VOL. 132 | NO. 35 | Friday, February 17, 2017
Downtown Developer Charged in Public Corruption Case
By Patrick Lantrip
John Wessman, the real estate developer who plans to turn two Downtown Memphis buildings into boutique hotels, has been charged with bribery in a Palm Springs, California, corruption case.
The Riverside County District Attorney’s Office filed a criminal complaint Thursday, Feb. 16, against Wessman, developer Richard Meaney and former Palm Springs Mayor Stephen Pougnet.
A statement from the Riverside DA’s office alleges Wessman and Meaney secretly funneled an estimated $375,000 money to Pougnet between 2012 and 2014, when he was the mayor of Palm Springs, to buy his influence.
“At the time, both developers had a number of significant and lucrative development projects that were before the Palm Springs City Council,” the statement reads. “Pougnet, while serving the city as its mayor, voted on a number of projects in which he had a financial interest over that same timeframe. During that time, Pougnet never disclosed those financial interests on any of his Statement of Economic Interest (Form 700) documents, which he signed under penalty of perjury.
The criminal complaint charges a total of 30 counts across all three defendants; Wessman's charges include nine counts of bribing an executive officer and one count of conspiracy to commit bribery. If convicted of all the charges, he would face a maximum sentence of 12 years in California prison.
“At this time, all we know is what is currently being reported,” Downtown Memphis Commission president Terence Patterson said. “The potential impact on the development is uncertain.”
Wessman currently is tied to five projects in the Memphis area.
His company, Wessman Development, was awarded a 15-year payment-in-lieu-of-taxes incentive by the Center City Revenue Finance Corp. on Tuesday, Feb. 14, to convert the former Memphis College of Art graduate school at 477 S. Main St. into a 62-unit boutique Arrive Hotel.
The following day, another one of Wessman’s projects, which involves converting a long-vacant historic building in at 119 Madison Ave. into luxury apartments, a high-end basement bar and coffee shop, was granted a $80,000 exterior improvement grant to help mitigate costs for exterior renovations to the 100-year-old building by the Center City Development Corp.
Changes to another one of Wessman’s notable projects, a 150-room hotel on the northwest corner of Madison Avenue and B.B. King Boulevard, was approved by the Memphis City Council Feb. 7.
The company’s amended plans for the Leader Federal Bank building and the two-story building next to it would add a new nine-story building past the corner on the B.B. King side.
The existing two-story building on the corner now runs north-south to Bates Alley next to a surface parking lot. The new plan by would keep half of the two story building at the corner but demolish the northern half running to the alley for the nine-story building.
Wessman co-developer Chris Pardo told The Daily News: "I have just returned to Palm Springs and was surprised to hear the announcement this afternoon. I have been a designer for Mr. Wessman over the past three years and believe him to be an ethical and straightforward person.
"I have no reason to believe the team at Wessman Development will adjust any of their current nor future development plans including the various Memphis developments. I personally am very excited about bringing them to fruition over the coming months as planned."