Cover Story

Couret Controversy

by Leslie Turk

North Lafayette's proposed traditional neighborhood development is mired in lawsuits and debt, and local contractors and creditors are hoping a California company will salvage the project.

It was to be north Lafayette's River Ranch.

Filled with wildflowers and 200-year-old oaks, the almost 200-acre family property tucked away off I-49 was going to be transformed into Couret Place, a self-contained traditional neighborhood development and potential economic engine in the northern part of the parish. After the death of Lucille Couret, who led a private life on the property, the heirs decided to sell the family property and its landmark circa 1790 home, one of the finest examples of early Creole architecture in the state.

While the ambitious project was announced almost two years ago, there was little momentum until early March of this year when the TND's representatives said they had secured a critical component of the mixed use project. O&S Holdings of Santa Monica, Calif., said it wanted Couret Place's front 50 acres and a significant amount of adjoining land to develop an entertainment and shopping center. With its commercial anchor in place, Couret Place broke ground March 21, touting the creation of 1,000 residential lots and 30,000 square feet of commercial space.

But what no one knew ' including a handful of local contractors lined up to lay the infrastructure ' is that mysterious Couret Place frontman John W. Royston of Lafayette was scrambling behind the scenes to strike a new agreement with the property owners, the Buller family of Evangeline Parish, which had become increasingly concerned about the Royston group's financial wherewithal to pull off the project.

Despite those ongoing battles between the developer and landowners, by early May local contractors were putting other projects aside to fast-track work on Couret Place. "[Royston] really rushed us to get going," says Stacy Landry, general manager of Youngsville-based Glenn Lege Construction. After more than a month on the job, however, contractors were not being paid, and on June 29 Todd Vincent of the engineering and surveying firm Sellers & Associates got a phone call from one of his employees who said a Buller family representative was at the site telling the contractors to go home.

With their invoices ' one as much as $400,000 ' languishing several months, contractors began filing liens on the property and lawsuits against both the Bullers and Royston's Couret Place.

Then, on Sept. 1 the Buller family filed suit against Royston's Couret Place for breach of contract, and Couret Place countersued and pointed the finger at the Buller family.

In addition to the legal mess, it now appears that O&S, once purportedly interested in Couret Place's front acreage as well as Acadian Hills golf course and adjacent property, has backed away from the proposed TND. The company, which developed Shreveport's 650,000-square-foot Louisiana Boardwalk, a waterfront entertainment/outlet shopping center anchored by Bass Pro Shop, still lists a Lafayette project under "future developments" on its Web site. However, O&S may be taking its concept to another site.

Real estate developer/broker Cecil Trahan confirms O&S has optioned two parcels of land at Louisiana Avenue and Interstate 10 ' 11 acres on the northwest corner and 41 acres on the northeast corner ' near Stirling Properties' proposed Target-anchored center. "They have a two-year option," Trahan says. "They put up some serious deposit money."

But there may be a silver lining for the north Lafayette TND. A company called Cal-Bay International, a publicly traded real estate development and investment group out of Carlsbad, Calif., wants to wipe the slate clean and do its own TND at the site.

"The [Buller] family has expressed interest in moving the original deal aside," says Bill Sickert, vice president of Cal-Bay International, who is confident he will have a letter of intent with the Bullers within days. It's actually the second letter of intent, he explains, the first one having expired because Cal-Bay was still trying get its arms around the existing problems. "The Bullers have been wonderful to deal with ' kind, honest, integrity-filled individuals," he says. The plaintiffs in the suit against Royston's Couret Place Inc. are Couret Farms LLC and the Lucille Couret Testamentary Trust, Mary Agnes Buller Callaway, who lives in Lafayette; two family members in Orleans Parish; and Dr. William Buller and George H. Buller of Ville Platte.

Navigating the debt that has accumulated is taking a significant amount of time, Sickert says. "It could be as high as $2 million. Our goal at Cal-Bay is to make good with all of the local contractors." Court records indicate that Royston family members and other investors have options on lots in Couret Place, but it's unclear how many local people put deposits down. "It appears there are 55 separate lots that 12 entities have put deposits on," says Sickert. "We're still discovering who all those people are."

Sickert says Royston, a Lafayette accountant, and his partners also favor his company taking over the project, though Cal-Bay has yet to determine whether Couret Place is owed any money at all. "They have, unfortunately, a huge amount of debt. The value they bring is difficult to assess," notes Sickert.

Cal-Bay has about a dozen commercial and residential developments under way, mostly in southern California and Nevada. None is a TND, but Cal-Bay has been involved with two similar developments in the past, he says, noting the north Lafayette project would be its most significant TND undertaking. Sickert was not specific about Cal-Bay's past TND projects.

The Cal-Bay executive is convinced his company's Lafayette project would be a huge success. Though he would not disclose how much Cal-Bay will pay the Bullers for their 177 acres, he says it's at least double what they would have received under the original deal with Royston's group. Cal-Bay also plans to purchase and preserve the historic home, which remains fully furnished and is in pristine condition, as part of its project.

The Buller property would be Cal-Bay's largest single acquisition, and the company anticipates the project will be under development for three years. The company expects to make more than $100 million on the TND, which it hopes will generate $400 million in sales. Cal-Bay says funding for the project, which may continue to be called Couret Place, has been secured.

In contrast to the financial muscle of a company like Cal-Bay, the financial strength of John Royston and his California partner, Stephen F. Owens, has been questionable over the past two years, according to the Bullers. In their lawsuit, the Bullers say Couret Place twice renegotiated what was originally a $3.9 million property purchase to be paid out over time by way of partial owner financing. (Court documents indicate Owens or Couret Place owns 22 acres on the site, which was bought for $550,000 as part of the original agreement. The dispute is over the remaining 177 acres.)

The family claims Royston and his partner formed Couret Place Inc. because they had to bring in another partner when they were unable to make a $1.15 million payment Dec. 31, 2004.

According to the Louisiana Secretary of State, Couret Place Inc. was formed Dec. 10, 2004, with Royston as the registered agent and Stephen F. Owens of Alpine, Calif., as the director.

In its countersuit filed Oct. 25, Couret Place denies the allegation that it did not have adequate funding.

The new investor was likely Clayton Lee, who is referenced in some of Royston's documents filed by the Bullers. A Daily Advertiser story the day after the Couret Place groundbreaking identifies the owners of the Couret Place development as Royston, Owens and a company called Lisar of San Francisco. It's unclear whether Lee is associated with Lisar. The Independent Weekly obtained an e-mail address for Clayton Lee, but at press time he had not responded to an interview request. Owens, whom sources say may have lived in this area at one time, could not be reached for comment.

Rather than move forward on the first agreement, the Bullers maintain Couret Place proposed a new revenue sharing program, which they agreed to. "Plaintiffs now realize that this [agreement] and its terms were presented in order to buy more time for Owens and Royston, and was presented by them in such a way that the Bullers were misled to believe that they would receive more money for the property than was agreed to or available in [the original agreement]," the lawsuit states.

The Bullers say the developers initially committed to fund all of the infrastructure and development costs but came back to them in February of this year asking that they put the land up as collateral to create a Community Development District. The CDD would allow bonds to be issued to secure infrastructure financing for the project. Although initially reluctant, the Bullers said they would consider the CDD and bond program subject to 15 terms and conditions. However, while the parties were still working through the issue of a CDD, Couret Place began asking for money to pay infrastructure bills that were coming in.

By then, the Bullers were getting legal advice from a Ville Platte lawyer and became convinced they would be assuming too much risk in the CDD plan. It was the first time they had sought legal representation since the project's inception. Their attorney, Wendel Fusilier, believes Couret Place did not have legal representation and that Royston was drafting all of the agreements.

Royston declined to be interviewed for this story, citing the pending litigation, but downplayed his role in the project. In an e-mail response to an interview request, Royston wrote: "In regards to me personally, if you have researched the contracts that are in place, the record will show that John W. Royston is not the developer of Couret Place (Couret Place Inc. is the developer of Couret Place); that I was never an equity partner; that I was never personally responsible for any of the debts of Couret Place; that I was never expected to put up any money to fund Couret Place; that I am a very minority stockholder in Couret Place Inc." Royston also said he was not a decision maker for Couret Place. He also said the Bullers were pleased with his efforts on the project. "I cannot count the number of times that I had lunches and dinners with the Bullers wherein they repeatedly acknowledged my hard work and success and their total satisfaction with the performance of my duties and responsibilities," he noted.

The legal documents clearly show Royston spearheading the project, even signing as power-of-attorney for Owens.

Attorney Fuselier did not return phone calls last week, and Dr. William Buller, who lives in Ville Platte, says he will not comment at this time for fear of jeopardizing settlement talks.

It is unclear how the Bullers hooked up with Royston, a local accountant who seemingly came out of nowhere when he and his family began promoting Couret Place. In an April 2005 cover story about north Lafayette development in The Independent Weekly, the Roystons ' John and son Kevin, along with Kevin's wife, Ronnie ' said they planned to build a TND much like River Ranch on the property. The main entrance would be on Pont des Mouton Road, with additional access from the I-49 frontage road and Acadian Hills' golf course.

On the surface, the Royston family seemed to be doing everything right. The family quickly moved to get the Couret House on the Lafayette City-Parish Register of Historic Properties. They planned to apply to the National Register as well. The white-columned Couret House was to be the centerpiece of the sprawling TND, which would feature parks and lakes, apartments, large single-family lots, offices and retail.

"A town center and narrow streets will invite residents to walk more and engage in impromptu socializing," Kevin Royston said in a press release announcing the venture. "Commerce will also be a main focus at Couret Place due to its convenient location at the crossroads of I-10 and I-49," he added. Kevin, who was identified in the release as the town planner and designer, is an architectural intern, meaning he has a degree in architecture but has not passed the exam to be licensed in Louisiana.

Other family members were to have roles in the project as well.

Kevin's primary experience in this realm was having worked under the guidance of architects on two TNDs from 2002 to 2005 while at the local firm Architects Southwest, one of the foremost TND design firms in the South ' if not the country. Several experienced architects and developers interviewed for this story say that kind of background would not qualify him to deliver the complexity of a project like Couret Place.

Kevin, who says he received a monthly fee for his services over a two-year period and has been paid in full, defends his role. "All I did was the layout. It has to be stamped by a licensed engineer," he says. "You don't have to be licensed to do a master plan." Though he referred to himself as an architect in an interview with The Independent Weekly, he claims to have never represented himself as a licensed architect in the Couret Place project or any other jobs.

Kevin says he was also writing the TND code, a massive undertaking that requires a rewriting of otherwise generally accepted codes for such issues as building setbacks, lot sizes, landscaping, design of roadways and sidewalks and storm water retention.

The Bullers claim Kevin was not immediately identified as the town planner.

According to court records, Kevin and his wife also had options on Couret Place lots valued at $620,506.

Sickert, who had assumed Couret Place was planned by an architect, says he was impressed by Kevin's plans and may use them ' though he stresses that an architect or architects will also be hired. "The architect needs to be licensed. We will look at all those things," Sickert says.

In the beginning, Couret Place was marketed and promoted for the Roystons by Jaci Russo of Russo Ad Group, who declined to comment for this story. "We're no longer involved in the project," she says.

Royston may have been depending on his partners for development expertise, because he does not appear to have a background in real estate. The Louisiana Secretary of State lists about 50 active and inactive entities for which Royston has been a director, president or registered agent ' the latter likely indicating the role the accountant played to assist clients in annual filings and other state compliance issues. On the Web site for his Kaliste Saloom office of J.W. Royston, EA & Associates (the accounting services firm has had a number of different names over the years), Royston says he is a graduate of Northwestern University with a bachelor's degree in both accounting and business administration. He says the accounting firm is 15 years old, and before forming it he worked for the IRS, specializing in tax audits. He also says he was chief financial officer for an unidentified "multimillion-dollar corporation, heading over 12 departments." Additionally, he is the author of The Tax Man, Secrets of a Former IRS Agent, which his Web site claims has sold more than 10,000 copies.

Few people in local real estate and development circles knew much about John Royston when he announced the project in early 2005, but a number of local business people have had financial disputes with him. Royston has a history of allegedly breaking contracts, as about a dozen lawsuits were filed against him in state district court from 1997 to 2001 ' virtually all claims the accountant failed to pay attorneys fees, or make payments on car leases or promissory notes for property purchases. His wife filed for divorce on Valentine's Day 2000; in the divorce proceedings, Royston claimed that he could not pay spousal support because he had no money. However, in May of that year, he put $1,000 down on a $7,000 engagement ring from Gabriel's Fine Jewelry. Four months later, he was back in court when the Lafayette jewelry store sued him for the balance.

"He just flat out told me, 'You can sue me, but you're not going to get the money,'" says owner Gabriel Shaik, who was surprised to hear Royston had been planning a major real estate development. "My attorney got me a judgment, but what good is that? This guy's just going around ripping people off."

Local contractors once hopeful they would play a role in getting Couret Place off the ground and other individuals and groups who put money down on lots are hoping Cal-Bay International will come through for them. Leonard Guidry of Guidry's Construction in Scott, which installed all of the sewer mains, is still waiting for his $360,000.

All of the contractors believe the project has potential, which is why they are anxious to get back to work. Guidry was one of the first contractors to lay infrastructure about a decade ago in the raw land that became River Ranch and still takes pride in having played a role in the launch of such a successful TND. "Glenn [Lege] and I were both hoping it would be like that," Guidry says. "But I think there's a little bit of greed on one side between [the Buller family] and Couret Place."

Sellers & Associates of Lafayette, which was involved in the project almost since its inception, has $227,000 in outstanding bills ' though it was paid for early work. "What we were paid is a small amount compared to the $227,000," Vincent says.

Reps from these local businesses say their contracts were with Couret Place, but because there's some ambiguity over who was responsible for their services, the local businesses are suing both parties for their money.

River Ranch developer Robert Daigle says he was unable to get a number of local contractors to work at River Ranch and his Youngsville TND, Sugarmill Pond, because they had committed to Couret Place. "Sellers, Leonard Guidry and Glenn Lege are all first-class, quality contractors. If they did work out there, you can bet it was done right, and they should be paid," Daigle says.

"Now everyone is suing everyone, and we're sitting back with no money," says Landry of Glenn Lege Construction, which has completed about 90 percent of the storm drainage work and is owed $438,000. Thankfully, the strong local economy is keeping the company busy, but Landry says it would take a long time to recover from that kind of hit. "It's not going to close our doors," he says, "but it's going to hurt."