UPDATE: Joplin Looks to Future After Master Developer Leaves

Mar 26, 2015

New Tire Shop Going up in Joplin
Credit Michele Skalicky / KSMU

UPDATE:  The city of Joplin has filed suit against Wallace Bajjali and the two men who ran the Texas-based company.  The lawsuit, filed Wednesday, seeks $1.5 million and accuses Wallace Bajjali of fraud, according to the Joplin Globe.  One of the company's former partners, David Wallace, filed for bankruptcy Tuesday in federal court in Houston.  The paper reports Wallace was not available for comment Wednesday.

ORIGINAL STORY BELOW:

Joplin, Missouri recently lost the master developer it had hired to help the city recover from the 2011 tornado when the firm suddenly left town.  But, despite that, the city is optimistic about its future.  KSMU's Michele Skalicky talks with Joplin's city manager and with local developers to learn more.

May 22, 2011 is a day people in Joplin won’t forget.  That’s the day an EF-5 tornado tore through town in the early evening hours, leaving 161 people dead and many injured.  Thousands of buildings, including homes, businesses, churches and a hospital, were destroyed.

Today, progress is being made—many homes and businesses have been rebuilt, in many cases better than before.  A major manufacturing company in Joplin, Eagle-Picher, just broke ground for a 100,000 square foot expansion that’s expected to create 171 new jobs.

But a master developer, hired to lead the city’s redevelopment, recently left town and its co-founders resigned before ever breaking ground on a single project.

On February 4th, Joplin city officials cited “gross negligence, fraud, and willful misconduct” in terminating both the Master Predevelopment Agreement and the Land Assemblage, Disposition and Management Services Agreement with Wallace Bajjali Development Partners.

Joplin’s city manager, Sam Anselm, said, since entering into a contract with Wallace Bajjali in July, 2012, the city had paid approximately $1.68 million for the firm’s work in the community.

"We verified that information with them with receipts and invoices and things, and we paid them the $1 million for that.  There was about $4 million for land assemblage fees and then another $200,000 or so for just administrative to have the contractor bring some new funding sources to us for the recovery," he said.

So, where does Joplin go from here?

Forward, according to Anselm.

"At the end of the day we've got land that we can move forward with and work with developers on.  You know, we've also got some exciting quality of life things coming up, too, and we're in the process right now of renovating our historic baseball stadium, so a new minor league team will be, you know, starting to play here this May, so that's brought some excitement here to residents," he said.

He said they’re weighing some legal options now over the breach of contract by Wallace Bajjali, but it’s too soon to tell how that process will play out.  He said he doesn’t think there were too many tears shed over the firm leaving town.

Before Wallace Bajjali left, the firm had secured about 20 acres of land for the city.  Anselm said they plan to use that land for a new library and an assisted living/memory care facility.

"We feel like we're in pretty good shape with those projects.  The seniors project--we'll be putting that out for bid probably in the next few weeks, and we've had a lot of developers  who have expressed an interest in bidding on that project," he said.

Planning and design work continues for the new library, according to Anselm, and they hope to break ground in late summer or early fall.  He said the city received a $25 million grant from the Economic Development Administration for the library project.

And he said they’ve received approximately $158 million in Community Development Block Grant funds through the U.S. Department of Housing and Urban Development.  Consultants have been hired to distribute those funds, according to Anselm.  He hopes project proposals will be presented to Joplin City Council in the next few weeks.

Joplin developers, Cory Ferrell, with Ferrell Construction, and Matt Harris, with True Style Homes, weren’t sad to see Wallace Bajjali leave.  Ferrell said he saw their exit from the city coming from the very beginning.

Harris said Joplin is coming back slowly, but economic growth is going to come from small business owners.

"We pretty much knew that that's what it was going to take.  We can tell you that we've seen a lot of growth, especially in the downtown area," he said.

The Pizza Palace in downtown Joplin where we met was revamped and under new ownership, and Harris said other businesses are opening up.  Ferrell agreed that it will be up to local businesses and developers to come up with their own plan for how Joplin should grow—not someone who comes in from the outside.  He was relieved to see Wallace Bajjali leave.  So was Harris.

"I think that, you know, outside sources--and it is my opinion--they don't have the intent of what we have to make Joplin into what we want it to be," he said.

Ferrell is excited about the potential he sees for Joplin, especially in the downtown area, but also for the city as a whole.

"There's a lot of economic opportunity there because we do have the lowest cost in any city for a lot of industry to move in here," he said.

Anselm said, nearly four years after the tornado, Joplin’s population is down only about 1.5 percent.  He sees that as a very good sign for the health of the community.

"We felt it was important from day one to put the message out to our residents that, 'we don't want you to leave.  We want you to stay in Joplin, and, you know, work with us as we continue to rebuild,'" he said.

He said there are more businesses in Joplin now than there were before the storm.  And the new Mercy Hospital in Joplin, that replaces the one destroyed in the tornado, just opened for patient care last Sunday.  He said Joplin’s economic health is good.

"Our sales taxes are, you know, above projections in terms of what we considered in our budget for this year, and we have a lot of new jobs coming this fall," he said.

Sales tax totals for the years since the tornado have been steadily increasing. 

Missouri State University economics professor, Dr. David Mitchell, said there are things cities that are recovering from a disaster should focus on before anything else.

"The last thing you want to do is come in and build a new shopping center that the town's not going to be able to support, so you want to make sure that, you know, your schools are in good condition, you have great healthcare facilities, you have basic infrastructure in place," he said.

He said Joplin's done a pretty good job so far--he pointed to the new hospital that just opened .

Anselm said they likely won’t hire another master developer to help Joplin move forward.  He said they have a great staff at the city who will take it from here.

City of Joplin Tax Receipt Year-to-Date Totals:

FY 2009:  $11,738,774.73

FY 2010:  $11,505,344.82

FY 2011:  $12, 297, 227.55

FY 2012:  $12,875,335.00

FY 2013:  $12,487,867.36

FY 2014:  $13,124,775.50