Sen. Luther Strange’s (R-AL) swamp pal, Sen. Bob Corker (R-TN), is set to receive more money each year from Alabama taxpayers from the sweetheart deal in an Alabama retail development arranged by a law firm that is a big donor to Strange’s Senate campaign than he receives from his salary as a United States senator.
Under the terms of that sweetheart deal signed off on by the Mobile City Council and the Mobile County Commission, Corker, as a 13 percent owner of McGowin Park Incentive, LLC, a Delaware Corporation, receives a prorated split of that entity’s hefty sales tax rebate from retail purchases made at stores in McGowin Park retail center in Mobile Alabama. The center is a huge development opened in 2015 of more than 24 stores, including “Dick’s Sporting Goods, Field & Stream, HomeGoods, Ross Dress for Less, Hobby Lobby, Best Buy, Old Navy, Petco, Ashley Furniture HomeStore and Dollar Tree,” as one publication noted, strategically located right off heavily traveled I-65.
That rebate is substantial; 28 percent of all city sales tax collected and 30 percent of all county sales tax collected from stores in the center is paid out to McGowin Park Incentive, LLC, in two securities known as City of Mobile Limited Obligation Project Revenue Warrants, Series 2013 and Mobile County Limited Obligation Project Revenue Warrants, Series 2013.
Corker received $40,459 in 2015 and $108,682 in income from City of Mobile Limited Obligation Project Revenue Warrants, Series 2013, and Mobile County Limited Obligation Project Revenue Warrants, Series 2013, according to financial reports he filed with the United States Senate. He is scheduled to receive $155,500 in income from those warrants in 2017; $168,808 in 2018; $192,000 in 2019; and $192,000 a year for the next 15-and-a-half years.
During the twenty years in which he receives money from this deal, Corker is expected to receive more than $3 million of the Mobile, Alabama, city and county sales tax revenue paid by customers who make purchases at the McGowin Park retail center in Mobile.
Corker’s current annual salary as a United States senator is $174,000 per year. If Corker were to win a third term in the United States Senate, his salary in 2019–the first year of that third term–is currently anticipated to be the same: $174,000 per year, or $18,000 less than he will receive from the City of Mobile and Mobile County.
Corker was part of the Republican establishment chorus that persuaded President Trump to rally in Huntsville, Alabama, Friday night with Sen. Luther Strange (R-AL) tonight, according to multiple press reports. Strange trails conservative grassroots champion Judge Roy Moore in the Alabama Republican primary runoff election to be held next Tuesday by more than 8 points, according to the latest Real Clear Politics average of polls.
Corker’s affinity for his establishment Republican allies in Alabama is understandable given the role played by the Alabama law firm that donated $28,000 to Strange’s Senate campaign in setting up the sweetheart deal in the Mobile, Alabama, McGowin Park retail development.
Mobile’s 2016 Comprehensive Annual Financial Report does not show how much the city paid in Limited Obligation Project Revenue Warrants, Series 2013, issued to McGowin Park, LLC, in 2013 and subsequently assigned to McGowin Park Incentive, LLC, in 2014, in FY 2016.
Breitbart News contacted the comptroller of the City of Mobile to understand why the city has failed to include this specific expenditure line item — who referred us to the director of media, who has responded but not yet provided an answer.
According to Annual Reports Sen. Corker filed with the U.S. Senate between 2014 and 2016, he made an investment in an entity known as McGowin Park, LLC, an Alabama corporation, valued at between $1 million and $5 million on July 11, 2014, for which he received a 13.7 percent interest.
McGowin Park, LLC, is an investment vehicle controlled by the Hutton Co., a Chattanooga, Tennessee, real estate development company whose CEO, Karen Hutton, has been a longtime financial contributor to Sen. Corker. It was formed for the purpose of developing the McGowin Park retail center in Mobile, Alabama.
As Breitbart News reported Wednesday:
In August and September 2014, both the City of Mobile and Mobile County took the unusual step of protecting the developer in which Corker now had a 13 percent interest, McGowin Park, LLC, from losing its sales tax rebate in the event the lender providing much of the financing to the project, Wells Fargo, decided to foreclose on the collateral pledged to secure that loan.
At its August 19, 2014, board meeting, the Mobile City Council took the apparently unprecedented step of authorizing the assignment of City of Mobile Limited Obligation Project Revenue Warrants, Series 2013, for the McGowin Park Shopping Center from McGowin Park, LLC, to McGowin Park Incentive, LLC, for the stated purpose of insuring that the project lender, Wells Fargo Bank, would not be able to attach the warrants as collateral.
When the Mobile City Council separated the sales tax rebates (warrants) from McGowin Park, LLC, which owns the retail development, and placed those sales tax rebates in the legal control of McGowin Park Incentive, LLC, it provided a huge financial benefit to Sen. Corker.
The McGowin Park retail center was sold for $77 million this year. Its owner, McGowin Park, LLC, made a significant profit in the form of a capital gain on the original investment. As a 13 percent owner of McGowin Park, LLC, Sen. Corker presumably received a handsome profit off the $1 million to $5 million investment he made in McGowin Park, LLC, just three years earlier, in July 2014.
But in addition to that profit, Sen. Corker apparently retains the 20 year flow of income from the sales tax rebate warrants that were transferred from McGowin Park, LLC, to McGowin Park Incentive, LLC, in August and September 2014 by the Mobile City Council and the Mobile County Commission.
Breitbart News asked Mobile City Attorney Ricardo Woods if he advised the City Council and mayor to approve this assignment, since the official minutes make no mention of his advice on the matter.
Breitbart News also asked for the legal reasoning behind that advice and if Mr. Woods requested formal or informal advice from outside parties prior to providing that advice to the City Council and the mayor, either from former Attorney General Luther Strange, anyone in the attorney general’s Office, or other outside counsel.
Mr. Woods has not responded to our inquiries.
One month later, in its September 19, 2014, meeting, the Mobile County Commission took the unusual step of authorizing the assignment of Mobile County Limited Obligation Project Revenue Warrants, Series 2013, for the McGowin Park Shopping Center from McGowin Park, LLC, to McGowin Park Incentive, LLC, for the stated purpose of insuring that the project lender, Wells Fargo Bank, would not be able to attach the warrants as collateral.
According to the minutes of that meeting, Mobile County Commission President Hudson asked County Attorney Jay Ross if he recommended “the Commission to authorize the developer to transfer the Warrant to a Special Purpose LLC?”
“Mr. Ross said yes. He said the City of Mobile recently approved a similar request about a month ago. Mr. Ross said it did not affect the County’s liability; it was an internal financial issue,” according to the minutes.
Breitbart News asked Ross what additional legal standard he used in providing that advice to the Mobile County Commission, besides the fact that the city of Mobile had done the same thing a month earlier.
Breitbart News also asked Ross if he requested formal or informal advice from outside parties prior to providing that advice to the County Commission, either from former Attorney General Luther Strange, anyone in the attorney general’s Office, or other outside counsel.
Mr. Ross has not responded to our inquiries.
Alvin Hope, a partner with Maynard, Cooper, & Gale, the Alabama law firm whose partners and political action committee donated $28,000 to Luther Strange’s 2017 Senate campaign, represented McGowin Park, LLC, the development company in which Sen. Corker had just acquired a 13 percent interest, at the September 19, 2014, Mobile County Commission Board meeting.
It was at his request that the Mobile County Commission authorized the assignment of warrants from McGowin Park, LLC, to McGowin Park Incentive, LLC.
At the time of these actions in 2014, Sen. Luther Strange was serving as Alabama attorney general.
Breitbart News asked current Alabama Attorney General Steve Marshall whether former Attorney General Strange had any oversight responsibilities related to the sales tax rebate deal between the City of Mobile and McGowin Park, LLC, the sales tax rebate deal between Mobile County and McGowin Park, LLC, or the subsequent issuance of bonds by The Improvement District of the City of Mobile – McGowin Park Project and The Improvement District of Mobile County – McGowin Park Project.
Breitbart News also asked whether local government officials had requested a formal opinion or informal communication from former Attorney General Strange as to the legal status of the sales tax rebate deal between the City of Mobile and McGowin Park, LLC, that was approved by the Mobile City Council on July 23, 2013, either before or after that meeting.
Neither Alabama Attorney General Marshall nor anyone from his office has responded to our requests.
Breitbart News also asked Sen. Corker to confirm or deny the details of the income he is scheduled to receive from the City of Mobile Limited Obligation Project Revenue Warrants, Series 2013, and Mobile County Limited Obligation Project Revenue Warrants, Series 2013, annually until 2035 but received no response.
UPDATE:
Senator Corker’s office responded after our deadline with this three paragraph response:
We think the amounts you are referencing are based on hypothetical sales projections and are not guaranteed to the investors. Furthermore, Senator Corker had nothing whatsoever to do with the agreement between McGowin Park and the Mobile City Council and Mobile County Commission. As is custom in development projects, such agreements were in place long in advance of Senator Corker first being approached about being an investor in the project. And regarding your original report, the senator did disclose the value of the assets in both 2015 and 2016.
We are aware that the senator’s investments are of great interest to numbers of self-interested individuals, including large Wall Street hedge funds who are seeking to discredit Senator Corker and the work he is doing to protect taxpayers and reform our nation’s housing finance system. False accusations have been floating around D.C. since early 2015 in an effort to discredit him while he’s doing this important work.
It is disappointing that error-ridden opposition research we have strong reason to believe was compiled by the politically-motivated firm Fusion GSP – which sought to take down President Trump with a controversial dossier and is currently under investigation by the Senate Judiciary Committee – is now being used in an attempt to connect dots that simply do not exist.
Breitbart News states unequivocally that Fusion-GSP was not our source for this report.
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