Bringin’ Home the Bacon

texas-kay-granger.si
by P.A. Humphrey

(Published in the Texas Observer on: April 20, 2000)

When Fort Worth Congresswoman Kay Granger announced in 1998 that she’d helped land millions in federal funds to complete a commuter rail line linking Fort Worth and Dallas and build a multi-user transportation hub in downtown Fort Worth, the local press greeted her with the fanfare traditionally reserved for members of Congress who bring home the bacon.

Granger, a Republican member of the House Transportation Committee – the committee that awards federal funding for transportation projects – hasn’t been shy about parlaying her clout in Washington into pork for her hometown.

She’s been a little less forthcoming, however, about her ownership of a 7,677 square-foot building – purchased by Granger in March of 1998 – that sits in a prime spot just across the street from the site of the nearly completed Intermodal Transportation Center. Purchased at a fire-sale price of just over $100,000, the once-dilapidated property, after renovations, is now valued on the tax rolls at $534,000. Sitting, as it does, in the middle of an area of massive revitalization, the value can only continue to grow.

In the wake of the deal, few are likely to question Granger’s business acumen. Her ethics may be another story.

The new center will host the commuter rail line, as well as Amtrak, Greyhound, city buses and possibly a “trolley” that makes the rounds of the city’s tourist spots. Trains between downtown and Dallas are scheduled to start running in October, 2001.

Granger (herself a former mayor of Fort Worth) served as a member of the mayor’s subcommittee on the transportation center and was a leader in the debate over where to build it. She supported the Fort Worth Transportation Authority’s decision, made with the advice of the subcommittee, to build the hub at Ninth and Jones Streets, in what was then a dilapidated industrial area on the east side of downtown.

As property values in the neighborhood began surging, Granger’s timely purchase made her first in line for the big payoff – assuming the federal money for the project kept flowing – and the city didn’t change its plans.

Granger’s investment seemed in doubt as recently as April of 1999, however, when a group of urban planners recommended a change of course: placing the center near the old Texas and Pacific Railroad terminal, an historic train depot located at Throckmorton Street and Lancaster Avenue on the south end of downtown – too far from Ninth and Jones to do Granger any good. Put on the spot – she had yet to publicly reveal her investment, or even report it on her federal financial disclosure form – Granger publicly supported taking another look at the plans.

She may not have been too worried. With the design on the Jones Street site 70 percent complete, construction already underway, and funding for another design for another site in doubt, it was highly unlikely that the Jones Street site, which had already been approved by the city council, would be changed. It wasn’t.

Intermodal Transportation Center

Fort Worth’s Intermodal Transportation Center

“Granger’s people leaked it as a pre-emptive strike,” rather than allow an opponent to break the story, one Fort Worth politico said.

Granger, the darling of Fort Worth’s downtown business establishment, never denied her motive for buying up the shabby old building. “I bought the property knowing that the trains are going to be there, and the bus transfer center,” she told the Fort Worth Star-Telegram. “It was a great location.”

The admission raised nary an eyebrow in Fort Worth, where the you-scratch-my-back-I’ll-scratch-yours system is alive and well. Officials of the transportation authority and Kenneth Barr, Granger’s successor as mayor, declared themselves ignorant but unconcerned and expressed the belief that the Congresswoman would never do anything but “what’s best for Fort Worth.”

Democrat Mark Greene, Granger’s opponent in the upcoming November election, says he doesn’t know the details of when and where things happened but is dismayed by the city’s look-the-other-way attitude. “Congresswoman Granger’s involvement in the site-location process and the fund-allocation process have at least the appearance of potential impropriety,” he said.

“Elected officials should do everything in their power to avoid even the appearance of anything that would betray the public’s trust. Without having all the facts, I’ve always been a little troubled about this deal.”

Granger did not respond to several requests for an interview for this story.

One thing is certain: With her prime spot on both the Transportation Committee in Washington and the site selection committee in Fort Worth, Granger was expertly positioned to shepherd the deal from cradle to grave.

Such “vertically integrated” nest-lining is a sign of the times: Congress’ increasing preference for block grants means more and more specific funding decisions are made at the local level.

In landmark legislation in 1991, Congress turned over most of the control of funds for transportation projects to state and local governments, while providing incentives – like funding multi-use transportation hubs – to encourage alternative methods of moving people from one place to another.

In 1997, the board of the Fort Worth Transportation Authority (otherwise known as the T) and the City Council approved plans for building the Fort Worth Intermodal Transportation Center at Jones Street.

Granger, under the name Jones Street Investments, Inc., purchased the building at 715 Jones Street in March of 1998. (Strangely, the property was not listed as an asset on Granger’s federal financial disclosure statements until June 1999, and then only at a value of between $101,000 and $250,000 – nowhere near its current value. The value was not increased on her June 2000 statement.) The following September, it was announced that the T had received $22.2 million in federal funds to complete the rail line and build the transportation center – a windfall not only for Fort Worth (for which Granger happily took credit) but also for the small club of Jones Street property owners, of which Granger was the newest member. Federal money has been trickling in ever since.

Granger’s City Hall connections have apparently proven valuable. When she bought the Jones Street property, it was zoned light industrial. City Hall sources say the former mayor pushed through a zoning change to retail/commercial, and then, after the shell of the building was rebuilt, got a variance to put apartments on the second floor. “It was all kind of hush-hush,” one city employee said. “It was done quietly. She wanted it done that way. If it’s zoned commercial, you don’t have to pay sales taxes on the renovations.”

Granger, who still lists her address on campaign forms as Sundance Lofts (a trendy downtown development), reportedly occupies one of the two apartments on the second floor and her son lives in the other. The third floor is a roof terrace where Downtown Fort Worth Inc. held a fundraiser last October, although Granger had assured city officials in writing that it was to be for her private use only. The bottom floor is still listed as retail/commercial.

“The intention was, and still is, to set up for some kind of retail establishment or some kind of office space,” said Fort Worth Senior Community Planning Examiner Ben Jessamine. The space is for lease, he said.

A dispute with a contractor over work done on the building revealed some other interesting information about the deal, and about Granger. General contractor Steve Chojnowski did much of the renovation work until he had a disagreement with Granger about whether or not she had told him to use a brick exterior instead of plaster. She refused to pay him and he filed a lien against the property. “She basically said she didn’t have the authority to make that kind of change, and I said that she did make it,” Chojnowski said.

Granger is listed in Secretary of State’s records as vice president of Jones Street Investments, Inc. the legal owner of the building. No other officers are named. Real estate developer Steve Flory is listed as the company’s registered agent. But in sworn depositions presented at the hearing concerning Chojnowski’s dispute with Granger, Flory swore that he was the only officer of Jones Street Investments, Inc. Granger signed an affidavit stating that she was not authorized to make any changes to the contracts.

“Their position at the trial was that she wasn’t an officer,” said David Broyles, Chojnowski’s attorney. “She didn’t testify. They were saying the only person who had permission to act was Steve Flory. He was president and sole officer. He testified he received no compensation for this, he was just doing it as a favor.”

A mediator eventually ruled in Chojnowski’s favor and ordered Jones Street Investments, Inc. to pay him.

“Yes, we got our money,” Chojnowski said. “This damned thing almost put us under, though. …I made her mad,” he said, of the Congresswoman. “She’s used to getting stuff done for nothing: ‘I’m Kay Granger, don’t send me a bill.’ It makes you wonder how somebody could be elected to Congress when in her personal life she’s as bone-headed as this.”

After suing Chojnowski, paying for the arbitrator and paying another contractor to finish the job, the renovation of 715 Jones Street was getting to be a pretty expensive project for Granger. She apparently went looking for some financial aid, Broyles said. “We were under the impression, when we went into this thing, that Ms. Granger owned 100 percent of the shares,” he said. “In cross-examination, we discovered that Mr. Raymond Thomason put in $250,000 after the deal got into trouble and became a shareholder. He had two-thirds of the shares.”

Thomason, a real estate developer from Abilene, is a long-time Granger friend and has been her frequent escort at social events. The pair met when Granger was a member of the Fort Worth zoning commission and Thomason was in the process of developing a shopping center in east Fort Worth.

Granger has not reported the sale of two-thirds of the shares in Jones Street Investments on her federal financial disclosure statements.

Uniform Commercial Code documents show that Jones Street Investments has two mortgages on the property. The first, for $100,000 with Bank One, is dated May 19, 1998 and the second, for $820,000 with Bank One, is dated June 17, 1999.

How Granger or Jones Street Investments managed to convince Bank One to lend more than $900,000 on a building that is valued at roughly half that is not explained. On May 11, Granger announced that she had secured another $5 million appropriation for the Intermodal Transportation Center in the house transportation bill. The plans now include an outdoor farmers market, a clock tower, and improvements to adjacent property.

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