Prado owner behind on payments, putting tenants at risk, bank says

In mid-December, when most of the town was lit up for the holidays, tenants at the Prado shopping center on Forsyth Road were in the dark.

The lights outside the stores and in the parking lots had been shut off because the landlord -- a prominent but financially troubled Macon developer -- failed to pay utility bills, according to court documents.

“That was kind of dangerous for us,” says Wela Henry, manager of Metabolic Research Center, a weight-loss business at Prado.

The shopping center, which opened in 2005, was ordered Jan. 6 to be turned over to a court-appointed receiver to manage the property. According to a court petition filed by CertusBank, Forsyth Road Partners, a Macon company run by developer Jeff Jones, not only failed to make payments to the bank, but it also put the tenants’ “safety and health” at risk with “conditions that can be dangerous and potentially injurious.”

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.

CertusBank assumed Jones’ $3.9 million loan for the Prado development when it took over the failed Atlantic Southern Bank. In its petition, CertusBank contends that “thriving businesses” at the shopping center have continued to pay rent to Forsyth Road Partners, but the company has not paid the bank.

Bibb Superior Court Judge Ed Ennis appointed The Furman Co., a South Carolina company, as receiver over the property. He also granted a restraining order requiring that records and accounts related to property be turned over to the receiver.

Reached by phone late Friday, Jones referred questions about the Prado case to his attorney, Bradford Wilson.

Efforts to reach Wilson were unsuccessful.

‘None of us knew what was going on’

At Prado, brick pavers line the drive and parking spaces that form a semi-circle around columned storefronts. Developers aimed for upscale, and were hit-and-miss -- the miss being the fountain, the intended centerpiece of the development’s open space.

The fountain hasn’t worked for years, tenants say. Its water is green and stagnant.

“The biggest deal to me is this is the newest shopping center on this road, and it’s not being kept up,” said Judy Smith, who opened Rumor boutique there just a few months after Prado opened. “That fountain hasn’t worked since the day one. That part is a shame.”

Water service disconnection would have been an inconvenience for her store but crippling for the restaurant and nail salon at the center, she said. When garbage spilled over in the containers out back, Smith broke down her own cardboard boxes and stored them in an extra room.

Management, she said, failed to provide pest control, so she finally hired an exterminator to spray outside the store to keep out roaches.

“I didn’t feel like I should have to pay for that,” she said.

The court filing includes a July 2010 letter from Atlantic Southern Bank to Jones declaring several notes, including the Prado loan, as being in default. CertusBank’s petition contends that Jones failed to respond to the letter about the Prado loan and others being in default.

The filing also alleges that tenants -- which also include Yvonne’s Natural Market, Burgess Flooring, Head Over Heels Boutique, Macon Nail and Tan, The Frame Game and State Bank & Trust Co. -- have paid and are continuing to pay rent.

“Whether the defendant is wrongfully receiving and withholding rent payments is not fully known,” the petition says.

For tenants, the outdoor lights getting turned off was a sign of landlord troubles.

“Everybody pays for their own (power) inside, The outside is the property owners,” said Yvonne Mourfield, owner of Yvonne’s Natural Market. “I guess that was why none of us knew what was going on.”

Legal issues mounting

The Prado court action is the latest legal trouble for Jones.

During about the last year, he’s been steeped in a lawsuit after failing to make good on selling some convenience stores to a group of men that 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 lawsuits allege the company collected earnest money from two different buyers for five of the stores and from three on another store.

Some of them were leased after the Macon companies’ contract to buy the stores had been terminated.

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.

The Macon companies used an Indian-American real estate broker, Mumtaz Paroo, an agent with Virtual Realties in Duluth, as a contact. Rebel Pantry officials say they granted several extensions to Piedmont Fields to buy the stores but finally yanked the contract.

Jones and Woodland South recently filed -- and were granted -- a motion to lodge a “third-party complaint” against the Las Vegas lender, USA Global Holdings Business Trust, which has a long history of legal issues.

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.

Jones initially said he did not want to sue USA Global in case the financing somehow came through,

“I put it off as long as I could,” Jones said Friday. “They took damn near a million dollars.”

The would-be store buyers -- some of whom told The Telegraph earlier that they lost their life savings in the deal -- are seeking refund of their money, along with damages, and their lawsuit alleges fraud and civil RICO.

A criminal complaint filed by one of the would-be buyers, Jasmeen Singh Nanda, was turned over to the FBI by Macon police. Nanda, a 27-year-old college student, paid $50,000 down toward the purchase of a convenience store. The FBI is no longer investigating.

A Texas man who said he sent $50,000 to Piedmont by FedEx filed a complaint with the Bibb County Sheriff’s Office that investigators sent to the district attorney’s office, who bounced it back for more investigation.

At a Superior Court hearing last week in Macon, the Atlanta realty company, Virtual Properties, filed a motion to dismiss and asked for more distinction in the wording of the lawsuit -- specifically requesting that the “defendants” in all counts be identified, and not “thrown in this bucket together.”

The company’s lawyers also sought to distance itself from Paroo, saying she was an independent agent and not an employee. and that she acted alone in arranging the deals.

Paroo is no longer affiliated with the company, David Thatcher, attorney for Virtual Properties, told the other parties’ attorneys in the courtroom after the hearing.

Also after the hearing, one of the lawyers representing Jones, Harrelson and White, told Paul Mason, an Atlanta attorney representing the group of would-be buyers, reiterated Jones’ earlier positions that they still want to repay the buyers.

“Our position,” attorney Robert Smith told Mason, “is we owe your clients money, but not to admit RICO or fraud.”

The case took a turn in November when 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 23 gas stations in several states 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.

Information from the Telegraph archives was used in this report.

This story was originally published January 15, 2012 at 12:00 AM with the headline "Prado owner behind on payments, putting tenants at risk, bank says."