The attorney for Forsyth Road Partners says the bank, and not his client, is to blame for water and other utilities briefly getting turned off at the Prado shopping center on Forsyth Road.
“Forsyth Road Partners hasn’t been paying the utilities because they haven’t been collecting any of the rent since August,” said attorney Brad Wilson.
This month, CertusBank, which assumed the loan for the shopping center property when it took over failed Atlantic Southern Bank, went to court and got a court-appointed receiver named to manage Prado. In its petition, CertusBank claimed that Forsyth Road Partners, a Macon company run by developer Jeff Jones, not only failed to make payments to the bank but also put the tenants’ “safety and health” at risk by not keeping utility payments up to date.
A letter to Jones from bank attorneys dated July 12 declared Forsyth Road Partners in default of the $3.9 million loan.
John Flanders Kennedy, attorney for the bank, contends that Forsyth Road Partners still has the responsibility of paying utilities and managing the property because the group technically still owns Prado.
“They have obligations pursuant to them as owners of the property,” Kennedy said Wednesday.
Jones and Forsyth Road Partners failed to respond to numerous inquiries about the defaulted loan and management concerns at Prado, Kennedy said.
“Various bank representatives called the property owners and the calls went unreturned. The property owners were having issues with the property that were not being communicated to the bank. They weren’t communicating with the bank about various aspects about how the property was or was not being managed.”
Kennedy said the bank found out that bills were not being paid the same way everyone else did -- when the center’s lights went dark.
“That’s why we asked for the receiver, to ensure utilities get paid ... to make sure someone is minding the store,” Kennedy said.
Wilson says that shortly after the bank assumed rent collection under a clause in the mortgage agreement, they ceased paying utilities.
“From what I understand, the bank has been receiving all the rent since September,” he said Tuesday. “CertusBank has taken that. Why should the property owner continue to pay it if he’s not receiving the rent? The utilities had not been paid because the bank has been collecting the rent for four months.”
According to court documents and interviews with tenants:
On Nov. 22, two days before Thanksgiving, Firehouse Subs, one of the shopping center’s original tenants, called the bank to report water service had been cut off because of overdue water bills. The bank worked out an agreement with the Macon Water Authority.
On Dec. 12, outdoor lighting was turned off, also for non-payment.
Garbage pickup recently was suspended, causing trash to overflow from containers.
Janitorial services have not been paid “for many months” and there is an “imminent risk of being terminated, further heightening potential problems.”
Forsyth Road Partners, doing business as Prado, neglected landscaping and grounds maintenance at the center, which has “further placed in jeopardy” the leases with current tenants.
Wilson said he was surprised at the bank’s request for a court-appointed receiver.
“Most of the time when you get a receiver your primary purpose is collection of rents and income, but the bank had been receiving all those since September.”
He described the Prado property as the “exception” in Jones’ companies’ operations.
“The other properties he’s involved in, where the rent’s being paid, all the utilities are being paid. This is the exception. They stopped paying that. Why pay out the expense when you’re not receiving the income?”
The Prado action is the latest in legal troubles for Jones, who has filed personal bankruptcy and also faces litigation over a commercial real estate deal gone bad. A lawsuit in Superior Court includes 10 plaintiffs who accuse Jones of failing to make good on selling some convenience stores to a group of men who fronted his company money for the transaction.
That lawsuit levels some serious charges -- including fraud and civil RICO -- against Jones and other defendants including Will Harrelson and Randy White (who work with Jones’ company), three of their companies, an Atlanta-area realty company and one of its agents.
Woodland South and Piedmont Fields, two of Jones’ companies, collected more than $650,000 in earnest money from 10 buyers -- all Indian nationals -- to purchase some gas station-convenience stores in north Georgia. Woodland South would still own the actual properties.
The deal fell through, Jones says, because local banks stopped making real estate loans, forcing his company to turn to a fringe lender in Las Vegas with a history of legal problems. The lender, however, failed to deliver funding, even though Woodland South, Jones says, paid it $650,000 to underwrite $5 million in bonds.
According to the lawsuit, from October 2009 to October 2010, Piedmont Fields and Woodland South entered into purchase agreements with 15 buyers. Piedmont Fields had a contract to purchase six stores owned by Rebel Pantry Inc. of Blue Ridge.
The would-be buyers sued to get their money back, but some have resorted to other means. Jones, Harrelson and White all told police and put in court responses that some of the clients have threatened to kill them and harm their families.
Jones and Woodland South recently lodged a “third-party complaint” against the Las Vegas lender, USA Global Holdings Business Trust.
The third-party complaint accuses USA Global of “numerous fraudulent misrepresentations” and alleges that Izhar Syed, a USA Global trustee, converted Woodland South’s $650,000 deposit to his personal use. Woodland South is asking for its money back, as well as punitive damages
A separate but related lawsuit in State Court was dismissed with prejudice in December, meaning the plaintiff -- a Kennesaw State student who paid $50,000 for a store -- cannot sue again.
The case was settled, but Wilson said he could not release the terms.
Had the financing gone through, Jones and his companies planned to also buy an Arkansas fuel distributor and 23 gas stations in several states. The Macon companies would own the actual store properties and provide fuel to the businesses, which would have been sold to the Indian buyers.
In November, the Arkansas fuel business, Magness Oil Co., filed a lawsuit accusing Jones’ Piedmont Fields of breach of fiduciary duty. It also named USA Global Holdings Business Trust and a trustee, Sidney Tarrant, alleging similar counts against them.
Documents in the case include a copy of a $500,000 wire transfer from Piedmont Fields to USA Global to generate $45 million for Piedmont to buy the 23 gas stations and the fuel wholesale/delivery business from Magness Oil.
USA Global, the lawsuits alleges, transferred the earnest money to entity names Swiss Global Collect, USA. Magness Oil claims the $500,000 is owed to them.
Wilson declined to comment on that case, saying he has not read the lawsuit or talked to attorneys involved in the case.
USA Global and affiliated companies have faced a number of lawsuits in several states that make similar allegations against them. Last year, a Nevada judge ordered the company to pay $1.8 million in damages to a company that claimed USA Global left it holding the bag in a bungled deal.
Information from Telegraph archives was used in this report. Telegraph business editor Harold Goodridge contributed to this report. To contact writer Rodney Manley, call 744-4623.