A Disneyland for gun lovers
Monday, February 20, 2012
Cynthia Calvert
Frank McCrady, president and CEO of the East Montgomery County Improvement District
(EMCID), announced last week that a preliminary agreement has been made with Front Sight
Firearms Training Centers to build a facility in East County. McCrady said the project will bring
significant economic impact.
The firing range project, which has an interesting connection to the questionable dinosaur theme
park, EarthQuest, supposedly coming to East County, also brings a controversial history.
Front Sight's headquarters is located in Pahrump, Nev., the same community that former
EarthQuest consultants Don Holbrook and Chris Brown have contracted with to develop a theme
park in that rural area.
<<PAGE-DIVIDER>>
According to the Pahrump Valley Times [ 10- 12-2011 ], after the EarthQuest project stalled,
Holbrook entered a contract with the rural, economically depressed Nevada community to
present the efficacy of building Think Tank!, a park where visitors can drive armored tanks.
Holbrook prepared a report for the town saying that Think Tank! would be a place, "Where
guests would be able to drive a military tank... in a fun, safe environment." There would also be
obstacles with special effects and explosions.
Holbrook added that millions more could be gleaned from tourists if Pahrump were to expand on
that idea and build'Adventure Springs,'which would include the tank/explosion range along
with a movie, a lake, a visitor center, a town, a hotel with a water park, a family entertainment
center, a golf range, an event space and retail and dining space.
Interestingly, this is the same situation that developed with EarthQuest, which went from a small
idea called Project Rex, then became the $50 million Dino-City which eventually morphed into
EarthQuest, a $600 million plus, 1600-acre resort with four "lands," a museum, rides, special
effects, a water park, hotels, conference center, restaurants, retail and office developments, with
Holbrook involved every step of the way.
Front Sight has a controversial history in Pahrump. Matt Ward, editor of the Pahrump Valley
Times, said that while the range is part of the peaceful community, it is known as a "gun nut
heaven." The owner, a former chiropractor named Ignatius Piazzo, originally touted the idea as a
residential development with a total gun focus. Piazzo, according to KLAS-TV in Las Vegas,
bought 550 acres in Pahrump in the late 1990s and promised to build "the safest town in
America'by building a'Disneyland for Gun Lovers."' KLAS-TV investigative reporter Colleen
McCarty (| 8 News NOW - Las Vegas News | Weather | Traffic) said, "Thousands of people bought in with memberships
ranging in price from a few thousand to hundreds of thousands of dollars. Most were guaranteed
a lifetime of weapons training and six-figure deals, called platinum memberships, and were
promised a one-acre home site."
But the master-planned community never happened. Piazzo, according to McCarty and Pahrump
Valley Times reporter Gina B. Good
(archive.pahrumpvalleytimes.conV2005/11/18/news/frontsight.html), was eventually sued by
several of those members.
California attorney C. Keith Greer filed a class action lawsuit in November 2005 on behalf of
several Front Sight members, alleging racketeering and fraud. Greer said Piazza de-frauded
thousands for his own personal gain, Good reported. She also reported, "The action demands a
jury trial under the Racketeering Influenced and Corrupt Organizations (RICO) Act. The 26-page
complaint against Front Sight centers on membership benefits and promises. At the
organization's inception in 1998, memberships were sold to fund construction of shooting ranges.
Free classes for life with memberships that could be willed to family members were attractive to
gun owners who sought professional training. Additional benefits - like home sites - were
promised for higher priced memberships."
<<PAGE-DIVIDER>>
Greer said, "Piazza took other people's money for investment capital to start his operation and
then when he got it up and running, he hung them out to dry. Didn't follow through on the
promises he made, didn't give them what they expected, didn't give them their money back."
Eventually, by June of 2009, in response to Piazza's refusal to pay a multi-million dollar
settlement, a federal judge ordered a receiver to take control of Front Sight, its facilities, its
operations and its assets (www.pahr-umpvalleytimes.com/2009). Seven days later, Piazza made a
financial offer and regained control of his property. According to the KLAS-TV, Front Sight still
owes more than $5 million of the class action settlement.
Websites devoted to Front Site (THR - Powered by vBulletin) have lengthy complaints that Piazza is a
Scientologist or a former Scientologist. In fact, Piazza sued one of his former platinum members
for writing in her blog that she believed him to be a member of the controversial organization
(Diana Hsieh: Front Sight, Ignatius Piazza, and Scientology?).
Pahrump Valley Times editor Matt Ward says a mysterious death that occurred on the property,
along with the recession, stopped the home development side of the operation.
"A guy died out there, not by a gunshot, but it was some sort of accidental hanging. Then there
was a big lawsuit and the home development just never happened," he said. According to KLAS-
TV, a range visitor died in 2007 in a zip line accident and a lawsuit did take four years before it
was settled (www. 8new snow. com/story/l 5 691632)
Front Sight failed to meet Nevada state fire safety standards numerous times, according to
KLAS-TV reporter McCarty. The reporter said, "Front Sight has failed again to outfit its
classroom building with fire safety basics like sprinklers, fire pumps and water. It's no surprise
despite claims construction was on target; Front Sight has again failed to meet its deadline. This
is the fourth such failure in the last two years."
Controversy not withstanding, the Internet is also filled with glowing praise for Front Sight.
Numerous blogs, letters, articles and news reports show there are many who vouch for the
experience as exceptional, fun, beyond their expectations and that the gun range experience is
excellent.
Courses range from $1,000 to $2,000 and the website (Firearm Training Courses - Handgun ( Glock, etc.), Shotgun, Rifle, (Sub) Machine Gun - from FrontSight.com) is filled with dozens
of testimonials, course offerings, and options to learn or enhance individual firearms proficiency.
Final arrangements with Front Sight is pending; the final site has not been chosen yet.
As with EarthQuest, McCrady is assuring taxpayers that the development will not cost them a
penny. EarthQuest developers received millions of dollars from EMCID; taxpayers were given
assurance that parking fees at EarthQuest and intellectual property rights will make up for the
EarthQuest costs estimated to be as high as $10-15 million (The Tribune has made numerous
requests of EMCID for the total number of dollars spent to date on the EarthQuest project but no
answers have been provided). McCrady said the incentives given to Front Sight will come from
rebates of sales taxes and other revenues generated by the new business itself.
<<PAGE-DIVIDER>>
"None of the incentives will come from any existing source or take away from current funding,"
he said. "We're looking at venue taxes to provide the incentive needed to bring these businesses
to East County."
Where's the money?
Tuesday, February 21, 2012
Cynthia Calvert
The East Montgomery County Improvement District (EMCID) is a public agency empowered by
the State of Texas to issue municipal bonds that are sold to the general public. The funds
received from the sale of the bonds can then be invested in various projects, with both public and
private interests, within EMCID's boundaries.
Generally speaking, in an improvement district such as EMCID, bond proceeds are utilized to
facilitate economic development within EMCID's district that will bene Fit the taxpaying public
with local job creation, new tax revenues, user fees, etc. The new and increased assessments can
then be used to fund a variety of civic, charitable, educational and other organizations to improve
the overall quality of life for local residents.
Consequently, there is a solemn obligation on the part of the EMCID leadership and board to
ensure that the bond funds are managed diligently and invested prudently.
The Tribune has now independently confirmed that EMCID issued $7,635,000 in sales tax
revenue bonds on April 15, 2009. The proceeds of that bond sale were used to reimburse the
promoters of the EarthQuest project for pre-development costs, primarily conceptual, and design
work.
The bonds were issued in two sets with different maturities, and a blended interest rate of 6.525
percent. The bonds will mature in two stages of 20 and 30 years, in 2029 and 2039, respectively.
In addition to the foregoing bond sale, EMCID President and CEO Frank McCrady said in a
recent Houston Chronicle article that EMCID has also incurred cash expenditures of $2.5 million
in non-developmental costs related to EarthQuest. This amount was apparently paid out of
existing tax collections, bringing the total (verified) cost of the project to $10.135 million.
Given the pending foreclosure of EarthQuest's intended site, the unending project delays, an
almost complete turnover of those involved in the venture and the continuing weakness in the
local and national economies, EarthQuest is, by any measure, a troubled project.
Notwithstanding, McCrady has given repeated assurances that "EarthQuest will be built". . .
[and] "it's not a question of if, but when."
But what happens if EarthQuest doesn't get built?
<<PAGE-DIVIDER>>
To answer that question it's necessary to first understand how the bond process works.
Simply stated, a municipal bond is a written promise on the part of a governmental agency (in
this case EMCID) to repay monies it borrows from private investors. As collateral for the bonds,
EMCID granted the owners of the bonds a lien on, and a pledge of, three fourths of I percent of
EMCID's sales and use taxes. This calculation equals 50 percent of the total sales tax base of
EMCID.
Thus, the bond is similar to a mortgage that would be taken out when a homebuyer purchases a
house. In the case of EarthQuest, the $7.635 million in bonds issued by EMCID represents the
,'mortgage" that
EMCID incurred in order to "buy" a "house", i.e. the EarthQuest theme park.
If the theme park subsequently becomes a reality, then new jobs will be created, new tax and
revenue streams will be generated and the "house" will produce sufficient income to pay off the
mortgage.
However, the EarthQuest project differs from a typical home purchase in one major respect: the
,'mortgage" was incurred in 2009, but no "house" has yet been built. Furthermore, there is no
guarantee that the "house" will ever be built. Nevertheless, EMCID has guaranteed to the
purchasers of its bonds that the "mortgage" will be repaid.
And like all mortgages, the bonds must be repaid with interest. Since these bonds were issued for
20-and 30-ycar terms, while paying 6.525 percent interest, the total interest cost to EMCID is
projected in the bond prospectus to be $10,960,254.
Consequently, the total cost and liability of the EarthQuest project is not $10.135 million as
previously mentioned, but is more than $21 million due to the future accrual of interest, the
payment of which has been guaranteed by EMCID.
So who will pay this "mortgage" if the house never gets built?
As usual, the answer is: the taxpayers. More specifically, the taxpayers that reside or shop within
the EMCID district.
If EarthQuest isn't built, EMCID will have no choice but to repay the principal and interest on
the bonds out of current tax revenues. In doing so, the annual debt service on the bonds will
significantly impair EMCID's ability to fund other projects. For example, the total annual debt
service of the EarthQuest bonds, by year, is: 2012 - $487,506; 2013 - $550,556; 2014 -
$551,506; 2015 - $552,156; and so on.
The foregoing scenario becomes even more disconcerting when the total bonded indebtedness of
EMCID is considered. That is, EMCID has additionally sold bonds on two other projects
unrelated to EarthQuest. The unpaid principal amount of these two bond sales equaled
<<PAGE-DIVIDER>>
$7,673,416.00 as of February 15, 2012. When the annual debt service of these two bond issues
are combined with the EarthQuest indebtedness, the above annual payments more than double.
For example, the total, combined annual debt service of all EMCID bonds, by year, is: 2012 -
$1,077,494; 2013 - $1,141,924; 2014 - $1,142,849; 2015 - 1,142,133; and so on.
With only a finite amount of tax receipts coming into EMCID, combined with EMCID's
outstanding bonded indebtedness, it is painfully obvious that EMCID will have to forego many
economic development opportunities if the EarthQuest project is not built.
So who will pay if EarthQuest isn't built? You will.
Bookmarks