Travis County Commissioners Court
February 1, 2005
Item 5
5. Approve or reject proposed farmers' market lease agreement with danny wright and garland eatles d/b/a danny's barbeque and catering. And the note simply says that the matter may be taken up in executive session under the consultation with attorney and the real property exceptions to the open meetings act. Yes, sir, please come forward.
>> I guess as a quick introduction, as he comes forward, this is not a normal lease agreement like we have normally been presented with what's going on out at the farmers market. So we will be getting some information related to some legal issues in executive session which is proper. But duke would like to lay out some things that he is basically three different parties involved in this and perhaps even more issues before we get into executive session. I mentioned to duke as well they don't have to hang around here for the next eight hours until we get out of executive session.
>> unless you just love --
>> unless you love it.
>> give us your full name, we will be happy to get your comments.
>> thank you, my name is duke [indiscernible], my wife and I formerly leased the farmers market for over seven years, we believe we were the longest leaseholders at the market. I have about four pages that I would like to read, it will take me a few minutes if that would be okay.
>> okay.
>> thank you, judge. Kathy and I are here to dispute the seizure and sale of our personal property at 6701 burnet road, buildings d and c. According to hill rylander agent for the county at that location, he said the county had him lock up the location, seize our property, and we are asking why both of these things happened within a 48 hour period. We received zero communication from hill rylander until after he wrote a new lease and took payment for personal property from danny. On January 20th, hill called kathy and I on my cell phone and told us there were some major changes going on at the market. His cell phone broke up, he did not call back until Friday, 21. At that time he told me he had seized our stuff and applied $7,000 of the $10,000 to miller's county. John miller had a lease with the county from the period of November up until three January. He got county to okay the $3,000 balance to be paid to us. I was out of state at the time. I was in new mexico. I could not see him until Monday. Going back to Thursday's cell phone call, after hearing that there were some major changes at the market, kathy and I drove by, we found three of danny's barbecue employees moving, sorting, cleaning the building and equipment. We were completely surprised and since I was leaving Texas that evening, we told the three employees we would be back on Monday to arrange the sale of the equipment. They had obviously been taken on over. We had no idea that they had already paid hill. At that time we noticed the sign and other personal items on the table separated out. We asked what that stuff was about. And they told us that danny's employees told us that they were told by hill to set john's personal property aside. So he could get it back. I understand that later on john's employees or miller barbecue did in fact come by and pick up their personal items. This is what happened since the original sale on October 31st. On November 1st, hill rylander called me and said that he had someone to lease the buildings and to buy my equipment. Just as I had done when I had brought him the lessee the first time. I agreed to sell $30,000 to miller's barbecue for payments of a thousand dollars a month. Hill new and totally understood, I felt we were both pleased. He had alessee and I didn't have to move my equipment package. I received my payment for November and December payments and I went on my way. Sometimes around the first of January hill said he was having problems collecting from john, john owed him two months rent and never signed a lease. I told hill john in fact paid me on time in January. My third payment. He said he didn't know what -- hill told us he can't know what to do. Kathy and I left saying that was so unlike hill to allow someone to go over two months without paying a dime in rent. Sometime after hill asked me, sometime after that, hill asked me if I still had the phone number of a guy that I had talked to immediately after selling to john. That person happened to be danny from danny's barbecue. I told him that I did, later gave him danny's name and number. And I also told him at that time if you have to put locks on the door, if you have to put locks on the door, let me know as he previously said you might have to. I stopped by danny's barbecue, January 28th, asked danny if he had a bill of sale, how much he had paid because northwest in fact my equipment. -- because this was in fact my equipment. He would not tell me he said without talking to hill first. He also stated that hill did not give him an inventory of the stuff. I also noticed at that time a large $2,000 piece of equipment was missing from the back kitchen. Danny also told me that hill offered him -- danny also told me that hill offered him a lease the week of January 10th, then called back on that Friday, the 14th, said it was off because john was going to pay him. Hill told me that swron was going to -- john was going to pay him the daily receipts starting Monday, January 17th, mlk day. John told me that on Tuesday he showed up and the doors were locked. So sometime over the weekend it appears that mr. Rylander changed his mind. Thursday kathy and I received a call from hill about the major changes at the market. In my opinion, the only changes that -- in the market that have -- since that time have been lack of interest. Ever since hill's letter to the county through -- through the honorable judge Biscoe back on October 21st when he asked the county to buy him out, things have seemed to go downhill. If you go to the farmers market any day this week, the only thing that you can buy is a hot dog, antique table or a party by gourmet chefs, that it. Nothing else is opened. Stone house grill is closed down and the barbecue is operating on the premise without a valid lease since January 18th. I say valid because according to my understanding of the second amendment of hill's contract with the county, dated may 10, all leases must be approved in advance by the owner and no tenants will be allowed to move into the premise without written leases. I believe this particularly swift deal between hill rylander and danny's barbecue, the sale of my equipment would not have happened if hill were to have followed this paragraph b. I would like to close after my comments what happened on January 24th when kathy and I arrived at house bill's office, that Monday morning. He told us that he was only doing what he was told to do and began writing in his checkbook. I asked him why he sold our stuff, he angrily answered because he had bills to pay and needed the money. Besides, duke, you have already sold it twice. He refers to the sale to john and -- in the first sale. I felt he really did need the money and really did believe it was his turn to sell the property. I looked down at the post dated check on his desk and left with a few heartfelt words of disgust. Went outside -- when outside kathy asked me why I took his check, I told her I only wanted to make a copy of what hill was offering us for our $30,000 equipment package. I did make a copy that same day and rushed the check in the -- and returned the check in the mail slot in hill's office. My understanding is that hill told john he sold our stuff for $7,000 and that hill told us he told it for 10. No one has a bill of sale that I have seen. And where was danny's check deposited? I've got copies of the checks from john miller, a copy of the check from hill rylander, copies of lots of things.
>>
>> [one moment please for change in captioners]
>>
>> when we showed up that Tuesday after mlk day it was locked all down. I had talked to hill, john had talked to hill, and it was just like, well, I changed my mind, we need all of the money right now and then you can have the equipment. Two days later -- I guess it was that Thursday after martin luther king day, danny's barbecue was in the building with keys, with the equipment. So we didn't have any opportunity to get back anything. We have an agreement with duke, we're still paying him for the equipment, so just wanted to let that be known.
>> and the purchase price to you was $30,000?
>> yes, sir, I believe so.
>> so we believe that if the equipment were appraised, it would appraise out at about 30,000?
>> your honor, I have a ucc form filed, I have a copy of that where I originally sold my equipment to a group, and it was filed for $45,000. 31,500 of that was equipment package. The balance was what I sold. After 10 months that larry if I can, who has the lease at the -- larry thick who has the lease at the market went bankrupt. That was on the ucc form. I also have a five-page inventory of my equipment prior to that that I gave to a bank, and that's for 28,250. So we're talking about 28,000 for the bank, 31,000 filed with the ucc form. At this time I couldn't tell you what it's worth. I did notice at least one piece of equipment missing.
>> what's the date of the inventory?
>> I have no date on this, sir. It just came out of one of my bank files.
>> when was it done?
>> the sale to the sound group probably three or four years ago.
>> do we need copies of these?
>> yes, sir.
>> and I have duke and I talked to john miller yesterday as well. I asked them to as much as possible, playing judge judy, please bring as much documentation as you can to show a relationship between with john miller related to this equipment. While it was an informal, I'm selling my stuff to you, not like there's a contract to say that, there are still things they can prove up, but there was a sale in process and payments being made that does show that there was a contractual relationship going on there. It appears to me that the equipment has been sold out of underneath both sets of individuals for far less than what was owed, and we're getting caught up of it's being blamed on the county when we all know in fact very little if any of this money ever goes to the county. It's really an issue with mr. Rylander. Is mr. Rylander going to be here today? Great. Because i've got a whole bunch of for him. But it's y'all's mess. And we're caught in the middle and we've got three different sets of business people and a manager out there, and it seems like property in dispute that was seized to pay off a debt that was far in excess -- the value of the property was far in excess of not only what was paid, whether you believe the 7,000-dollar figure or the 10,000-dollar figure, and whether they have the right to do that because somebody else owned that property. And had rights to take it back if indeed things went awry with this relationship.
>> did we give you a chance to give your comments?
>> I'm pretty much speaking with what duke talked about, except my version is a little bit shorter. On Monday, January third, 2005, my husband and I went up to the market to collect our monthly payment from john. John was not there, nor did it look like he was going to open that day. We did, however, run into mr. Rylander, who was putting john's rent on his door at that time. Mr. Rylander at that time informed us that he was very upset with john. He explained to us that john owed him two months' rent and didn't have a lease. He also added that he would lock up the doors if he didn't get some kind of payment from john. When we walked away from the market I said to duke, this is not like hill at all to let a brand new lease and be two months behind and no lease. That's not the way hill does business. My husband not long after that conversation, probably a few days later, with mr. Rylander, he gave hill the name and phone number of danny of danny's barbecue. Danny wanted to rent the barbecue building at the time that mr. Rylander was renting to john. On Thursday, January 20th, duke and I found out danny was still interested because he and his crew were already moving in. Duke told danny's employees that he would talk to danny on Monday after -- to work out a deal with the equipment. Not knowing that hill rylander had already sold and collected money for our equipment. When duke and I got back to town we went to see hill to see what was going on. That's when hill rylander told us that the county seized all the property and was told to sell it to danny's barbecue for 10,000. And hill told us that we would get 3,000 of it. He was acting like he did us a favor by I squeezing 3,000 out of county for you, but I had to pay 7,000 to take up john's debt. When we asked hill how he felt it was fair that he could cep 7,000 -- keep $7,000 of our money, he said I have bills to pay too, and duke, you already sold your equipment twice. He told -- hill told us his hands were tied, and I'm sorry. I just feel betrayed by an agent of the county and hurt that mr. Rylander would do this to duke and I after seven years of the longest people paying rent, and we made it in the small business for every seven years because we cared and we cared about that market. And I just feel that hill is so unfair. That's all i've got to say.
>> thanks, kathy.
>> we'll call this item up in executive session when we get there. That may well be late this morning or early afternoon, get advice of counsel and either Commissioner Sonleitner or somebody from the Commissioners office will contact you this afternoon.
>> do you have copies of the things we talked about related to the deposits, those kinds of things that we discussed?
>> I have a copy of the check -- i've only received two payments and also I have copies of the matters to judge Biscoe from an attorney.
>> we all got that. John, could you raise your hand, please?
>> john hilly is our attorney handling this. If you could get the stuff to him that would be great.
>> thank you.
>> take care.
>> we'll call that item up in executive session and announce it specifically under real estate and consultation with attorney exceptions to the open meetings act when we get to executive session.
let's bring back up the item we said that we would discuss in executive session, we will do that, but we wanted to hear from mr. Rylander since he is here, plus not keep him waiting. That is item no. 5. Approve or reject proposed farmers market lease agreement with danny wright and garland eatles d/b/a danny's barbeque and catering. Commissioner Sonleitner.
>> did you have any statement, we heard from some folks this morning, I had some questions, but I wanted to give the floor to you first.
>> I do have a statement about the issue that was brought up earlier, thank you. Judge Biscoe, Commissioners, my name is hill rylander, I manage the Travis County farmers market at 6701 burnet road. I have managed this rot for the past 17 -- this property for the past 17 years, my contract expires in a little more than three years. The previous tenant at the market operated a barbecue restaurant for approximately 7 years. It was known at the bbq world headquarters. Mr. Bishoff sold it and the equipment over a year ago to mr. Larry thicke of the astound group. 10 months later mr. Ficke advised me he was walking on his lease and not to expect any other payments. Mr. Bishoff requested to sell the equipment and his building a second time. Since I found a new tenant willing to purchase the equipment, since mr. Bishop and mr. Ficke assured me to do whatever they could due to the last months of the contract I was amenable to letting mr. Bishoff sell it again. Mr. Miller of john miller barbecue then signed a lease with the county and made a deal with the bishomm to once again pay for the equipment. None of them made payments towards the final two months of the ficke contract. The contract that I referred to was written by the county attorney's obvious, states under article 19, landlord lien states upon the occurrence of any event of default by tenant, landlord may in addition to any other remedies provided herein or by law enter upon the premises and take possession of the building and any and all improvements to the premises, all goods, wares, equipment, furniture, fixtures, without liability for trespass or conversion and sell the same with or without having such property at the sale. Which landlord or its assigns may purchase and apply the proceeds thereof less any and all expenses connected with the taking of the expense happens and sale of the property ... To the landlord. That contract was signed by mr. Bishoff, mr. Thicke and mr. Miller. After two months or more it was apparent mr. Miller could not make any contributions to the county in the way of rents or utilities. I was forced to send him a certified letter advising that I would be forced to lock his building and he would forfeit the equipment under the contract. I advised the county attorney's office at the time that I September the certified letter. He once again did not make a payment, I did lock the building and make the payment as stated in article 17.01 in the event of default which states: if the tenant fails to pay the rent of any other sum of money due here under when due ... Then this lease shall be in default, any time thereafter landlord may terminate this lease and enter and take possession of the premises. I placed the phone call to danny williams who had shown interest earlier in the building. Mr. Williams said he was still interested in the building and equipment, since I was acting in accordance with the contract we negotiated a price for the building and the equipment. I negotiated a lease as usual and then mr. Williams paid an additional $10,000 for the equipment. I applied the amount of the money owed to the county which was in the neighborhood of $7,000. Which -- which in in -- if you include the interest and all of the back rent left a balance of 3,000. I then called mr. Bishoff to advise that I as a represent of the company sold the equipment to mr. Williams in order to fulfill the obligation to the county but that there was an additional 3,000 that was not due to us. I told him that I felt that should go to him, even though I knew legally the county had the right to the equipment as stated in the contract. I do not know the precise amount mr. Bishoff was paid initially ... But I do believe it was a substantial amount of money. According to mr. Bishoff and mr. Miller, mr. Bishoff was also paid $3,000 by mr. Miller, it has been more than a year since mr. Bishoff has had any interest in the location. Yet he had been paid two times for that equipment. I'm aware by mr. That most if not all of that equipment was used. I have been advised that 10,000 was a fair price if not more than fair for that equipment. I would also like to point out in addition to the rent and triple net as a courtesy, I personally prepaid the utilities in the dumpsters on behalf of all of the tenants. And needless to say, I have not been paid the utilities or the dumpster fees for the past several months from the barbecue place, even though the utilities have consistently been running. I'm quite confident that mr. Williams who currently has applied for a contract with the county and has bought the equipment will meet these obligations. I will be happy to attempt to answer any questions.
>> a couple, is danny's currently operating in that space?
>> they have been in the space getting it cleaned you and repaired. They have quleened up and repaired. Danny has a fleet of trucks that he operates out of. So -- so they have not yet opened the doors there.
>> under what authority are they on the premises since we have not acted on whether we have got a lease?
>> well, there was no authority. I -- they wanted to get in there and clean it up so that they could begin on the first of February and be ready and operational. And so -- so it was -- it seemed like it was to our benefit to let them go in and clean up and get everybody set up and ready.
>> without a valid lease.
>> yes, ma'am.
>> in terms of the miller barbecue lease, I know that the Commissioners court acted that last fall. Did you sign and return that lease to john hilly?
>> if I didn't, I'm -- I certainly can. I will. I thought that I did. But maybe I haven't.
>> john, do you have that lease.
>> I don't have it in my file. It's something that we will occasionally have to -- hill will occasionally have to catch up with some of his paperwork on.
>> and a lot of times the words "the county" has been used. You are the authorized agent for the property out there. Did somebody at Travis County say sell that property and get money for it? Or did you make that assessment?
>> I did. In that the -- the contract says that the county or the assigns, which I assumed was me had the authority to do that.
>> but Travis County, no one from Travis County said, go in and get that money.
>> no.
>> and in terms of the money that or the results of this sale, what, if anything, did Travis County get in terms of the sale of that property?
>> what -- what the proceeds from the sale of that goes to pay the -- the rent that was never paid towards the rent, so you will get the -- your rent from that.
>> no. We would get a very small percentage of the rent. The money went to you.
>> yes, ma'am. And your percentage will go to you and the rest of it is going to be eaten up by the past rents. What I had mentioned earlier about the rent, it was two months, I realized after mr. Bishoff began saying that I had taken his equipment, it dawned on me there was another month in November that had not been paid, too. That plus all of the utilities, which I prepaid. It goes towards all of those things.
>> under the landlord's lien, article 18, there is reference to whether there are prior liens or security interests on the property that's out there. Do you not think mr. Bishoff had some kind of prior claim to this property that while he may have gotten some moneys, he has not been satisfied with the full price of the equipment either through -- well, one, two, three different folk, they have not paid him the full price of the equipment yet.
>> any other liens he had, I don't know anything about. My instructions and in the best interest of helping Travis County is that we have to -- I didn't get -- we didn't get any money at all from mr. Miller. And I let that ride for over two months. I was confident that he would come through and he just never did. I give him several opportunities to, it just never happened. So --
>> mr. -- I talked to mr. Miller yesterday. He said that he had an agreement with you to start turning over the detail sales -- daily sales receipts in terms of moneys to start paying you and thought that's the route that they were going and was quite surprised to find the place locked up and that it was no longer the case.
>> that's because we had agreed that by -- I think it was a Monday evening, I don't know the date right now, but that he would have that day's receipts to me and we would begin that process. That Monday night it was not there, Tuesday morning it was not there. This is after I don't know how many times he assured me that I would be getting paid something and never, never got paid anything.
>> is it normal for you to let people not pay their rent for search months.
>> no, no, ma'am.
>> so how was Travis County's interest being protected in terms of somebody having a lease and we didn't -- you didn't get any kind of income which means Travis County didn't get the -- the small percentage of whatever moneys were owed?
>> I'm sorry, ask me that question again.
>> is it normal for you to let somebody slide for two months, because when you were not getting money, neither was Travis County getting any money during that time period, is that when you consider to be the normal course of business, is to let people slide and no moneys be turned over?
>> no, it certainly is not. The only reason it happened this time is I have known mr. Miller for 20, 25 years, I have always known him to be reputable. I was confident that he was going to eventually get us paid. I -- there was nobody more surprised and -- that is not my modeus opperandi, we were personal friends for years and I trusted that was going to happen.
>> final question, the statement was made who is now out at the Travis County farmers market in terms of paying tenants. How many paying tenants do you have out there right now on the property.
>> hill country landscape, stone house grill.
>> they are not in business anymore.
>> but they are still paying. And --
>> they are not in business anymore, is that correct?
>> they are not in business and I have a deposit check from a perspective tenant that is negotiating right now. The equipment with -- with russell englemann who is the owner of stone house grill. So hopefully we will have a tenant very, very soon to -- to fill that slot. But mr. Englemann has continued to pay rent.
>> so we have a cloalsed down restaurant and we have hill country landscapes, they have been there for a long time, I have bought wonderful plants from them. Who else? We have got the antique thing still going?
>> the little antique shop. Ruth's attic is going. We have the -- dog almighty, which sells hot dogs and hamburgers and then there is a small culinary --
>> the kitchen, yeah.
>> yes, ma'am.
>> that's it.
>> that's it.
>> stalls? Anything going on with the stalls.
>> not this time of year, dead of winter, we don't have any fruits or vegetables.
>> thank you. I have got an answer to all of my questions.
>> hill, how many permanent locations are there in the farmers market that you would consider to be a -- a legitimate building where somebody can operate 12 months, how many of those kind of structures are out there?
>> seven.
>> so we presently have what, three.
>> one paying, but one that's not in operation and are there a couple of a that are paying.
>> the culinary, the gals are paying. Dog almighty is paying. Stone house grill is paying. And hopefully if the approval of danny williams will have that one being paid.
>> so maybe 50%, I mean, of the permanent structures that you have out there you might have in operation within 60 days.
>> yes.
>> since I don't have -- I know that you have been out there for a long time. What would you say the average over the 17 years that you have operated has been with regards to -- to your vacancy rate?
>> I think we are -- right on top of where we should be. The big exception is the big tin barn because that is 5,000 square feet. Which it's vacant, which is currently is, that make as difference. But otherwise we are in pretty good shape assuming that danny williams' lease is approved. And I can get this new guy into stone house grill location.
>> would you say over the 17 years that you have operated you have hit the 50% mark on the permanent structures? I have been out there plenty of time, when the fruits and vegetables are out there. There's lots of activity. It's kind of a tough nut out there to get, you know, businesses out there that can really sustain itself to make the thing work. Would it be 50% -- would you venture to guess that -- over the 17 years that I have probably had 50% or is it 30% or -- of the permanent structures.
>> I would say 50%. We went through the first several years not being able to lease out that tin barn, then for a few years with it being leased out. Currently it's empty. I do have some prospects for it right now, but until I get a contract and deposit money, then it doesn't count. We also have a problem with the farmers insofar as there were droughts three or four years running where they could not stay in business, had to get out of business. So we lost a lot. Then of course competition. The competition while they are billed as farmers market, if you have been through them, the majority of the people there are vendors, bakery, things that compete with our permanent tenants. It's difficult for us to allow that to happen and compete with the permanent tenants. When the season is in season, we still have a goodly amount of farmers, they do very well. They participate in the w.i.c. Program which is critical and they have been very successful doing that.
>> so bottom line, john, the person or the company, who is really on the hook if somebody or maybe -- maybe the business that was in operation, the sr.s that was in -- the bishoffs that were in business for seven years, did they just live out the year, daily contract, you went to somebody else or were they seven years of a 10 year, you allowed them to sublease the lays? Ultimately is the justification, hill, for taking this whatever this $30,000 worth of equipment, is it a result of you thinking that if I go all the way back to who is, you know, on the bottom of the page, did you feel justified in saying, you know,, I mean, I had to do whatever I had to do in order to get rent out of that facility and the one thing that really was an asset, other than the building itself there, it was the equipment. Is that -- was that the justification that you used for -- for saying you know what, I'm going to sell this equipment and try to get some money out of it?
>> yes, Commissioner. It was -- again, I had -- I thought that I had gone way above and beyond by allowing mr. Bishoff from two different occasions to sell his equipment. Whether he got 100% of what he was asking or not I don't know those terms. But it wasn't apparent in the case of mr. Miller there was not going to be any payment and we were all going to be behind the 8 ball. In order to secure what we could secure, within my rights and what was expected of me according to the contract, I followed it. I did five days notice, certified letter, and then changed the locks. I had a buyer for the equipment. So we were able to come out whole.
>> how often do you turn over receipts to Travis County in terms of what dollars are due Travis County?
>> the accountant and I are working on that right now. But like what receipts?
>> well, the county is owed a certain amount of money based on what's going on out there. Is that something that's -- that's done annually, something that's done monthly?
>> we have -- we send you at least annually, I know, yeah, the -- what the county receives is a percentage of the rent.
>> correct.
>> so my -- the -- the accountant is putting it together right now for fiscal year ending October. We -- we are just behind the 8 ball now but she's getting it done immediately we'll get you paid. She sends that information to you, I know she has been sending monthly statements, cash flow statements.
>> I haven't seen a cash flow statements in months, those are supposed to be sent to us on a monthly basis. They are not. We are supposed to have gotten paid long before now. We haven't. Can you remind everybody how much over the 17 years annually Travis County makes off of the farmers market?
>> I'm sorry, I don't have that information.
>> would it be --
>> it's been going up. That much I know at least it's been, you know, particularly with the big tin barn rented, but I know that there's a -- it's a scale that's a sliding scale according to how much income it maxs out at 10% or something like that. I know that you have been at that for the past several years.
>> do you think that it's more than $10,000 a year or less than $10,000.
>> I believe that it's less than $10,000.
>> there you go, less than $10,000 a year is what Travis County makes on this deal. Could you also remind everybody what is the date in terms of when the lease out there is over.
>> I believe 2008.
>> I get asked that a lot. Thanks.
>> anything else from the court? Thank you, mr. Rylander.
>> thank you, sir. We will call this item up in executive session. We will take executive session this afternoon.
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Last Modified:
Wednesday, February 2, 2005 9:40 AM