Dallas developer Tim Barton indicted, loses Turtle Creek site

DALLAS — An actual property developer indicted final week on felony fraud costs has misplaced management of a high-profile site he as soon as deliberate to show right into a high-rise luxurious rental tower and Mandarin Oriental resort within the unique Turtle Creek neighborhood in Dallas.

Tim Barton, proprietor and president of Dallas-based JMJ Development, misplaced a battle Wednesday in chapter courtroom, the place he sought repeatedly to hold on to a 2-acre site at 2999 Turtle Creek Boulevard.

U.S. Bankruptcy Judge Scott Everett granted the center of a movement by the secured lender, HNGH Turtle Creek LLC, giving HNGH possession of the property within the prestigious neighborhood north of Uptown and south of Highland Park.

Barton has already filed a discover of enchantment to the courtroom’s ultimate order.

Barton, who can also be CEO of Dallas-based funding agency Carnegie Development, is at present dealing with costs associated to the alleged bilking of Chinese investors out of $26 million involving land websites for housing communities in North Texas. It doesn’t seem that the Turtle Creek property is in any respect concerned within the proceedings with both the U.S. Securities and Exchange Commission or the U.S. Attorney for the Northern District of Texas.

Barton, by means of his growth corporations, not directly owns and develops actual property initiatives by means of single-purpose entities. One of these entities, 2999TC Acquisitions LLC, deliberate to raze an upscale workplace constructing on the Turtle Creek handle in Dallas and construct a luxurious resort and residential condominiums at a price of roughly $395 million.

In 2020, nevertheless, 2999TC Acquisitions defaulted eight instances beneath its $32.5 million mortgage with its unique secured lender, Everett wrote in an order he signed Wednesday in U.S. Bankruptcy Court for the Northern District of Texas in Dallas.

Despite the collection of defaults, HNGH agreed to offer Barton’s 2999TC Acquisitions entity a “final chance,” Everett wrote in his order. If the debtor entity paid HNGH in full by Oct. 29, 2021, 2999TC would retain the property securing the mortgage. If 2999TC did not pay in full by that date, HNGH would document a monetary instrument known as a “deed in lieu of foreclosure,” turning into the property proprietor, in line with a recap of the case’s historical past in Everett’s order. 

HNGH was initially a unit of HN Green Hollow Capital Partners, a three way partnership between former Five Mile Capital veteran James Glasgow and HN Capital, which is sponsored by Hunt Investment Group, an affiliate of Hunt Consolidated, in line with a 2019 news launch on the JV.

Given 2999TC’s historical past of defaults, HNGH had negotiated the “deed in lieu” — secured by the property — beneath a forbearance settlement through which HNGH took over the mortgage in early 2021 from the unique lender on the undertaking, Happy State Bank. The financial institution had held the unique notice on the property as collateral.

2999TC Acquisitions did not pay by the October 2021 deadline, however filed Chapter 11 chapter shortly earlier than the deed in lieu was recorded, triggering litigation through which HNGH asserted its rights to the property.

The events resolved the litigation by means of a mutually agreed upon courtroom order that gave 2999TC a brand new deadline of March 15, 2022, to pay in full and retain the property. The Barton entity missed that deadline, too, however requested and obtained one more agreed courtroom order extending the deadline, this time to May 31 of this yr, which 2999TC handed once more, Everett’s 49-page order states.

“And here we are once more,” Everett’s order says. “The Debtor — blaming HNGH — missed the May 31 deadline and seeks yet another extension.”

Upset on the delays, HNGH filed a movement to implement its possession rights beneath the agreed courtroom orders, solely to have 2999TC Acquisitions contest the movement in a listening to that lasted greater than 50 hours and took 15 nonconsecutive days stretched over two months, Everett’s order says.

In its newest request for an extension, Barton and 2999TC alleged that HNGH was a “predatory” lender.

Everett rejected that argument, saying trial testimony and proof offered within the prolonged listening to confirmed HNGH’s prolonged forbearance previous to 2999TC’s chapter submitting and HNGH’s settlement to repeated fee extensions after the chapter undercut Barton and 2999TC’s rivalry that the lender was predatory.

In late 2019, JMJ Development revealed plans to open the Mandarin Oriental as a part of a 25-floor mixed-used growth with 176 visitor rooms and suites in addition to 100 luxurious Mandarin Oriental-branded residences.  

The resort was to function 4 eating places and bars, assembly and occasion amenities, a spa, a health middle and an out of doors pool. 

JMJ was alleged to personal the resort and Mandarin Oriental Hotel Group was lined as much as function it.

“JMJ is excited to finally have the best of the best site in Texas,” Barton mentioned in a news launch issued on the time. “We’ve been working the district since 2007 and endurance has paid off.”

The undertaking was initially set to open in 2022.

Barton faces different authorized challenges associated to properties he controls by means of his firm and different entities as properly.

The U.S. Securities Exchange Commission has requested a federal choose to position tons of of acres claimed by his entities all through North Texas into receivership pending the unraveling of courtroom proceedings involving land offers that authorities prosecutors declare are fraudulent. 

Barton faces federal costs for allegedly taking greater than $26 million, by means of entities he managed, from Chinese nationals who had been instructed they had been investing in suburban land growth offers for housing communities to supposedly be inbuilt Parker, Kaufman, Tarrant and Johnson counties. He was indicted final week on 9 felony counts together with securities fraud, wire fraud and conspiracy to commit wire fraud.

In a separate, noncriminal authorized motion, the SEC accused Barton, veteran Texas homebuilder Stephen Wall and Chinese businessman Haoquiang Fu, often known as Michael Fu, of operating fraudulent real estate investment offerings. The three labored collectively to steer buyers to purchase securities issued by corporations the three managed then allegedly “misappropriated nearly all investor funds,” in line with an SEC lawsuit filed Friday within the Northern District.