Property tied to Paul faces foreclosure
Shopping center is owned by affiliate linked to businessman under fire
A shopping center that was once home to dance hall Midnight Rodeo — and is owned by an affiliate of World Class Holdings, a company founded by Nate Paul — may be headed for foreclosure next month.
Paul is the Austin businessman at the center of the scandal currently engulfing Texas Attorney General Ken Paxton.
The property at 12260 Nacogdoches is set to be auctioned off Nov. 3, Bexar County property records show, although county officials have repeatedly postponed foreclosure sales due to the coronavirus pandemic.
Sonora Bank first pushed to foreclose in December and subsequently filed notices again this spring and summer, most recently last month. The bank’s promissory note is for roughly $4.7 million.
Two other San Antonio properties owned by entities connected to World Class were slated for foreclosure this summer.
Lenders sought to foreclose on warehouses at 639 Lanark on Aug. 4, a sale that was later rescheduled for Sept. 1, and a shopping center in the 8300 block of Culebra Road that was also set to be sold Sept. 1. It appears unlikely the sales took place, given county restrictions.
Foreclosure sales of properties Paul owns in Austin and Plano were also scheduled for Aug. 4. But the sales set for that date didn’t occur after a hurried legal opinion ordered by Paxton made foreclosure auctions harder to stage, the Austin-American Statesman reported.
Paxton’s relationship with Paul came under scrutiny after a group of Paxton’s top aides sent a letter to the attorney general’s human resources office on Oct. 1. They accused him of using his office to
benefit the businessman, who gave Paxton $25,000 in political contributions in 2018.
Federal and state authorities raided Paul’s office and home last year, and he complained he was treated unfairly and illegally by law enforcement officials. No charges have been filed.
Paxton appointed a “special prosecutor” to look into the matter but closed the investigation last week, not long after Travis County District Attorney Margaret Moore’s office distanced itself from the case. Paxton
said he pursued the investigation after receiving a referral from Moore’s office, but Moore said Paxton brought Paul’s request to her.
Paxton has denied wrongdoing. Paul’s attorney, Michael Wynne, said in a letter Sunday that problems within Paxton’s office scuttled his client’s complaint and led to “a chaotic public spectacle of allegations.”
The foreclosure opinion, ordered by Paxton and dated Aug. 1, says foreclosure sales held outside are subject to a 10-person attendance limit under an executive order issued by Gov. Greg Abbott unless local of
ficials carve out exemptions. Sales shouldn’t take place if bidders can’t participate because of the attendance restriction, according to the opinion.
The document was not a formal attorney general opinion but “intended only to convey informal legal guidance.” Paxton ordered the opinion to be finished before the weekend, two agency officials told the Statesman, and was unusually attentive to it.
The Aug. 4 foreclosure sales of the World Classowned Austin and Plano properties were rescheduled for Sept. 1, but it’s unclear whether they took place, the Statesman re
ported.
In Bexar County, county officials postponed foreclosure sales in August and September. Gatherings of more than 10 people outdoors are still prohibited, per a Sept. 21 order.
Amplify Credit Union sold the note it held on the Northeast Side warehouses later in September, and one of Paul’s Austin entities filed for bankruptcy protection before the foreclosure sale was to occur, the Statesman reported.
The lender for the Culebra shopping center, Vantage Bank Texas, also appears to have sold its note around the same time, county records indicate.
Representatives for Amplify and Vantage didn’t respond to emails seeking comment. Sonora Bank, which is seeking to foreclose on the Nacogdoches center next month, declined to comment.
Paul started World Class in 2007 and built a portfolio of 120 properties across 17 states, worth an estimated $1.2 billion, a 2017 Forbes profile noted. But his business has run into trouble recently, with foreclosure notices, bankruptcies and legal entanglements proliferating.
World Class Holdings’ Austin office did not respond to several requests for comment Monday.
Paxton’s office did not respond to an inquiry.