PULL THE PLUG It may be time to pull the plug on Maritime Park Development Partners and switch the Community Maritime Park to a public works project. The financial woes of Land Capital Group founder Scott Davison, who won the bid for the waterfront project and later formed MPDP to sign the agreement and actually do the development work, have caught up with him.
Wells Fargo Bank has a default judgment against Davison and Land Capital Group for over $7 million that was filed in Superior Court in Maricopa County, Arizona and a second default judgment filed in Escambia County Circuit Court against MPDP for failure to garnish the wages of Scott Davison for $374,860 owed Wells Fargo by Davison and another limited partnership, LCG Mesa, LLC.
At the first of this year, the contract with MPDP was delayed because the master developer couldn’t get the required performance bonds for the maritime park. During the March 30, 2010 meeting of the CMPA board, Davison of MPDP bristled at comments by CMPA attorney Ed Fleming that a letter from a bonding company provided by Davison didn’t expressly commit it to providing MPDP a performance bond. And though Davison insisted the bonding letter had the language embedded in it that met or exceeded the requirements of the master developer agreement, MPDP eventually had to bring in Hoar Construction from Birmingham to get the bonding. The Wells Fargo lawsuits in Arizona may have been why MPDP wasn’t able to get the bonding.
Why did Davison fight the performance bond or try a “bait & switch” with a clearly deficient letter? Because each month MPDP gets a check for $60,389.35 from the CMPA for its developer fee. The performance bond debate lasted three months. MPDP collected another $181,168 before the developer had to bring in a more creditworthy partner.
The problem of the $7-million-plus default judgment may not so easily be solved as the bonding issue. The large judgment was entered in the Maricopa County court on August 18. Six weeks later it was filed in the Escambia County Circuit Court. No notification was given to the city, CMPA or the public by Davison or MPDP. Meanwhile, MPDP got another $181,168.
Can Wells Fargo get that judgment against Davison and Land Capital Group applied to the MPDP? If so, then those $60,389.35 checks will start going to Wells Fargo, and MPDP will have no incentive to complete the project. Those apartments and hotels that MPDP showed the Pensacola City Council last month will remain just another set of pretty drawings.
While it may be a difficult decision for the CMPA board, now may be the best time to terminate its agreement with MPDP. Hoar Construction has a separate contract under Magi Construction to do the construction of the public sector so that schedule can still be met. The board will need to step in and make sure the Covenant with the Community is met. But the CMPA could save over $700,000.
The next CMPA Board of Trustees meeting is set for December 10. Let’s see how many more $60,389 checks it wants to write to MPDP.