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Gary Bradley, Alien, Inc., sue

Friday, September 29, 2000 by

Heep over partnership, loans

Heep says she never received money

By Rob D'Amico

Developer Gary Bradley is suing Hatsy Heep Shaffer for failing to develop her property in a partnership with him and for failure to pay outstanding loans of at least $700,000, according to documents filed in the case.

One lawsuit filed Aug. 31 states that Shaffer promised to give a Bradley company her portion of the Heep Ranch land in return for profits and promised payments from the land's development. Additionally, the pleading states that Bradley arranged for $700,000 in loans so Shaffer could pay off judgements, liens and other debts and expenses associated with the property. Alien Inc. is separately suing to collect $700,000 in loans. Attorney Wallace Smith, who represents both Bradley and the corporation, declined to discuss specifics about Alien, Inc.

Shaffer said a Feb. 22, 1999 “letter of intent” for a limited partnership that outlined the development agreement was not valid. Furthermore, she said she never received any money from Bradley. “Not a dime,” she said.

The Alien Inc. lawsuit documents include promissory notes for the loans signed by Shaffer on Feb. 22, 2000, but she says she has never seen the documents. Smith said, “We will have no problem proving in court that she got the money.”

Shaffer began a verbal war against Bradley last week and claimed he was trying to take her land and water system for his development efforts. Shaffer owns one-third of the 5,700-acre Heep Ranch in several tracts along the I-35 corridor near the Travis and Hays county lines. Shaffer and her two sisters– Betsy Urban of Dallas and Kathleen Adkins of Houston–are heirs to the estate of Herman F. Heep, an oil wildcatter who ran a cattle operation on the Heep Ranch.

Bradley could not be reached for comment on the lawsuits or Heep's statements. An agreement between Heep and Bradley states that a limited partnership would develop the Heep land owned by Shaffer. Shaffer would own 50 percent of the partnership and its profits. A Bradley corporation would own 49 percent, and Bradley would act as a general partner for the remaining 1 percent. The general partner was to receive $30,000 per month for his services. Starting in September 2002, Heep was to receive at least $350,000 per year. Bradley was to help Shaffer with the settlement of disputes that led to the final division of land between her and her sisters. And his corporations would pay for all development and associated fees.

The lawsuit states, “Development of the Ranch posed a series of difficult challenges, the first of which related to then-pending litigation between the sisters, which had to be settled before the Ranch could be partitioned. Moreover, several complex regulatory and land use issues would have to be resolved in order to realize the development potential of the property after partition. Based on Bradley's expertise in land development and experience resolving difficult regulatory issues, Defendant (Shaffer) expressed a strong desire to form a partnership with Bradley for the development of her interest in the Ranch.”

Bradley wants to put residential and commercial development on the land, as well as a 2,500-acre tract owned by Texas A&M's Herman F. Heep and Minnie Bell Heep Foundation. Bradley currently has a contract to buy that land. Another one of his projects would serve all of the development, a proposed toll road extension of State Highway 45 to U.S. 183. The road would connect Bradley's Circle C and Spillar Ranch developments with the new development and Austin-Bergstrom International Airport.

Shaffer says the agreement she signed along with her husband, David Shaffer, is not binding, and that after signing it she quickly determined that Gary Bradley was someone she “would never do business with.” In particular, she said the agreement would have put her at legal risk because Bradley was going to put money in offshore accounts she didn't trust. “I'm not interested in being part of his…schemes,” she said.

She also said that she continues to find evidence that her water system is a key to Bradley's development efforts, and that it has been his intention to control her water and infrastructure all along. (See In Fact Daily, Sept. 19, 2000) Indeed several documents from a water supply company and the Texas Natural Resource Conservation Commission show that Bradley and other developers–including John Lloyd, owner of the Heep Boone tract north of Shaffer's property–are creating a master plan for the entire area. Part of that plan includes water service from the Creedmore-Maha Water Supply Corporation, which currently has an application before the TNRCC to expand its service area to include the Heep Ranch.

Creedmore-Maha doesn't have the water supply to serve the development, which could include water-intensive uses such as computer chip manufacturing. However, the water company currently is negotiating with the Guadalupe-Blanco River Authority for water from Canyon Lake. And Lloyd said this week he believes the area will eventually be served from the north by the Lower Colorado River Authority. Shaffer says the developers know it would be much simpler to get her water.

Regardless of Bradley's intentions, it's clear that at some point he believed he had a limited partnership with Shaffer and was authorized to represent himself as her partner. Shaffer maintains that this became a misrepresentation when she rebuffed the developer's agreement.

The lawsuit also includes a letter from the Texas Secretary of State's office confirming the limited partnership named “ SH 45 Development, L.P.” Smith refused to comment on why the letter and application for the designation were dated Aug. 29, 2000, a mere two days before the lawsuit was filed.

Austin Ventures to take penthouse

In CarrAmerica's Sixth Street building

Venture capital firm joins two law firms as anchors

Austin Ventures, the largest venture capital firm in the Southwest, has agreed to lease the top two floors of the CarrAmerica building under construction at 300 West Sixth Street, In Fact Daily has learned.

Jeff Pace, managing director of CarrAmerica's Austin office, said Austin Ventures intends a formal announcement of its commitment next week. Pace said, “They could have gone anywhere in the city. They could have gone to the top of a mountain overlooking the city. Instead, they chose to be at the top of this new office tower in the heart of downtown.”

Austin Ventures will move from another downtown location to occupy the 22nd and 23rd floors, or roughly 40,000 square feet, of the CarrAmerica building. A spinoff company, AV Labs, will take a portion of one of the two floors to incubate start-up ventures.

Austin Ventures' decision gives the CarrAmerica building three anchor tenants. The two original tenants, slated to occupy 100,000 square feet each, are law firms Akin Gump Strauss Hauer & Feld and Clark Thomas & Winters, each of them moving from other downtown locations. The building, with 440,000 square feet of office space, is expected to be ready for occupancy in January 2002.

Michael A. Kennedy, president of Commercial Texas, LLC, a commercial real estate firm, suggested Austin Ventures decision to move into the building will encourage other firms to take a look at the opportunity. Speaking of Austin Ventures' role in spurring the New Economy, Kennedy said: “What Austin Ventures has done is indirectly created over $15 billion in value and 9,300 jobs through its Austin investments.”

Mayor Watson wants you to know

City not to blame for street cuts

Communications companies have Sate on their side

Does Austin have corduroy streets? With constant cutting, trenching and construction in Austin streets these days, that metaphor seems more and more appropriate. At Thursday’s City Council meeting Mayor Kirk Watson said he wants people to know that the constant mess is not always the city’s fault.

Much of the work on downtown streets is from telecommunications companies installing or upgrading high capacity conduits and fiber optic lines to keep up with the information technology explosion. The city doesn’t necessarily have much control over these projects.

Michael Parks, director of Telecommunications and Regulatory Affairs for the city, addressed the City Council Thursday on two agenda items concerning such bandwidth improvement projects. Both items were approved. One was to amend a license agreement with Qwest Communications, and the other was to grant a license to PF.NET Network Services Corp. “for the placement of facilities in the public right-of-way.” Parks, along with Assistant City Attorney Sonny Hood, explained legal stipulations concerning rights telecommunications companies have to excavate city streets for placement of communications lines.

Watson asked Parks to repeat some of what he had said to make perfectly clear that the city is indeed not in control of when and where trenches will be dug in city streets. In fact, the city is mandated by the state to comply with telecommunications companies and even assist them in tearing up city streets to place communications lines. And proposed legislation would actually give the city less power to say when and where excavations would occur. There is currently so much activity in the telecommunications industry that proposed legislation would give the industry more power to excavate and disrupt city streets without regard to the city and its citizens.

Watson said citizens automatically assume the city is in charge of all the numerous construction projects under city streets, when the truth is more that the city is ahead of the state in trying to prevent such widespread trenching. “We’re doing everything state law allows to ensure a minimum of disruption,” he said. “We want people to know it’s not the city doing this.”

Nationally, the number of such high capacity lines doubled between 1993 and 1997, according to a paper released by the Downtown Austin Alliance. Many of these lines have been installed in downtown areas to provide faster Internet service. “In Austin, each telecommunication company is responsible for laying (its) own wiring and then maintaining it,” the report states. “To do this, (the companies) obtain a construction permit from the city to close parts of the right-of-way. This enables the telecom companies to dig their trenches, lay cables and fiber optic wires, and then repave the street. Because this has been done so many times in the downtown areas, we are beginning to have ’corduroy streets‘ that are constantly under construction.”

©2000 In Fact News, Inc. All rights reserved.

Planning Commissioners appointed… The City Council Thursday appointed Lydia Ortiz, a South Austin resident, to fill the position previously held by East Austin activist Susana Almanza on the Planning Commission. The Council also re-appointed Ben Heimsath, an architect who lives in Hyde Park. The appointments were by consensus, although Council Member Danny Thomas attempted to appoint Darwin McKee instead of Heimsath. Mayor Pro Tem Jackie Goodman made a motion to appoint Heimsath and Ortiz. Thomas made a substitute motion, to reappoint Almanza, add McKee and eliminate Heimsath, saying East Austin needs representation and otherwise would have none. The motion failed for lack of a second. McKee, an attorney, lives in Northeast Austin and is chair of the Water and Wastewater Commission. A few weeks ago, Thomas appointed Rev. Sterling Lands to the commission. Lands is listed as a resident of Northeast Austin on documents provided by the City Clerk’s office… Interport zoning approved… City Council unanimously approved zoning for the 652-acre Interport Planned Unit Development, but lowered the height on all tracts to 60 feet. The Planning Commission had recommended a height limit of 75 feet along State Highway 71, east of Austin-Bergstrom International Airport. The Council did grant LI (limited industrial) zoning for the tracts fronting on the highway, with the proviso that any warehouse loading docks be hidden from view of the highway. Developer Pete Dwyer had requested a 75-foot height limit on the entire property so he could build a hotel along the Colorado River… Good news for some city employees…The Council removed a cap on longevity pay yesterday to help management keep city staff. In the past, the city has given additional pay to employees based on their time with the city– up to a maximum of 12 years. In the future, each year beyond 12 years will also count towards extra pay. Bonuses are paid in December..

© 2000 In Fact News, Inc. All rights reserved.

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