JACKSON Somebody has to pay back $1.5 million to the U.S. Department of Housing and Urban Development since the Farish Street project stalled in 2014, but it is unclear whether the City of Jackson or the Jackson Redevelopment Authority must foot the bill.
The City's Deputy Chief Administrative Officer Marshand Crisler told the Jackson Redevelopment Authority commission on Nov. 16 that HUD had sent letters to the City and Jackson's economic-development representative, Jason Goree, explaining that a federal moratorium on development of the properties on the historically black Farish Street would end soon.
The JRA is a quasi-governmental entity designed to encourage development across the city through federal grants, agreements, and long-term financing based on its independent credit rating and bonding ability. Crisler, a former city councilman, now serves as the City administration's chief executive since CAO Gus McCoy stepped down a few months ago.
Crisler said the City expected JRA to pay back the $1.5 million that fell through the cracks during the aborted plans to develop the historic Farish Street district in 2014. The City of Jackson and JRA purchased the property on Farish Street bounded by Amite, Mill, Hamilton and Lamar Streets in 1997 with the money, which HUD gave the City to fulfill a "national objective" defined then as providing jobs to low-income residents, a letter HUD sent in 2014 shows. The City then asked JRA to find developers and guide the project to fruition.
In 2002, JRA chose Performa, a company known for its development of Beale Street in Memphis, to manage the development. But after years of stagnation, local lawyer-turned-developer David Watkins formed a group of investors who bought the rights to work on the project, called the Farish Street Entertainment District, during the 2008 recession.
Difficulties followed, though, including revelations that the Farish properties required significant investment to fix structural and sewage issues as well as investigations into Watkins' use of bonding money in other projects, causing the project to stop mid-construction. HUD then decided in 2014 that the City of Jackson failed to provide for the "national objective," demanding the $1.5 million back.
JRA Chairman McKinley Alexander said commissioners believe the City is liable for returning the money. "That culpability, $1.5 million that you are attributing to JRA, we don't know where that came from," Alexander said to Crisler. "Certainly at this point in time, we don't accept that as being something that is in our domain."
The entertainment district sat unfinished since 2014 as JRA, Watkins and HUD discussed how they could resolve the matter, mostly through legal means.
JRA's attorney, Penny Stimley-Brown, told the board last week that the legal battle ended a few weeks ago with the end of post-trial briefs. She expects Hind County Chancery Court Judge Dewayne Thomas to hand down a final verdict soon.
"The only matter still active is on the liens in connection with Farish Street. The trial has completed on that, and we are simply waiting on all post-trial matters to be resolved and for a ruling from the court," Stimley-Brown said.
As the parties wait on the judge's decision, JRA has asked the City for permission to move forward with issuing new request for proposals, or RFPs, for future development of Farish Street.
"I thought I would have a letter to address formally about the matter that y'all have been inquiring about, in terms of the RFP for Farish Street," Crisler said. The acting CAO said that he thought City Attorney Monica Joiner had sent a letter to JRA about the issue. On Nov. 29, a JRA representative said she had not seen any letters enter the office from the City. The city attorney could not be immediately reached. The Jackson Free Press has filed a public-records request for the letter.
Crisler summarized the message from HUD, saying it had relaxed its restriction on the development, including clearing Jason Goree of any conflicts of interest. Goree, a developer, was previously a partner in Watkins Development and still works for the City in economic development.
"I understand that Mr. Goree has received a letter clearing him of that action," Crisler said. "It is also my understanding that JRA has not yet received a letter. Until that letter is received, it would be difficult for the City to say that you can act on that particular matter."
Who Will Pay?
Crisler told the JRA board of commissioners that the City would own the property if it paid the outstanding bill owed to HUD in relation to the Farish Street development.
"The other thing that I am understanding (is) there is a requirement by HUD that we, and by that I mean the Jackson Redevelopment Authority, pay back the $1.5 million owed. I don't know if that is the case or not," Crisler said. "The City of Jackson, I think, has taken the position to be prepared to pay it in three years, which would be $500,000 a year, if the property is returned to the City of Jackson."
Crisler said that although the City and JRA are separate, they could work together to upend the stymied Farish Street revitalization. While the mayor appoints the JRA's board members, the City does not have any authority over the organization.
"In concert with trying to move downtown development, we are certainly interested in that project moving forward only under the guise and under the direction of HUD and certainly nothing that would put us at odds with them again," Crisler told the JRA board.
Crisler said that if the City paid that amount, then they would expect to own the 17 properties that make up the former entertainment district.
"We have to pay it back," Ward 2 Councilman Melvin Priester Jr. said during a Nov. 28 interview, stating that because the City received the money before passing the property to JRA. He said he was not sure how much but that he believed Jackson had already paid some of the amount back.
HUD representatives did not return requests for comment by press time.
Read more about past Farish Street problems at jfp.ms/watkins.