Friday, November 23, 2007

Another bad deal for Trenton

This morning's Times carried an article by staff writer Andrew Kitchenman about the continued delays in getting Performa Trenton's "Foundry" project off the ground. This time, it's the lack of closing on the loan from Citibank to finance the project.

To catch everyone up, Performa is a management/development entity headed by one John Elkington. Mr. Elkington and company's sole claim to fame is/was the management of the city-owned Beale Street entertainment district in Memphis, Tennessee. Several years ago, Mr. Elkington decided to leverage his "success" in Memphis by taking on the development of similar projects...mostly around the south. During the later years of the Bob Prunetti led County Administration, Performa proposed a development in Trenton. Originally set for the former Apex Lumber site and adjoining properties along S. Broad Street, the project was shifted up to the area opposite the Sovereign Bank Arena and encompassing the sole surviving building of the old American Steel and Wire Company plant, "Building Four" (this was to be the location of yet another failed development scheme earlier on in the site's history).

The project has been subject to numerous make overs as the developer has sought $10 million in public money along with a $21.8 million dollar loan from Citibank. While we are continually assured that this is a go and ground breaking will occur in this month or that month, nothing has happened.

Well, nothing that is except the failure of Performa Trenton LLC to make a tax payment of $16,800 on part of the property. "An oversight," Performa Trenton LLC partner and spokesman Lindsay Burbage said at the time.

And now we learn that the major financing for the estimated $50 million dollar project has been delayed as the lender seeks more equity from Performa. Perhaps not an unwise move on the part of CitiBank considering Performa's track record elsewhere.

Performa has had little, if any, success outside of Memphis. The Winston-Salem, North Carolina project was dropped because the developer couldn't get as much control of the properties as he desired. Performa was literally kicked out of Shreveport, Louisiana's "Red River District" for failure to perform as promised. The Farish Street project in Jackson, Mississippi has run aground time and again and the Mayor there is reportedly unhappy. And in Birmingham, Alabama Performa is also running into delays in securing loans for a proposed project.

Meanwhile, back in Memphis, the City Council has gone to court again to force Performa to turn over monies owed the City from the management fees collected. Coincidentally, this violates a court order issued in 2002, the same year Performa announced it's Trenton project. It seems as though there are allegations that Mr. Elkington has neither paid the City of Memphis it's share of the money collected for managing the Beale Street district nor placed said monies in a court mandated escrow account. Some estimations place the amount owed Memphis in "the millions."

Further, it has been reported that over a quarter of a million dollars is owed to a contractor for labor and materials used to construct a club in downtown Memphis, near Beale Street, that Mr. Elkington is a partner in. Horizon Construction has filed a lien in the amount of $229,562.39 against the owners of Ground Zero Memphis. The owner of the club is listed as Lee's Landing Commercial LLC with an address at Elkington's Beale Street office.

Taken altogether, it is hard to ignore the fact that Mr. Elkington's Performa Empire is built on shaky ground. It may just be time for the Mercer County Improvement Authority (of which Mayor Palmer's wife, Chris Foglio is a member) to take a step back and start looking at ways to extricate itself from this bad idea.

3 comments:

Irving Bertrand Clean said...

Like so many "development" activities before it, Performa reeks of the huckster Lyle Lanley, who forced the monorail down the throats of Springfield, much to the consternation of Marge Simpson.

o8618 said...

At least Springfield got a decent song and dance routine

Irving Bertrand Clean said...

If Trenton is Springfield, then Jackson, Memphis and Shreveport are Ogdenville, North Haverbrook and Brockway.