Tag Archive for NewMark Merrill

Longmont City Council lap dog for developers

The new mall plan looks DOA to me. Basically, we are replacing Dillard’s with Sam’s Club. Why does Longmont need three Walmarts?

And what small businesses will want to be in the same mall as Walmart? Why cozy up with people who will undercut small business prices?

The stores that NewMark Merrill has in mind are not bringing new kinds of business to Longmont. On the contrary, they are aggressively overlapping with stores on Hover and Ken Pratt that have proven they can do business here. The mall’s intent is to siphon off that business, not develop new business.

Photo by M. Douglas Wray ©2011 FreeRangeLongmont.com

Twin Peaks redevelopment will use TIF to destroy what are now viable businesses

The tax increment financing is what the developer is looking to pocket, and reaping these tax dollars will also give them the upper hand in undercutting the prices of the existing stores they seek to undermine. That’s not a productive way to do business. It will use TIF to destroy what are now viable businesses, and will only replace them with a cheaper version. If you think Twin Peaks Mall has succumbed to urban blight, wait ’til you see what Hover and Ken Pratt will look like in 5-10 years.

Big-box abandonment will be pervasive. Or Longmont City Council will be dishing even more TIF money in an attempt to save them.

This is a poisonous project and NM should be kicked out of here. It is self-destructive for Longmont to continue with this plan.

That the new mall will restore Longmont’s reputation as the armpit of Boulder County is really the least of our problems. This is a financially unsound plan, designed to benefit the developer and not the city or residents. It will damage Longmont seriously. Longmont’s tax dollars would be far better spent in redeveloping Main Street, Kimbark and Coffman.

Longmont’s October Surprise

Photo by M. Douglas Wray ©2011 FreeRangeLongmont.com

Shell game?

Well, well, well, it looks like hizzoner Bryan Baum has pulled a fast one just in time for the election.  Or maybe, just maybe, the real fast one was pulled by NewMark Merrill.

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.

Baum’s “used car” salesmanship

Photo by M. Douglas Wray ©2011 FreeRangeLongmont.com

Longmont's getting malled

Mayor Bryan Baum came into office on a wing and a promise.   And in the black art of “used car” salesmanship, he’s hoping you won’t notice the sleight of hand.

During the 2009 campaign Baum repeatedly chastised the 2007 City Council on their progress on reviving Twin Peaks Mall and claimed that he would make it happen.  And what has been Mayor Bryan Baum’s position on the Mall since his election?  “Oh, well, there’s nothing we can do about it.  The Mall is private property and the city has no control over it.”

Mayor Baum, you knew all along that this was private property but you chose to use the state of the mall to agitate your way into public office.  Voters are getting mighty exasperated with politicians making promises that they don’t keep.  And you made a whopper.  No matter how you cut the mustard, you have done nothing.  Fool them once, shame on you.  Voters won’t be fooled twice.

Longmont Mayor Bryan Baum - Dim moment

Longmont Mayor Bryan Baum - Dim moment

During the run-up to the 2009 city election Mayor Baum totally dismissed the previous council’s action to “blight” the mall and surrounding properties.  And we all know that the qualifications for “blight” are broad enough to drive a Mack truck through them.  It would have been just as supportable to deny a blighted condition.

The 2007 Council also arranged for mall development experts to conduct a two-day charette in October 2008 to determine how the entire mall area might be designed and developed to meet the many needs of the citizens and City of Longmont.

The community might be very interested to know that when the final chapter of that event was to be presented – the financial analysis by Panattoni – their computers (all of them?) failed and there were NO numbers produced.  More than curious.

The city was negotiating with Panattoni on how Tax Increment Financing (TIF) might be used, but Panattoni wanted $15 million in bonds for Phase I only, an outrageous amount of exposure for the city.  To pay off these public bonds, Panattoni wanted to use 100% of all new property taxes and 90% of all new allowable city sales taxes collected at the mall to construct their version of Phase I.  The public benefit to the city would have been a mere 10% of new sales taxes generated.  Panattoni further disregarded not only the ideas generated in the charette, but disregarded the public’s input from numerous public meetings on Twin Peaks redevelopment.  Their “my way or the highway” negotiating position caused the negotiations to break down.

Incidentally, lost property taxes to our schools from TIF have to be backfilled by the state.  As everyone knows, budget shortfalls at the state level have resulted in repeated cuts to education.

Panattoni purchased the mall at the height of the development craze in July 2007 for $37 million.  And it wouldn’t surprise me to learn that intentions were expressed, if not promises made, to Panattoni by the sitting council at the time of the purchase.  In February the mall was valued at $17 million.

Panattoni hired NewMark Merrill, a shopping center management firm known for specializing in distressed properties, to handle the mall’s myriad of problems.  Just recently Bank of America placed Twin Peaks Mall into foreclosure.

The Baum SquadBut then I suspect that foreclosure was anticipated by those that Baum has called “connected.”  Connected, in this case means Longmont’s “Old Guard,” its oligarchy, select movers and shakers within the business community but far from all of Longmont’s business community.  It certainly does not include those council members who are not part of the Baum majority.

If/when the mall is sold, it clearly will be a short sale.  How low the fire sale price goes will depend on how big a bath Bank of America wants to take.   Panattoni put $8 million down on the property.

Should Longmont be fortunate to have a new mall owner – one that is not looking for a deal that includes the sun, moon and the stars – I hope that Longmont will have a mayor who will look out for the interests of the entire community and not one who will give out the city’s PIN on yet another wing and a promise.