By TED CARTER
The leader of a group vying to develop a Jackson convention center hotel says difficulties the team’s financial adviser had with the Securities and Exchange Commission should not hurt the team’s selection chances.
Nor should Mychal Jefferson’s arrest on an auto theft charge while a college student 25 years ago harm the team’s prospects, Mississippi Development LLC’s CEO Mitzi Bikers said.
“I think he has been an amazing part of our team,” she said Monday of Jefferson, who is chairman of the Houston-based “family office” wealth management unit of New York investment banking firm Hamershlag Sulzberger Borg Group and CFO of Mississippi Development.
“I have every confidence he is going to do a great job,” Bickers said.
Mississippi Development is the local team created by Engineering Design Technologies, a Washington, D.C., development company that is competing to build the convention center hotel adjacent to the Jackson Convention Complex. A review committee appointed by the Jackson Redevelopment Authority is studying proposals from Engineering Design Technologies and Red Leaf Development of Herndon, Va. The JRA board says it intends to announce a selection on Oct. 29 to send to the mayor and City Council for approval.
Jefferson, a 47-year-old Laurel native, said his auto- theft arrest goes back to a 1990 fraternity prank at the University of South Florida.
“Some of my fraternity brothers and me took a car” belonging to a member of another fraternity, he said, recalling they drove the car off campus and tossed eggs at it.
“I got hit with unauthorized use of an auto,” Jefferson said. He added he received a “time-served” penalty for six weeks he spent in the Hillsborough County jail awaiting trial, along with one year of probation.
“I’m not proud of it,” the Houston resident and married father of four said.
His troubles with the SEC stemmed from the 90 percent ownership share the Houston office of Hamershlag Sulzberger Borg owned in a distressed oil and gas equipment company, RPM Advantage, which did not make required SEC filings from 2006 to 2011.
Publicly held RPM Advantage at the time was in litigation over a failed merger with a company called Buchannan Electric. RPM’s attorney advised it to cease the SEC filings to avoid allowing Buchannan Electric to use information from the filings in the litigation. However, RPM stopped making the filings without first getting a waiver from the SEC, Jefferson said, conceding that was a mistake by RPM.
RPM had zero assets throughout the period and did not sell any of its shares, according to Jefferson.
The SEC ultimately revoked RPM Advantage’s securities registration on Jan. 30, 2012.
The securities regulators sought to designate Jefferson as a defacto officer of RPM but administrative law judge Carol Fox Foelak refused. Jefferson said his firm’s ownership shares in RPM stemmed from around $500,000 in unpaid loans and bills for services.
“They had only one thing they could give us and that was equity,” Jefferson said.
“We were never involved in day-to-day operations.”
The SEC complaint mentioned Jefferson several times, and noted his auto theft arrest. The agency limited its mention of RPM Advantage Chairman & CEO David Pressler to the heading of the complaint and an included exhibit.
“They never mentioned his name but they tried to tar and feather me,” Jefferson said of the SEC.
Like Bickers, the head of Mississippi Development, Jefferson does not expect his SEC difficulties and 1990 run-in with the law to harm the group’s efforts to gain a contract to build a 304-room convention center hotel. “I don’t expect any of this stuff to put any of this in jeopardy,” he said in an interview last week.
“We have done business with all the investment banks out there,” despite their knowledge of his troubles with the SEC and law enforcement, he added.
Some observers of the convention hotel issue say they are concerned that Jones Walker, the multi-state law firm that helped prepare the RFP for the hotel, is also the lead legal representative for the team put together by Engineering Design Technologies. Bickers insisted in an interview last week that Jones Walker had no hand in putting together the team’s hotel proposal.
Bickers, a Georgian and political operative, is credited with getting out the black vote statewide that helped longtime Mississippi U.S. Sen. Thad Cochran survive a close Republican primary election runoff with state Sen. Chris McDaniel in June 2014. In 2013, she left her job as senior adviser to Atlanta Mayor Kasim Reed after news reports that she had filed a fraudulent financial-disclosure statement, the National Review reported in a June 27, 2014 story.
Bickers contributed $4,000 to Tony Yarber’s successful Jackson mayoral campaign in March 2014. She lived in Jonesboro, Ga., at the time.
Bickers and her team were one of three respondents to the request for proposals for a convention hotel the Jackson Redevelopment Authority issued in March. The JRA disqualified one respondent, MS Block Development, for failing to submit its proposal by 3:30 p.m. on June 31.
The JRA review committee spent its first two meetings discussing how much weight to give the various parts of the RFP responses. The six-member panel made is up of JRA board members Kemba Ware, Rodrick Donaldson and McKinley Alexander; and community representatives Wanda Wilson, head of the Jackson Convention & Visitors Bureau; Fred Banks, chair of the Jackson Convention Complex board; and convention complex General Manager Al Rojas.
Both Engineering Design Technologies and local partner Mississippi Development are competing with Red Leaf Development and local partner Advanced Technology Building Solutions LLC. Both developers want to use the full range of City and JRA incentives outlined in the request for proposals. These include a tourism sales tax rebate, possible contributions from the Jackson Convention Center Commission, tax increment financing, ad valorem tax abatements and New Market Tax Credits.
Neither has proposed a direct financial contribution from either the City or JRA.
Engineering Design Technologies and Mississippi Developers estimate they can build the 304-room hotel the JRA wants for $75.1 million, though the hotel would have a fully enclosed garage. It instead would have 300 spaces situated in a combination of surface and structured parking.
The developers have pledged to put up the more than $7 million needed to buy the land for the hotel and pay off its current debt. The development team will use about $41 million in tax-exempt revenue bonds issued by the Public Finance Authority, a bonding entity created by the State of Wisconsin that arranges tax-free bonding for cities and counties nationwide. The team’s proposal specifies $11.3 million in borrowing help from the City and JRA.
Engineering Design says it has arranged for the eight-floor hotel to carry the Marriott flag.
Competing developer Red Leaf Development and its local partners have agreed to put $8.8 million into building an eight-0floor 304-room hotel and garage parking for 1,000 vehicles. Red Leaf put the cost of the hotel and garage at $83.6 million, of which $41.8 million would come from urban renewal bonds issued by the JRA.
The developer is considering Starwood Hotels & Resorts and InterContinental Group Hotels to operate either a full-service Sheraton or Crowne Plaza.
Neither the City nor the JRA has done a market feasibility study, omission hospitality industry experts say could prove costly later on.