The Clarion-Ledger reported the Canton Zoning Board "is holding a public hearing at 3 p.m. today at City Hall on First Choice Development's request to rezone the site east of the interstate at Old Jackson and Sowell Roads from C-3 commercial to a planned urban development designation. The urban development designation is needed because the project covers residential and commercial uses.
Ridgeland-based First Choice also is asking the city for a variance that would allow it to go beyond the number of apartment units permissible and skirt the setback requirements in the city's zoning ordinances." Article
More than a few residents are opposed to this project because it will include apartments. Naturally the developers claim they will be nice. However, lets examine same facts about this project and the developers. The TIF Bonds resolution as passed by the Madison County Board of Supervisors (3-2 vote, you can figure out who voted how.) provides some details.
First Choice Development (mentioned in the CL story), JJ International LLC, and Blackhawk Development are listed as the developers. $3 million in TIF bonds are to be issued with terms of up to twenty years. The resolution states "a portion of the proceeds which will be used to pay the cost of constructing improvements necessary for the Developer's project. The County has pledged all of such portion as may be needed, of the increased ad valorem real and personal property tax revenues as security for payment of the Bonds. The City has previously agreed to pledge one-half of the increased ad valorem real and personal property tax revenues of the City and up to twenty-five percent of the increased sales tax revenues of the City for such purpose."
Time for some due diligence. Who exactly are these developers? First Choice Development is owned by Patrick Sartain, Kenny Simmons, and Carl Clack according to the Secretary of State's website. JJ International is owned by Aakash Chandan. Blackhawk is owned by David Turner and Terry Hawkins. However, Sartain and First Choice are mentioned as the main developer in the bond resolution and most news articles.
An examination of Madison County land records shows a multitude of property transfers between Sartain, his various companies, and other entities as well as numerous deeds of trusts issued by lenders. However, there are two substitute of trustee notices filed against Mr. Sartain and his wife, Jennifer. Bankplus filed one on March 16, 2010 for a loan issued April 15, 2008 for $100,319. Deed of Trust The other one was also filed on March 16, 2010 for a loan issued by Bankplus to the Sartains on June 2, 2009 for a loan of $277,262. Deed of Trust. Filing a Substitute of Trustee notice is usually the first step a lender usually takes before it initiates foreclosure proceedings against a debtor although it is not a foreclosure action itself (Translation: The lender has chambered a round but hasn't taken off the safety yet.). However, several loans held by Sartain-owned companies have been paid off this year as well (Community Bank and First South Farm Credit) and several tax sales were redeemed. One curious transaction took place in June 2009 when Mr. Sartain issued a loan of $230,833 to First Choice Development, his own company on a one-year note.
Blackhawk has borrowed quite a bit of money in the last year. It borrowed $2,709,026 from Bankplus on April 10, 2009 on a one year note for land in Section15 Township 08N Range:02E. Mr. Hawkins borrowed another another $1,455,535 on April 10, 2010 on a five-year note through another company he partly owned: Turnhawk.
What does all this mean? I don't know. However, when substitute of trustee notices are filed on a developer, its never a good sign and is an indication he is behind on his payments. Before the Zoning Board goes one step further it should start asking questions about the financial solvency of some of these developers. They should also ask Bankplus how much it is on the hook for with these guys.
It is no secret several high-end developers are in trouble in Madison County right now as they have appeared before the Board of Supervisors begging for permission to reduce the size of the homes they wish to build as the market for large, expensive homes crashed. Longleaf. Livingston Township. Lost Rabbit. Mandalay. Harborwalk. The names just roll of of the tongue after awhile as the list grows longer. Then there is the Parkway South TIF's. Madison County found out it was on the hook for those bonds when the Parkway South PID suddenly informed the County in April it might miss its May bond payment of $89,000.
While John Bower (the son of the founder of Kidneycare, Dr. Bower) promises a high-end development, the fact is, the market for such projects is pretty weak in Madison County and several developers are trying to avoid going bankrupt after betting heavily on upscale developments. The City of Canton should make sure it is not falling for another pie in the sky scheme by some developers that it will regret in a few years, if not sooner. It should also let the Superintendent of Madison County Schools speak. However, good government is not something the City of Canton is known for these days.
Tuesday, June 1, 2010
Canton rezoning fight today
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19 comments:
It is only a matter of time before we see the commercial land owners begin to fall like, well, dominoes.
Lost Rabbit will be foreclosing soon. It'll be years before anything positive happens out there.
I didn't think it was a good idea to build, and build and build all those expensive houses there.
Did the developers think there was just a never ending supply of people with the kind of jobs and income needed to keep buying them in that price range?
I can't even begin to symphathize with them. They should have known better. I do hate it for the vendors they owe money to and have left hanging. There'll be businesses than just builders go bankrupt over poor judgment like this.
Meanwhile Harvey wants to pull off a massive last ditch giveaway of Jackson's dwindling taxes for a new hotel in a vain attempt to prop up the already red ink listing convention center and his flawed gold rush downtown bubble strategy. The goose is cooking.
A zoning proceeding is not a legitimate venue to inquire about the developer's financing. As a practical matter the developer won't be able to get his financing lined up until the property has been rezoned. Good luck finding any developer these days who has perfect credit.
So builders going under or facing foreclosure should get a green light for project they may not be able to finish or have to downscale?
Works for TCI and Gene Philips.
C'mon over here to Rankin, in the Hunter's Point neighborhood. This is not even a high dollar house and it is abandoned by the builder. Go look for yourself.
To all those that want to "bet" original developers can make these developments happen, pay attention how they leverage the neighborhoods. Small builders become their financing to afford their attempts to turn over the land they need to get their money out of - in other words....OTHER PEOPLES MONEY!
Anonymous 4:30pm reply to Kingfish: The change in zoning does not belong to any particular developer. A municipality is only supposed to change the zoning classification if a need exists for the classification sought and there has been change in the neighborhood since the last rezoning. If need and change exist, the land should be rezoned; if the owner can't prove change and need, then the land shouldn't be rezoned. If the developer who seeks the change cannot get the necessary financing for his project, theoretically the next owner can. The point is that a city shouldn't rezone based on what one developer promises to build. This is contract zoning, which is illegal. Besides, do you think it is a good idea for city employees to be evaluating developer financials?
So 7:04PM you think it is fair that developers who promise great things should be able to mitigate their losses by effectively devaluing original investors in their "scheme"? Your allegation of "contract zoning" is illegal if the city requires contracts in order to zone, it does not apply to developers who cannot deliver on their promises.
Anon 7:04PM lets have a discussion with you at least ID'ing yourself. It is futile to the discussion to not have an authority on the issue who may (or not) be involved and be unwilling to stand on what they believe in (anonymously) if they want to criticize.
it amazes me that hard working people trying to earn a honest living are disected like this.
interesting, the school district and the neighbors continue to be opposed to commercial and residential development?
Hard working trying to earn an honest living?
Excuse me? What about all the HARD WORKING PEOPLE WHO PAY THE TAXES TO SUPPORT THIS CRAP?
The taxpayers had to pay for all those improvements around Harborwalk. Did them alot of good, didn't it? Parkway South put them on the hook for alot of money. Then there is all the other building in Madison County where the developers promised the world and found out there aren't 100,000 who can afford $400,000 homes in the Jackson area wanting to move to Madison County.
If these developers come to US wanting US to give them their TIF's and zoning variances, we have EVERY RIGHT to dissect them you bastard. How dare you come here and tell us we shouldn't perform due diligence when the taxpayers in this state get ripped off every day or when the supervisors in Madison as well as other places screw over the constituents who put them there in the first place.
I don't want to examine the financials of every developer. Not at all. But when they come before a government body asking for special treatement and TiF's, then we have every right to check bankruptcy and land records to see if they are in trouble and then demand more information if they are.
You are right on, Kingfish!
Additionally, there are fire and safety issues that haven't been discussed, i.e., the impact of this density of multi-family housing on the fire rating code for the local fire district or the City of Canton.
The City of Canton didn't appear to want any fight with the citizens today!
The turn out was amazing and people were still arriving 30 minutes after the meeting was canceled.
The City will need to make arrangements for a larger meeting place, web casting, etc., next time!
Anonymous 4:30 and 7:04 reply: My point is that no municipality or county should rely on developer promises/dreams to rezone; rezoning should be based on the facts; has there been change and is there need? Don't want to make your brain explode, but by the way, that's the well-settled law. It's called Euclidean zoning. Check it out for yourself: http://en.wikipedia.org/wiki/Euclidean_zoning. If an owner wants governmental incentives, like a TIF or a PID, that's a different matter, the municipality or county should be able to ask for anything it needs to make a rational decision. You're confusing two different topics, incentives and zoning. Zoning law is pretty straightforward, while incentives are all over the board.
Parkway South keeps getting it's hits but what about the North PID or Parkway East? They would like all the attention on the South so if you dig you will find why none of them want to talk about the North. what about all the promises made by the supervisors and oops they regroup and go to Calhoun Station and why is this being developed? Also what about the State Auditors, what is going on there? Meanwhile new Mercedes are being ordered and picked up and the board musts keeps on aiding where it financially is feisable for whom? then on top of everything anything on this site that happens in Madison County Queen Mary is always brought up just more smoke screens.. lake Caroline is in the county and these apartments wanting to go in are not in the city but the county. Taxpayers wake up and smell the smoke and find out where the real smoke is, it is never where it is portrayed to be in Madison county.
KF, any thoughts on the cancellation and Barbara B's comment about the notice?
KF, your due diligence is a little inaccurate. It appears to me in reading the deed of trust you provided that George Carr is the debtor, not the lender?
You're right. corrected. Saw grantor by his name and stayed on the wrong track. My fault and I know the difference.
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