Terance Frazier filed a claim for damages against Fresno. Then the council gave him $700K
Weeks before the Fresno City Council gave nearly $700,000 to a company co-owned by Terance Frazier, the developer filed a claim for damages for the way the city handled an audit of a separate project.
Frazier filed claims for damages on July 3 and amended them two weeks later, according to documents released on Tuesday, following the city’s audit of nonprofit Central Valley Community Sports Foundation, which runs Granite Park.
That long-troubled development and its managers were audited for performance from January 2016 to July 2018. The audit was spurred after Frazier asked for an additional $150,000 to run Granite Park, which would double the city’s financial commitment.
The audit released in January found personal loans, missing documents, questionable spending and a large amount of unaccounted money. The nonprofit’s accounting practices looked “not ethical,” according to the audit.
Frazier’s initial claims from earlier in the month totaled $10 million in losses, according to earlier filed documents. He did not immediately respond to requests for comment from The Bee.
An amended claim from Frazier listed unspecific damages for how the release of the audit hurt the reputation of the developer and caused him to lose sponsors, among other damages, according to the form.
“City manager and/or mayor and others prematurely and knowingly released a false and misleading audit report containing known errors,” the claim says.
Bredefeld: City practices raise a stench
Councilmember Garry Bredefeld said not all members of the City Council were aware of Frazier’s claims, which could potentially lead to a lawsuit, before the council voted on Aug. 15 to give $659,298 to another company of Frazier’s. Noyan Frazier Capital LP, a development company run by Mehmet Noyan and Frazier, was awarded low-income housing funds for a downtown apartment building.
Bredefeld said the council’s president and vice president, Paul Caprioglio and Miguel Arias, were informed. “Surprisingly none of the other council members were told about this (claim for damages),” Bredefeld said. “Everybody needs to know all the information when you’re making a decision about taxpayer money.”
Bredefeld called a news conference Tuesday to “shine a light” on “the stench” coming from the city’s incompetence and mismanagement. He said the council could change its mind on the decision by calling a special meeting, which can be held if requested by the council president or four councilmembers.
“I think the stench will continue without a special (meeting) vote,” he said. “We need to do our fiscal due diligence on every vote. That did not happen on Aug. 15.”
He also questioned whether Frazier’s contract for Granite Park was being maintained, saying it does not have basketball and volleyball courts required in the agreement, among other lacking amenities.
Mayor Lee Brand said in a statement that the Granite Park and downtown apartment building are separate projects that should be judged on their individual merits. He went on to say it’s the responsibility of the city attorney to speak to the council about potential litigation.
Arias: Bredefeld logic doesn’t add up
Arias said he was not aware of the claims for damages before Aug. 15. Caprioglio declined to answer the question on Tuesday.
Arias said Bredefeld’s logic doesn’t add up, noting a claim for damages is only potential litigation. The city continues to do business with Granville Homes, for example, which is in ongoing litigation with the city.
The Building Industry Association of Fresno/Madera Counties, Granville Homes Inc., Wathen Castanos Peterson Homes Inc. and Lennar Homes of California Inc. filed a lawsuit in May 2017 related to an increase in water rates that is ongoing. Bredefeld has approved projects with some of those builders in the meantime, Arias noted.
“People litigating with us does not determine the content and how we vote on the items,” Arias said. “This is simply something where he has a personal issue with a person or company.”
The councilmembers are also free to ask city staffers about potential litigation from developers before voting at council meetings, Arias said. “I’m convinced if he had asked, he would have got answers. He doesn’t need to act surprised,” Arias said. “It’s just a failure of (Bredefeld) to do his homework.”
Frazier’s downtown project already benefited from about $1.6 million in public money, including the waiving of developer fees and state grant money, before his company came back to the council in August. In 2016, the city purchased parcels on Fulton Street near Kern Street and sold it to the developer for $1.
Bredefeld was the only member of the council to vote “no” on the new money given to Noyan Frazier Capital in August. Councilmember Esmeralda Soria did not cast a vote, because she’s in a relationship with Frazier, and Councilmember Mike Karbassi had not yet joined the council.
Email notification
Bredefeld provided an email chain from City Attorney Doug Sloan that showed Arias was sent an email about the claim for damages. Arias did not respond to the email and it’s unclear if he read it, according to the thread.
“This email confirms what most of us know at City Hall, the truth and Mr. Arias rarely meet,” Bredefeld said.
He argued that Frazier has a history of bad management and doesn’t have the reputation of a group like Granville Homes. Frazier also made a claim for money, and is not arguing over policy changes like Granville.
Arias said he receives emails about claims for damages routinely but doesn’t necessarily read all of them. He said he doesn’t see them as raising any red flags until they become actual litigation.
He said he’s never seen the form from Frazier, noting the administration handles claims at that level. The council shouldn’t micromanage the administration, he said.
“If they become actual litigation, that’s when we all get briefed,” Arias said. “The issue with Granite Park is the administration’s responsibility. It’s not the council’s.”
This story was originally published September 3, 2019 at 4:09 PM.
