Is GREDC *Investing* in Land of the Dinosaurs Or Does LOD Have to Pay it Back? (Promissory Note) -UPDATED


 

Is GREDC *Investing* in Land of the Dinosaurs Or Does LOD Have to Pay it Back? (Promissory Note) -UPDATED
 


7 December 2010 at 5:15:14 PM
salon

Last night at the Glen Rose Economic Developmennt Corporation board meeting, the company that GREDC contracted with to do an audit discussed the $80,000 that GREDC had given to Land of the Dinosaurs LLC. Remember that earlier this year, the GREDC gave $80,000 dollars to LOD as an investment in which they got 8 *interests*, each worth $10,000 of investment; there was supposed to be a contract but none was made, and then-Mayor Miller did not ensure there was a contract before writing the check. I asked whether there was now a contract (even though I think it's a bizarrely bad idea AFTER an entity that gets money to have THEM write up a contract.) and the answer, unofficially, is no, that the LOD is having their attorneys create one. (Why isn't GREDC doing the contract?)

Here, again, was the video from Feb 4, 2010

The person presenting the audit said that she had put LOD in the category of receiveables, of money to be paid back to GREDC, as a loan, in the form of a promissory note. When she said this, no one on the board, including Darrell Best, said a word, asked her about this or challenged her. Why does this matter? Because an investment is very different from a loan.She also said the LOD is the one that is deciding to have this as a note. Here is video from yesterday, edited for just the relevant parts, about LOD, including Jones questions at the end.(The video actually stops after a few minutes, I accidentally left on blank space)

The auditing company left after their presentation. At almost the end of the meeting, Dr Mike Jones brought up the question of whether the LOD deal is a promissory note or an investment. Best said that the auditor was mistaken, that it's not a promissory note but an investment. Watch this video and you can see and hear where Dr Jones tries to point out the note from the auditor that says that GREDC cannot be an owner or operator of a project, and therefore the LOD deal needs to be a loan.

I went up to get a copy of that page from the auditing report and Best told Jones not to allow me to get a copy. I then did an open records request and went down today to get a photo of the document. (I have also filed a complaint with the AG's office about Best). Here's the page (iphone4 takes EXCELLENT pics)

Two things on the page above to read-one is about the contract. The second says that they found legislation that states that the corporation does not have power to own or operate any project as a business entity other than as a lessor, seller or lender.That is the point Best challenges, but not while the auditor was there; it was Jones who brought it up.

Makes me also wonder. Would this also apply to the Events Coordinator? If it's true that GREDC can only be a leaser, seller or lender, then the money for the Events Coordinator to the Chamber of Commerce, of which Best is ALSO president, would have to be paid back, right? Not just funded?

UPDATE: I called up Julie from the auditing company to ask her where the source referenc is. It is from the book, which you can find on the Texas Attorney General's website, entitled "Economic Handbook 2008"

Limited Power to Own or Operate Project. Generally, the corporation does not have the power to own or operate any project as a business entity other than as a lessor, seller or lender. However, the corporation does have all the powers necessary to own and operate a project as a business if the project is part of a military installation or military facility that has been closed or realigned, including a military installation or facility closed or realigned under the Defense Base Closure and Realignment Act of 1990 (10
United States Code Section 2687).272

272 Id. § 23(b) (to be codified at Tex. Loc. Gov’t Code Ann. § 501.160 (Vernon Supp. 2008), effective April 1,
2009).

Seems to me that the GREDC should be asking for the advice of an attorney because clearly Best is mistaken about this being able to be an investment.


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