Developer vows to move forward on Pflugerville mega-project; lawsuit pending

Renderings of Pflugerville Crossing

From the Austin Business Journal:

Scott Mann, the Houston developer behind the proposed $800 million Pflugerville Crossing LP mixed-use project north of Austin, said he has no idea why Pflugerville has backed out on an incentive agreement that was inked in January 2015.

“I don’t really know why (they) would terminate you with no discussion,” Mann said. “It bears investigating.”

The 119-acre project has two main elements: Sunshine Village Town Center and SunTech Office Park, which was previously profiled by ABJ.

Terri Toledo, a spokeswoman for the city of Pflugerville, said there’s nothing mysterious about the March 22 decision by City Council to void the agreement.

“The agreement was ended because the terms of the agreement weren’t met,” Toledo said. “The developer didn’t secure purchase of the land. The city didn’t receive completed development plans. It wasn’t progressing and letters were sent notifying Scott of the status of the project and the cancellation.”

Despite the cancellation of the deal, Mann said he is prepared to go forward.

“I feel (we’ve) done everything in good faith,” Mann said. “(The city) wanted to see this land developed a certain way and we did just that. We were ready to submit for permits.”

“The circumstances in those cases are on record. It was common knowledge,” Mann said.

Toledo said she could “confirm that the city was aware [of his criminal record].”

An attorney for landowner Kenneth Bohls Cousins Trust would not comment.

Major investment

Mann said his company, 88 North LLC, has invested as much as $1 million in planning and engineering fees. Mann, who is also a principal of Star Stream Capital, forged the agreement with the city, which included up to $303 million in property and sales tax rebates over 30 years, in exchange for creating the development and investing about $85 million in infrastructure.

Though he faults the city for unjustly yanking the project from his company, Mann directed his legal team to file suit earlier this month against the owner of the property. His company had not finalized the purchase from the Kenneth Bohls Cousins Trust.

In a complaint filed March 3 in Travis County District Court, Mann’s attorneys — Gray Reed & McGraw PC — allege that Phyllis Pastre as the trustee for the trust and another company, Green Island Investments LLC of Hackensack, New Jersey, committed fraud, negligent misrepresentation, tortious interference, conspiracy and other charges. 88 North LLC is seeking exemplary and punitive damages.

J. Scott Jackson of Fishman/Jackson, the defendants’ attorney, said “the trust will answer the lawsuit in due course and expects that the lawsuit will be resolved in its favor quickly.”

Here’s what Mann’s attorney claims is the essence of the complaint: 88 North LLC hired Sikich LLP, a professional service firm, to identify potential investors and during that process introduced the development company to Green Island Investments. Proprietary information was supplied to the potential investor with an understanding of confidentiality, the lawsuit states.

“It now appears Green Island is trying to cut plaintiff out of the deal and execute its own deal with the trust and the city,” the lawsuit states.

It goes on to say that 88 North LLC submitted a sales contract and a $100,000 escrow payment to the trust before learning that the trust and Green Island “entered their own deal cutting out the plaintiff.”

Criminal past

During an interview Monday, Mann confirmed that he spent time in prison in the early 2000s in connection with a savings and loan fraud case that dates back to 1996 when he was an executive with Jefferson Savings and Loan Association in McAllen, Texas.

Mann said that the 1996 criminal case was intertwined with the federal government’s takeover and management of the savings and loan crisis in the late 1980s and early 1990s and that many of the charges eventually were dropped.

He spent more than three years in prison. Court records show he was ordered to pay $460,000 in restitution to the Internal Revenue Service and $11,587,000 in restitution to other parties.

Mann said a settlement was reached with the IRS in 2001, but the other restitution is still pending in the courts — almost 20 years later.

“The restitution settlement is awaiting court approval,” Mann said. “Contractual and other obligations prevent me from providing the information you have requested.” Additional information>>>