ARTICLE COURTESY OF CYNTHA CALVERT
Tuesday, March 06, 2012
On Nov. 9, 2006, the Houston Business Journal reported that Don Lessem, “a Philadelphia entrepreneur and nationally recognized dinosaur expert, [had] chosen southeast Montgomery County as the site of a proposed large scale tourist attraction.”
According to Lessem, “Southeast Montgomery County edged out the other finalist, [the City of] Red Oak (a Dallas suburb).” He further stated that civic leaders in the New Caney area, “[were] a more aggressive and accomplished group, [with] a personal sense of commitment.”
From that moment on, the excitement and anticipation of a major, Disney-caliber resort grew to a fever pitch.
Time and again, local politicians and civic leaders repeated the mantra that New Caney and southeast Montgomery County had been selected over all other regions in America, news that was almost too good to be true. In particular, the board of directors of the East Montgomery County Improvement District (EMCID) took the lead in promoting, and funding, the dream that all rural counties and municipalities long to embrace. In fact, EMCID incurred liabilities in excess of $21 million to ensure that thedream would become reality.
All the while, local residents eagerly awaited updates as the project progressed. At first, Lessem’s proposal was Project Rex/Dinosaur City, a 50-acre, $50 million, EPCOT-style museum and “edutainment” center. Over time, the project would morph into EarthQuest, a 1,600-acre, $600 million world-class theme park in a mega-complex valued at $1 billion.
Commercial land prices soared, hotels were built, and local citizens rubbed their hands in glee, unbelieving of their good fortune. The train to the Promised Land had left the station and nothing was going to derail it; even the sky was no limit.
But now, almost six years later, EarthQuest is little more than fancy, watercolored pictures that adorn the boardrooms of EMCID.
Lessem, the brainchild of this great adventure, has left the project, along with the developer, Marlin-Atlantis. No construction is planned; investors are nowhere to be found. Funding to EarthQuest consultants has stopped.
The phone still rings at the EarthQuest Institute, but no one answers. And the site upon which EarthQuest was planned is under the threat of foreclosure. All the while, $7.635 million in municipal bonds issued by EMCID costs local taxpayers almost $600,000 in annual debt service.
And no one wants to talk about the $2.5 million in cash expenditures made by EMCID for “other” expenses related to EarthQuest. Even still, Frank McCrady, president of EMCID, continues to believe in the dream, boldly stating, “EarthQuest will be built; it’s not a matter of if, but when.”
So what went wrong? This is a nagging question that researchers for The Tribune have exhausted countless hours trying to answer. What they have discovered is, at best, distressing. And maybe most unsettling of all is the very genesis of EarthQuest. Of particular note are two revelations that portray a vastly different beginning than what has been told to the public.
Revelation No. 1:
There never was a national search to find the best location for Project Rex, the proposed museum and “edutainment” complex.
1. Lessem did conduct a nationwide solicitation of cities and economic development districts, asking them to respond to ‘requests for proposals’ (RFPs) to fund and construct Project Rex.
In a newspaper article dated July 26, 2006, the Beaumont Enterprise quoted Lessem as saying, “RFPs were sent out to economic developers all over the country, in fact, in Texas there were 16 applicants.”
The RFPs contained specific financial requirements that all applicants had to agree to in order to be “chosen” to participate in the search.The RFP stipulations mandated all bidders to: 1) issue revenue bonds for the construction of the project, at their own risk; 2) enact a ticket tax on visitors to repay the bonds; 3) pay for a ‘due diligence study’ at a cost of $100-$125,000; 4) pay for a second study at a cost of $50 – 75,000, if the first study was favorable; 5) pursue tax increment financing for items related to the project; 6) provide a land grant of 50 acres, preferably waterfront.
This “national search” appears to have been little more than a thinly veiled ruse to find a municipality willing and able to agree to Lessem’s demands: take all the risk, fund all the expenses and hope for the best.
In the process, Lessem and his associates would pocket hundreds of thousands of dollars in taxpayers’ funds for consultant fees, studies, etc. Whether or not the project ever came to fruition seems to have become incidental to the developers. And why not? They were getting paid no matter what ultimately occurred.
Revelation No. 2:
And the winner is . . . Jasper County?
As mentioned in the opening paragraph of this article, southeast Montgomery County edged out the City of Red Oak in November of 2006 to become the “winner” of Lessem’s national search. But just six months earlier, in July of 2006, another East Texas town had already been crowned, ‘king of the dinosaurs.’
As reported in the Beaumont Enterprise on July 26, 2006, Jasper County, not southeast Montgomery County, was chosen by Lessem as the site for Project Rex.
Lessem said, “I chose Jasper . . . because, in part, they promised to do some things [in] their RFP.”
Even more amazing than Jasper’s selection was the other city Lessem said was Jasper’s competition. That city was none other than Orlando, Florida, home to Disney World, Universal Studios, SeaWorld and a host of other world-class attractions. But in Lessem’s world, Jasper County was much preferred over Orlando.
Due to concerns raised in the “selection” process, Jasper officials called Orlando. When contacted, the representative at Orlando’s EDC replied that “. . . they had never heard of Lessem [or Project Rex].”
Soon thereafter, Jasper County terminated all discussions with Lessem.
The Tribune found the comment from the Orlando EDC to be very troubling. If Lessem had used a “stalking horse” between Jasper and Orlando, was the same tactic used between the New Caney area and the City of Red Oak?
To find out, Tribune researchers contacted the City of Red Oak, the reported “other finalist” in November of 2006.
The city manager of Red Oak acknowledged to The Tribune that his city had engaged in conversations with Lessem. However, he further stated “we never got to the point where we were ready to proceed with anything.”
Obviously, if the City of Red Oak was the “other finalist” with New Caney, then they never knew it.
So, was EarthQuest a fraud?
That question has yet to be fully answered. But what is certain is that the entire process of selecting a site for the project was tainted with self-interest on the part of the developers. It seems clear that the primary intent of the “national search” was to only find the most willing, if not desperate, municipal entity that would open up its coffers first, and ask questions later.
Furthermore, to ensure that their desired intent was achieved, the developers also appear to have orchestrated and manipulated the selection process, even going so far as to create false bidders. Cities who didn’t even know they were a “finalist.”
But maybe the saddest revelation of all is the complete failure of local officials to exercise caution, restraint and due diligence. Where were the gatekeepers to the public trust when it was needed most?
Unfortunately, the developer’s quest for a ‘willing and able party’ was, indeed, found in southeast Montgomery County.