27 Saturday Oct 2012
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economicdeveloper in
Consulting,
Corrupt Local Elected Officials,
Earthquest Project History,
Inaccurate Reporting by the Media,
Post Global Financial Crisis Recommendations,
Professional Economic Development Ethics & Conduct,
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EarthQuest,
EarthQuest Brief History,
Inaccurate Media Stories
These days the media has a great way of skewing their facts to make folks believe the direction they would like you to believe. In an effort to maintain transparency and respond to this video news story, I would like to provide some additional facts that were somehow overlooked by the news station… imagine that… an investigative report based on pure opinion.
First, the Theme Park from the beginning was envisioned to utilize a non-profit research and educational organization (EarthQuest Institute) to provide validity to the founder Don Lessem’s vision for the green and sustainable theme behind the for profit theme park. Quite common for major projects such as Disney and others to support their favorite causes and control the board of directors. In this instance the developer and the founder had agreed that the non-profit would commence ahead of the for profit to build awareness for the for profit project. Both the developer and EMCID (East Montgomery County Improvement District) had pledged funds to hire the three person consulting staff to build the awareness. Each of these staff members including myself signed an hourly compensation agreement, and each of us were private consultants at the time. We sold our time at our published rates.
This for profit theme park is approximately a $500M phase one build out and would have an economic impact on EMCID of billions of dollars and thousands of jobs. The project hired some of the worlds best consultants in the theme park industry to advise them on how to construct the project, what the genre and theme should be and what type of visitor expectations should be provided. In addition, as the site location consultant I provided the site evaluations, special legislation for the establishment of a special economic zone and worked as a contracted subject matter expert on public policy to support the capitalization phase with the developer and his investment banking team. All of us worked under signed contracts that were agreed upon in public open meetings at the East Montgomery County Improvement Districts open public meetings. There was no lack of transparency here by the paid staff. The failure of the project to gain funding in the first attempt can be squarely placed on the developers failure to raise the funds he had promised EMCID he would be able to do. Of course nobody had foreseen the 2008 global financial crisis coming during that process. So just like many communities EMCID had to go back to the negotiating table and find a suitable developer for the project and seek financing all over again with their new developer.
The original developer failed to provide his funds to the non-profit project and EMCID soon found out he was unable to fly the mission on the for profit project as well and they too ceased funding the project in 2010. The BBB made calls about the EQI but the staff had already resigned and was not about to provide work to an organization that had failed to pay their compensation contracts for their time provided, as I believe most paid workers would do if the shoe was on their foot. Secondary to this the Developer, Founder and EMCID were the named board members and they made all decisions regarding the project, including hiring the staff, which to this day has not been fully paid for their agreed upon time provided to the organization. In addition, there was much disagreement between the board of directors as to how to fund the organization, but when the CEO found out the developer was not going to fulfill his obligation to EQI, he closed down the non-profit and informed every one of his findings and let the staff go.
Then the CEO asked that the EMCID and Developer pay off the debts they had all run up on the EQI, including promised payment of the staffs unpaid time served over the two years. To this day the staff has not been paid, despite promises made to them by EMCID that if they continued to work through that time they would make sure the staff was paid for their time.
With regard to the theme park, it is a great idea and the market study which was recently updated I am quite confident will continue to demonstrate the value of moving forward with the project under a new developer with specific theme park experience. From the beginning EMCID was told that they type projects require massive upfront funding and risk from the public sector and can take from 8-14 years on average to come to fruition. Let’s not forget that the 2008 Global Financial Crisis hit and created a very difficult scenario for the original developer to find venture capital funding.
The new developer has agreed to make the taxpayers whole as part of his funding strategy and has agreed to move the project along once he has updated the market study, developed a strong financial business case and secured acceptable terms for financing. All this was done by the team of experts that EMCID hired (me being one of them) once they found that the original developer was not going to proceed in 2010. When this occurred EMCID rehired me to bring the new developer on board and assist them in securing the rights to the theme park intellectual capital and the rights to the site from the developers bankruptcy filing with his land company. All of these items were achieved by me and my advisors I brought to the project, without us this project would have failed and left EMCID stranded with no options in the future.
Without these actions the project would truly be a lost cause and the tax payers money would have been lost for sure. Now once the project gains financial footing the taxpayers will be made whole and Houston will finally get a new major theme park. Then I suppose all the naysayers will not bother to apologize to all the hard working staff of consultants who also took risks to get this off the ground and to this date still remain unpaid for a large portion of their time served under specific contracts approved by the EMCID, original developers and founder.
Here is the clip of the inaccurate news story from channel 2 in Houston I am referring to. Now at least when you watch it you will have some additional background on the subject. The staff hiring was agreed upon by the Developer, Founder and EMCID, and then solicited by them to provide their services. The staff is not the financiers, developers, or brain children of this project, merely the contractual help brought in by the various members of the boards of the directors.
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