Incubating Problems

The Palm Center was supposed to give small businesses a helping hand. But some businessowners say it's only given them grief.

In an effort to foster a working relationship with Mitchell, in mid-1995 a group of tenants led by Wiltz, Russell and contractor Danny Perkins formed the Palm Center Tenants Association. Wiltz says the group also hoped to promote the incubator concept to small businesses that might be prospective tenants for the center.

But according to Russell, the association was "a divisive thing" from the outset. "Instead of trying to work together," he recalls, "what [HSBDC] would do is try to divide the tenants by talking to them individually. 'Those people are a bunch of renegades,' they'd say. 'Why do you want to associate with them.' "

Despite conflicts, by August 1995 regular meetings were beginning to take place between the tenants group and HSBDC. Solutions to problems were proposed; some, such as added security and allowing tenants 24-hour access to the building, were carried out. But one issue has proven to be non-negotiable.

"All of the other concerns they have had, we solved most of those that we could," reports Howard Jefferson, chairman of the HSBDC board of directors. "But that was not the real deal. They asked us to cut the rent by 60 percent and make it retroactive one year. Well, that was not done."

Wiltz says the more the tenants pushed the issues of high rent and poor services, the more frustrated Mitchell became. Relations between the two sides sunk to their lowest on August 17, 1995, when at a meeting with several tenants, the executive director lost his cool.

"He told us to our faces that if we didn't like it, we could leave," recalls Wiltz, whose version of events is corroborated by a letter Russell received from Mitchell shortly after the meeting.

"[P]lease accept my sincere apologies if my remarks appeared insensitive relative to tenants exercising their option to move," Mitchell wrote. "Each tenant is a valued client of the HSBDC, and it is not our intent to encourage moving from the [Business & Technology Center]."

In a recent interview, Mitchell politely steered clear of any discussion of his dispute with the tenants. He did, however, suggest that he believes too much of his time has been spent dealing with Palm Center's incubators. "What we have here is a mixed-use complex," he pointed out, "and it's not geared just toward small business. The complex as a whole has to be run like a business."

That means that HSBDC has to decide when a tenant's "constant nudging" becomes a "disruption of the peace and enjoyment of the facility," says Mike Easley, an HSBDC board member and a small-business owner himself.

"It's been something of an unusual situation dealing with Richard Wiltz," Easley says, with equal parts bemusement and frustration. "After trying to accommodate him for so long, and to still be getting barraged with threatening letters and arm-twisting tactics ...."

Perhaps not coincidentally, the three tenants that HSBDC is trying to evict -- Wiltz, Perkins and Dora Fannon -- were among the most vocal members of the tenants association. So far, Wiltz, Perkins and HSBDC have been to court three times over the eviction issue. At the second hearing, District Court Judge Katie Kennedy ordered HSBDC and Perkins and Wiltz into mediation. That failed when it became clear that Mitchell wasn't about to back down and give the tenants a new lease. "He told us he'd give us until November 30 to get out," Wiltz says.

Fannon had a private meeting with Mitchell, her attorney and former City Councilman Al Calloway, who is now an assistant to Mayor Bob Lanier. Fannon says she received no satisfaction, and is waiting to see if the HSBDC will take her to court in order to get her out of the Palm Center.

As for the remaining incubator tenants, they point out that whatever the HSBDC has done, it hasn't contributed much to the success of their small businesses. That worries them -- and, they say, Houston's taxpayers should be worried as well.

"This," says Richard Wiltz, "is going to be like El Mercado II before it's over.

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