standing behind shovels. “Corrigan Apartments to ‘Anchor’ Area, Pastor Says at Groundbreaking,” reads a headline.
The 1986 event celebrated the start of a long anticipated project – 34-units of subsidized senior housing on the site of the razed Corrigan Elementary School. The Corrigan neighborhood had already converted the old school’s gym into a senior center.
Denise Cavlovic’s dad helped develop and run that building. She remembers him mopping the floors – one of many volunteer tasks that kept the building running on a small budget.
“It’s in our bylaws, there was not to be any money made off this,” Cavlovic said. “They were very strict about this being for the community.”
Due to requirements tied to funding for the apartments, the families created two groups: the Corrigan Neighborhood Association would own the apartments and Corrigan Heritage Incorporated would own the senior center. Effectively they were the same organization with the same members serving on both boards, Cavlovic said.
For years things ran smoothly.
Then the racoons came.
‘It just looked like a win-win’
In 2020, the animals clawed, chewed and rummaged through the ceiling causing $25,000 in damage.
(Editor’s note: a previous version of this story said the raccoons damaged the senior center in 2022. The damage occurred in 2020 but contributed to costs that led to the senior center’s $1 sale)
Carl Meyers, the president of both Corrigan groups, said the repair bill drained their funds. It seemed time to pass the space on to a new group of do-gooders with more funding.
Meyers didn’t know much about PACE at the time, but it sounded good on paper. The group, whose roots trace back to 2005, organized soccer, football and baseball teams as well as fitness training and biking trips for kids around the city. By 2022 it was serving nearly 5,000 kids and its budget had skyrocketed to almost $2.5 million from $102,790 eight years earlier.
The fact PACE was run by current and retired law enforcement sweetened the deal.
“What would be better for your neighborhood than a bunch of police officers in and around buildings?” Meyers said. “It just looked like a win-win to start with.”
Corrigan Heritage Incorporated sold PACE the building for $1 at the end of May 2022.
It didn’t take long for Meyers to regret the group’s decision.
“Police investigators raiding your building shortly after would tend to tell you there may be a problem,” Meyers said.
On Dec. 20, 2022, FBI agents searched the Corrigan Senior Center. Investigators alleged PACE executive director Rich Gonzalez, Omaha City Councilman Vinny Palermo and two additional men defrauded the athletic organization and others.
Gonzalez was eventually sentenced to 18 months in prison while Palermo received 27 months in prison. Johnny Palermo, a retired police officer and former president of the Latino Peace Officers Association, pleaded guilty and is awaiting sentencing. Jack Olson, a fundraiser, is currently scheduled to stand trial on June 24.
As the case developed during 2023, Meyers tried asking PACE what would happen to the senior center.
Jones, the PACE board chair, contacted Meyers in July explaining that PACE was looking to sell or regift the building to the neighborhood.
The problem was Corrigan Heritage Incorporated didn’t exist anymore, Meyers said. After the group donated the building, it stopped meeting. Meyers said the members could have reformed that group or started a new organization, but they didn’t explore either option because they didn’t think Jones had made a true offer.
Then Jones said he had an interested buyer the Corrigan people should talk to, Meyers remembered. But those conversations went nowhere, he said.
After a few emails and one in-person meeting, Meyers said he stopped hearing from Jones and only found out the building was for sale when a member searched the address on Google in February.
Pantos, the neighborhood group’s lawyer, wrote in his March 5 complaint that PACE blatantly violated the terms of the gift. Though PACE assumed and renewed the lease for senior programming, the fact it’s selling the building so quickly and never used it for youth programming indicates the original promise was “totally illusory.”
In an emailed statement Jones said PACE only used the building as storage and decided to sell it in April 2023. Earlier this month there was still an oversized $5,000 check made out to PACE sitting in one of the building’s activity rooms.
“Before listing the building we met with the group that donated the building and offered to give it back to them,” Jones wrote. “They stated that they could not accept it back. We also connected them with organizations deeply embedded in the South Omaha community to see if they would have an interest in taking over the property.”
Jones said the group has a sales agreement with a buyer and has “moved on” to focus on its sports programs for 2024. He said he believes the prospective buyer “wishes to maintain a working relationship” with the organization that runs the senior center programming.
‘It’s just gut wrenching’
Since learning of the sale in February, Meyers, Cavlovic and other members have been angry.
“It’s just gut wrenching that my father mopped those floors for no profit,” Cavlovic said, “and now they’re selling it. It’s disgusting.”
They’ve also been confused.
What will PACE do with the proceeds from the sale? What will happen to the seniors?
Jones did not respond to additional questions. Calls to Tony Espejo, PACE’s founder and current director, were not returned. Emails to an address associated with the buyer were also not returned.
For Meyers the issue is simple: This building is for the community and PACE is making money off it “as opposed to gifting it to a nonprofit organization that would carry on the same programs we espouse, protect the neighborhood and serve the community we’ve served,” he said
Gaudreau just doesn’t want to see this building go away. It would mean no more ice cream socials, live music, breakfasts or bingo. No one would sit at the front desk adorned with printouts of classic cars and seasonal decorations.
An obituary of a woman who used to come to Corrigan hangs there now.
“When you get older, change is harder to deal with. It really is,” Gaudreau said. “But this is just a very comfortable environment.”
1 Comment
The racoons came in 2021. I was the Director of the Center at that time. I hope Carl is able to prevail. Corrigan is the center of all social activity for many who attend. PACE using the building sale to cover the financial loss of its leaders criminal acts only furthers the corruption. SAVE Corrigan!