Russell Vandenburg Follow Up

Apparently I hit a nerve with some of you in regards to my post on Oscar Leeser canceling TVO’s real estate contact with the city. As usual your comments, suggestions and leads are not only useful but also much appreciated. As you already know through my Tweet on Tuesday, city council voted unanimously to terminate the contract with TVO.

According to the commentary at city council, Joyce Wilson met with TVO as soon as Leeser let her know he was going to ask city council to cancel the contract. According to Wilson she asked for and received a status report on where the project stood from TVO. Also, according to the commentary at the meeting, TVO will wind up the contract and deliver a database of all real estate property owned by the city as well as two books of properties that could be sold.

Although Oscar Leeser went out of his way to state that the cancellation of the contract had to do with his decision that the city should be handling the real estate portfolio instead of using a third-party his monologue left open questions as to the true reason for his decision to put this on the agenda. Likewise, Joyce Wilson seemed to pretend to agree to the mayor’s request however her comments betrayed a sense that she was not prepared for this action.

However, the fact remains that the city will continue to contract with TVO on a case by case basis but the open ended contract is now on a thirty-day cancellation notice period. Many of you asked for more information on Russell Vandenburg. As has become my process I’m laying out what I have on a time line basis so that we can connect the dots easier.

Russell Vandenburg has been a long-time member of the controversial Paso de Norte Group (PDNG) that has been involved in numerous controversial public policy initiatives including downtown redevelopment. He is also president of TVO North America.

According to TVO’s company profile it lists itself as one of the “leading privately held owners and operators of multi-family rental apartment communities in the U.S.” It lists its headquarters in Chicago and El Paso.

In 2007, TVO and Russell Vandenburg were both involved in the construction and management of the Garden Inn at UTEP. The land rental agreement to the hotel owners was approved by the UT Board of Regents in 2004 and the hotel opened on January 16, 2007. Some of you may remember that there was some controversy with sub-contractors alleging that they were not paid for the work they had done on the hotel.

In 2009, TVO announced it had acquired the Cliff Inn property and was going to build a four-story medical plaza in its place. The plaza was supposed to have opened in 2011. In 2013, GECU filed a lawsuit against Vandenburg’s group in relation to this project.

Also in 2009, TVO partnered up with Centro de Salud Familiar La Fe to build the Magoffin Park Villas. Magoffin didn’t break ground until late 2010. According to the information I have collected, both La Fe and TVO invested approximately $8.1 million in the development of the 91-unit apartment complex in Segundo Barrio. The apartment complex opened in October 2011.

When the developers went before city council for approval there was considerable controversy about the development because many in the community felt that they were not included in the discussion. Some also objected because of the lack of parking and the size of the building for the neighborhood. City council approved the development with Beto O’Rourke abstaining because of a conflict of interest as his wife worked for La Fe at the time.

On May 2, 2010, Russell Vandenburg was one of the twenty-nine signers to a letter addressed to the El Paso Times objecting to the portrayal of Diana Natalicio’s travel expenses by the paper. Other signers of the letter included Myrna Deckert, Leonard Goodman, Joshua Hunt, Woody Hunt and William Sanders.

In 2012 the city issued TVO a contract to manage the city’s move out of city hall into three temporary buildings in preparation to make room for the stadium. Published reports seem to indicate that TVO made approximately $490,000 in commissions. Cortney Niland criticized TVO’s handling of the purchase of the El Paso Times building stating that the job by TVO “was not done very well”. She added that “to recommend that we pay more than the market value, to me, is foolish”.

TVO provided professional real estate service to the city for the purchase of the El Paso Times building and two other buildings.

Coincidently, a Texas Attorney General ruling (OR2012-13456) on an open records request details how TVO objected to the release of the real estate services contract based on the notion that to do so would be detrimental to TVO’s business competitiveness. The Texas Attorney General Ruled against TVO’s objections.

On December 28, 2012 Citibank filed a Breach of Contract lawsuit against Russell Vandenberg. According to the latest lawsuit documents available to me it appears that the judge issued a Default Judgment against Vandenburg on August 20, 2013 for failure to appear.

Although announced in 2012, the Paso del Norte Group (PDNG) and REDCo, of which Vandenburg was listed as being on the board merged into one organization in January 2013.

The combined organization was named The Borderplex Alliance. According to them, the new organization will merge the city’s Economic Development, Business Intelligence and Data Analysis and Policy Development and Advocacy under their umbrella. Among the members of the new organization, besides Vandenburg are Myrna Deckert, Alejandra de la Vega Foster, Paul Foster, Woody Hunt and William Sanders.

The merger was the result of the city’s economic development study that indicated that economic development efforts needed to be revamped. The focus would now be regional development.

On August 14, 2013, City Bank allowed High Desert Investors, LP, the managing partners of the Garden Inn hotel, to modify its August 14, 2008 loan with the bank for $15 million. Russell Vandenburg is listed as a principal in the loan documents.

On August 29, 2013, GECU filed a Breach of Contract lawsuit against Vandeburg and various other entities including City View Investors, LLC. and TVO Development Investors, LLC. City View Investors was involved in the 2009 medical plaza development where Cliff Inn was formerly located.

On September 11, 2013 Russell Vandenburg filed divorce proceedings against his wife. On October 18, 2013; Martha E. Vandenburg filed a Temporary Restraining Order against her husband; Russell Vandenburg. The court ordered Russell Vandenburg from “destroying” any property, “falsifying” any property records, “tampering”, “selling”, “transferring” any property including personal items or real estate. It also prohibited Vandenburg from spending any cash or withdrawing money from any bank or limiting or terminating any credit or charge card in the name of Martha Vandenburg. The order also prohibits him from “destroying, disposing of, or deleting any e-mail or other electronic data relevant to the subject matters of this case, whether stored on a hard drive or on a diskette or other electronic storage device”.

The order goes on to prohibit Russell Vandenburg from “terminating or in any manner affecting the service of water, electricity, gas, telephone, cable television” on their property on Westside Drive.

Russell Vandenburg has been involved in the promotion of downtown development and is leading the charge in the city’s new economic development initiative under the Borderplex umbrella. He has also become embroiled in various legal entanglements recently.

Politically he has supported Beto O’Rourke and Steve Ortega as well as Eliot Shapleigh, not to mention numerous Republican candidates at the state level. Although Leeser went to great lengths to state that TVO and Vandenburg remain in good standing with the city, I believe Tuesday’s city council action had more to do then just bringing back real estate management to city staff. City council took no action on the executive session item related to possibly selling some city owned real estate.