consultants are sandburs

Thursday, May 26, 2011

RAMSEY - and who is Flaherty and Collins - $7.3 million of good faith condo buyer money disappeared. A thinly capitalized intermediary - of all things - was used. Reporting is that repeated victim phone calls were not returned. The paper's phone call was ignored. A public-does-not-need-to-know mentality, perhaps?

More than 200 people paid more than $7.3 million in deposits for units in uptown's 210 Trade

Kerry Hall Singe
ksinge@charlotteobserver.com
Kerry Hall Singe
Kerry Hall Singe writes on business and development for The Charlotte Observer.



[Readers can click the above live-link headline for the entire North Carolina reporting or continue here for relevant parts of the excerpted story. It exposes part of the personality behind the allegedly upscale "Bride and Pride of RAMSEY" found by city matchmakers Darren and Mike, at Landform. Note that the matchmaker firm gets a humongo commission but only if the marriage takes place. They have that as incentive for advising that the marriage under any circumstances be consumated.]


Randy and Adrienne Hollifield were considering a move to Charlotte from Tampa when their online search found plans for a proposed uptown entertainment complex and adjoining condo tower.

They were hooked.

At 210 Trade, they could live next door to the sports arena and light rail line. They could walk to restaurants.

After a quick visit to Charlotte in January 2007 to view site plans, the couple paid more than $25,000 as a deposit on a corner unit, asked for work transfers and moved to the Queen City.

"It was just very enticing. We wanted to be back in an urban area," said Randy Hollifield, who had lived in Fourth Ward years earlier.

Their dreams were crushed this week when the project's developer, Charlotte FC, an affiliate of Indianapolis-based Flaherty & Collins Properties, filed a Chapter 7 bankruptcy petition indicating it wanted to liquidate its remaining assets instead of reorganize.

The filing caps nearly two years of uncertainty for the project, which has been mired in lawsuits and an alleged squabble over building codes. Construction on the condo tower at College and Trade streets stopped in February 2008.

That the developer of 210 Trade filed for liquidation, instead of a reorganization, likely kills any chance depositors will get their money back, attorneys say. The tower wasn't built - only the foundation was poured, with the slab sitting atop a corner of the EpiCentre, rebar jutting out.

[...] The bankruptcy filing gives a glimpse into how people lost as little as $11,000 and as much as half a million dollars in deposits for units at 210 Trade.

More than 200 people paid more than $7.3 million in deposits for 261 units between 2006 and 2007, according to the filing, which lists 59 pages of unsecured creditors.

More than half a dozen buyers told the Observer they were embarrassed and angry about the ordeal, saying Flaherty & Collins didn't respond to repeated calls or e-mails made during the past year. A call to the company was not returned.

[...] David Pfleeger paid a $150,000 deposit for a two-story penthouse, according to the bankruptcy filing. Pfleeger said he and his wife planned to have his mother-in-law, Tina Chiofalo, move in with them. The floor plan would have allowed the couple to look after Chiofalo but still have privacy.

"It seemed a great opportunity," he said.

In anticipation of the move, Chiofalo sold her home 18 months ago and moved in with the Pfleegers in their Fourth Ward condo. Pfleeger, president of Atlanta-based AOS USA Inc, which consults clients on facilities and project management, has since turned his home office into a television room for Chiofalo.

He said he's frustrated by how Flaherty & Collins never responded to the 10 telephone messages he left.

"Things go up and things go down. I understand the realities of life and that you don't always win," he said. "But it seems like the state lets the developer take the money and not communicate with folks. It doesn't seem right."

Developer Afshin Ghazi, who built the adjoining EpiCentre, said he couldn't comment on the bankruptcy filing or Flaherty & Collins, which is involved in lawsuits with his company, The Ghazi Co.

Ghazi said he and close friends and family members lost more than half a million dollars in deposits on a dozen units. His parents, he added, had hoped to live in the tower.

In court papers, the developers blame each other for the tower's problems. Flaherty & Collins claimed The Ghazi Co. refused to provide agreements that could help them satisfy city code requirements, while Ghazi has said the developers did not get the needed financing and were using the permitting issue to "extort millions of dollars" from his firm.

[...]

Litigiousness. Financing inadequacies. Finger-pointing. Stonewalling those who were unsecured creditors.

Just who you'd be happy to take a multi-million dollar second lien position with, because of reliability, right?

No cause at all for doubt in Ramsey, with a track record like that, right?

No cause to demand substantial collateral security, if any exists, from the main firm, and to rely only upon an affiliated intermediary such the shell involved in North Carolina, right?

No red flags in any of that, right?

Good that Darren and Mike were so diligent in ferreting out the reported news in North Carolina, and not just being jolly well satisfied with whatever Flaherty or Collins told them, right?

Good that there exists a thick portfolio documenting the earliest and ongoing due diligence of Landform, in meeting fiduciary duty owed City of Ramsey, right?

I look forward to reviewing that thick portfolio, since I have a public data disclosure request in with the City, and they most certainly would not stonewall me the way those Carolina buyers got the stonewall treatment.

Right?

The city is lucky we have an outstanding, adept, alert, concerned, and prudent council majority. Right?

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