Blog Archives

Wisconsin firm buys troubled midtown Phoenix project

[Source: Milwaukee Business Journal] — Main Street Ingredients, a La Crosse company that manufactures and distributes food-processing ingredients, has been selected to buy the “opulent” Chateaux on Central brownstone project in Phoenix for $7 million.  The unfinished residential development at the northwest corner of Central Avenue and Palm Lane has been financially troubled since construction started in 2005.  All forward movement stopped when the lender, Mortgages Ltd., took it back in 2008 shortly before that company was forced into Chapter 11 bankruptcy protection.

Mark Winkleman, chief operating officer of ML Manager LLC, said MSI West Investments LLC submitted the winning bid for the Chateaux.  Closing on the property is scheduled for Friday.  ML Manager is the court-approved entity administering the Mortgages Ltd. loan portfolio in the wake of the lender’s bankruptcy.  The Chateaux is one of the first Mortgages Ltd. properties to be sold off.

Dave Clark, CEO of Main Street Ingredients of La Crosse, confirmed that his company is behind the winning bid.  Main Street recently created MSI West, a limited-liability company registered with the Arizona Corporation Commission.  The company has purchased real estate in other states and started looking around the Phoenix area last year.  “We like what we see in downtown Phoenix,” Clark said.  “We feel this will be a good investment, but we’re not here to turn a dollar.”

The project was designed as 21 five-story residences with private elevators and rooftop terraces.  The announced prices ranged from $2.8 million to $4.5 million per unit, but none were sold.  Desert Hills Bank provided the first construction loan, but the relationship soured when the bank filed a lien on the property.  The late Scott Coles, then CEO of Mortgages Ltd., stepped in to salvage the project, but Coles committed suicide on June 2, 2008, thrusting the entire Mortgages Ltd. loan and property portfolio into limbo.  Within a month of Coles’ death, several borrowers forced Mortgages Ltd. into Chapter 11 bankruptcy.

New contract ensures future state funding of downtown Phoenix’s TGen

[Source: Ken Alltucker, Arizona Republic] — After months of review, the Arizona Biomedical Research Commission last week signed off on a new contract that ensures continued funding of [the downtown] Phoenix-based Translational Genomics Research Institute.  The commission sought the new contract with TGen to protect Arizona’s interests in the wake of TGen’s alliance with Grand Rapids, Mich.-based Van Andel Institute.  Under the alliance, both TGen and Van Andel retain their locations, research staffs, and boards of directors.

TGen filed amended corporate documents last month with the Arizona Corporation Commission that reflect the change.  TGen is now a member-based organization instead of director-based organization, and Van Andel’s research arm, the Van Andel Research Institute, is the sole member of TGen.  TGen representatives said the new structure gives Van Andel shared control of TGen.  TGen receives undisclosed funding from Van Andel.

TGen President and Research Director Jeffrey Trent also holds the same position with the Van Andel Research Institute.  He splits his time between the two sites.  “It was of concern to all parties that the economic engine that TGen has been should continue in Arizona,” said Dawn Schroeder, executive director of the commission.  “It is a substitute contract, which puts in place safeguards for the state of Arizona.”  [Note: To read the full article, visit New contract ensures future state funding of downtown Phoenix’s TGen.]

New Arizona Corporation Commission to face tough issues

[Source: Ryan Randazzo, Arizona Republic] — If you make monthly payments to Arizona Public Service Co., Tucson Electric Power Co., a small Arizona water provider or other regulated utility, you have three new public servants watching over those companies for you.  Unofficial results from the Nov. 4 election show Democrats Paul Newman and Sandra Kennedy and Republican Bob Stump will join two Republicans remaining on the Arizona Corporation Commission.  The regulators will tackle consumer issues such as a pending rate hike from APS in 2009 and for the first time in a decade have Democrats at the table.  In addition to regulating utility rates, the Corporation Commission oversees telecommunications issues and securities fraud and has jurisdiction over railroad crossings.

Kennedy’s first steps will include working with state lawmakers in an attempt to save energy and money by moving the commission to a four-day workweek, she said.  “I’d also like to see the Corporation Commission seriously look at how utility companies can help seniors,” she said Thursday.  “We’re at a time when their income is not what it used to be.  Are they showing the aged and low-income consumers how to effectively utilize energy efficiency?”  [Note: To read the full article, click here.]

Dem “Solar Team” takes all 3 Arizona Corp. Commission spots

[Source: Arizona Secretary of State] — With 100% of the precincts reporting, three Democrats, dubbed “The Solar Team,” defeated their Republican challengers to win the open slots on the Arizona Corporation Commission.  For coverage of this race, courtesy of the Phoenix New Times, click here.





























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Phoenix’s private real estate financiers now in the spotlight

[Source: Andrew Johnson, Arizona Republic] — For years, “hard-money” real-estate lenders have operated in relative obscurity, raising billions of dollars from investors to fund thousands of developments across Arizona.  The inner workings of such financiers, who charge high fees and interest on building projects that banks deem too risky, traditionally have been familiar only to developers and the lenders themselves.  The integral role they play in the Valley’s real-estate market has garnered increased attention as banks have reined in lending activity.

The high-profile case of Mortgages Ltd. also has brought more attention to the industry.  It was thrust into the spotlight with the June 2 suicide of its chairman and chief executive officer, Scott Coles.  Coles’ death occurred amid lawsuits brought by borrowers and just three weeks before a developer forced the company into bankruptcy.  Phoenix-based Mortgages Ltd. was considered Arizona’s largest, oldest and best-known private lender.  But the company is only one of dozens of hard-money lenders in Arizona that specialize in short-term, high-interest loans for real-estate projects.  The firms’ operators say they have seized a bigger piece of the construction-lending market because traditional banks and institutional players are on the sidelines.  Many are still actively soliciting funds from investors, who are vital to their ability to make loans.

But Mortgages Ltd.’s problems have caused some industry experts to question whether hard-money lenders are next in line to be hamstrung by the bad real-estate market.  Their lending and fundraising practices — largely unregulated — also have come under scrutiny in lawsuits by investors and developers.  “Our industry for many years was the Wild West,” said Jayne Hartley, managing director of Phoenix-based private lender Coppercrest Funding LLC.  [Note: To read the full article, click here.]

Miffed about your utility bills? Vote carefully for Arizona Corporation Commissioners

[Source: Ryan Randazzo, Arizona Republic] — Winners of the three open seats on the Arizona Corporation Commission will have a strong voice on issues ranging from the size of utility bills to global warming, power plants, and transmission lines.  The winners will help form a new majority on the board, which has more control than any other state entity over energy policies at Arizona’s utilities.

Three of the five current commissioners are leaving office after finishing their terms: Chairman Mike Gleason, Jeff Hatch-Miller, and William Mundell.  The race is getting much more attention than usual, perhaps because of the rising power costs and state’s growing energy demand.  A dozen candidates, eight Republicans and four Democrats, are vying for the seats.

Commissioners Kris Mayes and Gary Pierce ultimately will have three newcomers to help them sort out the commission’s busy and often contentious agenda, which includes:

  • Debate and a legal challenge to the ACC requirement that utilities get 15% of electricity from renewable sources like solar power.
  • The type of power plants utilities build — coal, nuclear, natural gas, solar — and where.
  • A pending rate-hike request from the state’s largest utility, Arizona Public Service Co.
  • Power lines, including a debated high-voltage connection between California and Arizona.

The commissioners also make decisions regarding railroad crossings, a hot-button issue recently as Union Pacific expands its tracks in the state and residents fight to get the company to build underpasses or overpasses at busy intersections.  If that weren’t enough, the commission also investigates securities fraud.  [Note: To read the full article, click here.]

Corporation Commission candidate debates scheduled

What is the Arizona Corporation Commission?  Why should I care who gets elected?  The cost of electric and natural gas!  Broadband deployment to rural communities!  Renewable energy!  Integrity of the pipelines that carry gasoline across the state!  Arizona’s investment in utility infrastructure!  These are among the issues to be debated at the July 15 Primary and September 15, 2008 General Election debates for candidates for the Arizona Corporation Commission.  The debates will be held live at Rio Salado College in Tempe, presented by the Arizona Telecommunications and Information Council (ATIC), with support provided by the Arizona Citizens Clean Elections Commission. 

Why should you attend?  The Arizona Corporation Commission (ACC) is an independent regulatory authority created by the Arizona Constitution.  This powerful body, often described as a Fourth Branch of Government, makes decisions that have an enormous impact on Arizona’s future and the finances, safety, and quality of life of all citizens, businesses, and organizations in Arizona.  This year you will vote for three of the five Commissioners.

The Commission sets the rates you pay for public utilities including telecommunications, water, electric, and natural gas services.  Commission policies also determine the quality of these services and future utility infrastructure investments, including solar and other alternative energy sources.  In addition to utilities regulation, the debates will also cover the other services under the jurisdiction of the Commission including Corporations and Securities Oversight, and Railroad and Pipeline Safety.

How You Can Participate.  Live at Rio Salado College in Tempe, Webcast, Cable TV, and/or Online Forum.  Participation is free, however, registration for the live event and webcast is requested.  Click here for complete details.