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Business and economy news and issues in the Ozarks.

Joplin Cites Insolvency of Wallace Bajjali in Terminating Contract

KC Army Corps of Engineers

The city of Joplin says a firm tasked with tornado recovery efforts is no longer under contract.

In a news release posted to its website Wednesday, officials cited “gross negligence, fraud, and willful misconduct” in terminating both the Master Predevelopment Agreement and the Land Assemblage, Disposition and Management Services Agreement with Wallace Bajjali Development Partners.

City Manager Sam Anselm said in a statement that by taking this step, the city can move forward with its recovery “through the ongoing redevelopment of both the public and private sectors.”

Anselm continued, “We have demonstrated our resolve and resiliency to the world once before, and I hope we can show our true character again as we proceed with the next phase of our recovery.”

The city said last month that it was reviewing options regarding the contractual agreement with Wallace Bajjali after learning initially through third-party information and later verifying the firm was found to have skipped town and its co-founders had resigned.

Since entering into a contract with Wallace Bajjali in July, 2012, the city has paid approximately $1.68 million for the firm’s work in the community, land purchase fees and for revenue and cost benefit analysis of tax increment financing information.

In a letter to CEO David Wallace and President Costa Bajjali dated Feb. 3, City Manager Anselm cited insolvency of the firm with at least $8.5 million in debt the city had verified.