City of Baldwyn

- Incorporated – April 1, 1861

- Straddles Lee-Prentiss County line

- Population – 3,321 (2005)

By Patsy R. Brumfield

Daily Journal

BALDWYN – Ask downtown merchants how they feel about the Stanford Financial Group collapse, and they’ll say it’s hit them professionally, personally or both.

“Jim Davis made this a ghost town,” manicurist Paula Burgess said last week as she waited for her next customer at Kuttin Korner Station.

She shares that opinion with several other business people nearby because Davis, a Baldwyn native and SFG executive, came home selling a dream for a downtown renaissance.

He bought up much of the retail space along Main Street with a goal to renovate the properties for new businesses and an economic revitalization.

Today, it’s shuttered or curtained off so that passersby cannot see the cluttered construction materials and equipment, where renovation workers just walked away several months ago.

Davis’ access to capital dried up in February, when he and four other SFG executives came under federal scrutiny for illegality surrounding the sale of certificates of deposit by Stanford International Bank Ltd.

Personal and corporate assets were frozen and now a court-appointed receiver supervises legions of lawyers and accountants who are trying to figure out where all the investors’ money went.

On Sept. 27 in Houston, Texas, Davis pleaded guilty to federal charges he took part in the decades-long investment scheme. He faces up to 30 years in prison and agreed to forfeit $1 billion personally, although his attorney says Davis doesn’t have that kind of money and will help investigators find it among Stanford’s assets.

He and his wife, Lori, reportedly are in Michigan, where he works manual labor on a family farm. His sentence likely won’t come down until after criminal proceedings are complete against Stanford and the others.

Wanda Kesler, who owns and operates Lu-Ru Flowers on West Main Street, reports that her niche business is thriving despite all the nearby gloom and doom. She recalls the day last winter when the federal agents came to town and hauled away truckloads of documents and other things from Davis’ offices.

“It was strange seeing federal agents walking around our little town,” she remembers.

Empty buildings hurt progress

Jim Davis grew up in Baldwyn, then went off to college at Baylor University, where he met Robert Allen Stanford. They were roommates, went their separate ways, then ultimately starting to work together in the late 1980s.

When the Stanford operation eventually came to Memphis, Davis worked there but lived outside Baldwyn. The company eventually opened an office in Tupelo and Davis enjoyed a shorter commute.

After a few years, he became interested in revitalizing Baldwyn’s downtown.

Despite her growing business, Kesler admits being adversely affected by the criminal case and the ripple effect on the downtown property Davis controlled.

“I’ve known Jim Davis since he started buying up businesses downtown,” she recalled from about 2002, saying he even offered to buy her building but she thought it might be worth more after he spiffed up the rest of the commercial district.

Now, she says she’s uneasy about the street’s future. “All these empty buildings are his,” she said. “I hate it from a visual standpoint.”

The two blocks at the heart of downtown are home to Davis’ numerous empty buildings.

Most are in incomplete stages of renovation.

Most of their doors are marked by a simple sticker, “These premises have been checked by the Baldwyn Police Department.”

Midway, at the four-way stop with Second Street, the only somewhat viable Davis-related businesses stare catty-cornered at each other: Patina Decor, a decorating shop, and The Status Thimble, specializing in sewing, needlework and quilts.

They’re still operating because their operators convinced the receiver they were jointly owned with Davis’ wife, Lori, and that their revenues did not come from Stanford money.

Davis associate Laura Pendergest-Holt, also of Baldwyn, bought a building next to The Baldwyn News for her husband’s office. It’s shrouded by curtains, too, as the Holts bide their time in North Carolina while she awaits trial on the Stanford criminal charges and a civil action by the Securities & Exchange Commission.

She ultimately became Stanford’s chief investment officer, a few years after meeting Davis in a hometown Sunday School.

Hopes and dreams hurt

The scandal’s effects have left a psychological mark, too.

Eighty-four-year-old Raymond E. Hill, who fought under the iconic Gen. George S. Patton during World War II, said the Stanford collapse came about 30 days too early for him to cash in: Davis had offered to buy his building, the anchor on Main Street’s east end across from the old post office the Davises converted into an upscale coffeehouse and restaurant.

By February, the deal was almost done. Then the feds came to town and Hill’s windfall vanished.

“We had such hopes and dreams for downtown, for such positive change,” said one businesswoman, who asked not to be identified because she works throughout the community. “That hope is gone now.”

The Journal was unable to contact Baldwyn’s Downtown Association director, Lori Tucker, and new Mayor Michael James for their perspectives on the future.

But legal moves in a Dallas federal court may be one avenue to break the ice for reviving Davis’ frozen property here.

Retired businessman James T. Hassell Sr. has entered the court’s reign over Stanford assets, including Davis’, by seeking help to foreclose on property Davis bought from him in November 2007 but stopped paying on last January.

It may be a test issue for the rest of the street.

Paula Burgess, who manicured Lori Davis’ nails during better times, hopes so.

“My dream is to own a book store on Main Street,” she said with a sigh last week.

“But nobody knows – it could be up to five years before these buildings are up for auction.”

She’ll be watching the Dallas court with other Baldwyn citizens, who never thought their futures would be deep in the heart of Texas.

Contact Patsy R. Brumfield at (662) 678-1596 or patsy.brumfield@djournal.com. Read Patsy’s blog, From the Front Row, on NEMS360.com. Follow her on Twitter.com as RealNewsQueen.