Monday, February 7, 2022

Sweet Jesus, $47 Million? Partial Payment Request

The weekly Richardson City Council agendas are a rich source for conspiracy theories. An especially rich vein are the descriptions of the topics to be discussed in the secret Executive Sessions. Monday's agenda has this tantalizing nugget: "Consultation with City Attorney regarding JP — KBS Holdings, LLC Payment Request".

You may wonder who or what is JP-KBS Holdings, LLC. It's one of a spiders web of partnerships, joint ventures, LLCs, REITs, and other companies all owned or managed or somehow involving Mark Jordan. Mark Jordan is the husband of former Richardson Mayor Laura (Maczka) Jordan. The headline of a press release from the United States District Court for the Eastern District of Texas — Sherman Division tells us all we really need to know about the couple: "Former North Texas Mayor and Land Developer Husband Convicted in Public Corruption Trial."

Now, according to this sparse City Council agenda item, the Richardson City Council apparently has received a "payment request" from a company associated with that sad chapter in Richardson history. The agenda doesn't provide any background. The agenda doesn't say the City of Richardson is on the hook for a $47 million financial incentive it gave for development of Palisades ("Sweet Jesus, $47 Million?" is what Dallas Observer's Eric Nicholson exclaimed). The minutes are unlikely to be any more transparent about what's going on. The City Manager and Mayor probably won't think it's in their personal interests to talk about this. It's the current City Manager Dan Johnson's signature on the 2015 economic development agreement that the City is still on the hook for all these years later. And the current Mayor Paul Voelker was on the City Council at the time and was soon to become mayor upon the resignation of Mayor Laura (Maczka) Jordan. It's the incentives in that agreement that are possibly coming due in the form of a "payment request" that the City has received. A request that the City Council wants to discuss secretly with their attorney.

For the record, in 2015 when the Palisades financial incentives were awarded, I questioned whether it was a good deal for Richardson ("Sweet Jesus, $47 Million"). Spoiler alert: I was wishy-washy. I said, "My head hurts thinking about all the angles to this deal." Later, after thinking more about it, I came down against economic incentives like this ("Sweet Jesus, $47 Million - ctd"). Much more recently, when the City Council was deciding on its Council goals and strategies, I explicitly suggested this goal: "Reform City's use of tax incentives." My suggestion was ignored. The current City Council has no goal, strategy, or tactic to do any such reform, despite having six of seven members who were not serving on the Council at the time of the "public corruption" by the mayor and developer. Now this City Council is meeting to deal with the consequences of one notorious financial incentive the City entered into. And plans to do it without sharing any information with the public. Why? Apparently, even that is secret.

Background information: corporationwiki lists Mark Jordan as being associated with eighty companies, one of them being JP-KBS Richardson Holdings, LLC. Here is what the United States District Court for the Eastern District of Texas — Sherman Division has to say about Mark Jordan. This is from his criminal indictment:

Mark Jordan (Jordan), defendant, was a commercial real-estate developer. One of his companies, JP Realty Partners LLC ("JP Partners"), acquired and developed commercial real estate. In 2011, JP Partners, along with a separate entity, KBS Strategic Opportunity REIT Richardson Portfolio JV, LLC, formed JP-KBS Richardson Holdings, LLC. JP-KBS Richardson Holdings, LLC, with Jordan acting as managing partner, purchased approximately 40 acres of developable land, along with two office properties (collectively called the "Palisades Property"), located in the City of Richardson, the majority of which was located in the Eastern District of Texas. The Palisades Property was adjacent to the Canyon Creek and Prairie Creek neighborhoods in Richardson, Texas.
Source: Scribd.


Mark Steger said...

Andrew Laska speculates about what the City Council's executive session might have to deliberate. Read about it in the reborn "Richardson Echo".

Sassy Texan said...

KBS is still part of the club no matter the entity thru syndication it creates. What is quite interesting is if the deal to begin with is saddled as a corrupt deal, then does it matter who owns it now? Pre-sentencing investigation will be the teller of that story. The city should have cancelled that agreement. How that plays out will tell the new story.

Mark Steger said...

From agenda of the April 22, 2024, Richardson City Council meeting.

• Consultation with City Attorney
• Regarding Development and Economic Development Agreement by and between JP-KBS
Holdings, LLC and the City of Richardson Dated April 29, 2015

Note that JP-KBS Holdings is the company the Jordans ran when the City entered into a $47 million economic development deal for Palisades development. The Jordans are no longer connected to JP-KBS Holdings (I don't believe), but whoever succeeded them may be about to get a big payout from the City.

Mark Steger said...

Instead of a payout, the City declared the agreement void. Good decision.