UPDATED: Farish St. issue heading to court to settle JRA objections on developer lien
by Ted Carter
Published: October 24,2013
JACKSON, Mississippi – Liens filed recently by the Farish Group to protect what it says is its several million dollars of expenditures in the stalled Farish Street redevelopment project has been met with a lawsuit from the Jackson Redevelopment Authority, the city agency that booted Farish Group from the project earlier this month.
Lance Stevens, lawyer for Farish Group managing partner David Watkins of Watkins Development, had said earlier in the week the liens are to ensure the return of the approximate $4.5 million of Farish Group money that went into the project. The liens, he said, would have priority over liens from other investors in the project, including the Mississippi Development Authority, which has a $5.4 million stake in the effort to transform Farish Street into an entertainment district.
The Jackson Redevelopment Authority, which granted Farish Group a 45-year lease of the two block redevelopment district in January 2010, insisted in a suit filed Thursday that it has immunity from liens and called the attempt by Watkins to secure his investment “incredible.”
“The property of the Jackson Redevelopment Authority is public property and it is not subject to any liens,” the JRA said in a press statement, though it did not site a statute or legal precedent.
“Moreover, in its lease, the Farish Street Group committed that it would not allow any liens to be placed on Jackson Redevelopment Authority’s property and if any were attempted to be filed, it would satisfy them. It has failed to do so.”
The JRA did not detail why the promise not to file a lien would be necessary if a public property is not subject to liens.
An attorney with the Mississippi Senate who specializes in public lands said nothing appears in state statutes on either public lands or liens that would prohibit a private entity from entering a lien on publicly held property. Texas and California laws specifically forbid it but Mississippi’s apparently does not, according to the Senate lawyer. In the case of Texas, a developer must buy a surety bond to cover any cost or fee disputes that arise.
“I don’t see why we would have something like that,” the lawyer said. “I just don’t know what they could possibly be referring to.”
An exception could be something in Mississippi case law, an area of law that attorneys for the Legislature do not follow closely, the lawyer said.
The JRA, for its part, advised in its press statement on the court filing that it would not field questions about the lien issue or any other aspect of the dispute with the Farish Group.
Stevens, in an email reacting to the JRA action, did not address the JRA claim that the Farish Street properties are immune from liens. He emphasized, however, that the JRA suit all but ensures no other developer will put private money into Farish Street or any other JRA-sponsored project.
“The JRA is establishing a precedent which will deter any developer in their right mind from improving our city on a JRA lease,” Stevens said. “ This is tragic for Jackson’s urban renewal efforts, including the Farish Street Entertainment District.”
Stevens said that the JRA should be cautious about implying Watkins does not have a substantial financial stake in the project he took over in 2008 at the urging of Jackson government and civic leaders.
“JRA’s statement that a layman’s look at Farish Street makes the developer’s claim of expenditures questionable is downright silly. And libelous,” he said. “Every dime of this money spent on Farish Street has been monitored by the lender and a full audit of the sums spent was performed at the City’s request. And JRA has not put a dime into the project.”
The MDA said last week the $5.4 million it has in the Farish Street redevelopment is in loans to Watkins and was used to pay off construction loans, a method the MDA noted is common in financing construction projects” in which it has an interest.
“The loans were not secured with the buildings but rather through future lease payments,” Tammy Craft, MDA spokeswoman, said.
“MDA is working with Jackson Redevelopment Authority and the Central Planning and Development District to determine the future course of action on how the loan will be recouped,” Craft said. “All legislated funds for this project have been expended.”
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