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Goliad's mess: Which businesses were involved?

By chirst
Sept. 7, 2013 at 4:07 a.m.
Updated Sept. 8, 2013 at 4:08 a.m.

The Hanging Tree Restaurant in Goliad.

Since 2008, the city of Goliad has issued about $550,000 in loans or grants to promote economic development.

Of the 13 loans and grants, six went into default, with two of the businesses closing. Multiple loan contracts could be up for legal dispute because of unclear contract terms or unsigned contracts.

The city also has lost contracts and has not kept up-to-date records of payment schedules.

Here are the details of each loan or grant:

HANGING TREE RESTAURANT

Hanging Tree restaurant owner Allen Najvar received a loan for $12,000 and a grant for $12,000 in 2006 under a previous economic development corporation in Goliad. The purpose of the loan is not listed in the contract.

Najvar defaulted at an unknown time, however. The timing is unknown because his payment records from 2006 through May 2011 are missing from the city's files.

His loan payments were lowered from $1,050 to $200 a month sometime in 2011. Missed payments were not reported to a credit agency.

He owes between $1,612 and $4,800, according to conflicting payment records from the city.

LONE STAR VIDEO

Lone Star Video owner Vicki Rubio was granted two interest-free loans, one in December 2008 and one in July 2009, to open a family video rental store in Goliad. The loans were signed the same months they were approved.

At the same time, Blockbuster, the largest video rental in the world, was closing stores across the country and contemplating bankruptcy because of competition with Netflix and Redbox.

Lone Star Video closed in 2011, shortly after a Redbox came to Goliad.

Rubio used the city's $25,600 to "repair and renovate" a building at 649 W. Pearl St. She did not add plumbing to the building until after the video store closed. The building is now worth $24,900, according to the Goliad County Appraisal District.

Rubio defaulted on her loans a couple months before running for City Council.

Rubio won a seat on the City Council in 2011 and started voting on municipal development board directors. She continued missing payments, failing to make 33 payments on the two separate loans through August 2013.

Rubio lost the City Council re-election in 2013 and came to the development board to renegotiate the loan. The board lowered her monthly payments from $461.11 to $400 in July.

City Council changed the payments to $350 each month later in July.

Rubio owes $12,337 on the two loans.

TEXONIAN DEVELOPMENT

The city opted to grant $122,750 to Texonian Development in 2012 to help develop 51 acres.

No one from City Council or the development board knows what will be constructed, however. In the contract, the developers, Hunter Stewart and Benton Carter, must build "residential, commercial and/or retail tracts."

A specific plan for development was not approved.

Sereniah Breland, former city administrator, left her position partially over the Texonian contract. She said it did not meet regulations agreed on by the city.

City Council members, including Mayor Jay Harvey, came to meetings to speak in favor of the contract.

The agreement gave the company two years to begin construction on the project, but development board members said that was not in the original contract and they would not have approved that length of time, according to meeting minutes.

The land has not been developed, but the developers said they hope to break ground in the next three months. The money has not been given to the company but is a committed fund for the next two years.

ANGELS RV PARK

The district granted a partially forgivable loan to Joe and Donna Kehoe to build an RV park in Goliad in 2009. A second loan was given in 2011 for a combined total of $66,320. Of that, $20,660 was forgiven without repayment.

The city was missing the performance agreement for the first loan, even though the first loan had the forgivable portion if the owners met all requirements in the performance agreement.

The city has no record of checking the employment status of employees.

The loan note and performance agreements are unsigned by one or both parties on various documents.

PANACHE ON THE SQUARE

Richard Tinney, Panache on the Square restaurant owner, started the application for a loan from the Goliad Municipal Development District for $19,588 in at least March 2009, while he was still a Goliad city councilman.

His loan was approved in April, while Tinney was still on council, according to meeting minutes. Tinney abstained from voting on the contract.

Roney Powell, who was a council member, voted against the loan.

Tinney was not re-elected to council in May 2009. The loan agreement was brought back before council in June to amend the terms of the loan.



The loan document with the city was signed in July 2009.

Tinney defaulted on his loan in 2010, missing almost a year of payments after his business closed. He was not on the City Council when he defaulted. His loan note was unsigned by city staff.

Sereniah Breland, former city administrator, renegotiated his payments in 2011, lowering them from $416.67 to $350. Tinney has made all of the payments since.

The collateral listed in the loan agreement is kitchen equipment, furniture and a 1999 Chevrolet Tahoe.

Tinney owes between $5,384 and $6,897 on his loan, according to conflicting payment schedules provided by Goliad.

WL LAUNDRY

Lionel Garcia, of Goliad, took out a $31,128 low-interest loan to open a laundromat in Goliad in October 2009.

He was given the loan despite having a lower-than-required credit score and little collateral, according to meeting minutes.

He stopped making payments on the loan the month after winning a seat on the City Council in May 2011.

Garcia was in default on his loan for more than two years. His loan was not called into collection, however, until June 2013, after the Advocate began its investigation into the development district.

Garcia has not come to the development board meetings to negotiate payments and has refused to give an accounting of his finances to the city, which he is required to do under his performance contract.

The only collateral for his loan is the washers and dryers he was supposed to purchase with the money. However, the city does not have serial numbers for any washers or dryers, and a bank also has a right to the washers and dryers if collateral is called in.

Garcia has claimed in development board meetings that he is paying his father's medical bills, which is why he cannot make the payments. However, municipal development board directors have claimed his father's medical bills are covered by Veterans Affairs.

Garcia refused to comment for the story.

He owes between $19,529 and $26,753, according to conflicting loan payment schedules provided by the city.

GOLIAD FUNERAL HOME

Adrian Fulton, of Victoria, received a low-interest loan for $58,095 and a $7,750 grant for the creation of new jobs and sales tax in July 2010.

Buddy Zavesky, a council member at the time the loan was granted, planned to work at the Goliad Funeral Home.

Fulton paid off the low-interest loan within months.

ANTLERS INN

A group of individuals - Rajesh Bhakta, Rangit Bhakta, Aran Bhakta and Kamlesh Bhikha - were loaned $50,000 in 2011 to open an inn.

The promissory note is unsigned by both parties.

Despite numerous open records requests by the Advocate for all loan documents created by the city, the Advocate did not learn about this loan contract until reviewing meeting minutes.

The city did not have a loan payment schedule prepared for the loan until June 2013.

The city produced an unsigned contract more than two months after the original request.

The city then presented a copy of promissory note on Sept. 4 that was signed by all parties.

The individuals owe between $26,476 and $29,251, according to conflicting payment schedules.

BEST WESTERN

The Best Western was approved for a municipal development loan of $250,000 in addition to a $60,000 grant but refused the loan.

The grant money was issued to the company after it built a sewer lift station in July 2012, said Yatin Bhakta, part owner of the hotel.

After one year of ownership, the hotel is to transfer ownership of the lift station to the city.

TEXAS STAR INVESTMENTS

Texas Star Investments was granted $51,120 to move the sewer line to build a new store at its current location in October 2012.

Construction on the expansion has not yet started, but the company has moved the sewer line, said Joe Holt, business manager for Texas Star, which was the first step of the process.

Holt said the grant will be a "no-lose" situation for Goliad because the new store will bring in additional tax revenue for the city.

The contract does not have a time limit for construction.

Texas Star Investments is a corporate company based out of Corpus Christi.

The contract is not signed by the company.

ANS WELDING

Alvin and Stephanie Welch were given a $32,000 low-interest and partially forgivable loan in March.

Since receiving the money, the Welches have yet to build a business. Larry Zermeno, city administrator, called them and asked for the money back. They declined.

The city has not created a payment schedule for the loan.

The city has not called the loan into default, and there is no time limit in the loan contract for the Welches to open their business.

Stephanie Welch declined to comment for the story, saying she has retained a lawyer for potential disputes with the city.

They owe $31,300.

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