Sunday, September 6, 2009

Bliss Block: The Fleecing of Florence

"Bliss Block, what a crock," the reader wrote. Our faithful follower expresses how many in Florence have felt the past few years when it became obvious the city would in all probability never recover the small fortune it had lent real estate developer Jimmy Neese.

Named for a nineteenth century attorney who practiced in the 100 block of South Court Street, the name Bliss later became primarily connected with the buildings at 101, 103, and 105 South Court. After Best Jewelers closed its doors, the building at 101 had generally fallen into disrepair, and the other two buildings were hardly in pristine condition as well; city fathers were more than happy when James Martin Neese announced his plans to purchase the properties for approximately $250,000.00 and restore them to their original grandeur.

Incorporating as Bliss Block Ltd, Neese then requested a loan from the city in order to finance the renovations to the three buildings, as well as a fourth storefront located diagonally across the street. In the last decade, it was common for the City of Florence to offer low interest loans to local businesses seeking to expand. The program itself was later found to be an illegal use of city funds, but at the time, Neese was certainly not the only local entrepreneur to take advantage of the program.

However, while the economy was growing, not every one who negotiated one of these business loans was able to repay the debt. Over the years, Bliss Block fell farther and farther behind until it became apparent the city was in danger of never recouping its loan. It seems the Florence loan was known legally as a "no recourse" loan, meaning the city had almost no legal remedy available to it. A second Neese loan of $250,000.00 from First Southern Bank of Florence, as well as another large loan from a Huntsville bank, were also in default.

After months of waiting for any payment from Neese, the City of Florence sued Neese for nonpayment in 2007, but lost the case in Lauderdale Circuit Court. No recourse meant exactly that--Florence had little hope of enforcing the contract with Neese. Neese himself was always prepared to present the books for Bliss Block Ltd, books that showed no assets, but where had the money gone?

After purchasing the Bliss Block property for $250,000.00, Neese received a $325,000.00 tax rebate for his historical preservation of the site. He also negotiated to pay off his $250,000.00 loan at First Southern Bank for only $100,000.00. First Southern, fearing they would lose the entire amount, was more than willing to settle. Coupled with the $600,000.00 loan from the city, Neese netted a grand total of $825,000.00. Certainly some of that amount was used to refurbish the three Bliss Block buildings, but Neese's company contracted with construction firms in which the realtor had a financial interest. Jimmy Neese's financial gain from these financial transactions may never be known.

There are rarely any good outcomes in divorce, but perhaps Neese's split with wife Delana Darby Blake will have a silver lining. Perhaps now citizens of Florence will know exactly where the city's money went and what it financed.

What's up with this: Work continues on the renovation of loft apartments in the 200 block of North Court Street. Thanks to those who assist in the preservation of these historic buildings--at least those who do it legally.