Title: How the Pratt/Archer Family Lost Markham Hill to a Developer - Part 3
Part 3: Seth Mim’s Promises in Federal Court
From Sean Shoemaker’s interview with Julian Archer in Part 2 of this series, four things contributed to the Pratt/Archer family losing their historic land on Markham Hill to a developer: (1) the Archers were late on a payment to Simmons First National Bank, (2) Simmons First National Bank refused to accept the Archer’s late payment as promised, (3) developer Seth Mims (Partner and President of Specialized Real Estate Group) did not follow through on his promises made under oath in federal court during the bankruptcy trial, and (4) allegedly, the Archer's lawyer Stanley Bond repeatedly failed to act in their best interest. After the bankruptcy trial, the Archers filed a malpractice lawsuit against Stanley Bond. The next two Weeklies will summarize the Markham Hill bankruptcy, list the complaints against Stanley Bond, and give the judge's decisions, only quoting from legal documents I found online.
Part 3 of this series focuses on Seth Mims’ testimony in federal court about the Markham Hill property.
Seth Mims was Specialized Real Estate Group’s (SREG) representative for the out-of-state money (RMD Properties/Robert M Dant) used to purchase in cash the Markham Hill property, not at the appraised value but at the amount owed to Simmons First National Bank to resolve the bankruptcy trial. Seth Mim’s promises were made on the stand under oath on February 4, 2016 before the Honorable Richard D. Taylor in the United States Bankruptcy Court, Western District of Arkansas, Fayetteville Division. I have the entire transcript of Mr. Mims’ testimony for anyone who wants it. Excerpts follow:
"The Court: Ms. Rucker?
Ms. Rucker: Yes, Your Honor. I’d like to call Seth Mims.
The Court: All right. Sir, if you’ll stop in front of the witness box, raise your right hand. Do you swear or affirm the testimony you’re about to give will be the truth?
Mr. Mims: I do."
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"By Ms. Rucker [for the Trustee]:
Q - Okay. And you want to buy the property that’s proposed to be sold in the Trustee’s sale, correct?
A - That is correct."
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"A - Well, I wouldn’t be here wasting everybody’s time if we had not already secured multiple partnership options. Like any developer, each project, we go out and shop for debt and equity. And in this case, I have been successful. In fact, I am just trying to choose which one best suits our development plan for this particular property. But we are ready to close.
Q - Okay. And what factors are you taking into consideration in choosing?
A - Well, to be honest with you, I’m trying to find an equity partner for this deal that will help me find a way to try and help Mr. Archer regain the inn or operate it for a time until he can get the funds to buy it back. That – that is the only reason I haven’t made a selection on exactly which equity partner yet, because I’m trying to find one that will have sympathy, the way I do, about Mr. Archer in this case.
Q - Are you – the west 72 [acres], the property that’s the subject of the individual Archer estate, what are your plans with that property?
A - I plan to – we plan to develop a single-family neighborhood, a series of clustered single-family homes, little pocket neighborhoods, if you will, intertwined by walking trails and green spaces.
Q – Okay. And the property that’s the subject of the Archer, LLC estate [east 72 acres], that you have offered to pay two million dollars for, that is the property that you were talking about trying to choose the correct investor?
A – Yes. That is correct. It would also be my preference that the same investor be involved in both perhaps."
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"By Mr. Conner [for SREG]:
Q – Mr. Mims, you understand that the less and except clause in the order that we’re asking the Court to sign leaves Mr. Archer and his wife with roughly four acres of property and their familial home in Fayetteville?
A – 4.1 acres and their home.
Q – Okay. And you are okay with that?
A – Yes, sir.
Q – You – in fact, it is your hope, and the reason you’re shopping is that you – you would like to have Mr. Archer continue, if possible financially, to operate the inn, that that might actually benefit the development that you are planning on the property?
A – Yes, that could be a benefit."
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"By Mr. Story [for the Nutters, the Abrahams, and Baumann & Crosno, LLC]:
Q – Mr. Mims, I represent the buyers for the four Halsell lots [at end of Halsell Rd before it turns into Sang Ave, two acres of the Archer’s Markham Hill property].
A – Yes, sir.
Q – And we’ve previously discussed that if you were to purchase those, you would either potentially honor the contracts as they were, if that isn’t needed for the development --
A – Uh-huh.
Q - -- and if it was, you would agree to substitute properties with those buyers?
A - Yes. We worked out an arrangement that if the decision is made to sell those four lots in question, that they will be sold to those buyers for the prices that they had anticipated. If there is a decision to not sell those lots, then we will help them find some other ones nearby."
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Seth Mims/SREG/RMD Properties' broken promises:
(1) Promise: 72 acres on the west half of the Markham Hill property will be single-family homes in clusters separated by walking trails and green space.
What SREG actually did: Rezoned this acreage from RSF-4 (at most four single-family homes per acre with required minimum of 30% hillside/hilltop preserved tree cover) to RIU (unlimited living units per acre; maximum of 480 living units; single-family, duplex, triplex, quadraplex) and RA (consisting of required minimum of 30% hillside/hilltop preserved tree cover).
(2) Promise: Help Archers get a loan (from RMD Properties) to buy back the 72 acres (Pratt Place PZD) on the east half of the Markham Hill property.
What SREG actually did: Stopped all communication with the Archers.
(3) Promise: The Archers could keep their 4-acre log house property.
What SREG actually did: Maneuvered the Archers off the last bit of their land.
(4) Promise: Work it out to let the Archers run the Pratt Inn & Event Barn business.
What SREG actually did: Stopped all communication with the Archers.
(5) Promise: Let the Nutters, Abrahams, and Baumann & Crosno buy the Halsell Rd lots that were under contract or help them find equivalent properties nearby.
What SREG actually did: Neither.
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