By Chris Otts –

A guard shack remains from the Philip Morris plant. The other buildings on the site at 18th Street and Broadway were demolished in 2008.

A guard shack remains from the Philip Morris plant. The other buildings on the site at 18th Street and Broadway were demolished in 2008.

Teresa Bridgewaters spoke to WDRB News on Feb. 6, 2017.

Teresa Bridgewaters spoke to WDRB News on Feb. 6, 2017.

Drone footage shows the site at 18th and Broadway.

Drone footage shows the site at 18th and Broadway.

With Frank and Teresa Bridgewaters to the right, Mayor Greg Fischer announced the planned Walmart in 2014.

With Frank and Teresa Bridgewaters to the right, Mayor Greg Fischer announced the planned Walmart in 2014.

The office of TMG, the Bridgewaterses' construction company

The office of TMG, the Bridgewaterses’ construction company.

 

 

 

 

 

LOUISVILLE, Ky. (WDRB) – On Sept. 19, 2013, Louisville Metro government cut a $1.1 million check to Newbridge Development, the family company entrusted with bringing a marquee development to a prominent corner of impoverished west Louisville.

About six months later, Mayor Greg Fischer joined Newbridge’s owners, Frank and Teresa Bridgewaters, for a triumphant announcement that Walmart planned to build a $25 million supercenter on the long-vacant site at 18th Street and Broadway.

The city’s no-interest, $1.1 million loan would allow Newbridge to buy a handful of additional properties to enlarge the site and close the deal with Walmart.

But the world’s largest retailer never built the store, abandoning the project altogether last October.

Now, more than a decade after Metro government essentially gave the property to the Bridgewaterses, the site continues to languish with weeds and rubble, and city officials face the prospect of losing any influence over its future.

Despite the fact that nothing has been built there, the Bridgewaterses ran up a $1.7 million debt against the land, according to a bank that is trying to foreclose on the property.

Separately, the Bridgewaterses haven’t repaid the $1.1 million in taxpayer funds that Fischer’s administration lent them, on loose terms, in 2013 just before the Walmart deal was announced.

In fact, city officials aren’t sure what happened to most of that money — $743,000 – as public records show the Bridgewaterses spent only $357,000 on property purchases needed to complete the Walmart site.

The dispute is likely to play out in court in the coming months as MainSource Bank pursues foreclosure on the roughly 18-acre site that the Bridgewaterses once hoped to sell to Walmart.

The bank has asked the court to sell the property at a public auction to repay a $1.7 million line of credit on which the Bridgewaterses defaulted, according to the complaint.

Records also show that Fischer’s administration took few steps to ensure repayment of the $1.1 million no-interest loan, which is separate from the $1.7 million bank debt.

The city’s collateral on the loan amounts to a set of mortgages – worth only $357,000 – on the four properties Newbridge bought with the funds.

But the Bridgewaterses also mortgaged those properties to MainSource Bank to help secure the $1.7 million credit line, records show.

Metro government said it hasn’t written off the $1.1 million. Nor have officials conceded that the main site at 1800 W. Broadway — which was donated to the city in 2002 — will end up being auctioned by the court.

“Louisville Metro will explore every option to recover any money that it is owed,” said Josh Abner of the Jefferson County Attorney’s Office, which represents Metro government in the foreclosure case.

Abner said the county attorney’s office is “evaluating and preparing initial claims” to be filed in the case.

The Bridgewaterses, for their part, did not respond to calls and emails from WDRB News. Last week, Frank Bridgewaters refused to speak with a reporter who visited the couple’s office in Shively.

“I don’t need to talk you guys. See you later,” he said, before leaving the company’s lobby.

The couple has not yet responded in court to MainSource’s foreclosure complaint, which was filed Feb. 7.

Last month, a day before the foreclosure was filed, Teresa Bridgewaters told WDRB that the developers were moving forward with plans to bring a mixed-use development with retail, restaurants and possibly residences to the corner.

Site remains vacant 17 years after plant closed

With its position facing Broadway, the site has long been seen as a prime candidate for a big grocer or national retailer in west Louisville.

“We always had a vision that we would bring this property back to a vibrant location where people could work but also enjoy the convenience of shopping,” Teresa Bridgewaters said during the Walmart announcement in 2014.

But following Walmart’s retreat in October, the property remains vacant nearly 17 years after Philip Morris USA shut down the cigarette factory it had operated at 18th and Broadway for half a century.

Philip Morris, in a gesture of corporate goodwill, gave the site to the city for a nominal $100 in 2002.

The Bridgewaterses did not get involved until 2006, when then-Mayor Jerry Abramson’s administration selected them to develop the site under an agreement with the city.

The couple owns The Mardrian Group, Inc. – or TMG – a local commercial construction and land development company founded in 1992, according to its website.

“I think Teresa and Frank Bridgewaters are true assets to our community,” said Metro Council member Barbara Sexton Smith, whose district includes the Broadway site. “They have spent many years trying to develop different parcels of land in our community, and they fought long and hard to bring the $30 million Walmart project here.”

Under the 2006 agreement, the Bridgewaterses paid nothing for the property but were required to demolish the Philip Morris buildings and market the site to major retailers.

A decade later, the city still has a tenuous claim to the property. The county attorney’s office noted that the agreement gives Metro the option of buying the undeveloped land back from Newbridge, and the developers would be obligated to get rid of liens like the $1.7 million mortgage to MainSource Bank.

But the city still would have pay Newbridge at least $1.7 million for the property, according to the agreement.

Developers haven’t repaid $1.1 million taxpayer loan

During the press conference in 2014, Fischer said the city had agreed to help seal the deal with Walmart by committing $1.8 million to allow the Bridgewaterses to buy six additional pieces of land to bulk up the site for the big-box retailer.

At the time of the announcement, Metro government had already cut the $1.1 million check to Newbridge, the Bridgewaterses’ company. The rest of the $1.8 million was never released as it was contingent on Walmart closing the sale.

WDRB first raised questions about the loan in 2014, noting that the amount of money pledged to the Bridgewaterses seemed to far exceed what was required to buy the additional property.

Records now show Newbridge ended up spending only $357,000 in property purchases between December 2013 and July 2014.

Fischer spokesman Chris Poynter confirmed last week that none of the money, including the $743,000 not needed for land acquisition, has been repaid.

Janet Kelly, an expert in local government finances at the University of Louisville, questioned the structure of the loan.

While there are no hard-and-fast rules, Kelly said local governments typically try to ensure that any taxpayer funds given to private developers are used only for their intended purpose.

For example, instead of just handing over $1.1 million to the Bridgewaterses, the city could have released the funds in stages or as needed upon the closing of the property purchases, she said.

“It strikes me as highly irregular for the city to release funds to the developer for the purpose of acquisition of the property prior to that developer making a good faith evidence that the property has been purchased or is well intended (to be purchased),” said Kelly, who directs U of L’s Urban Studies Institute. “… That just doesn’t happen.”

Kelly added that city officials – in their zeal to secure a big development for a low-income, under-served area – may have overlooked such details.

“I can understand why they might have stepped away from their normal protocol for these type of public(-private) partnerships — because of their, I think, genuine desire to do something for the West End,” she said.

The city, through the County Attorney’s office, now says it’s going to try to get the money back from the Bridgewaterses.

But in 2014, Poynter told WDRB that the Fischer administration wouldn’t mind the Bridgewaterses keeping any excess funds as a contribution to the “holistic development.”

“That’s just money for them because they have spent a lot of money there over the years clearing the land, etcetera,” Poynter said at the time.

Sexton Smith, the Metro Council member whose district includes the site, said she was unaware of the details of the loan but wants more information.

“If there are monies that should be paid back and they were required to be paid back in the original agreement, then we should look into that and move toward that,” she said.

Metro Council member David James, whose district nearly borders the site, said he didn’t know that the city loan was far in excess of what was needed to buy properties for the project.

“I don’t really have thoughts on it other than, I guess, the city would be entitled to get its money back,” he said.

Records show developers still may have profited

During the Walmart press conference in 2014, Teresa Bridgewaters said their company had “invested millions of dollars” in the site since 2006 even though it seemed “nothing was happening.” She did not detail those investments.

But even as the Broadway site remains undeveloped – and is possibly headed to a court auction – the 10-year arrangement with the city still may have been profitable for the Bridgewaterses, according to a review of public records by WDRB.

In 2010, the Bridgewaterses sold off 7 acres of the site to Brown Forman Corp. and kept the $1.14 million from the sale — a deal that Abramson’s administration approved.

Brown Forman seeded the lot and built a walking track for its corporate headquarters, which is just south of the Broadway site.

Abramson, now an executive in residence at Bellarmine University, recalled that allowing the Bridgewaterses to sell acreage at the rear of the site wasn’t expected to hurt efforts to land a marquee retailer for the rest of the property.

“It didn’t have any negative effect on the opportunity for development. They (Brown Forman) were a supporter, and had been a strong supporter of developing that corner, and so we went ahead with it,” Abramson said in an interview last week.

So far, the Bridgewaterses’ main economic contribution to the project has been the clearing of the old Philip Morris buildings, which was estimated to cost $1.3 million, according to the 2006 development agreement with the city.

But in 2009, the contractor that performed the demolition sued the Bridgewaterses for nonpayment, and court records show the case was settled for $275,000.

The city, for its part, refused to release records submitted by Newbridge to certify the demolition costs, saying that information is not “final” and thus, not public record.

Besides the demolition costs, records show Newbridge spent $346,000 in 2007 to buy adjacent land.

It’s also unclear what funds the Bridgewaterses could have realized by salvaging materials from the demolition.

“There was scrap; there was all sorts of value there in terms of metals and old brick and stuff, and we allowed them to do that, to keep those funds as sort of a running start to be successful,” Abramson said.

To be sure, Teresa Bridgewaters said during the Walmart announcement “much” of the material was donated to Habitat for Humanity.

Meanwhile, records suggest the $1.7 million that MainSource Bank is trying to collect by foreclosure actually dates to January 2007. That’s when Newbridge first borrowed against the property – shortly after obtaining it from the city – with a loan from Your Community Bank of New Albany, Ind.

The couple had been expected to obtain financing to pay for the demolition, according to the 2006 agreement.

Records show the debt was shuffled to Louisville lender Gus Goldsmith before ultimately ending up with MainSource Bank in 2015. MainSource Financial Group CEO Archie Brown did not return a call for comment.

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