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TELL MEL

Altair offered hope for Hendry County, but few jobs, no money

MELANIE PAYNE
TELLMEL@NEWS-PRESS.COM

Perhaps the state should have killed Project Assassin from the start.

Brian Jones, Chief Executive Officer, and his wife Michelle Jones, Executive Vice President, of ALTAIR Training Solutions, Inc. Brian and Michelle talks about the arms room in the building. They have guns, as well as a locked room for those taking part in the training to store their personal guns.

Assassin was the name Enterprise Florida Inc. gave to its deal with Altair Training Solutions Inc., a company with facilities in Hendry and Collier counties that offers training for law enforcement and military combat personnel. Financed by private investors, Altair sought to purchase a shuttered prison complex in Hendry County and expand its operations. And it turned to the state and county for incentives.

Enterprise Florida is the economic development organization for the state. Its goal is to help businesses expand and also retain and lure businesses to the state.

Altair’s owners, Michelle and Brian Jones, said they would bring 150 jobs, with an average annual salary of more than $62,000, to Hendry County. In their desire to lure the company away from Texas and Arizona, where the owners said they were considering moving, the state and county overlooked signs that the company was little more than a pipe dream. They also overlooked the owners' troubling financial history and that they had no secured contracts necessary to meet $4.5 million in loan obligations.

The Joneses' short history in Southwest Florida is mired by lawsuits, liens, judgments, several defunct businesses, foreclosures and a bankruptcy. Brian Jones' military career was embellished in published reports, marketing materials and even by state and local officials, inferring experience in special operations that he lacked.

And just 18 months after the state and county provided incentives, lenders foreclosed on the $3.7 million property purchased in Hendry County, the state terminated Altair from the tax incentive program and the company became delinquent in its property taxes in Hendry County.

Altair, which was supposed to be a multimillion dollar enterprise generating $32,000 a year in taxes for the rural county, brings in $275,000 a year in revenue and has 20 employees, according to information in its U.S. Coast Guard contract.

Missed opportunity

The state's program could have been a boon to Altair. The Qualified Target Industry Tax Refund incentive program was set to refund Altair the money it paid in income tax, sales tax, property taxes and workers' compensation insurance premiums if it had met certain goals. The refunds could have been as much as $6,000 for each new full-time job the company created. In all, Altair could have qualified for $806,000 in refund payments from the state.

The Joneses didn’t meet hiring goals and never received tax refunds from the state program, according to the Department of Economic Opportunity. In Enterprise Florida’s 2015, annual report however, Altair was listed as one of 211 projects “which will create $2.7 billion in statewide capital investment and more than 33,500 jobs” in Florida. Altair’s contribution, according to Enterprise Florida: 144 jobs and a $36.25 million capital investment.

In December 2015, Enterprise Florida terminated Altair from the tax incentive program. An audit showed the company didn’t create the 35 jobs it claimed in paperwork it submitted. According to the independent auditors hired by the state, Altair produced only 15 “new jobs” and it was noted those were in “December only.” The average annual wage, based on the December salaries, was $41,015.73. Altair said the wage was $49,809. The annual wage, according to the agreement, was required to be $62,162.

Michelle Jones paints a different picture of what happened with the state. She said Altair voluntarily left the program because it realized it couldn’t meet the hiring goals. She insisted the company had 35 employees at the time of the governor’s visit on May 4, 2015, and had at least 25 employees in December 2014 – well above the goal of 19 – but 10 fewer than were reported to the state at the time.

"Not everything goes according to plan," Michelle Jones said. The Joneses thought they would need employees, but the organizations that use the property for tactical training "bring their own personnel," she said. "We shifted the business plan a bit. We didn't want to be in the program."

Termination from the program is not unusual. Just over 41 percent of the 1,523 approvals for incentives under the state’s Qualified Target Industry refund programs between July 1, 1994 and June 30, 2015 did not receive payments and were deemed ineligible for future payments.

One reason for the high termination rate is that business owners don’t always understand the terms of the agreement, said Department of Economic Opportunity spokeswoman Erin Gillespie. Contract laborers or workers who don’t live in Florida, for example, don’t count toward hiring goals.

And because no taxpayer money is disbursed unless and until the business meets performance requirements, due diligence for companies in the tax refund and credit incentives programs doesn't assess a company's credit risk. For companies in the tax refund incentive program, the focus of due diligence is on things such as the criminal history of a principal, significant litigation, civil fines and whether there is a “substantial probability of non-performance,” Gillespie said.

Despite the high termination rate, Gillespie said thousands of Florida jobs have been created as a result of the Qualified Tax Incentive Program.

Hendry loses

Hendry County’s Economic Development Council also spent months courting Altair and assisting it in securing a tax abatement from the county and qualifying for the state tax refund program. The taxes, abated 50 percent the first year, are delinquent and the company owes the county more than $90,000, according to Hendry County tax records.

Hendry County, with an unemployment rate of 11.6 percent, the highest in the state, clung to the hope Altair offered to rescue a derelict property and bring high-wage jobs to the county. The vetting of the Joneses, however, didn’t bring to light the financial problems, and commissioners were taken by surprise when Hendry County business owner Chad Mudge informed them at a 2014 public meeting that Jones never paid him $38,500 for work he did at Altair’s facility in Collier County.

“The deal (with the county) was going south before it started,” Mudge said in a recent interview with The News-Press.

Brian Jones, Chief Executive Officer, and his wife Michelle Jones, Executive Vice President, of ALTAIR Training Solutions, Inc. They keep a board of patches to show who they have said they have trained.

Mudge said he sandblasted the old Copeland prison, cut the vegetation back, built part of the shooting structure and dug out ponds. He said he paid contractors $28,000 of his own money. Jones paid him $5,000 so he wouldn’t file a lien, Mudge said, now wishing he had because the rest of the money never materialized.

The Joneses filed for bankruptcy in 2008 listing $537,695 in claims. According to a motion filed by the trustee, the Joneses did not make payments according to the plan and the case was closed. Their home in Lehigh Acres, which the Joneses purchased in 2006 for $359,500, was foreclosed on and sold in 2009 for $130,000, according to court records.

Mudge said he went to the meeting to tell the commissioners to “watch out,” he said. “But I was too late.”

This wasn’t the first time Hendry commissioners and the Economic Development Council lured a company with a tax abatement. In May 2014, shortly before Altair came calling, BioNitrogen Holdings Corp. secured a 90 percent property tax abatement from the county. The company, which had planned to build a fertilizer plant outside of Clewiston, also was approved for a tax refund incentive from Enterprise Florida and an $850,000 grant from the state Department of Transportation for a proposed turn lane into the plant site.

BioNitrogen filed for Chapter 11 bankruptcy in November 2015. The plant has not been built and yet the company will continue to get the tax abatement until June 2018.

It didn’t take long for the financial hammer to fall on Altair either. Within months of Gov. Rick Scott’s photo-op visit to the plant in May 2015 and Enterprise Florida’s report on its successful partnership with Altair, the property in Hendry County was in foreclosure.  The mortgage holder claims that Altair owes $4.5 million “plus interest that continues to accrue,” according to the lawsuit filed in Hendry County. Two more suits were filed in 2016 threatening the property in Collier County where the Joneses started their business.

Hendry County Commissioner Karson Turner expressed regret that Altair did not flourish as planned.

Turner said he was initially impressed by the Joneses’ determination and drive. When they didn’t meet the deadline to complete the purchase of the property, “They got in their vehicle and drove to Tallahassee and convinced the DEP (Department of Environmental Protection) to allow them to start acquisition of that land,” Turner said. “That scored a lot of points with me.”

The prison had sat idle for years and the Joneses secured it and fixed up many of the buildings.

“It’s impressive what they’ve done,” Turner said. “They did what they said they would do, but not to the magnitude that they said they would do it.”

Hendry County awarded Altair a five-year tax abatement. The first year Altair would receive a 50 percent abatement on property improvements and tangible personal property. Each year the abatement would drop by 10 percent.

But even with the abatement, Altair is delinquent on its taxes, according to the Hendry County Tax Collector’s Office. The tax on tangible personal property, which includes items such as firearms and vehicles, was $7,651 for 2015. In September, Altair made a partial payment of $1,251 leaving $6,400 due, Hendry County records show.

Brian Jones, chief executive officer, and his dog Sarge walk toward their sniper and rapelling building out by the shooting range.

The property tax due for 2015, for the three parcels that comprise the facility in Hendry County, is $85,650.18. The  amount was delinquent as of Nov. 8.

Although Altair claimed to be a “defense contractor” and the Joneses professed to have “military contracts,” public records failed to show the company had any contracts with the U.S. Government prior to July 2016 when it was awarded a contract with the U.S. Coast Guard, for a three-month use of training facilities. The contract was $40,000.

The company also claimed to have contracts with local law enforcement agencies. The Lee County Sheriff’s Office stated the company was not a vendor. The Collier County Sheriff’s Office could not locate any payments to the company. And Altair did not appear on any public contractor lists for state agencies.

Michelle Jones in an email said the contracts were confidential.

Lawsuits mounting

Karen Urbanik and her former husband Michael owned the 25-acre former Copeland Prison property in Collier County where the Joneses first opened their firearms training business. The Urbaniks had intended to open a firearm and tactical training business on the Copeland property, but the trainer they were partnering with unexpectedly died.

The Joneses wanted to start the business with the Urbaniks, but Karen Urbanik said she and her husband wanted to sell the property and business. When the Joneses couldn’t get financing, the Urbaniks carried the note.

Urbanik said the Joneses began making improvements to the property without pulling permits or paying contractors and liens were filed on the property. The Joneses and Urbaniks settled a lawsuit and the Joneses agreed to pay the Urbaniks $115,000 and satisfy the liens.

The Joneses are making payments on the $115,000, on time, Urbanik said.  “But several lawsuits and liens keep coming up.”

Although the names of the plaintiffs differ in each of the suits, the plaintiff represents the same group of investors, the Naples-based CMG Partners LLC.

One lawsuit against Altair alleges that the Joneses failed to pay promised royalties on its revenues, a condition of the $3.5 million line of credit extended to the business. According to the lawsuit, CMG was supposed to receive the first payment on Oct. 20, 2015.  Yet, “Altair failed to make the First Royalty Payment or any payment whatsoever pursuant to the Royalty Agreement,” the lawsuit stated.

Two of the lawsuits involve alleged defaults on promissory notes. One was for $425,000 made in 2012, another for a $4.5 million loan made in 2014.

In court documents, Altair claimed the plaintiffs installed a CFO who disclosed information that was used to “sabotage … client relationships.” According to Altair, the CFO altered documents and then, along with CMG, attempted a forced takeover of the company.

The Joneses declined to discuss the lawsuit.

But CMG Partners’ Robert White said his company doesn’t have any interest in taking over Altair. “They’re very nice folks,” he said of the Joneses. “It’s just business for us. We’re lenders and they were in default.”

After the Joneses purchased the property they didn’t deliver on the government contracts. “They don’t have the business acumen or level of sophistication to do the dream they have. It could happen with a well-capitalized firm with government contracts, but it’s not going to happen with them,” White said.

The Joneses said they had so much business and were so busy that they had to schedule interviews more than one month out. There have been occasional advertised shooting events at the facility such as a two-day “close quarters combat shooting carbine course,” the last weekend in August.

Background questions  

Some have accused Brian Jones of exaggerating his service record as well as Altair's prospects. Jones’ military career – distinguished in its own right – was embellished in the company literature and doesn't appear to match his official service record. This has led to Jones being featured on websites dedicated to exposing people who exaggerate or fabricate military experience. The accusations are that Jones, in presentations, interviews and company literature recounts missions in Bosnia, Iraq, the battle of Mogadishu made famous in "Black Hawk Down" and the rescue of an American businessman from a prison in Panama.

Larry Vickers, who participated in the 1989 rescue of American Kurt Muse from Modelo Prison in Panama City, Panama, asserted Jones wasn’t there. Vickers, a retired master sergeant in the U.S. Army, said he first heard about Jones when someone emailed him asking if he knew him from that famous operation.

“I can tell you he was not involved in any way, shape or form with Modelo Prison at all,” Vickers said. “There were 23 guys involved and he wasn’t one of them. ... Those who talk about it have never done it. And those that have done it, don’t ever talk about it.”

Brian Jones, chief executive officer, and his wife, Michelle Jones, executive vice president, of ALTAIR Training Solutions. Brian talks about the land and how they use it. There is a big map under glass so he can show clients the land and what it has to offer. Michelle looks on.

Via email Jones responded that he was a radio operator during the Panama mission and “never said anything more than that.”

Daryl Holland, a former contractor for the Joneses, said he began to question  Jones’ military record after an incident at the range in which Jones had an “accidental discharge with his pistol." That led Holland to discover that Jones’ assignment to Delta Force didn’t involve expert marksmanship. “He was a support guy, a radio repairman,” Holland said.

Holland said Jones told him the trumped up exploits in the media and marketing materials were errors made by journalists and public relations professionals. But Holland said, when he heard Jones introduced on a radio show as a Delta Force Operator, “He didn’t correct (the reporter).” And he continued to circulate brochures with the misinformation, Holland said.

Jones brought a defamation lawsuit against Holland. The brochures and advertisements that “misstated the military designations and qualifications of Mr. Jones,” were made in error and Holland circulated them on the internet, the complaint stated.

The lawsuit was dismissed “for lack of prosecution” after Jones failed to file anything in the case for 10 months. Jones said he decided not to waste his energy in a legal fight with Holland.

Lessons learned

Neither the state nor Hendry County expressed regrets about dealings with Altair and the Joneses.

“Florida’s incentives process was overhauled under Governor Scott, ensuring that taxpayer money is protected throughout the incentive award process,” Morgan McCord, press secretary for the Florida Department of Economic Opportunity wrote in an email. The awards aren't made unless the company meets the goals, which McCord said, "safeguards taxpayer dollars" and allows the state to "use the incentive program to successfully attract businesses to Florida without risking state funds."

A similar logic was used by Hendry County to justify the Altair deal. There were no other viable bids for the property. And although Altair originally proposed tax abatement without performance standards, Turner said, the county had been burned in a previous economic incentive deal with a company called BioNitrogen and the commissioners wouldn’t agree to do that again. Still, Hendry County officials wanted the Joneses to open Altair there.

Turner described it this way: “We’re in a desert, we see a mirage and run to that S.O.B. and hope there’s water.”

Brian Jones, chief executive officer, and his wife, Michelle Jones, executive vice president, of ALTAIR Training Solutions. Brian's dog Sarge rests next to him during the meeting.

According to White of CMG Partners, the lender foreclosing on Altair, there may yet be hope for the Hendry County property even if Altair fails.

“The place does have potential,” White said. “It’s a historically underdeveloped business zone. People need jobs out there. And (Hendry County) will make the same deal,” he said. CMG would even lend money to the right buyer.

“The facility has a long list of buyers,” White said. Some potential buyers have secured government contracts and can bring “50, 60, 100 employees” to Hendry County. “It can come to fruition,” he said. “But not with the current owners.”