Money, by far, is the most daunting of the countless little plagues haunting the development of the Farish Street Entertainment District. Local banks have been unwilling to commit to a $3 million loan to Performa Real Estate for the second phase of the project, which includes much of the heavy construction on buildings slated to be the Funny Bone Comedy Club, Wet Willie's and other entertainment venues.
One particular bank locked up a Performa loan in deliberation for more than a year, according to Performa Senior Vice President of Development Cato Walker.
"The (bank) had (CEO John Elkington) out for a year and a half," Walker said. "Why would you do that? Why would you hold somebody out that long?"
Walker pointed out that the bank demanded not only Performa's financial information, but also information on Elkington's personal financial status, such as verification on whether he owned stock, owned his own house and details on his savings account. It's the kind of information that Walker said most banks don't care to know, especially when the state of Mississippi has virtually cosigned for the loan.
Walker would not confirm rumors about Elkington's financial situation, but even if the CEO's possibly shaky credit score was not a factor, loaners have had good reason to be leery of Farish Street.
In the 1990s, some Farish Street residents feared losing their identity within a flurry of gawdy entertainment venues and nightclubs, and that an outside developer might distort the image of what was once the central business of the black community in Jim Crow-era Mississippi.
Charles Tisdale, the late editor of The Jackson Advocate, said in a May 23-29, 1996, article, quoted that year in The Commercial Appeal, that any funds aimed at the project "should be directed to the control of the people who live in the district" to determine the district's developmental direction.
The city of Jackson entered a contract with the Farish Street Historic District Neighborhood Foundation in 1999 to be a ombudsman of sorts for the Farish Street Entertainment District, providing a destination for government grants and ensuring the project made room for local residents.
Vern Gavin, chairman of the now-defunct foundation, said in the same Commercial Appeal story that the foundation intended to "make sure the history and culture of that district are always presented," so that the district should "not become anything other than what it originally was."
Elkington and local hip-hop artist Kamikaze don't often see eye-to-eye. Kamikaze criticizes Performa for spinning its wheels for eight years on Farish Street and wants the company removed from the endeavor. The rapper agrees with Elkington, however, on what the Farish Street Historic District Neighborhood Foundation did for the district.
"The way I understand it, they basically pissed off the money (people), which made it difficult for anybody on Farish Street to get any local money to continue the project," said Kamikaze, a Jackson Free Press columnist. "They were the stewards for a shotgun house project at the end of Farish, but it was a failed project, and the foundation was given a sum of money that it never accounted for."
It was given about $2.8 million, according to Elkington, who describes beating his head against the wall over the foundation's mistakes since 2001.
"They poisoned the water for all the banks," Elkington said. "BancorpSouth lost a lot of money there, and Liberty Bankthey were two big parties. The deal was so screwed up. Those buildings were substandard. People couldn't live there because they weren't properly insulated, they were poorly built, and they were packed in there. Residents had no parking, and they left these people by themselves. They had no shopping, no anything. It was a bad situation."
Close inspection of the charred remains of one burned-out building reveals no insulation between the inner and outer walls of the structure, though Gavin told the Jackson Free Press he had no reason to believe the refurbished structures were built without insulation. The occupants of the complex likely felt every degree of heat during Mississippi's 102-degree summers if the design for that one house holds true for the others. The project, Elkington said, was likely sabotaged by corner-cutting contracts and bad design.
There were originally 35 restored shotgun houses, now dilapidated and making news regarding vagrant-sparked house fires and media blitzes by Mayor Frank Melton pushing their demolition. During the 1990s, however, the foundation considered the houses essential to making the district viable with permanent residents.
The housing initiative made use of federal tax credits and grants, as well as bank loans from local entities like BancorpSouth and Trustmark National Bank, Elkington said. The foundation also listed as partners the National Trust for Historic Preservation's Main Street Program, the Local Initiative Support Corporation (LISC), the National Equity Fund and the Fannie Mae Foundation. The foundation hired Michael Herveya community developer from Richmond, Va.to head the foundation's staff, at the request of the National Trust. But Hervey left at the turn of the century, and the shotgun project crumbled. Foundation Chairman James Smith stepped in around 2001 and oversaw a decade of revoked grants and pulled money for projects that never developed direction.
The foundation stopped returning calls in 2006, and vanished in a puff of litigation. A collection agency filed a case against the foundation in Hinds County Circuit Court in 2007 for about $26,000, the price and accrued interest of a copy machine assembly the foundation took with it when it slipped into oblivion. Robert Boehm, founder of TBF Financial, LLC, of Deerfiled, Ill., confirmed that his company bought the foundation's debt from Jackson business CopyTektronics. Boehm said he is still very interested in meeting with Smith and collecting the money.
Smith has apparently not fallen completely off the map. In a desperate attempt to separate itself from the former foundation's foibles, Downtown Jackson Partners President Ben Allen, Kamikaze, Sandra Faye Holly and others have declared the former foundation officially defunct and formed the Farish Street District Foundation. Holly, one of the holdovers from the former foundation, sent a 2008 letter to Smith, informing him that his tenure as chairman has expired and requesting he "return all foundation-related correspondence and materials."
Smith, a Madison resident, did not return calls for comment, but responded with a letter to Holly in February 2008 arguing that he was "still chair of the board of directors of Farish Street Historic Neighborhood Foundation," and that he had "checked with the secretary of state (sic) office and the Farish Street Historic District Neighborhood Foundation is in good standing with that office."
Gavin said the former foundation's mishaps could not lie exclusively at the feet of the dead foundation.
"The foundation got into a financial bind in managing the project, so the National Equity Fund took possession of the project. They use a different management company to run the shotgun houses, and pushed the foundation out of the day-to-day decisions," Gavin said. "I don't think the foundation could've done anything differently."
Gavin said the city chose to cut the foundation's funding during Mayor Harvey Johnson's administration, which hit the organization's ability to supervise the project.
"When they cut the funding, obviously the management was hurting, so from that perspective, the city had to share a part in that responsibility, as well as the National Equity Fund," Gavin said. "The project was more the brainchild of the foundation, but there was a number of other players involved who controlled the purse strings. ... [T]he rest of the responsibility has to be shared by all those involved."
Johnson said the city regularly made grants available to the foundation, not only for the shotgun project, but for revitalization efforts on Cohea Street and for infield development. "The city provided a significant level of funding for projects, but the city had no management authority on the projects," Johnson said. "To say the city destroyed the foundation by cutting funding is not the whole story."
Most lenders aren't looking for scapegoats, however. In fact, many aren't looking at all. The devastation left from an organization that defaulted on both loans and federal grants left a vacuum that nobody has rushed to fill. John Leith-Tetrault, president of the National Trust Community Investment Corp.which very rarely loses money in revitalization effortsadmitted his organization took a hit in Jackson, and won't be casting lines back to Farish anytime soon.
"The National Trust lost $200,000 when the foundation failed to follow through on an affordable-housing project about eight years ago. We came to Jackson to offer a work-out plan and were met with hostility from some board members who were unhappy with the work of the then-departed executive director. The foundation never made any attempt to pay back the loan, and the debt is still outstanding," Leith-Tetrault said.
"The National Trust invested far more in efforts to bring a national developer in to rehab Farish Street and the King Edward (Hotel). We worked hard to build the capacity of the foundation. Board infighting prevented that from working."
Leith-Tetrault added that the foundation hadn't even admitted that it had borrowed the trust's money in the first place.
"The Trust ended its heavy involvement in Jackson when it realized that the Foundation board could not even agree that they had actually borrowed the $200,000," he said, saying the loan is "well documented with appropriate signatures signifying board approval."
Officials at Liberty Bank's corporate office in New Orleans did not return calls for comment, while BancorpSouth's Hinds County President Tommy Darnell refused to offer a statement on any issue pertaining to the Farish Street loan and the foundation.
Elkington bemoaned the damage the foundation did to the city's credibility regarding Farish Street, particularly regarding the National Trust. "The Farish Street (Historic District Neighborhood) Foundation had a chance to make it work, but they had a huge failing that's going to affect Jackson as far as the National Trust," Elkington said. "It won't be easy for the city or any company looking to do business with Farish Street to get over that."
Still, a few people with an eye to the future feel the enormous rift left by the former foundation can be overcome.
"We haven't had a terrible experience with Farish Street, no more than in other parts of town," said Trustmark Jackson Metro President Harry Walker. "As far as our organization is concerned, we're still positive about Farish Street. We've done some pretty good-sized projects down there. The first phase that Elkington did, we came out just fine on. The problems we had (with Phase 1) had a lot to do with bureaucracy issues, more than anything."
Walker pointed out that the movement to develop Farish in the past had been fractured, with warring factions all pulling the project into different directions.
"We think it can be done when all the parties decide that it needs to be done, when everybody comes together for a common cause," Walker said. "If you have the MDA in there, the city in there, the developer in there and the Central Mississippi Planning and Development District, and they all have the same goal, then it can be accomplished. We believe in putting money back into the community."
Wait a minute! Did I hear Trustmark Bank Harry Walker say "we believe in putting money back into the community?"
That's the best news I've heard in a long time on Farish Street!
I didn't know that the National Trust had been involved in this project in the past. I thought they would be a viable alternative if Performa could not get the loan, but I guess not.
Harry is a great guy and hopefully this will get resolved ASAP.
If anyone can make this work, David Watkins should be the one to do it. I like the notion that the project will be expanded to include more buildings and (dare we hope?) more living space for residents. Without a residential component, this project wouldn't work as well. I still have my doubts as to whether or not a Wet Willie's is appropriate for the area.
Well you can thank your state senate for failing to pass a bill that would have permitted the sale of alcohol on Farish street. Typical.
24 for it; 17 against. Takes 25 to pass.
It could come back up for debate.
I speak too soon. CL now reporting it passed on a second try with 25 votes!
Great news! It will be good to see this project jump from the drawing boards into reality!