Couldn't have said it better myself, Jerry Dixon. Threatened with default on his west-side project, his partner accusing him of improperly tapping an escrow account and missing a key construction deadline, Dixon squirmed his way to an explanation.
You see, his business partners at Senior Housing Group are "very strict Chicago attorneys who are very legalistic about everything," he explained.
"Here, we do things a little bit differently, and that is not their way," he said. "We've been in a battle with them about the way things are done here."
Dixon certainly is an expert on how things are done here. He and his partner at Gadsden Co., son-in-law Adam Weinstein, have a reputation for berating city staffers and working the City Council to get their way.
After all, we sold Gadsden a prime piece of real estate on West Congress Street for $250,000 so he could flip it for $1.43 million that same day. We let Gadsden use that money - our money, since it was city land - to pay for infrastructure improvements the company was always supposed to make itself.
And still he was late to pay the bill, forcing contractor KE&G to threaten a lien of $195,000 for work it did installing a reclaimed-water line in April. Now we have Gadsden improperly tapping an escrow account that was set up with the proceeds from the land flip to pay for infrastructure like ... the waterline.
Both Senior Housing and Gadsden were supposed to approve any draws on that escrow account, but somehow that did not happen.
The draws on the escrow account surprised those Chicago attorneys.
All of this raises the question: If Dixon didn't tap the escrow account to pay KE&G, what did he do with that money? Dixon has said he paid for change orders and the bill for another contractor, Ashton.
"We didn't take the money and go to China," he told me. "We kept the money and paid the contractors, or are in the process of paying the contractors, for the work that they have done."
In the process?
The whole point of the flip was to help Gadsden pay for these improvements.
Many readers are familiar with Gadsden's saga, but here's a quick refresher: In 2008, Gadsden entered into a complex development agreement with the city for 14 acres on Congress Street just west of I-10. The development agreement was split over four phases. If Gadsden hit performance requirements by putting in infrastructure and development on the site, it could stake claim to the next phase. By putting in infrastructure, Gadsden received a discounted purchase price.
Gadsden had big plans: a boutique hotel, more than 400 homes, retail and so on. But the dust bowl at the site tells you what happened.
The failure to develop isn't all on Gadsden. The city promised things it didn't deliver. The economy tanked.
But instead of scrapping the agreement, the city gave Gadsden new life - a cash transfusion - through the land flip with Chicago-based Senior Housing. Through tax credits, Senior Housing is building a six-story affordable-housing project.
About $611,000 from the land flip went into that escrow account to pay for the infrastructure improvements - the one Gadsden accessed improperly.
This is all troubling because Gadsden is supposed to pay roughly $3 million toward the modern streetcar.
Given these recent developments as well as past financial issues - it's fair to wonder if that $3 million is funny money. Dixon says he can pay it but, as we all know, he has said a lot of things.
"I'm not clear where the hell that is," Gary Hayes, executive director of the Regional Transportation Authority, told me. "Is the Gadsden money real? Is it on the table?"
What we do know is that at one point Gadsden was delinquent on taxes earlier this year, owing $53,000. Another Dixon company, Rio Development, which built the neighboring Mercado District of Menlo Park on the west side, owed $37,000. We know the Mercado is also facing foreclosure after Rio Development defaulted on a $1 million loan.
Even City Councilwoman Regina Romero, Gadsden's biggest supporter, is hedging publicly.
She said she doesn't know the details of the dispute between Senior Housing and Gadsden, but she expects the development to be finished.
"I don't know what he is talking about," she said of Dixon's comment about Chicago attorneys and those pesky legal details. "What I do know is that there is legal language that Senior Housing and Gadsden got themselves into. They signed on the dotted line. They agreed to it. And whatever the legal language says they have to do, they have to do."
Jerry Dixon says we do business differently here. The city has yet another chance to show him otherwise.
Contact columnist Josh Brodesky at 573-4242 or jbrodesky@azstarnet.com
