Money, morality and business deals

A long-time local resident, and former member of our county government, sat down at my breakfast table recently. He wanted to talk about the recently-aborted data center deal between Data Knight 365 and Floyd County’s Economic Development Authority (EDA). “Something smells here,” he said. “The county was too eager to make the deal. I’m wondering […]

Checkmate on Data Knight 365

Data Knight 365 (DK3), the data services company that really wasn’t one, defaulted Wednesday on the controversial deal to purchase 51.5 acres of undeveloped land in Floyd County’s Commerce Park for a data center plan that existed only in the grandiose promises of promoters with a questionable track record and the willingness of a government, […]

Data Knight 365 and Floyd County: How much more?

As my story in today’s Floyd Press reports, the county’s Economic Development Authority (EDA) Tuesday approved issuing a formal “final demand for closing” for the twice-aborted sale of 51.5 acres of undeveloped land in the largely-empty Commerce Park on Christiansburg Pike to Data Knight 365 (DK3), a company whose ownership and resources remain in doubt.

What does a “final demand for closing” mean? Can’t say for sure because EDA chairman Jack Russell refused to provide details after the authority met in its third closed-door “executive session” in 34 days to discuss the controversial deal that has generated much debate and more than a few jokes among Floyd County residents.

Russell responded with “I really don’t know” when I asked what the “final demand for closing” entailed. Was there a timetable? Russell refused to answer. Did the EDA set a new deadline after DK3 missed closing dates on Sept. 1 and a previous “final” closing date of Oct. 23? No answer.

I later learned timetables were discussed in the closed-door session. It’s not the first time Russell lied about the activities of the EDA. I doubt it will be the last.

Russell apparently believes the expenditure of county taxpayer dollars is not the business of the public that pays those taxes and bills. The EDA is a group of appointed volunteers with the power to cut multi-million dollar deals involving county property and funds with little or no oversight from the Board of Supervisors, the ones elected to represent the citizens. Because Virginia’s Open Meetings Act allows closed-door discussion on certain real estate deals and legal matters, Russell manipulates the law to assure that much of what the EDA does is hidden from the public — so much so that some EDA members say privately they are worried that they have “pushed the envelope” of the law with some of the discussions and decisions the authority has made in secret.

The Data Knight 365 soap opera continues

The proposed location for a data center at Floyd County’s Commerce Park To the suprise of some, Data Knight 365, on the last day of a deadline, delivered a set of documents required for closing on a deal to purchase 51.5 acres of land in Floyd County’s Commerce Park for a proposed $67.8 million data […]

A lack of data from a data center company

Floyd County officials are moving to resolve, one way or another, the controversial proposed data center project in the Commerce Park on Christiansburg Pike.

Details of decisions made in an hour-long closed-door session of the Economic Development Authority have not yet been disclosed but the county is obviously moving to either get Data Knight 365 to move on the deal or move on.

I’ve been around a lot of business deals in my life but this one ranks as one of the strangest I’ve ever encountered. Questions continue to haunt Paul Allen, promoter of the project after the State of Ohio shut down his business and a civil suit filed under the Racketeering Influenced and Corrupt Organizations (RICO) act in Tennessee names him in a loan-kiting scheme that nearly brought down a 105-year-old family owned bank.

At this point, Allen is not charged with any crime — either state or federal — but he has been accused of being less than forthright in a deal that fell through at the Radford Army Ammunition Plant and an aborted attempt to buy a networking project in Memphis.

So far, the only name on agreement documents signed with Floyd County officials is William Byler, the Amish businessman from Middlefield, Ohio, who co-owns a woodworking firm with his father and who has partnered with Allen in other ventures. The county based, in large part, its decision to go forward with the deal because on the reported involvement of Power Direct, a Cleveland telemarketing firm run by Dan Delfino.

But Delfino, like others involved in the deal, has not been in contact with the county since Data Knight 365 missed the Sept. 1 deadline for closing on the $900,000 purchase of 51.5 acres of land behind the power substation in the Commerce Park.

A tightly-written performance agreement requires Data Knight to spend $67 million to develop a 120,000 square-foot facility by Sept. 1, 2013.  Failure to meet any of several milestones in the agreement gives the county the right to revoke the deal and retain all funds paid to that date and ownership of all improvements made to the property.

Floyd County required Data Knight to furnish three pieces of documentation by closing:

  • A documented list of all principals in the project;
  • A verifiable letter of credit;
  • A detailed explanation of what role Allen now plays or will play in the project.

When the EDA met Tuesday night, the county had not heard from the company nor had Data Knight provided any of the documentation requested.

A lack of communication and failure to turn over required documentation led to the disqualification of Allen’s previous company, B-Telecom Inc., from further consideration in the sale of the Networx project in Memphis a few years ago. Questions over the validity of a letter of credit also became an issue when B-Telecom tried to lease space for a data center operation at the Radford Army Ammunition Plant.

Data Knight’s filings as an LLC (limited liability company) list only Byler as an owner of the company. Byler was also a participant in the failed deal at Radford.

So the county is faced with a data project hampered by a considerable lack of data.