Buyer reneges on $22 million county deal

Yet another deadline has come and gone – the last, according to Jefferson County Attorney Kathleen Kennedy – in the long lingering contract sale of the county-owned Ford Park Entertainment Complex. Buyer Renaissance Development Group, led by front man Kevin Johnson, bid $22.2 million to secure the $43 million property in 2020, but, to date, only put up $440,000 in earnest money toward the purchase price.

Despite multiple deadlines placed on the buyer since the March 2021 deadline to pay, Johnson et al’s failure to fork up another $560,000 in earnest money by Friday, March 4, of this year, sealed the deal’s doom.

During a meeting of Commissioners Court held in advance of the March 4 drop-dead deadline, Jefferson County Commissioners and County Judge Jeff Branick voted to cut off further negotiations without revisiting the topic again should Johnson not come through as he had assured time and time again.

“If they don’t come up with the money, the deal is off,” Branick said in the days leading up to March 4. Also, according to County Auditor Patrick Swain, the $440,000 already produced as earnest money on the Ford Park sale will forfeit to the county.

“There have been some vague communications,” Assistant to the County Judge Fred Jackson said, as of Feb. 18. Nothing rose to the level of anticipating payment on the deadline, or denoted that any money was to be produced in the coming days. “I’m always hoping,
but…”

Branick said he was sent a copy of the email Johnson sent to Jackson in February, but he didn’t get it from the Renaissance man himself.

“I’ve have not had any email communication from Renaissance Group,” Branick said, before referring to the communication sent to Jackson. “It didn’t make a lot of sense to me.”

Communication sent to media detailed Johnson’s excuses for payment on a contract a year past due. In part, Johnson referenced the need to acquire a third appraisal on the property. Jefferson County taxpayers paid for the first appraisal. The second appraisal was not shared with county officials, according to staff in the county offices.

Additionally, Johnson pointed to requirements placed on the company by the banking lender that, a year later, had not been clarified satisfactorily to the financier.

When questions were posed to the auditor’s office, purchasing office and County Judge’s office as to how many bids have been accepted by the county without the bidder proving ability to pay on the spot, not one was noted.

When examining the first request for bids to purchase Ford Park, the county’s attention to requiring proven ability to pay were extensive.

In the first bid package, the qualifying bidder would be required to submit audited financial documents, as well as (1) balance sheets for the prior three years; (2) income statements for the last three years; (3) statements of cash flow for the prior three years; (4) statements of changes in stockholders’ equity for the prior three years; (5) notes to financial statements; (6) corporate/partnership federal income tax returns for the last completed fiscal year; (7) credit report – Dun & Bradstreet Report; (8) credit history letters from financial institutions; and (9) most recent quarterly financial statement.

When Johnson’s Renaissance failed to provide the requested financial documents, Purchasing Agent Deborah Clark recommended rejecting Johnson’s bid for the multi-million-dollar sale.

“The majority of what we asked for was audited financials, and we did not get any audited financials,” Clark said, indicating the financials were integral to awarding a bid. However, when the new bid package was produced a short time later, the financial reporting requirements were altered.

In the second bid package, there were no nine points of financial assurance to prove ability to pay. Instead, the second bid announcement contained language that it was the bidder’s responsibility to provide financial information that “provides assurance to the county that bidder will be able to assume duties, liabilities and obligations from the county for the contracts subject to novation as listed in this bid.

“If the bidder will be purchasing the property as a cash transaction, the bidder must include certified documentation from the bidder’s financial institution or lender that the bidder has the cash or financial credit with the lender for the bid amount.”

Also as spelled out in the bid proposal, all financial documents obtained – or reporting of what was not obtained – is held as confidential for purposes of providing information to the community as to the financial solvency of the bidder.

Prior work with the county was not listed, but Renaissance “General Manager” Kevin Johnson was also integral to the failed Palms golf course on Pleasure Island, another revitalization dream Johnson sold to Jefferson County residents that is currently growing weeds and posing a fiscal burden on the city of Port Arthur. According to Texas Comptroller records, Johnson forfeited the Palms LLC due to franchise tax deficiencies in 2015.

Financial records for Renaissance’s general manager, Johnson, would also show failure to live up to fiscal obligations. Former customers of Johnson were awarded damages due to Johnson’s prior poor performance, and he and his wife, Patti Sepeda-Johnson, filed for bankruptcy, discharging debts due to those who offered them lines of credit in the past. Sepeda-Johnson is listed as Renaissance’s owner, according to the Minority Business designation awarded to Renaissance amid the bid process to acquire Ford Park, although the company itself was worth approximately $1, according to the couple’s bankruptcy filings.

A visit to the two greater Houston area Renaissance headquarters addresses listed on materials sent to the county reveals an empty office and a rented mailbox.

As of two days before the “absolute” last day to produce the additional half-million in earnest money, the county staff handling the purchase reported no check in hand, and no concrete response that would assure the check was on the way.

“We’ll wait and see,” Branick said, as he has many times over the last year of waiting for the Ford Park sale to finalize.

March 4, there was nothing to see.

“There was nothing to report,” Swain said days after the Ford Park money was due.

At a Commissioners Court meeting held March 8, no remarks were made publicly regarding the Ford Park sale. After the meeting, County Attorney Kennedy said she was preparing a letter to send Johnson’s attorneys dissolving the Ford Park sale agreement.

“The deal is off,” Kennedy said. Although she anticipated Johnson’s group may invoke further litigation regarding the failed sale, Kennedy was unphased by the thought. “They had until March 4. It’s over.”

Purchasing Agent Clark said the sale of Fork Park will go out for bids again in the future, if county commissioners vote to do so.

Although he lists his residence in the Houston area, Johnson was in Beaumont on March 7 at Ford Park in Beaumont, attending the Beaumont Panthers basketball game on the sidelines. Johnson did not appear in Commissioners Court the following day to address the Ford Park sale demise. Calls to Johnson were unanswered as of press time.

Timeline of failed Ford Park sale:

Aug. 11, 2020 – Jefferson County Purchasing Dept. releases first bid request, with bids due the same month. The legality of the bid package came under question on announcement, as the county failed to get a property appraisal as required by law.

September 2020 – First bid rejected due to noncompliance with financial report request; and the county acquires a property appraisal on the Ford Park Entertainment Complex that shows value exceeding $43 million, double the minimum bid request.

Sept. 20, 2020 – Jefferson County Purchasing Dept. releases new bid specs for Ford Park; the provision requiring audited financial documents is removed. (See 5A for bid specs.)

Nov. 6, 2020 – Bids due on second Ford Park bid package; Renaissance Development is the lone response, and comes in under the minimum bid requirement at $22.2 million on a specified $29.8 million minimum bid.

November 2020 – County accepts bid that was under the minimum, and then accepts earnest money less than the minimum 2% specified in the bid package.

March 2021 – Money is due for Ford Park sale.

April 2021 – Money is on the way.

May 2021 – Money is on the way.

June 2021 – Money is on the way.

July 2021 – Money is on the way.

August 2021 – Money is on the way.

September 2021 – Money is on the way.

October 2021 – Money is on the way.

November 2021 – Money is on the way.

December 2021 – Money is on the way.

January 2022 – Money is on the way.

February 2022 – Money is on the way.

March 2022 – Money is due for Ford Park sale.