ELIZABETH NELSON:
Welcome to Episode 19 of Hollow Hype. In Episode 18, the people who used to live on the Southtown block remember it as an affordable place, with trees and gardens. All the homes and trees have now been removed. Heidi has not yet attracted the $54 million she needs to redevelop the block into luxury apartments.

Some people in Ann Arbor are embarrassed that they ever did business with Heidi. They don’t want to talk about it. They’d prefer that no one else talk about it. That’s especially true for the elected leaders and city staff who were so eager to partner with Heidi, just two years ago.

TYLER STONE:
 it does raise the question of like, does nobody on the mayor's staff know how to use Google? Like, can you not do even the most cursory, cursory, truly cursory background checks on a human being that you're maybe gonna be doing millions and millions and millions and millions of dollars of business with?

ELIZABETH NELSON:
My name is Elizabeth Nelson. From 2018 to 2022, I served on Ann Arbor City Council. That experience taught me a lot. Mostly, I learned: people will say just about anything if they think you’ll believe it. This is HOLLOW HYPE.

In Ann Arbor, Heidi found plenty of people willing to believe what she had to say. I watched Heidi get closer and closer to City leaders, asking for more and more, and getting everything she asked for. I’ve been trying to understand how this happened in Ohio and West Virginia. 

[MUSIC]

GEOFF SCHENKEL:
My name is Geoff Schenkel. I was born and raised in Marietta, Ohio. I grew up across the Muskingum River on Harmar Hill, left for a short period of time to do an art apprenticeship with a master muralist in San Francisco. Came back, worked as an artist. 

And then when I had kids, I quit traveling so much and have done a lot of other kind of community-minded employment activities like developing a mentorship program, have worked with developmentally disabled adults to teach art skills, things like that.

In 2017, ran for city council, served until November of 2023. Right after I was elected for a fourth term, I stepped down and took the city of Marietta's community development director position. Our current mayor used to be our city council president. And after he was elected, they reached across party lines and hired me to be their community development director.

ELIZABETH NELSON:
Geoff works at the same position that Heidi once held: development director for the city of Marietta. It’s an appointed position.

GEOFF SCHENKEL:
The mayor chooses and he appoints. I work at the pleasure of the mayor.

ELIZABETH NELSON:
Heidi was appointed development director of Marietta in 1998. She was appointed by Mayor Joe Matthews.

GEOFF SCHENKEL:
Joe Matthews was the mayor when I was first elected. Joe Matthews was in office for a very long time.

ELIZABETH NELSON:
Joe Matthews is now deceased. People have told me things about him, but no one will say anything on the record. Geoff wasn’t in politics or city government during the years that Heidi was most active in Marietta.

[MUSIC]

GEOFF SCHENKEL:
When I was in college, 92, 93, 94, I was finishing up school and also doing my apprenticeship with the muralist in San Francisco. There was a kind of renaissance of downtown development. The block that we're in now, in my childhood, 70s, 80s, and into the 90s, was not a nice place. This was, families did not bring their children here. 

This is where drunks passed out on the stoop and vomited on the sidewalk. This was not a classy part of town. And so redevelopment was a way of cleaning up blight and crime.

Heidi's sister was the owner-operator of the first coffee shop I ever remember Marietta having, like, big cities. When I would visit friends in Ann Arbor or Cleveland, or Pittsburgh we would go to coffee shops, and Marietta didn't have anything like that. Penny University was the first coffee shop that I ever know of, and it was right here in this block. And it was part of the revival of downtown Marietta between Butler Street and Green Street, which is just right outside the windows here.

ELIZABETH NELSON
I talked to Geoff in the lobby of the Lafayette Hotel. It’s where I stay when I visit Marietta.

[Audio recording]

 You have arrived! You're here at the historic Lafayette Hotel in beautiful downtown Marietta, Ohio. So let me tell you about this grand Riverboat-era hotel. Built and opened on July 1, 1918 by some forward-thinking Marietta businessmen, the Lafayette Hotel was built over the foundation of what was once the Bellevue Hotel. The hotel's location is at the confluence of the Ohio and Muskingum Rivers on the side of Picketed Point, where the pioneers who settled Marietta built their first cabins back in 1788. The Lafayette Hotel was named after the French Revolutionary War hero, the Marquis de Lafayette, who came to visit our fair city in 1825.

ELIZABETH NELSON:
The Lafayette is at the southern end of Front Street, where you can look across the river and see West Virginia. For several blocks to the northwest, Front Street is a lovely mix of stores and restaurants in renovated historic buildings.

In the 1990s, Heidi and her husband invested in these historic properties on Front street.

GEOFF SCHENKEL:
Heidi and her husband at the time were instrumental in bringing loft living and coffee shops and higher-end restaurants. Much of what we enjoy today, they played a big role in spearheading. I mean, there were other developers here as well over the years, and they did their part too. 

Heidi, her sister and her brother, worked on a number of downtown buildings and brought new life to them and converted them from things like dive bars to high-end restaurants. 

ELIZABETH NELSON:
When Mayor Matthews announced Heidi’s appointment as development director, her experience with these downtown buildings was one of her credentials. 

Geoff explains the job of development director

[MUSIC]

GEOFF SCHENKEL:
We work with census data for low to moderate income census tracts or neighborhoods. I mean, census tracts sound so fancy, but we're talking about pockets of poverty or downtrodden areas or downtrodden people or downtrodden households.

So the removal of barriers starting for those who are in need, whether it's financial or because they are some other minority, In the census tract across the river here, at one time in recent years, it was like 21% of the households didn't have access to a motor vehicle.

We work in partnership with county agencies. It is counterintuitive, but we probably have more intensive relationships with non-municipal entities than we do with our own city departments.

So if you're not working to reintegrate those who are living at the margins, I don't know what you're doing with this position of community development.

ELIZABETH NELSON:
In City Council meeting minutes there are only small hints of what Heidi did as development director for the city of Marietta. She proposed a new Development Advisory Board and she was ready with recommendations for who should serve on it. In her last few months as development director, she persuaded the Marietta City Council to vote in support of a broadband telecommunications economic development initiative.

GEOFF SCHENKEL:
Broadband and connecting, you know, that's a form of connection and having access to information is recognized as the kind of barrier worth removing. So, yes, there is a foothold there that makes sense.

ELIZABETH NELSON:
In state archives for Ohio, I found evidence of meetings that Heidi scheduled with staff who reported to the governor. Did these meetings make sense for the development director of Marietta?

GEOFF SCHENKEL:
I don't really – I mean, I talked to HUD in Columbus when I worked on this project out the window here with the Department of Development, Department of Development to the Governor's Office of Appalachia to an area, I just work through a chain of command. I don't have those relationships. 

It seems to me that we have a lot more middlemen agencies now than we did back in the day. I'm not a networker. I think in terms of building things, things, you know. I think like sidewalks and 304 aggregate base and chamfered edge on the concrete port, not a square edge. That’s my design background.

ELIZABETH NELSON:
It may be true that when Heidi was development director, there were fewer middle men. Maybe it made sense for her to engage that directly with state government in Ohio.

[MUSIC]

HARLEY NOLAND:
I was raised in Marietta, so I've lived here all my life other than for four years at university. And then I joined the Peace Corps, spent two years in Peace Corps, and then returned back here, opened a business, designing and restoration of buildings and things like that. So architectural design is my main business, but I also owned a restaurant for 30 years that's right up there, the Levee House. And then I had the tourist trolley that operates around town doing narrated history tours. And then I had the only bed and breakfast on a historic sternwheel boat, which was my home. I do a lot of things.

ELIZABETH NELSON:
That’s Harley Noland. He currently serves on Marietta City Council. He’s served on and off City Council for seven terms, since the 1990s 

HARLEY NOLAND:
There was a stint that I was off for two years somewhere in there. I ran for Mayor unsuccessfully.

ELIZABETH NELSON:
Harley was not on City Council when Heidi served as development director, but he remembers her.

HARLEY NOLAND:
I know Heidi from her working on old buildings in downtown Marietta. She owned a number of them on Front Street, which was our main historical shopping area. And she and her husband purchased several of those, renovated them, started two different businesses, one a brewery and one a restaurant.

It was the only brewery in town. It was a place to be seen and, you know, attractive couples all got together.

If you were to look at the original investors in the brewery, it was a younger crowd that had money, either inherited money or by their profession they were making money. And so her husband was semi-local, not too far from here, so he would have known friends their age and got them to invest in it. And, you know, microbreweries then were sort of a new thing, and so people want to be part of that newest wave, the latest fad.

In growing up here, Front Street were mostly bad bars, period. You didn't shop on Front Street. There were no shops, or very few. That changed. Front Street became the expensive, the good place to go shopping. And she was part of that. She had four storefronts in those three buildings total. And if you walked up and down Front Street, most of the buildings are in good shape now.

So we try to preserve our buildings. Also, at one time, there were tax credits available for historic preservation. If you met the secretary of the Interior's guidelines for restoration, you could get 45% of your restoration cost taken off your taxes. So put $1 million into a building, get $450,000 removed from your taxes. So therefore, you want to restore things.

ELIZABETH NELSON:
Harley remembers the Sequelle broadband project.

HARLEY NOLAND:
I spoke to her a couple times about broadband services.

She was looking for a site that had high elevation on which to put her broadcast equipment. And I live on a high point, so she was looking to see if I wanted to let them put a tower basically on top of my house.

I know that they wanted broadband, but myself included, didn't really know what all that entailed. And it was being marketed that it was going to be outside government funds. There was like government grants to establish broadband in these rural areas. I thought it was like federal funds to establish broadband service, so it wasn't like they were coming to me and saying, "Do you have money?" Some people said, "Oh, well, okay. Yeah, that'd be great." 

So who's against somebody else's money, you know? Free money.

ELIZABETH NELSON:
Harley agreed to talk to me almost immediately after I met him. He didn’t hesitate. Other people in Marietta are less willing. When I approached a former Council Member who served during Heidi’s time as development director, he immediately explained that he had not overlapped with Heidi at all. He tried to tell me that I had my dates wrong. My dates weren’t wrong.

GEOFF SCHENKEL:
We just seem like emotionally fragile. Like, Humpty Dumpty. We fell, and all the king's horses and all the king's men couldn't put the pieces together again. 
 
ELIZABETH NELSON:
Sequelle was the broadband project that led to Heidi’s conviction for money laundering. It was based in Ohio when Heidi applied for federal money and was awarded over $3 million. But that money was restricted. She needed additional money before she could access the federal dollars. On April 4, 2002, Heidi and her husband filed for bankruptcy in Ohio. Three days later, Sequelle was reincorporated in West Virginia.
 
[MUSIC]

KEITH BURDETTE:
I was elected to the House of Delegates when I was 23. Elected to the State Senate in 27. Became president of the State Senate at 34. Left the legislature because of the illness at 39. The voters were sick of me. And I went out and did some government relation work for a little while. And then went to work for Bob Wise when he was elected in 2000. And I was on his transition committee and then moved into his office when he was sworn in. 

I was an executive assistant to Governor Wise. I would like to tell you I had a very specific responsibility, but I had pretty broad responsibilities. I was in charge of his legislative agenda and his activities. I oversaw his contingency fund. I was the conduit to the governor for grants that would receive from all the agencies of state-- just a lot. Just quite frankly, whatever he asked me to do, that's what I did. But specifically, I was in charge of legislative activities.

ELIZABETH NELSON:
That’s Keith Burdette. Keith’s name appears on a lot of documents and meeting notes related to Sequelle. I have a notebook of scanned documents from West Virginia that I shared with Keith

He flipped through a dozen pages in his own handwriting.

KEITH BURDETTE:
That's Dave Satterfield. Jim Mylott, County Commission, no collateral. He did not get the approval and probably can't get it now. Jim Mylott, who's he talking about? Jim Mylott. That's in 2000. That's July, 160, 340 from United, with EDA guarantees of $500,000 operating cost, Robin.

ELIZABETH NELSON:
The Sequelle project didn’t exactly fall under the umbrella of Keith’s job.

KEITH BURDETTE:
Oh, I intersected with the issue because I knew Mike McPeek. I can tell you that's probably why it came to me. Mike communicated with me his support for it. To be honest with you, I had a great deal of trust in Mike. He was a local college president, and I had known him for some time. Trusted Mike.

When you need something in the governor's office, you try to identify somebody you know, and I was somebody they all knew. 

I'm also from Parkersburg. This whole project was in Parkersburg. It involved some Parkersburg people involved, Wood County Commission involved, the Mid-Ohio Valley Regional Council, all of whom I knew, all those players. 

ELIZABETH NELSON:
Mike McPeek was the connection to Heidi

KEITH BURDETTE:
I think she was brought to me by Mike. I believe that's how I met her. I don't think I met her more than once or twice. I really don't. Could be wrong about that even. But I don't think I met her more than once or twice. 

Slick's not the right word, but she was—-I did not accept-- I would not say that I immediately assumed she was not of a good character. But she was well put together. I don't mean that physically. I mean, she was very organized. She had a very impassioned pitch. I remember that.

ELIZABETH NELSON:
In June 2002, Marietta residents reached out to elected leaders in West Virginia, warning them that Heidi was not trustworthy, that she was likely to mis-use money, and that she had filed for bankruptcy. Wood County Commissioner Rick Modesitte relayed this message in an email to Keith Burdette.

KEITH BURDETTE:
Well, I've been in politics. So I hear all kinds of rumors about all kinds of people. About 20% aren't even-- more than 20% aren't true. So my response was the banks will vet them. I'm going to let them vet them.

Take rumors a little bit with a grain of salt. Even if they turn out to be true, in this case they did. You know, until they're proven or disproven, I take all rumors with a grain of salt.

[MUSIC]

ELIZABETH NELSON:
In 2002, the Sequelle project was appealing.

KEITH BURDETTE:
I remember in the Wise administration, I think once a week, we'd all get together and go through his requests or the requests for his time or an event or a meeting, whatever it is, and go, yes, no, yes, no, yes, this date, this date, this date. I mean, again, it was all pretty perfunctory. And the governor was very, very focused on doing economic development projects, making a splash out of them. Every governor does that-- and he had supported it for a long time along the way. So I think that's how it happened. 

Looking at it in 2026 is different from looking at it in 2002. 2002, there weren't many Sequelle type projects. And I don't mean it in a negative way. I mean, there weren't too many projects of that type that were looking at West Virginia. And so that was one. That was one of the reasons. He thought it might broaden technology in the state. And it didn't. But there have been some since. And he has worked on those as well.

ELIZABETH NELSON:
Moving the Sequelle project from Ohio to West Virginia made sense.

KEITH BURDETTE:
I work in economic development. All the time we get projects that couldn't get attention in Ohio. And many of them have done very well in West Virginia. It's not that unusual. But the flip side of that is we don't necessarily know what they did in Ohio versus what we do in West Virginia. So they could have been-- I'm working on a project right now where they just could not get any attention. They're a perfectly good company. They've got plenty of money. They just couldn't get attention. Big state. Well, a small state, they get attention.

ELIZABETH NELSON:
By the time Sequelle fell apart, Keith was no longer in the governor’s office. Bob Wise was no longer governor.

KEITH BURDETTE:
In the scheme of the overall running of state government, it was a hiccup. I don't want to downplay it, because it was real money. People were criminally prosecuted for some of the activity. But it was not the biggest mistake that the state ever made. And it wasn't the first one. And you just move on. That's what we have to do.

HARLEY NOLAND:
People were wanting broadband, and all of a sudden they found out that there really wasn't anything being developed.

KEITH BURDETTE:
What I remember is the fact that my friend got in a lot of trouble over it. And that was Mike.

ELIZABETH NELSON:
I still have questions about what happened. For instance, how did Heidi get to know McPeek? How did she know that McPeek could connect her to the governors office in West Virginia? 

Ultimately, what happened in Ohio and West Virginia is not so very different from what happened in Michigan. Heidi identified the people who would be most useful to her.

HARLEY NOLAND:
She's doing what she knows. She was very skillful at making connections and—well, by being the development director, she would have known about federal funds, federal grants, I would think.

ELIZABETH NELSON:
Heidi confidently presented schemes that were too complicated for most people to grasp.

KEITH BURDETTE:
Yeah, this was so new. I'm way, way, way beyond my true knowledge. But 24 years ago, I'm thinking there weren't a whole lot of people that she was dealing with that really fully understood everything she was proposing.

[MUSIC]

ELIZABETH NELSON:
People are not surprised to learn about what Heidi has accomplished in Ann Arbor.

HARLEY NOLAND:
Yeah, she knows how to make friends and make a good impression and gain support.

KEITH BURDETTE:
Somebody that does it once will do it again. Fortunately, typically, it's harder to get away with because of the internet. Somebody just checks it. In 2002, it wasn't a source. There was no Google, or at least it wasn't one utilized by state government.

It's harder in this environment, I would think, to get away with it. But not impossible. Not impossible. But somebody that's going to do it is going to-- I'm not sure the level of their remorse, especially if they really never get held responsible for it.

Thanks for listening. Visit HollowHype.com to find more information about this episode.
Coming up in episode 20: people who knew Heidi and Marge have a lot of questions. They want answers.

If you have something to share about Heidi’s activities in Michigan, Ohio, West Virginia, or California. Please reach out to hollowhypepodcast@gmail.com