FCRA sues property owners for breach of contract, fraud

The Fort Chaffee Redevelopment Authority (FCRA) has sued three property owners claiming breach of contract and fraud in hopes of getting the land back. One of the defendants is Steve Beam, whose ex-officio status on the FCRA board remains uncertain.

A lawsuit was filed July 12 in Sebastian County Circuit Court against Gift Monkey Properties LLC, RSMJ LLC, Beam, Rod Blake and Justin Green. Gift Monkey Properties and RSMJ are owned by Beam, Blake and Green.

The lawsuit focuses on conveyance of property on Fort Chaffee Boulevard from Gift Monkey Properties to RSMJ that was not approved by the FCRA trust. In October 2020, Chaffee Commercial Properties, which has the same owners as the other two businesses, and the FCRA entered into a contract. Chaffee Commercial Properties bought the property for $50,000 and agreed to construct a retail/office development on the property, the lawsuit states. The property was conveyed to Gift Monkey Properties in March 2021 without the knowledge of FCRA, the lawsuit states. However, when FCRA learned of the conveyance, they retroactively approved it.

The property was then conveyed to RSMJ in February 2023. The subject of the conveyance was broached earlier this year. At that time, the owners said the conveyance was done for convenience reasons in accounting. But the property received more than one extension on the development clause of the contract under the name Gift Monkey Properties after the conveyance.

Dalton Person, FCRA attorney, said that while the property was still owned by the same people, the new business entity involved has significant differences.

“It’s from a contractual standpoint. The new business (owning the property) would not be under the same contract constraints. It ends up being ‘how does (FCRA) have the right to enforce the contract,’” Person said.

Because extensions for development were requested and given to Gift Monkey Properties when that company did not own the property is what led to the fraud allegations, Person said. The lawsuit states that under paragraph 10 of the contract, the property owner was required to give the FCRA written notice prior to conveying the property so the FCRA could exercise its right to repurchase within 45 days of receiving the notice of sale if it so wished.

“Gift Monkey Properties, LLC breached the contract by conveying the property to RSMJ, LLC without first providing the Notice of Sale to the FCRA,” the lawsuit states. “Any sale, assignment or conveyance of the lands by Buyer in violation of the provisions of this conveyance shall be null and void and of no force and effect.”

Therefore the court should declare the conveyance null and void, it says.

On May 9, Dalton, acting on behalf of FCRA, gave written notice to Green, Blake and Beam that the conveyance of property “amounted to a breach of contract and that the subsequent extensions entered into by Steve Beam and Justin Green after Gift Monkey Properties, LLC had divested itself of ownership amounted to fraud,” the lawsuit states.

On June 19, FCRA gave the men written notice that they were exercising the right to repurchase property for the original sale price of $50,000. The defendants were also told that if they believed improvements had been made for which they should be compensated, they were required to provide the “‘actual verifiable costs” of said improvements and would need to provide copies of paid bills and canceled checks. In response, they produced an invoice in the amount of $120,960 from Steve
Beam Construction, and a check dated June 13, 2024.

“The invoice claims to be dated less than a month before the Required Improvements Completion Date of May 14, 2024. The description for $120,960.00 is simply ‘Demo Slab & Footings at 2.48 Acres.’ It is billed to RSMJ, LLC. Yet, in its extension request nearly two years prior on Aug. 2, 2022, Steve Beam wrote on behalf of Gift Monkey Properties, LLC that ‘We have started busting the concrete … We will remove the concrete and bad soils as needed…,’” the lawsuit states.

The check to Steve Beam Construction is dated after the required improvements completion date had expired, after the FCRA had notified  the defendants of their breaches of contract and fraud, and after the defendant’s attorney stated at a public meeting in May that the FCRA still possessed its right to repurchase, the lawsuit states.

John Alford, attorney for the defendants, said they denied all allegations.

The property in question also was listed for sale with Nunnelee & Wright Commercial Properties for $248,000. The property listing said the vacant pad site with 2.48 acres in Fort Chaffee is in a planned zoning district and has utilities at the street. It is situated on Fort Chaffee Boulevard
between Darby and Ward avenues, located near a number of Chaffee-based businesses including Old Fort Furniture, Premier Heating & Air, and Fort Smith Brewing Company.

Person said the listing has been taken down because FCRA asked the court for an injunction.