consultants are sandburs

Friday, September 09, 2011

Is David Flaherty only telling Ramsey what he wants us to hear?

photo credit
The last time David Flaherty was in Ramsey he attended an HRA worksession [untelevised] and among other things talked of financing difficulties in Ramsey his firm attributed to, he said, Ramsey Town Center history with the banks, the Minnwest foreclosure, the Nedegaard situation, and Ramsey buying the land - he did not get into detail, but the implication was local banks got burned and are hesitant to touch his ramp-wrap-rental by the rails which he expects Ramsey to finance in part, behind a $20 million+ bank lien, with Ramsey set to plunge $8 million into his adventure while he - his firm - puts in substantially less promoter risk capital. A plausible story, yes/ no? Ramsey burned some credibility, history is history, and it's not Flaherty's fault that Twin Citys locals have institutional memories. Banks getting burned burns in a memory that "COR rebranding" cannot scrub - that I fully believe as not only plausible but likely. Yet simple stories can be oversimplifications.

History IS history

The gentleman somehow, in the course of suggesting banks getting burned burns in a memory was either neglectfully or intentionally speaking when he did not report to us:

The developer of the unfinished [Charlotte North Carolina] 210 Trade tower says it owes its creditors more than $52.5 million.

Flaherty & Collins Properties filed Chapter 7 bankruptcy liquidation Oct. 2 [2009] for its affiliate Charlotte FC, the limited liability company used for the 48-story, 419-unit condo tower that’s partly built at the EpiCentre complex in uptown.

The filing details debts to about 300 creditors. Unsecured, non-priority claims — including contracts with condo buyers — account for $15.15 million in debt.

Minneapolis-based U.S. Bank has secured claims totaling $37.3 million. And House Investments of Indianapolis made a $6 million loan secured by a pledge of ownership interest.

Even the Mecklenburg County tax collector is owed — $84,743.

Total assets for Charlotte FC are estimated at $197,493.

[emphasis added, full report here] Local banks might have an institutional memory, and talk to one another, and being put into a bankruptcy situation on a $37 million investment of faith in Flaherty-Collins, by our local US Bank, might, just might, have percolated as useful information among local banking circles.

Flaherty did not tell us the red-letter info reported earlier, and we probably can assume he had some say and familiarity in that 210 Trade condo tower situation, from start to federal bankruptcy Chapter 7 filing. As CEO it would be the normal course of things that such affairs were not left to subordinates. Visiting Ramsey has not been left to subordinates, has it?

So, not mentioning material information - and I would not say that stiffing US Bank is immaterial, certainly not to US Bank. So, what's the explanation? Surely it was simple forgetfulness. David Flaherty is a busy man. But do we want to place a taxpayer $8 million wad of cash at the disposal of one so forgetful?

Strings can be tied to the pile of money, but still.

I think there was even among some, a forgetfulness to report fully who Ryan Cronk was/is as an "assistant" to Darren Landform.

Oh. I forgot. It's Darren Lazan.

Of Landform.

Sorry about that. A simple memory lapse. But I did remember to put in this screenshot:

This link

_______________UPDATE_______________
In fairness to the gentleman, Mr. Flaherty, I do not recall (when he was last in Ramsey at that worksession) wheter he said if he was getting local money financing for his Edina adventure. Surely Ramsey history could not have poisoned the well for local bank lending on that project. Mayor Bob should get on the phone to Darren, and perhaps get Kurt involved, and do another conference call, asking David Flaherty about who is financing Edina - my bet - NOT Minneapolis based US Bank. It seems that is how council business is conducted concerning the ramp-wrap-rental by the rails project, so I would not expect to see normal practices changed, should that question be posed to Mr. Flaherty at all, by Ramsey officials. Also, in fairness to Mr. Flaherty, I cannot say he did not earlier disclose to Ramsey officials that US Bank was the lender left out to dry on the Charlotte North Carolina project; I only can say to my knowledge no such info percolated down to the citizen and taxpayer levels in Ramsey, to the common folk, if officials have known of it.

______________FURTHER UPDATE______________
Readers may recall how the Minnwest foreclosure auction for the vacant remainder of the Town Center land was repeatedly scheduled and canceled, a pattern, in Ramsey, which Mr. Flaherty may be familiar.

Mr. Flaherty may have had special cause to notice the Ramsey situation, because of familiarity with a comparable thing, this Google, linking to stories here, here, here, here, and here; the latter opening:

EpiCentre gets a new lender, sells air rights - Company that bought rights to build tower is affiliated with complex's developer.
By Kerry Hall Singe - ksinge@charlotteobserver.com
Posted: Wednesday, Nov. 24, 2010


A company affiliated with EpiCentre developer Afshin Ghazi bought the air rights over the uptown project at a foreclosure auction Tuesday.

The sale resolves a longstanding hitch that stalled development of a proposed 50-story residential tower and left a concrete slab and exposed rebar sitting atop the EpiCentre entertainment complex.

210 Trade Investments, LLC paid $6million to own the rights.

US Bank originally financed the tower but started foreclosure proceedings when the developer, a subsidiary of Flaherty & Collins Properties, defaulted. US Bank later sold the loan to Ghazi-affiliated 210 Trade Investments.

Construction on the tower was stopped in 2008 because of problems with the city's code enforcement department over the air rights arrangement. The tower's developer later liquidated.

Ghazi declined Tuesday to say what is planned for the site but has been quoted saying it would be difficult to build a residential project in today's soft market. Something, he has said, will be built.

In other promising news for the EpiCentre, its lender, Regions Bank, sold its mortgage on the complex Monday to a new lender, Blue Air 2010 LLC.

Court documents provide no information about the new lender other than to suggest Blue Air is willing to work with Ghazi on a reorganization plan and invest in the 300,000-square-foot EpiCentre.

Regions started foreclosure proceedings on the property in July saying Ghazi had stopped paying on a $90 million loan. Ghazi put the EpiCentre's development companies into bankruptcy protection, stalling the process.

My guess would be if asked, Mr. Flaherty would say he is familiar with Mr. Ghazi.

Again in fairness to Flaherty, there is no Mr. Ghazi, or equivalent, appearing in any reporting on the Orland Park or Ramsey ramp-wrap-rental dreams.

______________FURTHER UPDATE_______________
Focusing back to the question of whether town officials know things they are withholding from the citizens, misleading the citizens that way, there is history. On a story since gone offline, Sakry wrote for ABC Newspapers:

While some may criticize the city for not checking out Nedegaard’s financial situation, there was nothing the city could do, according to former Ramsey City Administrator Jim Norman.

Nedegaard assembled the land and owned it. The city didn’t have a choice in selecting a developer, Norman said.

“We wanted to do the project and he owned the land,” he said.

The city’s options were to condemn the land or go ahead with Nedegaard with a letter of credit to protect the city, said Norman.

Although the city consultants did a study before the project started that indicated Nedegaard may not survive financially, it is not unusual for projects to have two to three owners before completion, he said.

The first indication the city received that Nedegaard was in financial straits was when contractors started putting liens on RTC property in fall 2006.

[...] When the urban center idea came in up in a comprehensive plan meeting with planning consultants in 1998, the council rejected it, said Norman.

The idea of a transit-oriented, mixed-use development resurfaced later in the year and was seen in better light by the council fighting for a Northstar Commuter Rail station site, which it later lost to Anoka in 2000.

Cultivated musrooms
History is history. Now, James Norman was his own man, a unique specimen, but after the fact, after the Nedegaard default-bankruptcy-death, and if I remember the time frame correctly after the Norman-Cook sister city trip to China and Norman's quitting city employment, he then says to Sakry, a study existed that was hidden under a hat.

What confederates of Norman were a part of this? I remember a meeting where Mulroney, Mulrooney, whatever his name -- was supposed to show up at a televised meeting and do a presentation on the subject of Nedegaard's financial status, and the mayor [Gamec then, a different mayor] blew some smoke about another engagement, or a sikness, I forget which, but the guy never showed to publicly say jack. History of how we were treated is evidence of how we possibly now are being treated, and how in the future we can anticipate being treated.

It ain't pretty.

Moreover, that reference to the Hendriksen-Connolly-Zimmerman council, (Gamec and Susan Anderson in the minority), having showed eminent good sense in saying the idea stinks; the powers that be appear to have started playing choo-choo-stop games; and who did what behind the scenes is still not public knowledge. Toto never pulled aside the curtain. If Toto had, what lurked behind the curtain would not have been too pretty either. History teaches, distrust is justified.


No comments: