Tuesday, July 9, 2024

Performance Bond? What Performance Bond?

JJ discovered more weaseling concerning the lease of Smith-Wills Stadium.   Although the 2019 lease required Kusche Sports Group to obtain a $5 million performance bond and submit a copy with the city of Jackson, the city has no such copy.   

The City Council approve leasing Smith-Wills Stadium to Kusche Sports Group, LLC in April 2019.  Tim Bennett owns Kusche.  

The lease contained the following key terms: 

* Kusche must pay a minimum rent of $125,000 per year. 

* Kusche must obtain a $5 million performance bond and submit a copy to the city. 

* The lease was valid for ten years with two renewable ten year terms. 

* Kusche must spend at least $6 million on improvements. 

Kusche never paid its rent. JJ  obtained public records that stated the company only paid $32,500 to Jackson since the first payment was due in October 2020.  The company subleased the parking lot to the VA for overflow parking.  The VA pays Kusche $370,000 per year under the 15-year contract although the contract includes costs such as shuttle service.  Earlier post and copy of lease.

In the event of non-payment of rent, the city should be able to file a claim on the performance bond.  There is just one problem. Kusche probably did not obtain a performance bond.  JJ submitted a public records request for a copy of the bond and received this response from the city yesterday: 

The City received a public information request from you on 6/22/24. 

You requested: Copy of Performance bond or bond submitted to city of Jackson by Kusche Sports Group and/or Tim Bennett under the terms of the lease for Smith-Wills Stadium. See p.2, first paragraph for mention of performance bond.

The City has searched its files and there are no responsive records relative to your request.

 Mr. Bennett managed to escape paying his rent nor was he held accountable for not getting a performance bond.  Tim Bennett's company owes at least $500,000 in unpaid rent to the city of Jackson.  However, the Jackson City Council wrote the debt down to $100,000 in January.  A city official said the city would accept the improvements made to the stadium as "payments in-kind."  The amended lease allowed Bennett to make four payments by 2026.  The first payment was due upon approval of the new lease.  However, Kusche has predictably not paid any money to Jackson in 2024.  Earlier post on amended lease. 

Ward 1 Councilman Ashby Foote quizzed City Attorney Drew Martin about the performance bond last week at the regular meeting of the Jackson City Council.  Mr. Martin admitted the bond was in the contract but he had not been able to find a copy of the bond .  Mr. Foote pointed out the city could have been paid the rent due instead of forgiving $400,000.  

"That's the reason you have a performance bond so if there is some reason the vendor's not able to pay, the insurance company will pay you the proceeds," said Mr. Foote.   The attorney said Mr. Foote was correct about the performance bond but he was not a part of the "negotiations" that took place near the end of 2023.  "It appears we didn't move on the performance bond and went on the modification instead," concluded Mr. Martin.

Kingfish note: So Mr. Bennett does not obtain a performance bond nor does he pay any rent.  Even though his back-rent was forgiven (probably illegally by the city), Mr. Bennett still has not made a payment this year even though he was required to do so.  


Anonymous said...

If Lumumba is ousted as mayor a very extensive financial & contract audit must be performed. This mayor is complicit with the hiring of extremely incompetent staff & causing thru financial & managerial chicanery a failed city government.

Anonymous said...

A $5mil performance bond, for a 10 year term would have cost Kushe a bunch of money. Probably $25-50k annually. I don't know of any bond underwriters who would even write that for what this is. It's not like it's a construction project. That was all fluff and a sound good pipe dream for both parties.

Anonymous said...

And this comes as a surprise to anyone?????

Anonymous said...

10:47 you are correct. But...and here's the thing...the very people who have the power to start proceedings to remove him just sanctioned some of his illegal dealings. There's more than one palm getting greased in Jackson.

Anonymous said...

I wonder if Bennet wrote off his covid improvements on his taxes as well as negotiated his lease buy down at the same time. I recall from a previous post where Bennet stated that during covid he did lots of improvements. My recollection during covid is you could not get any sort of building materials. This whole situation stinks.

Anonymous said...

Let me guess, if asked, Bennett cannot produce itemized list of improvements totaling what his reduced lease payment is either with receipts to back up materials. Just a hunch.

Anonymous said...

Essential investigative journalism for Jackson. Thank you Kingfish.

Hopefully Speaker White's blue ribbon panel is paying close, very close, attention.

Anonymous said...

So the Lumumba administration gifted a contract to a friend. shocking

Anonymous said...

The Lumumba way-

Anonymous said...

Meanwhile, CJ Lemaster continues to focus on the sentenced Goon Squad.

He and the other mainstream journos really don't care about helping Jackson and it's sad.

Anonymous said...

... the very people who have the power to start proceedings to remove him ...

Do tell. What would those "proceedings to remove him" be?

Anonymous said...

Another asset squandered during Lumumba's reign of error.

Anonymous said...

"Mr. Bennett still has not made a payment this year even though he was required to do so."

There is little doubt he's made payments. Just not to the City proper under the lease.

Anonymous said...

Any attorney worth his/her salt knows that it's bullshit to respond with: "Well, I wasn't around then".

Contracts and related, required documents speak for themselves, regardless of who 'wasn't around'. And as city attorney, this clown is responsible for monitoring performance of the contract. And that means making sure the city performs in accordance with the contract and calling foul if the other party does not perform accordingly.

I'm no attorney, but I have walking around sense (even though I wasn't around then).

Anonymous said...

Oops...They did it again!

Anonymous said...

"Hopefully Speaker White's blue ribbon panel is paying close, very close, attention."

Speaker White just experienced a sphincter tightening. As with PERS, he didn't realize the water was this deep.

Anonymous said...

@11:54 - I think if he was not around when the lease amendment in question was presented to the Council, it's fair for him to acknowledge that he was not around when that took place (and presumably would not have endorsed those actions at the time).

This item occurred under Catoria Martin's watch as she signed off on that specific agenda item on 1/10/24, shortly before her effective resignation date of 1/12/24. Drew Martin was not named City Attorney until February 13th so it seems that the discussion and voting on this item on 1/18/24 took place when there was no official city attorney yet the council was bullied by Lumumba and the Parks and Recreation director into approving it before fully understanding the impacts and alternatives. Extremely disappointed that no one on the council thought to ask about legal review of these revisions or reviewed the existing lease thoroughly enough to ask the right questions before approving such a huge amendment.

On the performance bond, didn't Chokwe mention that the other garbage company who responded to the latest RFP was disqualified from consideration because they would not agree to the provision about the performance bond (and chok-splained about how important a performance bond is)? Would be interested to see if we've even made sure that Richards is in compliance with that provision since we obviously haven't made it a habit of doing that due diligence for our other contracts, despite "claiming" to view this as a material contract provision.

Anonymous said...

"The City has searched its files and there are no responsive records relative to your request."

Everyone must understand that THE CITY HAS NO FILES, NO ORGANIZATION, NO COMPETENCY! Everything they spit out is selective, random and haphazard.

Beauregard said...

It may be the marxist mayor considers doing business in the usual way is racist. A hold over from the white supremacy that this country was built on.

At least, being on time, dressing professionally, and speaking properly are all considered to be part of a white supremacist culture.


Can anyone else see where this is going?

Anonymous said...

What a corrupt City. Please continue moving State jobs and offices outside the City of Jackson. Quit wasting State tax dollars where it’s wasted and unappreciated!

Anonymous said...

Someone.....any one please let us know what improvements were made?

Stadium still looks like an outdated monstrosity that needs to be torn down

Maybe Richards Disposal can get the demo contract

Anonymous said...

1:10 - you need to revise your time line regarding the city attorney actions - and resultant inactions but also maybe dive a little deeper into this cesspool.

Catoria Martin was NOT the City Attorney who signed off on the initial lease - she was, as you note, the CA who signed off on the AMENDED lease as she was walking out the door, allowing the amended lease to be presented to the Council. Her failure was to ensure that the primary lease that was being amended was proper when she stated that the amended lease as proposed and attached to the action item on the agenda was proper. Her failure to note that no performance bond was a failure, and that falls on her shoulders.

As you note, Catoria Martin left the city (bailed, along with those before her) and was replaced by Drew Martin. You note the gap between the two individuals serving as "City Attorney" and suggest that the failure on the Amended Lease to have a bond could be due to the vacancy in the CA position; however, that ignores the fact that the city still had some dozen other attorneys on staff, with one filling in as "Acting" City Attorney in some format. But, that's not the important part.

Go back earlier - to the original lease. Tim Howard was City Attorney who signed off on the original presentation to the Council, and although not known but likely he was still the City Attorney when the actual lease was
executed by the Mayor.

That's the important question it seems to me - who was the CA who told the Mayor that all was well and the lease could be executed. Of course the buck stops with the Mayor - it was his job to make sure all was in order, but he does have the cover to depend on 'advice of HIS counsel'. So the CA at the time the lease was executed, along with the Mayor himself, are responsible for the loss of several hundred thousand dollars that cannot be recouped due to the failure to have all the paperwork in order prior to signing the lease.

Any (competent) contract lawyer knows that the requirements in the document must be in place prior to execution. But in this case, the requirement of a performance and payment bond was not attached to the lease or presented prior to the Mayor putting his John Hancock (or whoever is the equivalent for a 'black city') on the bottom of the document.

Anonymous said...

1:10 - Endorsement of an existing contract is immaterial. The endorsers are the signatories and their successors. If he's not one, he inherits their duty to enforce.

Claiming "I wasn't here" is silly. Almost as silly as your post.

Beauregard said...

Strange, it's almost as if Mr. Martin didn't want to get involved in the details of the agreement. It could be Mr. Martin is aware of shenanigans that have taken place.

Anonymous said...

11:42, it’s very simple. You file a lawsuit to enforce the lease and/or for breach of contract and have the court award and make him pay the past due rent and obtain the performance bond he agreed to provide, and if he fails to do so, to evict him from the property. It’s quite simple and an open and shut case based upon the above facts.

Anonymous said...

I predict an episode of American Greed coming to town!

Anonymous said...

9:00 You are so correct and why would you not want that $$ to improve water, sewer, roads & infrastructure in the COJ, unless you ONLY a holler once losing control of $$ by Henry Wingate Federal Order. BTW, even Judge Wingate did not ask for this to be granted him, he inherited a situation to IMPROVE the State of MS, Capitol city by pure NEGLIGENCE of the current and former administration in the COJ. Kinda like football when you blame the refs & coaches when it is obvious your own team did not show up to play! Remember you as citizens get what you VOTE for come November!

Anonymous said...

Do as 9:00 says and then let the VA funds go directly to the COJ.

Anonymous said...

Keep digging and dig deeper, he never paid what he owed the city of Pearl for the ticket tax for his events at Trustmark Park, he never paid the ticket tax at what he owed with the Shuckers which is why he lost contracts with both.

Anonymous said...

@4:32 No one claimed that the new CA does not have a duty to enforce the contract in effect and that is not how I interpreted his response to Councilman Foote.

It seems Foote was asking why the City did not pursue a claim against the performance bond instead of forgiving $400,000 back in January when they amended the lease (would have been better if Foote brought this question up back in January, but I digress). The current CA was merely stating that he was not here when those decisions were made, so he could not speak as to why the Mayor and former CA elected to modify the lease and forgive the debt instead of pursuing other alternatives at that time.

He's not going to throw them under the bus if he values his job, but that doesn't mean he isn't going to do what he can to enforce the contract now, he was just put in a bad position due to stupid decisions from others before him.

@3:59 made a good point in that another former City Attorney was probably to blame for not ensuring there was actually a performance bond in place for the original lease

Anonymous said...

You cannot make this stuff up. Think you have seen it all, wait 5 minutes. Same for the Hinds Supervisors, losing state money because it was not spent. It is a clown show for sure.

Anonymous said...

10:11 - Your inference is based entirely on your interpretation, your supposition, and your thoughts.

Your obviously loaded slap at Foote is also noted.

Anonymous said...

@4:20am - Of course it is, which is why I deliberately used phrases such as "how I interpreted" and "it seems" to preface my comments... not sure what point you're trying to make since (presumably) neither one of us is Foote or the CA or claims to be able to read their minds. Did I miss a rule that prohibits commenters from expressing differing opinions based on our own interpretations and deductive reasoning?

I have a feeling Mr. Foote would not lose a wink of sleep over my comment (and might even agree with it himself), but if he too finds himself reading this JJ comment section in the wee hours of the morning and is offended at my "obviously loaded slap", I do apologize. It isn't lost on me that he was the only one smart enough to vote against the contract amendment back in January!

Anonymous said...

4:20 No slap at Foote at all. I feel sorry for him and some others on the council trying to make sense of the clown show. No sir not my intent.

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