ARK Group Faces More Heat from Irving Taxpayers and the Honky-Tonk King

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Live music everyday in Irving was a big part of Big Beat Dallas’ plans. File Photo Image from Grand Opening weekend this spring. Rachel Hawkins / NDG

By Nakia Magazine, NDG Special Contributor

Charlotte, NC-based developer ARK Group’s legal battle with Big Beats Dallas owner Billy Bob Barnett regarding the Irving Entertainment Center continues. This time, Irving Taxpayers Matter, an organization accusing ARK Group of fraud and professional misconduct, are demanding the developer be held accountable for what is classified as commitment of “material violations” of the TIF (Tax Increment Filing). ARK Group is the developer contracted by the city in 2015, to build the $250 million Toyota Music Factory entertainment facility. This could impact the reimbursement to ARK Group of $44 million dollars for expenses associated with the project.

The TIF agreement is the legal document which binds developers to a set of conditions required for reimbursement of building expenses. Irving Taxpayers Matter has hired Dallas-based firm Friedman and Feiger, LLP, which also represents Billy Bob Barnett (owner of Big Beats Dallas). They are seeking to litigate the claim that ARK Group is not entitled to receive the $44 million dollars in tax reimbursements submitted to the City of Irving.

Billy Bob Barnett, who many refer to as “the Honky-Tonk King,” alleges the ARK Group fell drastically short on building specifications in its development contract and lease agreement. Barnett has accused his landlord-developers of impeding operations to help Big Beats Dallas establishments maximize revenue from afternoon and evening crowds. Also, that the ARK Group failed to construct a canopy for the building altogether.

Attorney Larry Friedman, of Friedman and Feiger, LLP, spoke this week with the North Dallas Gazette by phone. Friedman shed light on the degree to which he says ARK Group failed to honor its contract. According to him, in addition to ARK Group “shortchanging Barnett’s establishments for 500 parking spaces,” ARK Group violated several other building code specifications for the Toyota Music Factory.

“ARK Group signed a contract to build 50,000 square feet of mixed-use space. Instead, they built 27,000 square feet of mixed-use space. This is a shortfall of 23,000 square feet of entertainment space which constitutes a material violation on the part of ARK Group,” Friedman stated.

He went on to allege other potentially eye-raising violations.

“We have substantial evidence that suggests that ARK Group played a shell game as it relates to obtaining occupancy certification from the City of Irving. It is well documented that ARK Group installed lighting fixtures and furnishings necessary to pass the City’s inspection and then removed them shortly thereafter,” according to Friedman.

Included in the lease agreement between ARK Group and Big Beats Dallas, is a clause allowing the City of Irving to step in as the landlord if the tenant establishes a breach of lease terms occurred.

In his argument, Friedman also refers to operating practices which ARK Group included in its lease with Barnett that he says impaired Big Beat Dallas establishments from moving afternoon patrons out before the evening crowd.

“We believe that ARK Group impeded operations in a way that made it impossible for my client to manage shift changes effectively,” he stated. Barnett’s claim includes a significant dollar amount associated with lost revenues allegedly caused by ARK Group’s obstruction.     

 

Irving City Taxpayers Join the Suit Against ARK Group

The legal battle between ARK Group and Barnett has gained even more force as local taxpayers in Irving have formed an advocacy group to dispute tax reimbursements due to ARK Group for construction expenses. Friedman, who also represents the Irving Taxpayers Matter, emphasized the developers must follow the stipulations in the TIF  contract to received reimbursement.

“The TIF contract states that if the developer commits any materials violations, reimbursement payments may be withheld,” Friedman stated.

Taxpayers are demanding the City withhold TIF payments based on material building code specifications not met. Reportedly the ARK Group has received approval on an audit report submitted to the City. This audit was to substantiate the Group incurred expenses greater than $160 million. However, $44 million in reimbursement payments may be withheld based on violations identified by Barnett according to his legal team.

 

Sentiments from the Irving Community and Minority Contractors

Members of the Irving community are strong supporters of their Honky-Tonk King in his battle against out-of-state developers.

“I’ve known Billy Bob Barnett for many years,” said, Reverend Peter Johnson, a leader in the Irving community. “I grew up here during the Civil Rights movement, and I must say, Billy Bob embraces all people. I believe in his vision. I think what he is doing over there is wonderful; and, I wish the City would support him.”

Other comments from the community which have come on the heels of this raging legal battle are from advocates aligned with the M/WBE (Minority and Women’s Business Enterprise Program). The M/WBE program sets forth performance goals which urge Texas localities to fill City development contracts with minority and women contractors. In previous articles, NDG has looked at the concerns regarding usage of M/WBEs in the construction phase of the project. Including a follow-up on how they ultimately failed to meet the goals for this project. 

Charles Jackson, a local Chamber of Commerce Member and M/WBE consultant, who is an advocate for contractors participating in the program stated that on average, “Minority contractors get less than 5 percent of city contracts.”

Jackson mentioned the performance goal for most areas in the state is 30 percent.

“I must say the M/WBE Advisor for the City of Irving is great, but they still need to make developers accountable over there for meeting the 30 percent recruitment goal,” according to Jackson.

Irving’s NAACP Chapter President, Tony Grimes, was complimentary of the City of Irving as it relates to publishing bids and making application information accessible to M/WBE Program participants. However, Grimes was candid about his desire to see more M/WBE contractors obtain proposals.