Investigation: Mayor Davis arranged city payments to developer after condo deal
by Associated Press
Published: January 30,2012
SOUTHAVEN — Southaven Mayor Greg Davis co-owns an oceanfront Florida condominium with a developer who’s received more than $3.4 million through real estate deals with the city since 2008.
The developer, Chuck Roberts, more popularly known as the public address announcer at the University of Memphis Tigers basketball games, bought the $500,000 luxury condo with Davis in 2006.
An investigation by The Commercial Appeal found Davis arranged city payments to Roberts and a business partner through three land sales reached after the mayor and Roberts refinanced the mortgage on their Miramar Beach, Fla., condo in October 2007. The new mortgage requires a speedy bank payoff — $497,500 — within five years.
The revelations are the latest in a series for Davis, 45, who is the target of an FBI probe into personal use of city funds.
One of the three city sales negotiated by Davis put $45,000 in Roberts’ pocket for a single day’s work. Records show the city paid $370,000 in March 2010 to Roberts’ firm, RH Holdings, for land he’d bought the same day for $325,000.
“It stinks,” said landowner Jimmy L. Dodson, who sold the land to Roberts.
Roberts turned around and sold his 20 acres to the city.
Dodson said he also had no idea the city was eyeing his land for a large drainage project to ease flooding.
In addition to the land sales totaling $3.4 million, Roberts received $116,510 from the city between 2002 and 2010 through an apparent leasing arrangement that city officials found difficult to explain.
“I don’t have any documentation on that,” said CAO Chris Wilson. “One guy (the mayor) was doing these deals,” he said, referring questions to Davis.
Davis has been unavailable for comment since aldermen voted to ask for his resignation earlier this month. The mayor is said to be at an undisclosed medical facility.
Davis’ attorney, Steve Farese, said Davis should be back in the city in two weeks.
“The mayor will have to decide if he wants to answer these allegations when he gets back,” Farese said.
Roberts, 44, who served as campaign treasurer for Davis’ unsuccessful 2008 congressional race, declined comment.
Davis’ financial tie to Roberts represents just a piece in a tangled web of connections between the mayor and businessmen receiving city funds.
A large piece of that web involves Roberts’ business partner, James M. ‘Jamie’ Harris, president of M&H Construction, a Southaven firm that’s received $40 million from the city since 2002.
The newspaper’s investigation found that Davis, who has served as mayor since 1997, co-signed a $380,000 loan with Harris while the pair co-owned a commercial building from 1999 to 2004. During that time, the city paid M&H $10.8 million, records show.
According to the records, Davis bought the commercial building in 1999 with Harris and his father, the late James Malcolm Harris Sr. The trio co-signed a $380,000 mortgage that year to buy the office and warehouse building.
Davis sold his interest in the building in January 2004, records show.
Harris, 51, didn’t respond to a phone message and personal visit to his office. An assistant told reporters Harris was busy and would call if he got a chance.
“Clearly, this is something the FBI is going to look at.”
Davis and Roberts bought their Florida condo in August 2006 on the second floor of the Surfside, a 16-story resort outside Destin where owners frequently rent out three-bedroom condos for $2,500 a week in the off season and $3,500 a week at the height of the July tourist season.
Walton County, Fla., property records show the duo paid $475,000 for the 1,535-square-foot unit and later refinanced, signing a $497,500 mortgage along with their wives in October 2007. The agreement with Financial Federal Savings Bank of Memphis required the borrowers to pay off the loan within five years.
Last year, Davis and Roberts signed an additional agreement that gives them until this July to pay off the loan. The document, filed in November, notes the loan balance stands at $480,617.
At the time of the Aug. 25, 2006, purchase of the condo, Roberts was four years into an unspecified vendor arrangement with the city that regularly paid him amounts ranging from as little as $100 to thousands of dollars.
City CAO Wilson said last week that he believes those payments involved some type of lease commission, but said he had no details.
Records show the city made the payments to Chuck Roberts Commercial Real Estate. The firm received $116,510 through 78 checks between 2002 and 2010, including $6,500 on Aug. 31, 2006, and $2,900 that Oct. 31. The city issued a $15,000 check to the firm in April 2008 and a final, $12,250 check in July 2010.
Independent of those payments, Roberts was involved in three recent land deals involving the city. Those deals steered $3.4 million to RH Holdings LLC, a company Roberts formed in 2003 with Jamie Harris:
RH Holdings received $400,000 in October 2008 when it sold a 1.7-acre lot to two developers engaged in exclusive negotiations with Davis to build a city fire station.
The city paid RH Holdings $2.7 million on Feb. 25, 2010, for 3.8 acres. The property included an existing 15,000-square-foot office building RH Holdings leased to the WIN Job Center, an unemployment office run by the Mississippi Department of Employment Security. The city is now the job center’s landlord.
Davis told aldermen at the time the land sale “will be at zero cost to the city because the lease payments will cover the loan.”
Since then, however, the state exercised its lease right to lower the rent, citing a loss of federal funds. The center originally paid $13,750 a month, but that’s been lowered to $7,500 a month. “It’s less money in our fund to offset the debt,” Wilson said.
The city paid RH Holdings $370,000 on March 24, 2010, for 19.96 acres of vacant land.
Records show the city had been eyeing the site for some time, obtaining an appraisal completed in November 2009. By Jan. 19, 2010, Davis and Roberts each signed a real estate sales agreement in which the city agreed to pay RH Holding $370,000 for the land.
Yet, at the time, RH Holdings didn’t own the land.
A title search paid for by the city showed it belonged to Dodson, of Olive Branch.
Deeds show Roberts obtained the land from Dodson on March 24 of that year and on the same day sold it to the city. The deed conveying the property to the city was signed by Roberts’ RH Holdings partner, Harris, who didn’t respond to messages seeking comment.
Dodson said last week he sold the land to Roberts for $320,000 or $325,000 but never knew the businessman would then sell it to the city.
Alderman Greg Guy said he did not know RH Holdings didn’t own the land before they sold it to the city.
“I was unaware that it was a simultaneous closing,” Guy said about the land deal. “I had no idea. Whether it is an illegal deal or not, the inference is one of impropriety.”
Added Alderman Ronnie Hale, “From now on, everything is under scrutiny.”
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