Pomona Seeks Study of Trade Center Risks

Seeking reassurances about its role in the proposed $96-million World Trade Center, the City Council has voted to hire an independent consultant to assess the project’s feasibility and the extent of risk being assumed by the city.

The analysis, which could cost an estimated $5,000 to $15,000, was requested by Councilwoman Nell Soto, who has been openly skeptical about the financial integrity of the project’s promoter and co-owner, H. Thomas Felvey.

“I don’t trust Mr. Felvey, and I think everybody knows that by now,” Soto told the council at its regular Monday meeting, adding that her reservations about the project “might be cleared up by an outside specialist.”

Takeover by Birtcher

Meanwhile, city officials have reported that Felvey, the Orange County architect who holds exclusive rights to negotiate for the development of the downtown trade center site, has relinquished some of his key duties in the project.

All of the financial arrangements, as well as a more active leadership role, will be assumed by Birtcher, the national development firm that co-owns the project with Felvey, city officials said.

“It was necessary,” Mayor Donna Smith said. “Birtcher knew the council was not very comfortable with the control Felvey had in the project. . . . If we have any questions or concerns, we’ll be dealing with Birtcher from now on. That’s what I wanted to see, and that’s what’s happening.”

The 41-year-old Felvey could not be reached for comment. When interviewed last month, he said that his professional difficulties, disclosed in a recent article in The Times, should have no bearing on the 14-story international business complex that he proposed two years ago.

But council members, who two weeks ago balked at a plan to provide Felvey with the 4.5-acre lot he needs to build the 1-million-square-foot project across from City Hall, on Monday continued to exercise caution.

List of Consultants

By a 3-1 vote, the four-member council agreed to let Soto prepare a list of community development consultants who could analyze the city’s involvement in the trade center plans. The candidates are expected to be publicly interviewed for the job at a council meeting.

“In my mind, the most important thing is to build the World Trade Center,” Councilman Mark A. T. Nymeyer, who has consistently supported all elements of the city’s plans, said at Monday’s meeting.

” . . . If that means that Mr. Felvey somehow has to get out of the way, let’s get him out of the way.”

In a story last month, The Times outlined how Felvey, while operating under three different corporations, had left a trail of debt and unfinished projects throughout the Los Angeles area over the last decade.

According to Los Angeles County Superior and Municipal court records, Felvey and his corporations are the subject of at least 12 uncontested default judgments for debts ranging from $1,000 to $96,000.

In interviews with more than two dozen former business associates and employees, it was learned that four firms that have done work directly connected with the proposed Inland Pacific World Trade Center have severed ties with Felvey because they contend that he or his corporations still owe them money.

Although surprised by the extent of Felvey’s troubles, most council members have said the city is well protected from any failures and have expressed confidence that the project can succeed.

One of the keys to that confidence has been the involvement of Birtcher, which has agreed to use one of its Laguna Niguel-based partners, Birtcher Development Corp., to serve as developer and manager of the project. The owners of the trade center would be known as Urban Equities Ltd., with Felvey acting as general partner and Birtcher as a limited partner.

A family-run firm spanning four generations, Birtcher has a national network of 16 offices and holds a development portfolio worth more than $1.3 billion. Locally, Birtcher has built the Pacific Design Center in Los Angeles and redeveloped the 528,000-square-foot Los Angeles Wholesale Produce Market downtown.

Under an agreement approved April 15, the City Council voted unanimously to issue $100 million in revenue bonds for the project, giving the Felvey/Birtcher partnership the means to finance construction. The bonds, which are not obligations of the city, will be repaid by Urban Equities Ltd. as revenue from the project is generated, city officials said.

Until now, it has been Felvey’s responsibility to gather the credit guarantees necessary before any of the bond revenues can be released to Urban Equities. Birtcher has now assumed that role, city officials said.

“It got to the point where it was understood that more was necessary,” said Jerry Schwartz, a management analyst in the city’s Community Development Department. “For the project to make it, they needed to get involved on a more active scale.”

Schwartz, however, said that the move should not be perceived as a “salvage-type” operation. “You’re talking about using the resources,” he said. “Birtcher is more reputable than Tom Felvey. If Birtcher can do other things--perhaps persuade the council better than Tom Felvey can--you do whatever is necessary.”

As part of the deal, the city has 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 from a proposed 260-room hotel.

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.

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

Felvey has called Pomona an ideal location for such a complex because of the city’s proximity to freeways, rail lines and the Ontario International Airport. As one of the fastest-growing regions of the country, the Inland Empire could become a major center for international trade, he has predicted.

Besides attracting business, city officials have estimated that the project would create 3,000 jobs and generate more than $1 million a year in general fund revenue.