Lawsuits, Unpaid Bills Trail Trade Center Promoter

The man on whom city officials are banking to bring a $96-million World Trade Center to downtown Pomona has left a trail of debt and unfinished projects throughout the Los Angeles area over the last decade, according to court records and interviews with more than two dozen former business associates and employees.

H. Thomas Felvey, an Orange County architect who two years ago was granted by the city the exclusive right to negotiate for development of the trade center, has repeatedly failed to pay bills and ignored lawsuits while operating under three different corporations since 1977, according to court records.

In more than two dozen cases filed in Los Angeles County Superior and Municipal courts, the 41-year-old Felvey and his corporations are the subject of at least 12 uncontested default judgments, for debts ranging from $1,000 to $96,000.

Four times, court records show, bench warrants have been issued after Felvey failed to appear at Superior Court debtor hearings in Los Angeles and Torrance, resulting in his arrest at least once. He was released after testifying that he had no money to pay the debts, according to attorneys who examined him on behalf of their clients.

Firms Suspended

Three of the companies he ran--Urbanetics Inc., Corporate Planning & Research Inc. and Environmental Resource Associates Inc.--have been suspended from operating as corporations by state officials in California and Delaware for failure to pay taxes.

In at least four lawsuits, Felvey is accused of abandoning projects or failing to deliver goods and services after accepting payment.

And, based on interviews with the participants, four firms that did work directly connected with the proposed Inland Pacific World Trade Center contend that Felvey or his corporations still owe them money.

“You can’t do that to people with no compunction and just walk away from it all,” said Robert Clayton, a financial consultant who has filed a lawsuit claiming that Felvey owes him more than $22,000 for work Clayton did on the trade center project in 1985. “Life just doesn’t work that way.”

Felvey, however, when reached by telephone Monday, said his financial difficulties have no bearing on the 14-story international business complex that city officials have hailed as the key to Pomona’s future.

‘No Relevance’

“My personal problems have no relevance to you or your story or the city or the project,” Felvey said, refusing to elaborate on any of the situations. “Obviously, my intent is to solve my problems.”

Community Development Director Sanford A. Sorensen, the city official most intimately involved with the project, said he was aware of most of Felvey’s difficulties but that he does not consider them unusual among developers.

“A lot of development in Southern California has occurred over the bodies of a lot of people,” Sorensen said. “And I think you would be very hard-pressed to find a significant project of any sort in Southern California that wasn’t built over the bodies of somebody.”

But when confronted with an enumeration of the debts and legal troubles, several current and former City Council members expressed surprise at the extent of Felvey’s professional predicaments, which include:

- A $96,000 default judgment for leaving unfinished a six-unit apartment project for Frederick and Lise Dellagatta in Malibu in 1978.

- A $46,000 default judgment for failing to deliver office furnishings to Computers International Inc. after accepting advance payment from the Los Angeles firm in 1983.

- Eviction from the Los Angeles office he used for both Urbanetics Inc. and Corporate Planning & Research Inc. and a $7,900 judgment for non-payment of rent to 411 West 7th Investment Co. in 1986.

- At least four judgments in Los Angeles Small Claims court or from the state labor commissioner in favor of former employees for unpaid salaries in 1985, ranging from $900 to $7,900.

- County, state and federal tax liens for 1985-86 totaling more than $45,000 against Felvey and his former firm, Corporate Planning & Research Inc.

- Three lawsuits in which Felvey is being sued by both the building owner who hired him and the two subcontractors he was supposed to pay for a Glendale remodeling project that he allegedly abandoned in 1985.

- A scheduled foreclosure next month by the First American Title Co. of Los Angeles on the Brentwood home of Felvey and his estranged wife, B.J. Hagfors.

- Unsuccessful attempts by creditors to seize Felvey’s red 1984 BMW for more than a year, according to Hagfors.

Of the firms that did work directly related to the proposed World Trade Center, Licher Direct Mail Inc. in Pasadena said Felvey owes $5,300 for promotional brochures printed in early 1985; Cushman & Wakefield Inc. in Ontario said Felvey owes $12,500 for leasing studies it did in 1985, and Bill Kyle, a financial consultant who worked last year to help arrange financing for the project, severed ties just three months ago after claiming that Felvey owes him $7,200.

“Well, I wish we had known,” Mayor Donna Smith said Monday after being told about Felvey’s financial condition by The Times. “I’m not excited about the news. . . . But we’ve got our tails covered. We’re not going to lose out because of one person’s reputation.”

Former Mayor G. Stanton Selby, who presided over the council from 1983 until this year and was one of the trade center’s biggest boosters, also said he was surprised by the information.

“It’s all news to me,” Selby said. “I think it would have been important to know about these things.”

Councilman Mark A.T. Nymeyer, however, said that he had become aware of Felvey’s financial condition in recent months.

“The fact that he can’t, quote, balance his own checkbook, unquote, casts a shadow on this man’s credibility,” Nymeyer said. “But from what I’ve been able to find out from staff, the city is well protected.”

Under an agreement approved April 15, the City Council voted unanimously to issue $100 million in revenue bonds for the project, giving Felvey and his current development company, Urban Equities Ltd., the means to finance construction.

The bonds, which are not obligations of the city, have been sold to two Minnesota banks, city officials said. They will be repaid by Urban Equities as revenue from the project is generated.

If Urban Equities is unable to make payments on the bonds, the bondholders could foreclose on the project and seize the building and land, city officials said. As a “fail-safe mechanism,” Sorensen said, Urban Equities will be required to spend at least $10 million toward another project on the site if the trade center is never completed.

Smith and other council members said they are confident about the arrangement primarily because Felvey has enlisted the help of Birtcher, one of the country’s largest development firms, which will use one of its Laguna Niguel-based subsidiaries to act as a limited partner in Urban Equities.

Once the project gets under way, city officials said, Birtcher will oversee the disbursement of funds, manage the development and retain an ownership interest in the trade center when completed.

Viewed as ‘Promoter’

“If Birtcher were not in it, I wouldn’t buy it,” Councilman E.J. (Jay) Gaulding said. “I don’t want Tom Felvey managing the project. . . . I’ve never viewed him as anything but a promoter.”

Felvey, who refused to discuss the financial details of his partnership, said Birtcher’s involvement was central to the project.

“I’m not terribly worried about my qualifications,” Felvey said. “It is now in the hands of the developer. My role is to help it succeed.”

Birtcher, however, while affirming its commitment to the trade center, emphasized that Felvey is still the key player behind the proposal.

“He’s the only one who can take control of the project and move forward with it,” said Clark R. Wardle, Birtcher’s vice president of partnership operations. “We’re here to assist Tom and guide him through the development process, but it’s primarily Tom Felvey as general partner in the deal, and he’s the person that has to take it forward and make it.”

Involved in 1984

Trained as an architect and interior designer, Felvey first became involved with the trade center plans in 1984 when he met Joanne Hobo, a Pomona businesswoman who wanted to build an international office complex in the downtown area.

Hobo, a native of the Netherlands who said she proposed the idea because of her numerous business contacts in Europe, had been granted the exclusive rights by the city in 1983 to negotiate for the development of the 4.5-acre lot across from City Hall.

Hobo said she worked with Felvey informally for nearly a year to generate support for the idea before deciding by “mutual agreement” that Felvey should take over the project in early 1985.

“I felt--and I think the city agreed with me--that Tom would have the best chance to put together a successful development,” Hobo said.

Felvey, expanding on Hobo’s original idea, proposed constructing an officially designated World Trade Center, and prepared plans for a 1-million-square-foot facility with a 260-room hotel, a retail galleria and trade mart.

Previous Projects

Although Felvey had several successful projects to his credit up to that point, he had never tackled anything of the World Trade Center’s magnitude, according to former business associates and employees.

Formerly a designer and architect with the prestigious New York firm of Skidmore Owings & Merrill, Felvey had been involved primarily in the restoration of historic buildings in Los Angeles, the former associates said.

Most of those jobs came when he was head of Corporate Planning & Research Inc., a company he formed in 1981 after spending the two years from 1976 to 1978 running Environmental Resource Associates Inc., a Delaware company owned by Felvey and his then-wife, Shoko, and her brother, Shige Uchino, according to the associates and court records.

In 1983 and 1984, operating as Corporate Planning & Research, Felvey was hired to renovate the old Pantages Theater in downtown Los Angeles, the old Broadway department store at Hollywood Boulevard and Vine Street and the former INA Building on Wilshire Boulevard. He received high praise from the owners of Nicky Blair’s for his interior design of the Sunset Boulevard restaurant in 1985.

Neglected Firm

But, according to several architects and other former employees from Corporate Planning & Research, the lure of the World Trade Center ultimately caused Felvey to neglect the firm until it ceased doing business.

“It became a Machiavellian story; a person obsessed with something he thinks will become his nirvana,” said Ken Newman, who, as director of architecture under Felvey, worked on the original designs for the Pomona project.

In 1985, Felvey formed Urbanetics Inc., which, in a proposal to the city, he described as the “development arm” of the architecturally minded Corporate Planning & Research.

Despite some initial skepticism, Urbanetics and Felvey’s World Trade Center proposal were greeted warmly in Pomona.

“Yes, I’d say I had some concerns,” Sorensen said of his initial reaction to the plan. “We were talking about a very large project. . . . But at that point, there was very little to lose.”

Rosy Predictions

Officials in this financially pinched city have predicted that the Inland Pacific World Trade Center will create 3,000 jobs and generate more than $1 million a year in general fund revenue.

In April, 1985, one month after getting approval from the city, the Pomona project was granted official membership in the New York-based World Trade Center Assn. There are 54 such officially designated trade centers in operation around the world.

Like a central market or commercial strip, the trade centers operate under the philosophy that concentrating international firms in one building will propel it into a worldwide commercial network, ultimately attracting more business activity to the region.

In addition, Felvey had pointed out that Pomona’s proximity to freeways, rail lines and the Ontario International Airport make the city a natural focal point. As one of the fastest-growing regions in the country, he said, the Inland Empire could become a major center for international trade.

As part of the deal, the city agreed to pay for construction of a $13-million underground garage with bonds issued by the Pomona Redevelopment Agency and establish a $1-million promotional campaign to be funded by taxes generated from the proposed hotel.

Federal Loan

Additionally, the city has obtained a $5.2-million loan from the federal Department of Housing and Urban Development that will be used to help finance the project.

In a recent move, one of Felvey’s equity partners, Kajima International Inc., paid the city $1 million last month to purchase the land, which had originally been priced at $500,000. In return, the city has agree to reinvest the money in the proposed hotel for a 12% equity interest.

Felvey said last fall that ground would be broken in January, 1987. When that failed to occur, the ground breaking was postponed until April 1. After that was scuttled, Felvey predicted last month that construction might begin in July.

According to Birtcher and city officials, the last potential stumbling block will be Felvey’s ability to line up sufficient credit guarantees before he can begin receiving cash from the $100-million bond sale.

Letters of credit, equity backing or other forms of security will be required before any money will be released to Urban Equities, city officials said.

“I think you’ll find we’re very carefully protected and insulated,” Sorensen said. “Certainly, if the project can’t stand scrutiny, there’s something wrong with it. But I don’t believe that’s the case.”

The first public hearing on the proposed Inland Pacific World Trade Center is scheduled for 4 p.m. Monday at Pomona City Hall.