NewMark Merrill (NMM) was hired by Panattoni to salvage Twin Peaks Mall. NMM specializes in distressed properties and the mall has certainly been distressed. NMM was supposed to pull Panattoni’s fat out of the fire. It appears that NMM let the fat sizzle until there was nothing left to sizzle and then “signed a contract” to pick up the property at a fire sale price.
Panattoni, good shopping center free marketer that it was, bought high and had to sell low. Actually, it would be interesting to know just who the seller is and who the buyer is in this latest iteration. Chances are that Panattoni may be toasting champagne. They put $8 million dollars down and likely took in sufficient revenue since July of 2007 to justify an $8 million dollar investment, at least to break even.
As to the $37 million dollar purchase price (according to insider Council Member Witt), it’s likely that Bank of America is holding the bag on this one. And there’s likely not much money in that bag. $8 million from Panattoni. Perhaps another $8 million from NewMark Merrill, if the sale eventually materializes. Golly gee. Poor B of A. It will have lost somewhere in the vicinity of $20 million.
If this “high finance” wasn’t pathetic, it might actually be funny. We the American taxpayer likely subsidized that loss at least in part. Bank of America was a big bank bailout beneficiary. And it’s been leading the way in foreclosure fraud since the crash of 2008 by hiring paper pushes to sign off on foreclosures without reading the documents or verifying who actually held the papers to what. There might actually be some sort of divine justice in the B of A episode – if you believe in Karma.
We’ve all heard about the fox guarding the hen house. It seems that NewMark Merrill positioned itself to take advantage of a potential purchase just at the right time. Barely more than two months away from formal foreclosure, NMM steps up to the plate and makes an offer – an offer that at least somebody couldn’t refuse. NewMark Merrill came aboard the Twin Peaks Mall freight train in July 2010 and in the ensuing 15 months learned all it needed to know. Wouldn’t you like to be in on insider trading, insider trading in commercial real estate that is.
But that’s bidness for ya. One man’s meat is another man’s carrion.
Baum is making all kinds of back room promises to be sure. Make no mistake about that. It’s in his bloodstream. Former Mayor Julia Pirnack likely did something similar in the spring and early summer of 2007. She couldn’t keep her promises because the makeup of Longmont City Council changed. The 2007 council took its fiduciary responsibility to the taxpayers of Longmont seriously. They refused to put the city on the hook for $15 million in bonding and forfeit all property taxes and 90% of sales taxes for the blighted area for 25-30 years.
If the deal actually is a deal and not just a campaign stunt as suggested by one of Baum’s backers in his/her Times-Call blog comment, I heartily recommend that the community not let its desire to see something good happen with the mall cloud its collective judgment when somebody, somehow comes knocking at city hall’s door with a hand out.
Longmont can benefit from a productive mall in a prime location, but only if it doesn’t buy a pig in a poke when it comes to a public-private partnership. Remember, NewMark Merrill is getting the property at the cheapest possible price. They should not need financial assistance of any kind from Longmont.