Archive for Wednesday, November 24, 2010

Lawrence City Commissioner Lance Johnson being sued over $1.95M bank loan

November 24, 2010

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Lawrence City Commissioner Lance Johnson is being sued over a $1.95 million loan that has gone bad and whether a bank should be allowed to seize some of Johnson’s assets.

Emprise Bank has filed a lawsuit in Douglas County District Court alleging that Johnson improperly transferred ownership of eight pieces of Lawrence property into a trust controlled by his wife in order to “hinder, delay or defraud” the bank in its efforts to collect on the loan.

“The lawsuit alleges that some of the personal assets were transferred to others in such a manner as to try to keep them from being available,” said Robert Coykendall, an attorney representing Emprise.

Both Johnson and his attorney, Chris Sook of the Sloan Law Firm, declined to comment on the matter.

The lawsuit alleges that in February 2008 one of Johnson’s companies, RKJ Properties, received a $1.95 million loan from Lawrence-based The University National Bank. The loan later was transferred to Emprise Bank.

Emprise alleges that as part of the loan Johnson signed an “unlimited personal guaranty” that pledged many of Johnson’s personal assets as collateral for at least a portion of the loan.

The lawsuit states that RKJ Properties has defaulted on the $1.95 million loan. But when Emprise sought to collect on Johnson’s personal guaranty, it learned that he had transferred multiple pieces of property into a trust controlled by his wife, Jennifer Johnson, who also is named in the lawsuit.

Emprise is seeking to have that transfer ruled null and void. It also alleges Johnson transferred his ownership interests in three companies — Smoky Hill Properties, St. George Investors and the Lawks Group — to the trust controlled by his wife. Emprise is asking for those transfers also to be ruled null and void.

The lawsuit is not the first sign of financial trouble for Johnson, who is the president of the Lawrence-based civil engineering firm Peridian Group. In June, the Journal-World reported that Johnson was more than $150,000 behind in property taxes both in Douglas and Johnson counties.

The bulk of the unpaid taxes was related to RKJ Properties, which owns commercial real estate in Gardner. Johnson’s ownership interest in RKJ Properties brought up questions of whether he properly disclosed his financial dealings to voters prior to being elected to the city commission in April 2009.

Johnson did not list his ownership of RKJ Properties on his statement of substantial interests, a public form listing business interests of candidates for office. Johnson previously has said the omission was unintentional. RKJ was behind on its Johnson County taxes during the time Johnson was campaigning for the commission.

Johnson’s term on the commission expires in April. He has not yet announced whether he plans to seek re-election.

Comments

Michael Capra 4 years, 4 months ago

its hard times and here gos another good guy thrown to the wolfs

KU_cynic 4 years, 4 months ago

Someone who is engaged in financial shenagins of this magnitude and who is unable /unwilling to pay his taxes should not be making decisions like whether or not financial subsidies and tax giveaways should be extended to Lawrence developers or whether the Farmland property should be acquired by the city.

Oh, too late, he has.

Lance Johnson should resign immediately from the City Commission in order to spend 100% of his waking hours trying to resolve his significant personal problems.

Let this be a lesson to Lawrence voters: no more grifters on the city commission.

somebodynew 4 years, 4 months ago

Well, I don't personally know him - but just reading this article, IF the allegations are true then he certainly doesn't sound like one the the "good guys" I want to have any business dealing with. And he probably shouldn't be partially in charge of the City either.

Enoughsaid 4 years, 4 months ago

Oh great, another politician who is a crook. How can this person manage city government, when he can't even manage his own affairs. He should resign and move to Bell California with the other corrupt elected officials.

Amy Heeter 4 years, 4 months ago

To begin with it is a civil suit. Next "it is alleged" I really don't think we should expect him to quit just yet.

jafs 4 years, 4 months ago

Well, one thing that is not contested is the fact that he didn't disclose his ownership interest in this business when running for city commission.

If he had, voters would have known that one of his business interests owed $150,000 in unpaid taxes.

That would have been good to know, don't you think?

Amy Heeter 4 years, 4 months ago

I didn't disect him at that time, however in a community this size there is bound to be crossover interest in many things.

jafs 4 years, 4 months ago

Perhaps.

But shouldn't he have disclosed that fact? That seems like a very important piece of information for voters to have when making a decision.

kansasredlegs 4 years, 4 months ago

It's common practice in the development world to be behind on taxes. Taxes are paid in full when the property sells. So don't beat your drum too loudly, since the only ones who would have voted against him for such information are those who are as uninformed and inexperienced as you it seems when it comes to real estate development.

jafs 4 years, 4 months ago

Then he could have explained that to us poor ignorant folks.

I guess you don't think not disclosing such a business interest is a problem, although it is required of candidates.

I do.

just_another_bozo_on_this_bus 4 years, 4 months ago

Seems to me that if real estate developers regularly carry that large a property tax tab on their properties, there must be some county or state policy regarding it.

Does anybody know what that policy is?

just_another_bozo_on_this_bus 4 years, 4 months ago

And if there is no policy, there should be. Otherwise, the practice is wide open to favoritism and abuse.

ModerateOne 4 years, 4 months ago

The policy is this: pay your taxes or risk losing the property on which you owe the taxes. That rule is the same for developers as it is for anyone who owns property. The only people who get special treatment under this rule are people who don't own property.

But it takes a long time before the legal system gets to the point of taking someone's property for failure to pay tax.

jafs 4 years, 4 months ago

If that's true, why do they call then "unpaid or back taxes"?

That makes it sound as though they should have been paid and weren't.

Each year we pay our property tax when it's due - isn't the same system in place there?

whats_going_on 4 years, 4 months ago

this further proves that nothing good can come out of that godforsaken piece of junk land they call Hays.

deec 4 years, 4 months ago

Theyhave free curbside recycling, and a good little university.

jayhawklawrence 4 years, 4 months ago

We don't know anything about the loan agreement or the validity of their claim of an unlimited personal guarantee or the legal view of the contracts.

I think it is very irresponsible to start slinging mud at this stage.

I have some sympathy for Mr. Johnson having the endure the challenges of running a business in this economy because business owners like him create the tax base that Lawrence depends on for its existence.

I would use whatever legal means necessary to protect my business from the banks.

And why couldn't they restructure the loan?

jafs 4 years, 4 months ago

We will find out who wins the case.

In the meantime, as far as the "tax base" argument goes, we know that this business interest owes $150,000 in unpaid taxes.

And that he didn't disclose this interest while running for city commission.

He got the loan based in part on that guarantee - without it, he most likely wouldn't have gotten it - why shouldn't he live up to it?

Bud Stagg 4 years, 4 months ago

Use whatever legal means??? He defaulted on a loan!!! That is poor money management and just plain dishonest to knowingly transfer all your assets into a trust. I don't care if it's legal or good business, it's just plain wrong!!!

This guy should resign effective yesterday. I don't want him making another decision on my behalf.

Steve Jacob 4 years, 4 months ago

Making loans like this is why University National Bank got put on the FDIC watch list, and guessing they had to ditch loans and raise money to become compliant with the higher banking standards.

Anyways, making big real estate loans like this in early 2008 is odd, the real estate price collapsed around Aug. of 2007 and we where to stupid to figure out what that meant to the rest of the economy until September of 2008.

OldEnuf2BYurDad 4 years, 4 months ago

Many who make their living investing in properties are in his shoes. I know others like him who relied on business models that assumed the easy availability of money, but when the economy tanked, they were unable to continue under their old business model and they found themselves unable to make loan payments.

The issue here is most likely about balloon loans. What guys like him did for many years was take out balloon loans, and then when the loan was due, they'd refi the loan. Well, NO ONE is doing refi loans of that sort any more (three years ago: no problem), so many property investors are defaulting on loans that require massive payments after2 years.

Take it easy on him. There are a LOT of people in the same situation right now.

jafs 4 years, 4 months ago

He got the loan, based on his personal guarantees - he should have to live up to them. If he didn't want to do so, he shouldn't have made them. And then, it's likely he wouldn't have gotten the loan in the first place.

And, as noted above, he didn't disclose his business interest when running for city commission, and the fact that that interest owed $150,000 in unpaid taxes.

jafs 4 years, 4 months ago

Also, it's a $2 million loan (to use a round figure) - are there really lots of people with $2 million loans right now?

And, that's only on the RKJ interest - he has a number of other interests which likely have loans as well.

It's hard to believe there are lots of people out there with multi-million dollar loans.

Sigmund 4 years, 4 months ago

Did a "lot of people" sign a “unlimited personal guaranty” that pledged many of their personal assets as collateral, then transfer that property into a trust controlled by his wife, then default $1.95 million loan? Let''s not even consider the $150,000 behind in property taxes both in Douglas and Johnson counties and fail to disclose ownership of RKJ Properties on a public form listing business interests of candidates for office.

Kind of the mutant offspring of Sue Heck and Mike Rundle.

just_another_bozo_on_this_bus 4 years, 4 months ago

"Kind of the mutant offspring of Sue Heck and Mike Rundle."

Oh, come off it. There is no comparison between the two.

Rundle's bankruptcy was a direct result of his NOT using political office to enrich himself. You can question the financial wisdom of someone who lacks financial security and/or ulterior motive of taking on the poorly paid position of city commissioner, but there was no dishonesty or conflict of interest involved.

Sigmund 4 years, 4 months ago

You have evidence that Lance Johnson is enriching himself at the City's expense? It must not have worked because I thought he was having problems paying his debts, just like Mike Rundle. if so this is a distinction without a difference.

just_another_bozo_on_this_bus 4 years, 4 months ago

Mike Rundle went bankrupt largely because he was underemployed so that he could devote the time required to be a very underpaid city commissioner.

The financial wisdom of that can certainly be questioned, but there's a big distinction and a big difference between that and defaulting on $2 million of loans and attempting to transfer out of his name property that was supposedly put up as collateral.

OldEnuf2BYurDad 4 years, 4 months ago

I didn't mean to imply that he's done nothing wrong. What I'm responding to are the people who see his debt problem as a reflection of his competence as a businessman.

The trust thing: Yep, that sounds fishy.

Do "lots of people" have $2M loans? YES. Anyone in that line of business is used to 7-figure debts. I don't, and most readers here do not, but anyone who invests in property, land or developments is carrying a lot of debt. And many are losing their shirts due to unpaid balloon loans.

thelonious 4 years, 4 months ago

So he loses his shirt. Boo-hoo. He's a big boy, he knew the risks, now he has to pay. Perhaps he'll have to work harder for a living and start over. That's what he needs to do, not try to defraud the bank (allegedly).

copyright 4 years, 4 months ago

Here's a snapshot of "a few" rental holdings--plus the personal mansion--though it's likely not all properties are current:

      http://www2.ljworld.com/propertyvalues/?q=lance+johnson

just_another_bozo_on_this_bus 4 years, 4 months ago

I assume the $600,000 property is his house. It's either at least a McMansion, or extremely overvalued.

Catalano 4 years, 4 months ago

Nice to know which rental properties to avoid.

just_another_bozo_on_this_bus 4 years, 4 months ago

He wanted to run with the Movers and Shakers, and was willing to roll the dice with risky loans. And getting yourself elected to the city commission to look after the affairs of the Movers and Shakers was a good insurance policy.

It'll be interesting to see if that works out for him, or backfires as they throw him under the bus (as Emprise Bank appears to be doing.)

skinny 4 years, 4 months ago

If the above is true Mr. Johnson needs to resign from the Lawrence city commission and be sent to prison!~

OldEnuf2BYurDad 4 years, 4 months ago

For which part of his "crimes" should he be sent to Leavenworth? Hard time in jail because he owes money? Calm down.

jafs 4 years, 4 months ago

How is it the bank's fault that Johnson got a loan based on personal guarantees which he is now trying to avoid making good on?

jafs 4 years, 4 months ago

Wow.

You are almost always complaining about those that don't take responsibility for themselves, but Johnson is somehow a victim here??

He got a loan and made some personal guarantees - I imagine he wouldn't have gotten the loan without them, otherwise he wouldn't have made them. Now he's trying to evade his responsibilities.

My wife and I bought a house in March of this year at a local bank without any trouble, and got a good low fixed rate loan. Of course, we had put enough down and have excellent credit.

How exactly does a landlord "loose" most of their ownership due to the government??

Johnson chose to be in the real estate business and to get this loan with the terms that he did - he would have reaped any and all benefits of doing so, and assumed the risk associated with the possibility of failure.

If he had been wildly successful, would you have given the government and his tenants credit for that? I think not.

jafs 4 years, 4 months ago

I do.

Candidates for city commission should comply with the disclosure requirements.

And, if he is in fact trying to defraud the banks and avoid making good on guarantees which he made in order to get a loan, that says a lot about his character and integrity.

I guess you don't think those are important qualities in a city commissioner.

thelonious 4 years, 4 months ago

Jafs makes the point - ultimately this is an issue of character and integrity, and those are important characteristics for a city commissioner - actually, they are also important characteristics for a successful businessman. I wonder if there is a connection...

superduper 4 years, 4 months ago

The link regarding properties with his name attached adds up to about $5.5 million and that is only in Douglas county. One thing to note to be fair, the search shows all properties that the person had interest in, not CURRENT interest in. For example my name comes up with 3 yet I currently only have one. He obviously has many properties in Johnson County as well. It would not be at all uncommon to have a few million of that in loans, and I don't mind that but....the accusation is that he knowingly defrauded that banks to hide assets is just wrong. If he is found guilty that will be the end of him...for awhile at least.

AS 4 years, 4 months ago

Is there a real difference between alleged and a person of "A Person of Interest"!!!!

4everahawk 4 years, 4 months ago

There for a minute I figured he in some way was linked to athletics! HA He even looks a little like one of them. This is another story that reminds me of how the rich get richer.....dirty business.

naturalist 4 years, 4 months ago

Wonder if that $150k could be used to give the city workers a bonus?

GovJunkie 4 years, 4 months ago

Comments from the Cheap Seats:

Rest assured, the bankers will do OK... I suspect Emprise took over the note from UNB for substantially less than $1.95 mm... Mr. Johnson may have some explaining to do before a judge, bankruptcy or otherwise, if the transfers are proven to be fraudulent or reversed for cause...and with loans and banks, this is a Federal matter that can have crushing consequences... but the ultimate winners will be... The Lawyers! GJ

just_another_bozo_on_this_bus 4 years, 4 months ago

Just like Wall Street, local banks have been making very risky loans over the last several years, especially commercial loans. They haven't been bailed out to the degree that Wall Street was, but that doesn't mean that the loans they made were smart, or that they and the borrowers weren't playing extremely loose with someone else's money.

jafs 4 years, 4 months ago

Why can't they get the loans?

Interest rates are extraordinarily low, from the Fed, so it hardly seems that this administration is trying to make it harder for banks to lend money.

beebo 4 years, 4 months ago

Unfortunately they are. See my post below and this is happening all over the country. Its not just a Lawrence or Lance Johnson thing. There are business loans on three-year balloons throughout the country that are set to renew 2011 and 2012 and they will not be able to renew because the collateral has significantly fallen in value and no longer qualifies as enough collateral for the loan. This is the second mortgage bubble that's about to burst.....The rates are low but no one qualifies as a borrower with enough collateral. The banks aren't lending based on relationships or past performance anymore. Their hands have been first slapped and now tied by the government.

just_another_bozo_on_this_bus 4 years, 4 months ago

It's merely the house of cards that is our economy on the verge of collapse.

And it was just as big a house of cards when these loans were made as it is today. People could just pretend that the bubble was real then.

jafs 4 years, 4 months ago

If the loans aren't renewable because the collateral has significantly fallen in value, that's unfortunate, but it's the risk that developers assume.

It's not the fault of the banks, or this administration, or anybody else.

Real estate speculation is just that, speculation. And, if you get a 3 year loan based on the assumption that the property will appreciate and you can refinance and then it doesn't happen, that's the risk you took.

If everybody had been less unrealistically optimistic about housing values, we wouldn't be in this mess in the first place.

Econtan 4 years, 4 months ago

Jafs, you are "spot on". Developers take the risk and reap the rewards. And Johnson is responsible for his debts. The Bank doens't attempt to retrade the loan when the developer makes a 20-30% return. The "transfer of interests" is probably an event of default. The Bank will win and right they should. The unfortunate thing is that all the legal expenses that will be incurred. It's situations like this that raise the costs of banking for all consumers.

Joshua Montgomery 4 years, 4 months ago

The banks aren't lending because FDIC is breathing down their necks about the level of risk in their loan portfolios.

You can pump all of the money you want into the banking system via the Fed, if the FDIC says your loans are worth $0.50 on the dollar and you are going to have to raise more capital, your reaction is going to be to stop lending money and increase your cash reserves.

So what if this means that you don't renew loans for long term customers? If the FDIC liquidates you in the short term because you were looking out for your customer's long term you are out of business.

If the Obama administration really wants to get loans flowing, they will enable SBA to underwrite 100% of new loans and lean on Shelia Bair at FDIC to stop crucifying small and medium sized banks.

jafs 4 years, 4 months ago

If banks had been operating at a decent level of risk management, we wouldn't have had the meltdown.

Apparently they can't do that on their own, which would be why the FDIC is having to do it for them.

I take it you're advocating that we simply let the banks return to their risky policies? That doesn't sound like a good idea to me, given the recent financial crisis.

Joshua Montgomery 4 years, 4 months ago

You are right about the banks taking crazy risks, big banks on Wall Street took enormous risks, cycling money in 24 hour increments and operating on the brink of collapse.

Many, many local banks continued to make conservative loans to customers they have known for years.

If a bank has a customer that has worked with them for 10 years and never missed a payment, the banker knows that the customer is a good customer and the loan is worth its face value.

FDIC comes in and looks at the customers credit score and the outstanding collateral, and says the loan is worth 1/2 its current balance.

Which one is more accurate. The primary problem is that the regulators have overreacted in the opposite direction.

If you want the economy to grow and create jobs you need to put money into the system. Banking is the best way to do this.

If you want to continue the economic doldrums, require 50% down and 100% collateral on every loan. See how many businesses expand operations.

I am not saying we need to return the the days of no-doc loans, I am just saying that the overreaction of regulators is the root cause of the lending problem.

jafs 4 years, 4 months ago

The possible overreaction of regulators is not the root cause.

The root cause is the behavior which led to the meltdown, which then caused regulators to overreact (possibly).

thelonious 4 years, 4 months ago

It's not just the FDIC - the banks aren't lending because they are afraid of their borrowers pulling (alleged) stunts like this one, refusing to cough up personal assets pledged as collateral because then they might have to sell the Lexus & the half-million dollar McMansion. That is the main reason banks aren't lending - no confidence that they will collect their collateral.

Sigmund 4 years, 4 months ago

Just who would YOU lend money to in this economic environment?

Carol Bowen 4 years, 4 months ago

There would have to be a high interest rate to justify the risk.

blindrabbit 4 years, 4 months ago

Sigmund and Just--- Was waiting for you to finish your comments on the issues of ex-commissioners ingratiating themselves while in office. Don't know too much about Mike Rundles issues; but really leery about Sue Hack's dealings. Her involvement in the Decptera (Decifera) hand-holding while being a commissioner as well as being an invested party was about as blatant as I can remember around here. Apparently not sufficiently egregious enough to disqualify her to lead "Leadership Lawrence" for the Chamber. Maybe we ought to screen these candidate better.

Sigmund 4 years, 4 months ago

Former mayor files for bankruptcy: Rundle says Lawrence city commissioners deserve higher pay, LJWorld Onlie, April 21 2007 Mike Rundle, a former mayor and 12-year Lawrence city commissioner, has filed for personal Chapter 7 bankruptcy protection. http://www2.ljworld.com/news/2007/apr...

thelonious 4 years, 4 months ago

As for 'Leadership Lawrence' - what is that old saying, "if you can't say something nice, don't say anything at all" - I think that applies to them.

beebo 4 years, 4 months ago

Original loans were made on the appraised property values at the time of the loan. Since then, the values have dropped dramatically and so the old loan that WAS 80% of the appraised values is NOW 120% of appraised value and therefore not allowed without more capital being added by the borrower. If the borrower had the capital they wouldn't have borrowed the money to begin with. The banks cannot renew the loans without the borrower putting more money down to get back to 80% of appraised value. Hope this help re: your question.

beebo 4 years, 4 months ago

This was a reply to jafs' question re: bank and loans. I posted it in the wrong place -

OldEnuf2BYurDad 4 years, 4 months ago

I guess one reason why I step up to defend someone like him is because I admire anyone who's willing to take some risks. It takes guts to try and be a mover and a shaker, so I kinda think most of you are, to be frank, just jealous.

I think it's great that he's pursued his dreams, even if he failed.

Keith 4 years, 4 months ago

And since he took the risks and they didn't pan out, he should now take the losses. Or should we privatize the gains and socialize the losses?

jafs 4 years, 4 months ago

He has assets - he's just trying to hide them.

Sigmund 4 years, 4 months ago

I admire risk takers as well, but I admire honesty more. If you sign a “unlimited personal guaranty” and pledge personal assets as collateral, then transfer that those assets into a trust controlled by your wife just before you default on a $1.95 million loan, is that honest risk taking? Or if you fail to disclose ownership on property that happens to be $150,000 behind on property taxes on required documents to run for City Commission, is that honest? I have a different word to describe those who file false documents and attempt to defraud banks, "criminals."

jafs 4 years, 4 months ago

I guess that's great, although his dreams seem to be simply the desire to make more money. Many people have dreams that I find more inspiring.

If he's willing to take the risk, and make personal guarantees, then he should be willing to make good on his promises rather than trying to get out of them.

And, the lack of disclosure bothers me as well - it's hard for me to believe it was unintentional, given the tax liability involved, which he would, at the very least, have had to explain to voters.

No jealousy here - I just question his integrity.

Bob Forer 4 years, 4 months ago

Excuse me? "It takes guts to try and be a mover and a shaker." ???

.....Try "greed" instead.

OldEnuf2BYurDad 4 years, 4 months ago

There are a lot of greedy people who are still too chicken to get out of bed in the morning and pursue what they desire.

Carol Bowen 4 years, 4 months ago

As a growth model, extreme risk is not sustainable.

BigPrune 4 years, 4 months ago

Commercial loans and their guarantees offer many options for a bank to use in order to call the note. Pretty much anything can be used as an excuse. Much different than a consumer loan or a home loan. People don't realize.

jafs 4 years, 4 months ago

Ok.

I assume that when he got the loan, he was aware of the terms.

If not, that was a mistake on his part.

Ricky_Vaughn 4 years, 4 months ago

Money doesn't make good people, no sir.

ResQd 4 years, 4 months ago

Laughing hysterically because it would not surprise me if the allegations were true. No wonder this city is in such a mess!

thelonious 4 years, 4 months ago

Yeah - obviously 'Leadership Lawrence' is having a positive effect on city governance and leadership. Floating a cardboard boat across Clinton Lake is so much more important than honesty, integrity, and hard work.

Flap Doodle 4 years, 4 months ago

Can he claim immunity under the Chris Dodd rule?

blindrabbit 4 years, 4 months ago

We need a change in the form of government! Strong Mayor as opposed to the lacky's we seem to continue to elect in the current Commissioner Form. Need a more professional, accountable individual.

pace 4 years, 4 months ago

Chamber types like Lance and "dirty Sue" when they get caught feel they are too special to resign. They bought the ads that got them elected, they lied about their finances to present a better face. No honor is involved, just business.

We need community education about how important it is to vote and really know who you are voting for. Slash ads, lies and tricks should offend us more, sway us less.

Richard Payton 4 years, 4 months ago

I wonder what Charlie Rangel would say....?

just_another_bozo_on_this_bus 4 years, 4 months ago

I believe both Dever and Johnson are having to recuse themselves from the votes and discussion on the Compton project at 9th and NH because both have contracts on it.

copyright 4 years, 4 months ago

Given the history and absolute predictability of The Lance Vote at such meetings, I fear the answer regarding Compton's action is (a resounding) "yes"!

jafs 4 years, 4 months ago

Borrowers who get loans based on personal guarantees should live up to them.

OldEnuf2BYurDad 4 years, 4 months ago

Someone name a rich or well-to-do person in Lawrence that they admire and respect. Someone "loaded" who they don't have a gripe against.

It's been my experience that it's the greedy poor who have the biggest complaints about the greedy rich. People who embrace moderate living don't put so much energy into judging the rich.

jafs 4 years, 4 months ago

I'm neither rich nor poor, nor particularly greedy, and have embraced "moderate living" for my entire life so far (I'm 49), and I imagine I will continue to do so.

I judge people based on their character (or lack thereof), not how much money they have.

On that basis, I find Mr. Johnson to lack character and integrity based on the lack of disclosure alone, and more so if the allegations are true.

pace 4 years, 4 months ago

. One does not get good character by joining the moderate strata on the income ladder. Nor does it come from telling yourself you are a good guy, no matter what you do, say, feel or think. If someone is tempted to answer your bizarre request for "names" leaving those names up in this forum, as targets for some of the screwed mouths of this forum. They should consider the idiotic basis of the request.

OldEnuf2BYurDad 4 years, 4 months ago

EVERY time someone with money is mentioned in the paper, people bring out all kinds of derogatory claims and accusations against them. EVERY time. "Moderation" is the opposite of greed, not the absence of money. Who are the moderate-yet-wealthy people we know? On these forums, NO ONE is good if they also have money.

And, still, no one has mentioned anyone. The jealousy is obvious.

Keith 4 years, 4 months ago

Well cough one up yourself, the moderate yet wealthy people don't make the paper, they obey the old dictum to appear in the paper 3 times, at birth, when wed, and at death.

just_another_bozo_on_this_bus 4 years, 4 months ago

I have known/known of a few. But I think pace stated the reasons quite well of why I won't list them here.

There is no crime in being wealthy. But it really does matter both how you obtained that wealth, and how you use it after you get it.

Sadly, a sizable percentage of wealthy people in this country wouldn't pass either of the above sniff tests.

homechanger 4 years, 4 months ago

I choose Wes Kabler. He is the one. Obi wan in my book!

Carol Bowen 4 years, 4 months ago

Bill Dann. He has always lived modestly, but donates to schools and other organizations. For children.

thelonious 4 years, 4 months ago

There was actual collateral, the properties themselves. But sometimes collateral diminshes in value (like in a real estate crash), so the personal guarantees are a back-up to the primary collateral - call them secondary collateral. This is absolutely standard practice, this bank was prudent and was neither sloppy nor foolish (except for perhaps not checking into his character deeply enough), and does not deserve what they got - what they have is someone who pledged 1) properties, and if they were not sufficient b) personal assets, to pay back a loan. So the value of his properties no longer cover the loan amount and he has to pony up personal assets - that's the way it works, and what he allegedly did instead (try to hide assets to avoid paying back the bank), if not criminal, is certainly unethical and dishonest, among other things it could be called.

Assuming the facts of the story are correct, let me ask you, would you loan him money, and if so, how many layers of collateral would you ask for? I am thinking that I would ask for any secondary collateral to be placed in escrow to avoid the kinds of shenanigans he has allegedly engaged in.

Sigmund 4 years, 4 months ago

Promise lender personal assets for a $2 million loan, transfer pledged property to a related third party, default on loan leaving lender holding the bag and property that has declined in value. Lance and wife laugh merrily all the way to the, well not to the bank. If the bank goes under the taxpayers pick up the tab via FDIC. I think I could make a case for attempted fraud and actual fraud if he succeeds. But since the current DA shows no interest in his failure to disclose financial interest in entities that owe $150,000 in back taxes required of all City Commissioners I guess he'll get a pass on that.

Richard Heckler 4 years, 4 months ago

Is Lance Johnson still owing delinquent property taxes?

Time for Lance to resign resign resign!

GovJunkie 4 years, 4 months ago

...and while all of you are taking the councilman to task for being underwater on his commercial property and not wanting to pay for something that has diminished in value well below what it will ever bring on the open market, please provide the same level of contempt for all the "homeowners" who had no skin in the game and chose to walk away from homes, even when they could still pay the mortgage because they were underwater and didn't want to pay for something that was not worth what it used to be...

I live on a two-way street!

GJ

Catalano 4 years, 4 months ago

Interesting that this did not even make the 6:00 news this evening. Hmmmm.

budwhysir 4 years, 4 months ago

What??? he has yet to announce his intent to run again in April??? Unthinkable... I mean who would ever think there was any possibility he would be allowed to run let alone be elected again....hmmmm

Sigmund 4 years, 4 months ago

So when Sue Hack "technically" violated the financial disclosure law but was never "technically" punished, the City Commissioners shed more tears than Glenn Beck watching a Frank Capra movie. There were promises of transparency and reform blah blah blah. Apparently accurately filling out and financial disclosure forms isn't more transparent nor reformed. As far as I can tell nobody gives a $hit when City leaders willfully break the rules. http://www2.ljworld.com/news/2007/nov...

Richard Heckler 4 years, 4 months ago

Lance Johnson should be held accountable absolutely!!! His collateral is likely not worth $1.95 million due to super inflated property values at the time the loans took place. Lance should resign. The person who was next in line last election should be invited to fill that spot providing that person is not a developer type with too much debt and many conflicts of interest.

So should the financial institutions be held accountable for lending out too much money to the would be wealthy... during periods of "boom town economics".

How did Compton finance his new project? Who is going to live there? Who are these mystery tenants? Where are they? Then again these are questions City Commissioners should also be asking instead of assuming real estate is as solid as a rock...this is what took the nations economy down the tubes aka turning a blind eye.

There are an estimated 10,000 homes on the market in the KCMO metro which suggests a buyers market. Deals can be had in KCMO which could produce serious competition for the Lawrence markets.

Lending should have been subject to tighter restrictions during "boom town economics" cuz lending institutions should know "boom town economics" is not sustainable and produces super inflationary property values.

Taxpayers should press for dumping the Free Lunch tax dollar give aways!! Here’s what happens: http://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans

http://www.uua.org/events/generalassembly/2008/commonthreads/115777.shtml

Richard Heckler 4 years, 4 months ago

"HowEmprise alleges that as part of the loan Johnson signed an “unlimited personal guaranty” that pledged many of Johnson’s personal assets as collateral for at least a portion of the loan.

The lawsuit states that RKJ Properties has defaulted on the $1.95 million loan. But when Emprise sought to collect on Johnson’s personal guaranty, it learned that he had transferred multiple pieces of property into a trust controlled by his wife, Jennifer Johnson, who also is named in the lawsuit.

Emprise is seeking to have that transfer ruled null and void. It also alleges Johnson transferred his ownership interests in three companies — Smoky Hill Properties, St. George Investors and the Lawks Group — to the trust controlled by his wife. Emprise is asking for those transfers also to be ruled null and void."

How were all of those transactions accomplished without notifying Emprise Bank? How were all of those transactions accomplished without approval from Emprise Bank?

Is this type of financial activity business as usual in Lawrence,Kansas?

nowthetruth 4 years, 4 months ago

Congratulations Jennifer and Lance! You have done a fantastic job of building a horrible reputation. All of your hard work is null now that you are known for your fantastic way of handing your financial matters. Pack up, move, start over! Lawrencians will never forget this stuff......

Cogito_Ergo_Es 4 years, 4 months ago

I think this is too harsh. Ok, Mr. Johnson is currently under the microscope due to his commissioners position. But, how do you know what role his wife played in any of this? Do you know how involved she regularly is in her husband's business affairs? (It would appear not much if a new trust in her name had to be created.) These are people after all. Maybe she was not a business partner as much as a wife and mother, and perhaps she did as she was advised and went with the only information she had? Maybe she was told and believed this was the only way? I think you need to lighten up, before you run an entire family out of town on the next coach!

just_another_bozo_on_this_bus 4 years, 4 months ago

In which case Johnson used his wife without telling her what she was getting into.

That might mitigate her culpability, but it would make him look like a real schmuck.

toe_cutter 4 years, 4 months ago

Have you ever seen the episode of The Sopranos where they have a crooked appraiser giving huge values for properties to get big loans which they walk away from and pocket the money?

Makes you wonder about Johnson and his partner Jeff Hatfield. I used to rent a duplex owned by those two.

Sunny Parker 4 years, 4 months ago

Pretty sad if you ask me! Why is it Democrats in Washington don't need to pay their taxes and that is ok with you all.

Johnson hasn't been convicted of anything.....

Clevercowgirl 4 years, 4 months ago

Has anyone mentioned that estate planning may be involved in the trust? Not a vehicle to defraud? Okay, I'll duck now.

Richard Heckler 4 years, 4 months ago

"Boom town Economies" are risky business. Banks should not have been a player but instead more of a watch dog on tighter restraints. The financial community knows all "boom town economies" bust sooner of later.

No doubt Lance Johnson wants to play with the big boys and girls however got in over his head and ego.

How many more are out there in Larryville?

These housing and retail markets are still in big trouble due in large part to the Bush/Cheney fiasco and due in part to reckless behavior by some in the real estate/development community. Douglas County movers and shakers want to be Johnson County movers and shakers without the common sense and market to match = reckless decisions and reckless local government spending.

Richard Heckler 4 years, 4 months ago

America Is Over Stored

This decade's building frenzy produced a bumper crop of new retail space. But the occupants haven't materialized.

The carnage in retail hasn't been this bad since an anarchist bombed Chicago's Haymarket Square in 1886. In January, Liz Claiborne said it would shutter 54 Sigrid Olsen stores by mid-2008; Ann Taylor announced that 117 of its 921 stores would be closed over the next three years, and Talbots axed the Talbots Men's and Talbots Kids concepts and 22 Talbots stores. (Those muffled screams you hear are Connecticut preppies trying to suppress their rage.) Even Starbucks has scaled back its yearlong saturation-bombing campaign.

Blame that exhausted marathon runner, the American consumer. Fueled by cheap credit instead of PowerGel, she looked great at Mile 16, but bonked at Mile 23 and is now crawling to the finish line. Sales fell in December, putting the cap on a miserable Christmas season. Last week the government reported that retail sales rose 3.9 percent between January 2007 and January 2008.

But back out inflation and sales of gasoline, and retail sales fell in real terms in the past year. Clearly, demand is down.

And supply is up. This decade's building frenzy produced a bumper crop of new retail space—from McStrip malls built near new McMansions, to hip new boutiques in the ground floors of hip new Miami condo buildings. But as is the case with those McMansions and condos, the occupants for new retail space haven't materialized.

In the fourth quarter of 2007, the national retail-vacancy rate rose for the 11th straight quarter to 7.5 percent—the highest level since 1996, according to research firm Reis, Inc.

With new projects coming online—34 million square feet of retail space will be completed in 2008—the rate is expected to spike further to 8 percent. In the parlance of the trade, many chains are simply over-stored.

Con't http://www.newsweek.com/id/112762

Richard Heckler 4 years, 4 months ago

Let's demand a new system and vote in Fair Vote America : http://www.fairvote.org/irv/

Demand a change on the next ballot.

Incumbents say NO to the voters while officials live in glass houses and digest corrupt money.

We need public financing of campaigns. Citizens cannot afford special interest money campaigns for it is the citizens that get left out. Let citizens vote on this issue. http://www.publicampaign.org/

Who would be against Public Funding? The special interest money providers plus their bought and paid for politicians!

TopJayhawk 4 years, 4 months ago

This just in....... The City of Lawrence has just been foreclosed. Film at eleven.

Richard Heckler 4 years, 4 months ago

College Hill Taxes Unpaid

One of the principals who is developing the corner at 9th & New Hampshire in Lawrence was quoted in the Journal World a few weeks back as asking for 'help' from the city with regards to financing the project. That same person was noted in a Capitol Journal article a month ago as being behind on and in default on a loan and property taxes associated with a development project in Topeka. Because those financial irregularities were not picked up and reported in our local paper, for some reason, I am sending along a link to the Topeka paper's article for your own perusal.

Quotes from the article:

Developers for a project to revitalize central Topeka's College Hill business district are in breach of their contract with the city because they failed to pay Shawnee County $130,196.77 plus interest for property taxes due May 10.

"First, the developer is currently in default under its loan obligations in excess of $16 million to the private bank group led by CoreFirst," he wrote. "In the event default of the loans is not remedied, the private bank group may move to foreclose on the property or appoint a receiver."

Topeka's city council voted in 2006 to provide about $5 million in tax-increment financing for a $30 million project in which Washburn-Lane Parkway Renovation built 183 apartments and 24,000 square feet of retail space on property it had acquired in the College Hill district, just northeast of Washburn University.

Developers Bill Newsome, Doug Compton and Steve Roth, of Lawrence, and Henry McClure, of Topeka, agreed to pay off TIF bonds issued by the city over a period of up to 20 years using the increase in property tax and sales tax revenues the city collected after the project was constructed versus the tax those same properties generated before the development was built.


Link to the article: http://cjonline.com/news/2010-10-28/college_hill_taxes_go_unpaid

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