© 2018 The Texas Lawbook.
By Bill Hethcock of the Dallas Business Journal
(June 6) – An Irving taxpayer advocacy group, represented by the lawyer for legendary honky-tonk developer Billy Bob Barnett is attempting to block the North Carolina-based developer of the Toyota Music Factory from receiving $44 million in public money.
A lawsuit filed Wednesday in Dallas County District Court by prominent attorney Larry Friedman alleges fraud and suggests that Charlotte-based ARK Group cut corners during construction to gain certificates of occupancy by certain deadlines.
Under a 2015 economic development incentive agreement with the city, the ARK Group had to meet the deadlines for the Music Factory in order to be reimbursed by Irving for $44 million in upfront costs, the lawsuit states. As part of the project, Irving established a Tax-Improvement Finance District allowing for payment of tax funds to ARK if certain benchmarks were met.
Barnett, who founded and then lost the 100,000-square-foot “world’s largest honkytonk” Billy Bob’s in Fort Worth, opened then abruptly shut five locations flanking a central plaza in Toyota Music Factory. In closing the venues last week, Barnett claimed the $200 million, city-owned entertainment district has fewer than the required number of parking spaces and that its plaza is smaller than the stated 50,000 square feet and is uncovered.
The lawsuit, filed by Friedman on behalf of nonprofit Irving Taxpayers Matter, makes those same claims and more.
“ARK has defrauded the taxpayers of the city of Irving by installing substandard toilets, sinks, counters and other fixtures in order to obtain approvals from the city and certificates of occupancy, and then ripping the fixtures out,” the lawsuit alleges.
ARK created 580 parking spaces around the plaza instead of the required 1,200, the suit also claims. And the lawsuit says that ARK built the plaza to be only 27,000 square feet instead of the 50,000 square feet required by the agreements.
“In addition, the layout of the Plaza is bisected, such that the Plaza cannot be used for many of the functions that were intended to be held there,” the suit says. “For example, in the Texas heat, shade is essential for use of the Plaza during many months of the year. Because of the configuration of the Plaza that ARK actually built, a huge canopy that was intended to cover the Plaza and provide essential shade cannot be constructed.”
Noah Lazes, ARK Group president, told the Dallas Business Journal Wednesday that there was never a requirement for the plaza to be covered. He pointed to a rendering of the Toyota Music Factory from March of 2014 that shows an open plaza.
“The now finished plaza looks almost identical to the 4 year old rendering,” Lazes wrote in an email. “The plaza and all work at the entertainment center has been approved by the City of Irving and is in full compliance with our City agreements. We adamantly deny the farfetched allegations by Billy Bob Barnett’s group.”
Lazes added: “It is unfortunate that Billy Bob Barnett’s business plan did not work out as we all hoped.”
See the full story in The Dallas Business Journal here.
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