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The Rise and Fall of Wallace Bajjali – Part 2: Joplin’s Not Sugar Land

Wallace Bajjali Development Partners lost millions of dollars in the 2009 collapse of the BizRadio Ponzi scheme. The firm survived by reinventing itself, focusing on urban renewal projects. It managed this thanks to the reputation partner David Wallace had built as mayor of Sugar Land. But that reputation was not all that it seemed.

Wallace Bajjali Development Partners door
Headquarters of Wallace Bajjali Development Partners, LP; in Sugar Land after the offices were vacated. 

 

“We just rolled up when this tornado came through, maybe 45 minutes ago…”

Costa Bajjali
Costa Bajjali. Photo from the Wallace Bajjali Website

On May 22, 2011, a mile-wide tornado plowed through city of Joplin, Missouri. David Wallace and Costa Bajjali were at a developers’ convention preparing to speak at a dinner hosted by Crossland Construction, a company with roots in Joplin.

Wallace Bajjali had worked on public-private partnerships with the cities of Pearland, Waco, and Amarillo. The connection with Crossland now led to the firm’s hiring as master developer to help rebuild Joplin. Its responsibilities included assembling parcels of land for development projects and attracting outside investors.

Joplin hired Wallace Bajjali despite the legal cloud of BizRadio hanging over the firm. “The decision was, we felt like they could still bring value to the community and help us move forward,” says Joplin Mayor Mike Seibert.

What mattered most was that David Wallace was the man responsible for putting Sugar Land on the map. As mayor from 2002 through 2008, he’d overseen the opening of Sugar Land Town Square, a highly successful mixed-use development, and investment had poured in. But work on the town square began under Wallace’s predecessor as mayor, Dean Hrbacek, and was well underway by the time Wallace took office.

Jacquie Baly, then a city planner for Sugar Land, says Wallace deserves credit for being a great spokesman for the city. “However,” Baly says, “we have always had city employees who worked full-time and who actually have been responsible for the development in our city. So, I don’t think it would be fair for one person to take the credit of those developments, especially a person who was a part-time elected official.”

David WallaceDavid Wallace. Photo from the Wallace Bajjali Website

There’s evidence that Wallace’s talents as a developer didn’t match his skill as a salesman. In Joplin, where the firm had committed to work on twelve separate projects, only two were moving forward. The city began to look at renegotiating the developer’s contract.

Meanwhile, Wallace Bajjali’s legal troubles kept mounting. Attorney Tom Schmidt represents more than thirty families who lost money in the BizRadio fraud. “My group’s total losses [from BizRadio] are approximately $35 million,” Schmidt says. “Of that $35 million, approximately $13 million was invested directly into Wallace Bajjalli.”

Schmidt dropped his first lawsuit, when the developers’ lawyers said the suit would kill a planned initial public offering of the business that they said would pay back the plaintiffs. But by mid-2014, Schmidt ran out of patience and refiled the suit.

Just what happened next is unclear. In January, Wallace Bajjali Development Partners vacated its offices in both Joplin and Sugar Land, apparently overnight. Soon after, Joplin’s city government and other stakeholders received a letter from Costa Bajjali, announcing his resignation from the firm. According to Bajjali, Wallace tried to buy him out of the partnership last August. When they couldn’t come to terms, Wallace first threatened to sue him, then resigned himself.

One bright spot is that the disappearance of Wallace Bajjali Development Partners has done little to slow the rebuilding of Joplin. One of the biggest worries a city faces after a disaster is that much of its population, its workforce, would leave and not come back. Mayor Mike Seibert says that didn’t happen with Joplin. “To give the impression that their leaving and their departure has put us in some sort of terrible, dire position is a very gross [mis]representation of the situation here,” he says.

We made repeated attempts to reach Wallace and Bajjali for this story. Neither returned requests for comment. We also reached out to Porter Hedges, the law firm that represented Wallace Bajjali. It says the ex-partners are no longer its clients.

 

Resignation Letters 

 

 

Also read The Rise And Fall Of Wallace Bajjali – Part 1: BizRadio Days

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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas delegations in the U.S. House and Senate, as well as the Texas governorship, the state legislature, and county and city governments. Before taking up his current post, Andrew...

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