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Published Friday, July 10, 2009 in Local

Stan Thomas faces multiple lawsuits

By Jeff Bishop

The Newnan Times-Herald

Contractors are lining up against local developer Stan Thomas and Thomas Enterprises on both the east and west coasts and even in New York, claiming that they're owed millions of dollars for work done on a number of projects, including the Ashley Park development in Newnan.

In response, Thomas says this is becoming a common story across America as credit markets freeze up, often while projects are in mid-stream.

"Every developer in America is fighting for his life," said Thomas Thursday afternoon.

"The large development with large loans, the banks are wanting them to repay," said Thomas. "And there's no place to renew, no place to get a new loan. That is the world we live in right now."

Site Technologies, Inc. filed suit in Coweta County Superior Court against Thomas Enterprises and received a judgment last month from Judge William Lee for $233,091 for work performed in 2007.

"Site Technologies has repeatedly sent e-mails and made telephone calls to Thomas Enterprises to request payment of the outstanding unpaid balance due to Site Technologies for its work on the Ashley Park project," Site Technologies alleged in its initial complaint.

"Despite Thomas Enterprises' assurances to Site Technologies that it would be paid the full amount owed, Thomas Enterprises has failed to pay Site Technologies the full amount," the company states in its complaint.

Thomas said that's because right now -- even though he believes it's only a temporary problem -- there's just no money to be had. Thomas said he's poured so much of his own personal funds into these projects that he's just about reached his limit. When the banks stop paying mid-project, it puts developers in a terrible bind, he said.

"Let me tell you, it's a bear," said Thomas. "It's all so volatile right now."

Site Technologies alleges that Thomas Enterprises "used ... borrowed amounts for other purposes ... instead of using its draws from its construction lender to pay Site Technologies the amounts due for its work on the Ashley Park project ..."

A legal fi. fa. has been issued against Thomas Enterprises for the amount due after Thomas Enterprises failed to live up to the terms of an April consent agreement. Site Technologies performed stone and concrete work and other construction work on Phase II of Ashley Park.

Thomas Enterprises has also been sued in Coweta Superior Court by Circle Supply of Atlanta for $505,585. The company claims it supplied materials for the Ashley Park project and hasn't been paid.

But the local lawsuits are a drop in the bucket compared to others coming from out of state. In California and New York, Thomas Enterprises is being sued by its former law firm and former consultants for millions of dollars of alleged debt, according to two reports printed this week in the Sacramento Bee newspaper.

The lawsuits stem from a proposed railway yard redevelopment project in Sacramento's downtown area.

In California, Thomas Enterprises Inc. and its Sacramento affiliate are being sued by its former law firm, the Oakland firm of Meyers Nave, and two consultants --Sacramento lobbyist KP Public Affairs and Berkeley environmental firm Design Community & Environment Inc.

KP and Design Community sued last week, according to the Bee newspaper. The suit by Meyers Nave was filed in January in Alameda County Superior Court and seeks $413,438.

In a lawsuit filed last month in New York, Thomas' former partners, led by renowned Southern California architect Jon Jerde, say the developer has obtained $185 million in loans but has made only a "minimal expenditure of funds" to move the project ahead, the Sacramento Bee reported. The Jerde group says Thomas has used money earmarked for the rail yard to "support his other projects around the country."

In an e-mail statement to the Bee, Thomas spokeswoman Leslie Valpey said of the lawsuits: "These are disputes that are being handled by our attorneys, which we expect will be resolved shortly."

Sacramento officials said Thomas Enterprises has been hamstrung by the state's fiscal crisis, which has delayed the flow of tens of millions of state dollars promised to the railway project. The first shot of state money, totaling $47 million, is about a year behind schedule but is expected to be delivered in a matter of days.

Thomas said Thursday that the state bond money is supposed to come "any day now," but that he now fears that it may be a casualty of the ongoing California fiscal crisis -- even though the bonds were earmarked for the rail yard project.

Thomas explained that developers can only fund expenses out of pocket for so long.

"We're in the middle of these projects, and there are no loans to be had," he said. "We were going wide open on these projects."

It seems that the culture right now encourages everyone to find some reason not to pay, or to delay, or to sue, he said. And the fact that banks are under intense pressure from regulators to write down the value of loans doesn't help matters either.

"People owe us money, too," he said. "And everyone is just trying to hold onto their money, hold onto what they have. But there's a trickle-down effect, when you do that."

Even with all the lawsuits -- which contain many allegations that just aren't true, or are sensationalized or out of context, Thomas said -- he doesn't regret any of the choices he's made.

"I love what I do," said Thomas. "And we will be all right again. Some days all of this will wear on you, that's for sure. It will keep you up nights. But things will get better. I believe that."