Former board members of the Eastern Waco Development Corp. are challenging the sale of a corporation building to a health and fitness company and hope to reverse the transaction and take back the building.
Thelma Evans, Wannika Muhammad, Virginia Bowie-Green and Cecil McDowell filed the lawsuit late last week against the development corporation, its president, Linda Jann Lewis and board members Lucious New, C.W. McKethan, Wanda George Green and JSPF, owners of the CrossFit Waco health club.
While the sale of the building is being challenged in court, the makeup of the Eastern Waco Development Corp. board also appears to be in flux. Evans and Muhammad said Monday that about 30 “members of the community” met Aug. 2 at the East Waco Library and voted to dissolve the current Eastern Waco Development Corp. board and replaced the current leadership with a new president and board members.
Evans said she is the new president, while Muhammad is secretary. The other plaintiffs in the lawsuit, who all served previously on the board, are members of the newly installed board, Evans said.
Lewis, who helped arrange the sale of the 13,000-square-foot building at 713 Elm Ave. to CrossFit Waco founders Brandon Hancock and Jonathon Shelton for a reported $469,000, deferred comment to Waco attorney Rick Brophy.
The building, a former Safeway built in 1953, was given to the corporation by Waco businessman Tom Salome in 1998 and has since been used as temporary office space for a variety of ventures and a gathering hall for lunches, anniversaries and meetings.
Megan Henderson, executive director of Center City Waco, said renovation of the building is complete. CrossFit Waco received its certificate of occupancy on Monday and plans to begin operations on Tuesday.
The lawsuit, filed by Dallas attorneys Charles Kaplan and Frank Fleming, alleges the sale should be voided because “EWDC had no actual or legal authority to sell the property and in fact was prevented from selling the property by provisions in the organization’s articles of incorporation and/or by-laws.”
The corporation forfeited its charter in May 2008 and 2011 and was delinquent in filing tax returns in May 2011, the suit alleges. The board allowed its charter to lapse again as of December 2017 and was without authority to sell the building, the suit alleges.
“The decision to sell the property was made by a fraudulent ‘board of directors’ that was not properly elected or selected and therefore could not serve as members of the Board of Directors of EWDC,” the suit claims. “The present makeup of the board of birectors of EWDC is invalid, unauthorized and lacks authority to act on behalf of EWDC.”
The suit, filed in Waco’s 170th State District Court, asks Judge Jim Meyer to grant a temporary restraining order preventing JSPF from making any improvements to the property or spending any manpower or money connected to its intended use of the building.
“In addition, plaintiffs seek to have the board of directors of EWDC and its agents, officers, board members and employees enjoined from transferring, spending, secreting, hiding, gifting, paying, or in any way changing the status or location of any of the money, funds or assets of EWDC,” according to the suit.
The suit also asks the judge to block the EWDC board from taking any action, including meeting or voting on matters concerning the corporation.
Brophy, who represents the board and assisted with the sale of the building, said the corporation is working to get its non-profit status reinstated, adding that it also paid outstanding franchise taxes before selling the building.
“It looks like they are alleging the board didn’t have authority and that is completely wrong,” Brophy said. “The board was doing what it thought was best for the community over there and that’s it. We have tried to reach out to these folks and we are going to continue trying to reach out to them, but we were not aware of the suit until you made us aware of it.
“All I know is my folks are a legally constituted board. They are trying to do what is best for the community and they think they have done that. If somebody disagrees, we are glad to talk about it, but we think what they did was good for the community.” Brophy said.
Evans and Muhammad disagree. They said no one was aware that the building was being sold until they read about it in the Tribune-Herald.
“We are not concerned about the money,” Muhammad said. “We are concerned about the building, and we want it back into the hands of the community. No one knew about it until it hit the paper. We didn’t know. It is a building given to the community, and it was given for a special purpose and no one knew what was going on. There was no community meeting, no board meeting, as far as we know, and they sold the building without the community’s knowledge.”
When Salome deeded the property to the corporation, he said he envisioned it becoming a “mini-market mall” to be used by the corporation to help start-up business ventures.
Lewis, who said she has been board president three or four years, told the Tribune-Herald in April that the board placed two conditions on the sale of the building.
“They will accept our subcontractors, and we’re targeting minority and women-owned subs, and they will make use of the Doris Miller Y, which has both indoor and outdoor swimming pools that could be made available to CrossFit members,” she said.
The Doris Miller YMCA of Central Texas is at 1020 Elm Ave., and Lewis said the Eastern Waco Development Corp. wanted to protect its viability by ensuring CrossFit becomes a partner, not a competitor.
“We will pay for renovations and reconstruction, and CrossFit will reimburse us as the work gets done,” Lewis said in April.
She estimated renovations would run about $150,000.
Evans, who said she was elected new corporation board president earlier this month, objects to the secretive nature of the sale of the building and questions the validity of the board’s status since losing its non-profit status.
“Linda Lewis became president and sold the building and kept it a secret from the community. We don’t know where the money is but we intend to find out,” Evans said. “ We want the lawsuit to continue because we don’t want them in the building. The injunction will keep them from using the building until it is all settled.”
Neither Hancock nor Shelton returned phone messages Monday.