CROSS ROADS — Town leaders have revoked a $6.5 million tax-incentive agreement on a major retail development project after its developer filed for bankruptcy.

Harv Kitchens

Mayor Harv Kitchens said he has had conversations with the current landowner, BB Syndication Services Inc., about future plans for the properties that cover 155 acres.

“Everything is different from one day to the next,” Kitchens said. “All we’ve done lately is talk with the people at the bank holding the note. Before Christmas, they told us they were putting together a marketing plan to find a developer after the first of the year.”

He was under the impression the group would hire a national broker to market the property, Kitchens said.

Allegiance Crossroads had announced plans for a three-phase, 470,000-square-foot shopping center east of Denton on U.S. Highway 380 in November 2007, two years after the Cross Roads Town Council agreed to award the tax incentives.

According to records with the state comptroller, Charles Ames is listed as the owner and director of three Dallas-based limited-liability corporations associated with Allegiance Crossroads. Ames also was one of the original owners and directors of the Rayzor Ranch development until investors reorganized the partnership without him.

Ames could not be reached for comment.

The much-publicized Villages at Cross Roads had announced lease agreements with Wal-Mart, several banks and restaurants in 2007.

“We’ve been in contact with the Wal-Mart broker,” Kitchens said. “We know they want to know who will be the developer of that property and if it has the backing.”

Ames filed for federal bankruptcy protection in May 2009. After the bank foreclosed on the properties and the deed transferred to BB Syndication Services in September, town leaders met in October and discussed in executive session whether to cancel the agreement.

The agreement between Allegiance and the town of Cross Roads awarded the developer $6,462,297, payable as 60 percent of the sales tax over a 15-year period, according to documents obtained through an Oct. 16 open records request.

On Oct. 20, town officials told the Denton Record-Chronicle that a copy of the letter canceling that 18-page agreement, also requested on Oct. 16, was still in discussion and not available for release.

On Oct. 21, town officials mailed the letter to Allegiance, according to town attorney David Berman.

When Berman briefed the Lake Dallas City Council during its Dec. 10 meeting on potential pitfalls in developers’ incentives, he alluded to the problems in Cross Roads without naming the parties.

He told the council the town revoked the $6.5 million agreement quietly.

“The bank never knew about it,” Berman said.

He released the Oct. 21 letter canceling the agreement to the Record-Chronicle last week.

Kitchens said the town was never at risk from a lawsuit because the agreement clearly stated that the agreement ended if the developer was bankrupt.

A call to a BB Syndication Services representative for comment was not returned.

Kitchens remains hopeful that Wal-Mart will come to the city, not because the city needs the revenue, but because residents need the services, he said.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com .