Pomona Council Balks at Felvey’s Involvement in Trade Center Plans

POMONA â€”  Concerned about the financial integrity of World Trade Center promoter H. Thomas Felvey, a cautious City Council this week balked at a plan to provide him with the land he needs to build a $96-million international business complex in downtown Pomona.

With one of four council members opposed to Felvey’s involvement and another undecided, the council’s Monday meeting sparked new questions about what role the 41-year-old Felvey will play in the project.

“I told Mr. Felvey that’s going to be a big problem,� Councilman Mark A. T. Nymeyer, who supports proceeding with the trade center plans, said in an interview. “We may see the demise of the World Trade Center. . . . A 2-2 vote (would be) a clear signal that this is going to go nowhere.�

Felvey, an Orange County architect who holds the exclusive rights to negotiate for the development of the property, had been asked by the council to attend Monday’s meeting to respond to reports about his financial and legal problems, disclosed in an article last month in The Times.

Felvey told the council that he was not familiar with any developer who, trying to realize his first major project, had not encountered some problems.

Special Meeting Slated

But some council members, instead of having their fears allayed, requested that any decision on the land transfer be delayed until they can discuss the project with Felvey’s development partners. The council voted unanimously to hold a special meeting June 25.

“Whatever answers he gave were a smoke screen for his lack of experience and for his lack of stability,� Councilwoman Nell Soto said. “As long as Mr. Felvey is involved, I really don’t feel I can vote for it. I’m not really willing to trust him to go ahead with it.�

Felvey, when contacted by telephone last month, said his professional difficulties have no bearing on the 14-story trade center that two years ago he proposed building on a 4.5-acre lot across from Pomona City Hall.

At the council meeting Monday, Felvey also said that such problems are normal for big projects.

“These things are slightly visionary,� Felvey said. “I think you’ll agree they take a great deal of courage. They do take a great deal of resources. And, above all, they take a tenacity and commitment that very few people have.�

In a report last month, The Times outlined how Felvey, while operating under three different corporations, had left a trail of debt and unfinished projects throughout the Los Angeles area over the last decade.

According to Los Angeles County Superior and Municipal court records, Felvey and his corporations are the subject of at least 12 uncontested default judgments, for debts ranging from $1,000 to $96,000.

After interviewing more than two dozen former business associates and employees, it was learned that four firms that have done work directly connected with the proposed Inland Pacific World Trade Center have severed ties with Felvey because they contend that he or his corporations still owe them money.

Confident About Success

Although surprised by the extent of Felvey’s troubles, most council members have said they believe the city is well protected from any failures and are confident that the 1-million-square-foot development can succeed.

One of the keys to that confidence, city officials said, is the involvement of Birtcher, a national development firm that will use one of its Laguna Niguel-based subsidiaries to help manage the project. The owners of the trade center would be Urban Equities Ltd., with Felvey acting as general partner and Birtcher as a limited partner.

Council members had asked that a Birtcher representative come to the Monday meeting to explain what responsibilities and how much control Felvey has over the project, but none attended.

Expressing her disappointment with Birtcher’s absence, Mayor Donna Smith said her decisions would probably hinge on the level of Felvey’s involvement.

“I’m not going to say if I’ll vote for it or against it,� Smith said. “It depends on how involved (Felvey) is going to be in the project. . . . I think it obviously would have made a lot of people a little more comfortable (if Birtcher had attended the meeting).�

Felvey, who calls himself the project’s promoter, told the council that his role has diminished over time.

“When a project starts out and the bulk of the risk is in place,� Felvey said, “the person who steps forward to basically try to fulfill a vision carries all of the risk and therefore, whether he likes it or not, carries all of the project.

“As the project continues toward fruition, if he’s at all fortunate and skillful, he’s able to assemble a team who begins to believe in the project, who begin to share with the risk, who begin to reduce his ownership position and they begin to lend credibility and expertise to the project, and that’s exactly what happened.�

With only four members on the council due to Smith’s recent mayoral victory midway through her four-year council term, Nymeyer said he fears that Soto’s opposition and Smith’s hesitancy may seriously hinder the project.

‘Just a Promoter’

“As far as I see it, (Felvey) is just a promoter,� Nymeyer said. “But if Birtcher can take over his commitments and buy him out of the project, I’m sure Donna would be very interested in going forward. He’s not indispensable.�

Contacted Tuesday, Birtcher President Don Talcott declined to discuss Felvey’s role in the trade center and downplayed the importance of attending Monday’s meeting.

“It wasn’t necessary for me to be there, and nothing was lost because I wasn’t there,� said Talcott, adding that he had intended to go but a busy week and a cold changed his mind. “I’m not going to allay any concerns through the newspapers.�

Besides giving the council a chance to question Felvey, the Monday meeting focused on a 28-page document outlining the proposed transfer of the trade center site by the city to Urban Equities and another partner, Kajima International Inc.

Under the proposed agreement, the city would sell the land for $1 million to Kajima, a Monterey Park-based construction firm that has been contracted by Urban Equities to build the project. Kajima will not transfer the deed to Urban Equities until the city has given final approval to all plans, city officials said.

In an agreement outlined by Community Development Director Sanford A. Sorensen, the city would reinvest the $1 million in a 260-room hotel proposed for the complex. In exchange, the city would receive a 12% equity interest in the hotel and a 9% return on the $1-million investment.

As a “fail-safe mechanism,� Sorensen said, Kajima or Urban Equities would be required to build an alternate $10-million project on the land within five years if the World Trade Center is not constructed.

At the end of five years, if the $10-million project is not built, Kajima or Urban Equities would have to return both the land and the city’s $1-million investment, he said.

Although a memo from City Atty. Patrick J. Sampson recommended that the council focus on Kajima and not Felvey’s integrity, most of the discussion--and ultimately the decision to delay action--centered on Felvey and his role in the project.

“I still think we need to clarify Mr. Felvey’s position,� Smith said. “Is he a controller in the project or is he a back seat driver?�

$100 Million in Bonds

Under an agreement approved April 15, the City Council voted unanimously to issue $100 million in revenue bonds for the project, giving Felvey and Urban Equities the means to finance construction.

The bonds, which are not obligations of the city, have been sold to two Minnesota banks, city officials said. Before any of the money will be released to Urban Equities, Felvey must present sufficient credit guarantees or other forms of security, officials said. The bonds will be repaid by Urban Equities as revenue from the project is generated.

As part of the deal, the city has agreed to pay for construction of a $13-million underground garage with bonds issued by the Pomona Redevelopment Agency and establish a $1-million promotional campaign to be funded by taxes generated from the proposed hotel.

Additionally, the city has obtained a $5.2-million loan from the federal Department of Housing and Urban Development that will be used to help finance the project.

Like a central market or commercial strip, trade centers operate under the philosophy that concentrating international firms in one building will propel it into a worldwide commercial network, ultimately attracting more business activity to the region.

Felvey has called Pomona an ideal location for such a complex because of the city’s proximity to freeways, rail lines and the Ontario International Airport. As one of the fastest-growing regions of the country, the Inland Empire could become a major center for international trade, he has predicted.

Besides attracting more business to Pomona, city officials have estimated that the project would create 3,000 jobs and generate more than $1 million a year in general fund revenue.