Tuesday, March 21, 2017

Stonebridge Public Improvement District (PID) in Brandon defaulted on bonds

The Stonebridge public improvement district defaulted on $22 million in special assessment bonds that were sold in 2007.  Stonebridge opened to much hoopla in 2008 right before The meltdown began.  The Mississippi Business Journal reported in May 2008:

According to its developers, the mixed-use development StoneBridge is the largest such project the City of Brandon has seen in nearly a half-century. And, Marcus Martin Builder and Heartland Development Company, LLC, held a grand opening befitting the project’s scale May 16.

The grand opening included home tours as well as free crawfish boil (3,000 pounds worth), hot air balloon rides, live music, space jumps, face painters, free T-shirts, door prizes, treats and more. Some 1,500 people turned out for the festivities.

In short, it was a community celebration, and that is what the developers say StoneBridge is all about — community. And they don’t just talk it — the developers have donated land for a new school and are planning other ways to boost the community.

The developers boasted of many attractions for Stonebridge as well:

StoneBridge is situated on 403 acres just south of Mississippi 18 and adjacent to the new Brandon High School. Homeowners may select from 432 townhouses, 162 independent living units or 536 larger three- and four-bedroom homes. These residences span a variety of separate yet complimentary architectural styles.

The list of amenities will include a central clubhouse and pool, 16-court professional tennis center and an approximately 52-acre lake. Abundant “green spaces” will be incorporated and connected by a network of sidewalks and walking trails that often avoid the development’s roadways all in an effort to curb or hide vehicular traffic.

These sidewalks will also connect StoneBridge residents to more than 75 acres of commercial/retail space totaling approximately 500,000 square feet. This will include a storefront “lifestyle” center offering an assortment of retail establishments and restaurants. At press time, Sallis said an anchor was being sought, but was not at liberty to discuss the ongoing negotiations. He did say that an anchor could be announced within a month.

That is not to say that StoneBridge does not have anything going on yet. On May 12, ground was broken for the StoneBridge Elementary School. The developers donated the 16-plus acres for the school out of community-mindedness. Sallis said a project as large as StoneBridge would put an undue burden on the local school system, and said donating the land “was just the right thing to do.”

The 78,000-square-foot school is slated to open in the fall of 2009, and will encompass approximately 35 standard classrooms, a P.E. room, language facility and other specialized rooms housing more than 900 second- and third-graders. Rest of article.

 The developers of Stonebridge were Heartland Development, LLC and Green Hills Development, LLC.  Ben Turnage is the manager of both companies. 

The article does not mention the Stonebridge PID but both the Rankin County Board of Supervisors and Brandon Board of Aldermen authorized the creation of the Stonebridge PID.*  Stonebridge's board members were Jason Womack, Grayson Orman, Jeremy Clements, David Quirin, and Watson Purvis.  Attorney James Bobo was the district's legal counsel. 

 Stonebridge's official statement issued for the sale of the bonds stated:

Stonebridge Public Improvement District. Rankin County. Mississippi (the "Issuer" or the "District"). a public improvement district organized and existing under the laws of the State of Mississippi, is issuing $22,000,000 aggregate principal amount of its Special Assessment Bonds, Series 2007 (the "Series 2007 Bonds").

The Series 2007 Bonds will bear interest on each April I and October I, commencing October 1, 2007 (each an "Interest Payment Date") …. Payments of principal of, premium, if any, and interest on the Bonds will be made by Bank of the Ozarks, Little Rock. Arkansas as trustee for the bonds (the "Trustee") ….

The bonds were sold but problems began to occur within a short period of time.  The Bank of Ozarks sent a letter to the district on February 24, 2010 that stated:

It is our understanding that Stonebridge Public improvement District Rankin County, Mississippi ("Stonebridge") no longer has a duly qualified and acting Board of Directors as required by Mississippi law. As you know, this is an event of default under the Trust indenture executed between Stonebridge and Bank of The Ozarks as Trustee.
The Bank of Ozarks followed up that letter with a notice of default to the bondholders on April 1, 2010:

One or more Events of Default have occurred and are continuing with respect to the Bonds. The Issuer does not have a functioning board of directors and the Special Assessments have not been fully collected due to a failure of certain property owners to pay same.
and another one on December 14, 2010:

Stonebridge PID, the landowner that failed to pay its Special Assessments in 2008, Green Hills Development Company, and the lienholder, Credit Union Liquidity Services, LLC ("CULS"). The lawsuit seeks to enforce the lien of the Special Assessments on the property.

 The taxes and assessments went unpaid on the unsold parcels.  The Secretary of State eventually took possession of them.  UMB Bank replaced the Bank of Ozarks as the trustee.  It sent a rather damning letter to bondholders on June 19, 2015:

Commencing in 2008, the District failed to pay debt service on the Bonds due to the failure of the developer, who originally owned all or substantially all of the property in the District (the “Developer Property”), including the property on which Special Assessments had been levied, to pay those Special Assessments when due. Real estate taxes and assessments levied by other governmental entities on the Developer Property were also delinquent….

As a result of the Developer’s failure to pay its tax bills relating to the Developer Property, including the Special Assessments, the Developer Property was forfeited to the State of Mississippi during 2009 and 2010 pursuant to procedures governed by Mississippi law. These procedures provide that if any taxes or assessments remain delinquent past the time permitted by law, the county sells the land for delinquent taxes. If no tax sale occurs the county places the property on a list to be struck off to the State of Mississippi. The District took no steps to enforce the lien of the Special Assessments against the Developer or the Developer Property, or otherwise to prevent the loss of the Developer Property. The two year redemption period provided by Mississippi law within which the Developer could redeem the Developer Property by paying the delinquent taxes and Special Assessments expired during 2011 and 2012 and the State now owns this property, free and clear of any claim or interest of the Developer.
The letter also states that Oppenheimer Rochester High Yield Municipal Fund holds 75% of the bonds.  The most recent letter states the interest and payments that were due on October 1, 2016 were not paid.  A Minnesota court ruling states that the bonds are in default (order is posted below on page 6 of the first set of documents.)

The Bank of Ozarks went to court to foreclose on the development in 2010 but the lawsuit is still tied up in the Rankin County Courts (That  court fight could be the subject of several posts.  Not quite Stowers v. Germany but getting there.)  NMB replaced the Bank of Ozarks as the trustee in the lawsuit.  The case was recently transferred from Rankin County Chancery Court to Circuit Court where it plods along through literally the legal equivalent of trench warfare. 

*The Board of Supervisors voted unanimously to approve the Stonebridge resolution on November 6, 2006.  The Brandon Board of Aldermen did so on February 6, 2007 in a unanimous vote as well.

Kingfish note: None of this should affect the homes already sold.  Those homeowners are paying their taxes and assessments as anyone else would in another co

The table of contents of the Official Statement is on page 6. 

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).

Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS