The Joplin Globe, Joplin, MO

Local News

February 19, 2014

JRC approves payment of fee owed in purchase agreement for Mercy site

JOPLIN, Mo. — It was business as usual for the Joplin Redevelopment Corp. on Wednesday, a little more than two weeks after an investigator hired by the City Council criticized fee arrangements with the city’s contracted master developer.

JRC members voted to pay a $57,500 land developer fee for securing land from Mercy Hospital at the site of the former St. John’s Regional Medical Center.

That site may be used in the future to build a science or discovery center.

The contract calls for the JRC to pay a 5.75 percent fee at the time it agrees to buy land in a transaction arranged by master developer Wallace Bajjali Development Partners.

The Mercy property was approved for purchase at $1 million last fall, but at the time, the JRC did not have any money to pay the fee, said Leslie Haase, the city’s finance director. The master developer had arranged for Mercy to carry a promissory note.

Mercy also has to agree to the use of the property before anything can be built.

JRC board member Phil Stinnett asked Wednesday where the JRC would stand if it pays the fee and then Mercy, in the end, does not agree to the purpose for the use of the land.

The city staff told him that the JRC would be out the $57,500.

City Attorney Brian Head told board members that Wallace Bajjali had arranged the land deal to give the JRC the last of 50 acres it needed to own or have under contract in order to obtain state tax credits that now have been sold, netting the board about $3 million.

Board members approved the fee payment, though member Fred Osborn abstained from the vote.

A special investigator on Feb. 4 gave his final report on a City Council-ordered probe into the conduct of two council members. One of those is Mike Woolston, a real estate agent who arranged land sales for a buyer who then sold the land to the JRC. Woolston said he did not take a commission for his part in those sales and that he abstained from council votes on them.

The investigator, Tom Loraine of Osage Beach, said Woolston’s actions were not enough to prevent him from appearing to have a conflict of interest and tainting the transparency of the deals in the public’s eyes.

“How can proper decisions be made as to continuing the relationship with Wallace Bajjali’s firm without extensive disclosures as to fees generated thus far,” Loraine’s report questioned.

David Wallace, CEO of the firm, told the Globe last week that his firm’s contract with the city and the JRC sets the fees at 5.75 percent, lower than the typical 6 percent fee that a real estate agent would charge for a transaction.

The city’s finance department keeps track of the fees paid and reports them regularly in financial statements of the JRC.

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