Suit calls White's building owners in default

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The owners of the White's Building are expected to consent to the appointment of a receiver.

The agreement with the Federal Deposit Insurance Corp. will stay legal action for 60 days, Kevin Ward, the FDIC attorney who filed suit on behalf of the federal agency this week, said Thursday.

The Richmond County Superior Court lawsuit contends that Sherwin Loudermilk and the Horizon Group Investments were in default on their $5.7 million dollar construction loan and in debt to contractors and service providers for more than $700,000.

They also owe property taxes for last year, which total $18,919, according to city property records.

The FDIC had requested an emergency appointment of a receiver to save the historic building from what it alleges is ongoing deterioration.

The consent agreement calls for appointing Rex Property & Construction Management Co. as a receiver for the building for the next 60 days. Over the next two months both sides will mediate the overall dispute, Mr. Ward said.

In an earlier article in The Augusta Chronicle , Mr. Loudermilk blamed the FDIC for the financial troubles.

He said that he had new lenders lined up to buy his loan but that the FDIC blocked him.

The FDIC ended up with the loan because the original lender, Haven Trust Bank, was declared insolvent on Dec. 12. The FDIC became the receiver for the bank's loans.

The developers of the White's Building borrowed money from Haven Trust and increased the loan last fall. The lawsuit alleges that the project has overdrawn its account by at least $479,000.

The Horizon Group reopened the building on 936 Broad St. last year. It had been vacant since 1978. The initial $9 million project called for a mixed-use building with business and the first floor and 51 condos on the upper floors.

Mr. Ward said he expects there will be a change in ownership.

A message left for Mr. Loudermilk was not returned Thursday.

Reach Sandy Hodson at (706) 823-3226 or sandy.hodson@augustachronicle.com.

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Brad Owens
5224
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Brad Owens 05/15/09 - 04:37 am
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Rex is owned by Paul King of

Rex is owned by Paul King of the DDA, the former chairman in fact, along with Julian Roberts III who also is on the DDA. The Chattooga Partners (the Augusta Renaissance Partners is a partnership between Augusta businessmen Clay and Braye Boardman, Julian Roberts and Turner Simkins. Chattooga Partners is a partnership controlled by Clay Boardman.) sold this building to The Horizon Group that is now in default. I caught Mr. King directing grants to his own clients from Rex when I was on the DDA (Paul King made the motion and voted to spend $50,000 of OUR tax money on a 150' sidewalk in front of a property he had sold and was developing for the new owners). When the Whites Building was sold Roberts was chairman of the DDA and unlike King, abstained when a vote concerning property he had an interest in came up. The vote was to help them try to get a $250,000 revolving loan to the Georgia Cities Foundation, which aids the redevelopment of historic buildings. I wonder if Julian Roberts III made that part of the deal to sell it to these guys? I thought it was unethical to have developers in charge of the DDA because they never put the small businesses first.

Brad Owens
5224
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Brad Owens 05/15/09 - 04:52 am
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Here is a link to the

Here is a link to the original article about the sale, http://chronicle.augusta.com/stories/062707/bus_133767.shtml. All of these big shots downtown sold this as THE TURNING point for our downtown. Now we see what happens when we let the DDA 'help' with anything. The DDA is made up of guys just like the owners of the Horizon Group. Birds of a feather stick together, and now Rex (Paul King) is ending up with the property...surprise surprise. "Mr. Ward said he expects there will be a change in ownership" well I wonder if that change will be to Paul King's company alone, or a group of DDA members? Now that all the hard work has been done like contamination cleaned and basic buildout we see hero Paul King coming to the 'rescue' of the property. (eyes rolling) This doesn't smell right and given King's past unethical behavior I REALLY smell a rat here. The Horizon Group owed $700,000 in bills, is $479,000 over drawn and still owes $19,000 in taxes PLUS the $5.7 million to the bank. That comes to within 2 million of the final projected cost of the project but is the building 80% finished? How many of the condos are finished?

getalife
6
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getalife 05/15/09 - 07:19 am
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How many condos were ever

How many condos were ever sold?

DuhJudge
206
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DuhJudge 05/15/09 - 08:08 am
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Paul is a good guy. He is

Paul is a good guy. He is one of the most invested people in downtown and his rehabilitation projects have been successful. He bought a lot of what Pete Knox started and has many of his units rented. There may be some conflicts because of his position with the DDA, but really now, who else has made a more positive contribution. I know from personal experience that Paul is not a beaurocrat first and he gets pretty frustrated by those that are. Sometimes a good leader is the one that has the plan first and knows how to get things done. If there was a conspiracy to create a scenario that resulted in a bank failure and a liquidation so that DDA members could regain control of a partially occupied building, well I don't think so. The rich may get richer, but who else is going to get the job done. Financially, the White's building is a lousy risk unless you have significant other income and don't mind building monuments for the rest of us to enjoy. Someone will have to manage the property, why not REX?

Brad Owens
5224
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Brad Owens 05/15/09 - 08:13 am
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getalife, according to an

getalife, according to an earlier article, "Horizon was able to sell 12 of the 17 available condos on the upper floors of the White's Building before the loan troubles arose. As owners of their condos, those buyers would not lose their homes if the federal government forecloses on the developer. There are 34 more condos unfinished. Horizon's vice president, Mike Raeisghasem, said people who had reserved some of those units have pulled out, at a cost of more than $1 million. So, 34 + 17 = 51 and they sold 12 of them so that means they sold about 24% of them. They can't even sell the five that ARE finished. Also if you use Horizon's math, they only need a (1) million dollars to finish 65% of the condos and it is a 9million dollar project. But now we find out that they are not telling the truth (like I said when the puff article ran in March) if you look at all the monny that has been spent and what is owed. So you can see that they have spent an equivalant of 80% of the total project's cost to only have about half of the project completed. Hence the FDIC's lawsuit. This stinks and Paul King (Rex) cannot be trusted either given his complete lack of ethics either.

Brad Owens
5224
Points
Brad Owens 05/15/09 - 08:18 am
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Here is a link to the

Here is a link to the original puff article where the charges made by these guys were just printed as if they were facts. http://chronicle.augusta.com/stories/2009/03/04/bus_513448.shtml. Compare thier statements THEN with the FACTS known now. Add that to the dates the liens were starting to be filed and its easy to see that all the money being borrowed was not being spent on the Whites Building.

Brad Owens
5224
Points
Brad Owens 05/15/09 - 08:34 am
0
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DuhJudge, yeah, good guys

DuhJudge, yeah, good guys always direct grants of public monies they are entrusted to use for development to thier own pockets. He has you fooled too I see, and having money and property doesn't make him right or ethical. Not to mention that the grant I am talking about was $50,000 for 150ft of sidewalk in front of the Delaigle house. A proerty that he bought on an inside deal from the county where Commissioners were fooled and told that the DeLaigle family was buying it to insure it wasn't demolished. That is why it was sold for the proerty value only without the improvemnets being part of the sale price. It was about $65,000 if I remember right, THEN he resold it less than five months later for $140,000 having only repaired the front porch (according to building permits issued), then his company was contracted to do the restoration and that is when he got $50,000 apporved by the DDA (he was the Chairman, made the motion, and voted on it). Yeah, he is a GREAT guy. A great unethical developer and he should fit in with Horizons crooks fine due to the whole 'birds of a feather' thing. And Rex should be excluded because the DDA helped get these guys a loan and Paul sits on the DDA.

AugustaVoter
1
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AugustaVoter 05/15/09 - 09:04 am
0
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Brad anyone who knows

Brad anyone who knows anything about Augusta business knows that only a handful of guys own everything in Augusta. That is why people like you and the owners of XMart can't and won't survive here. If the politicians hand is not in the pocket of the business then they run it out. Sad that in 2009 corruption still exists and we let it. I wonder if the FBI has ever looked into the Augusta Government?

AugustaVoter
1
Points
AugustaVoter 05/15/09 - 09:05 am
0
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By the way, I am waiting for

By the way, I am waiting for your comments to get removed because they are "offensive". When we know the only ones they offend are the ones I am referring to. The truth hurts.

joebowles
104
Points
joebowles 05/15/09 - 09:10 am
0
0
Brad, I agree with you on the

Brad, I agree with you on the sidewalk, but who in Augusta has invested in downtown properties and is willing to continue to invest in downtown, other than those you listed above???? I own nothing downtown and it would be foolish for me to throw good money into a project of this size without knowing the nuances of these types of projects. Rex or any of the others you listed above would make wonderful owners of this property.

jgdarling
3
Points
jgdarling 05/15/09 - 09:32 am
0
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Probably the best thing to

Probably the best thing to happen at the White's Building in some time.

Brad Owens
5224
Points
Brad Owens 05/15/09 - 10:09 am
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Joe, the article is about how

Joe, the article is about how they are going to sue Horizon to recoup the money because the numbers don't add up. As far as Rex goes, this is receivership not sale so any of the firms without direct relationships to Horizon through our appointed boards and ethical questions could be used. One that comes to mind is Blanchard and Calhoun and they are located downtown too. One thing you could do is take all the developers off the DDA and take away all the functions the DDA has assumed that were never meant to be under thier control. The DDA bill was created to allow cities to be able to issue bonds for parking decks. Now you have the DDA stuffed with these guys who serve thier own interests on these boards and they spend OUR tax dollars. I have no problem with PRIVATE business doing ANYTHING they like but when you have these guys sitting on government boards and these boards help guys like Horizon (and themselves) get tax dollars when they do so little other than that, I say they are the wrong people. you should defund the DDA and save that $200,000 a year for something we need, like taxe cuts.

chel
0
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chel 05/15/09 - 10:30 am
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Mr. Bowles believe it or not

Mr. Bowles believe it or not there are people like my husband and I who did invest in 3 downtown area properties of which one was condemned and turned them into nice buildings which provide services to assist kids and their families. We would have considered looking at other buildings and looked into several for investments,however we could not get cooperation from the City to assist us in getting negligent landowners to clean up their properties or condemned structures. So we didn't pursue anything further based on lack of concern.

Brad Owens
5224
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Brad Owens 05/15/09 - 11:55 am
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chel, you could not get help

chel, you could not get help but the DDA loaned the Boardman's $370,000 of our SPLOST tax dollars meant for downtown redevelopment interest FREE and fee FREE for FOUR YEARS to buy two pieces of property, the Confederate Widows Home and the Houghton School. When I was on the DDA and requested copies of the loan agreement, after one of the properties sold, I was stonewalled and told I would have to pay $500 for them by the board attorney, Byrd Warlick. I was a sitting board memeber and I was not able to get a copy to look at. By the way, I was told the amount was $200,000, then $270K, then $300K, and then only when Andy Cheek forced the issue as a commissoner did they come clean and tell the true amount. I bet you would have liked to be able to borrow over a third of a million dollars for four years for FREE huh? That is the way these devlopewrs do each other and they always get away with it. What was my reward for filing formal ethics complaints? I was voted off the DDA by the commission (Joe voted against me too by the way) so that they would have the 'trouble maker' gone. Well, I may be gone but I haven't forgotten the unethical activities of these DDA members, King most of all.

The Knave
24
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The Knave 05/15/09 - 01:26 pm
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Hooray for Brad Owens! He

Hooray for Brad Owens! He has taken on a bunch of snakes which, mixing metaphors, have become very adept at feeding at the taxpayer trough. Isn't it a telling fact that none of the Augusta politicians, including the saintly Deke, have the fortitude or initiative to deal with the snakes, and the reptilian system they have created and enabled. Congratulations Augusta citizens, you are getting the government that you deserve, not the one that you want. In the meantime, Augusta continues to sink lower and lower in the swampy miasma of good-ole-boy back slapping and back scratching -- "You do my deal, and I'll do your deal." The poisonous vapors and mists that are rising from the deals being done by these bums are sealing the fate of Augusta as a perpetual backwater burg, known mostly for the selfish, self-aggrandizing power elite who will do anything and everything for a buck.

Brad Owens
5224
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Brad Owens 05/15/09 - 02:21 pm
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The Knave, trying to get

The Knave, trying to get details on the power brokers cost me my seat on the DDA. Everyone just loves Paul King and he puts on a great facade but like most of his buildings, once you look past the facade is rotten underneath. Also, he didn't do all the work, he bought out Merryland Properties at discount rates after Old Man Knox was selling them all off. A certian former business partner of the current Mayor (they owned the Commerce Building together) was in charge of liquidating the properties. Many were sold at absolute criminal rates on inside deals. The Commerce Building was one of them that was under valued and then sold. Look into it and see if I am lying. Look at WHO bought the Commerce Building (666 Broad St) from Merryland, look how much they paid for it, and then look who bought half for how much later becoming 50/50 partners with Mayor Deke. The fact is, no one really cares I guess and these guys know it. They keep on doing what they want and covering it with press conferences and puff articles about 'growth' and 'revitalization'. they get Woodard from the DDA to blather on about 'progress' while they keep fleecing us. Lots of dirty and unethical stuff goes on downtown.

Riverman1
120723
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Riverman1 05/15/09 - 05:45 pm
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Brad Owens, calm down. You

Brad Owens, calm down. You are getting that way again. Relax and make your point without all the wild insinuations. This is rambling and accusatory against some fine people who have helped Augusta tremendously.

corgimom
51559
Points
corgimom 05/15/09 - 06:57 pm
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From what I know of Augusta

From what I know of Augusta politics, I believe that he is telling the truth. People have no idea of the terrible corruption that is present in Augusta. That is why when I came back to Augusta I bought my house in North Augusta. Look at how Augusta is declining. Results don't lie.

benzoboi
0
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benzoboi 05/15/09 - 07:11 pm
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Hey folks, I would like to

Hey folks, I would like to know what the owners of these condo's are going to do. I'm not interested in the FDIC, Loudermilk or any others but it seems to me the owners are in a pile of it. I know 3 of the 12 that have bought and they haven't mentioned anything to me. Maybe they are not invited to any meetings.

I feel sure all 3 would love to get out of the place. From what I understand the realter' pushed these condo's as a fantastic opportunity to own and live in this historic downtown property.

Are these 12 left to fend for themselves? Do they even know what is going on. I guess its, buyer beware.

What4
0
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What4 05/15/09 - 07:41 pm
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Imagine paying all that much

Imagine paying all that much money to live in the heart of the ghetto with no parking deck and no security. WOW!!

HillGuy
8
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HillGuy 05/16/09 - 01:50 pm
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Why is that anytime something

Why is that anytime something seemingly good happens in downtown, it gets royally screwed up?Apparantly these idiots had no clue how to develop a condo building.

Little Lamb
56818
Points
Little Lamb 05/16/09 - 09:04 pm
0
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Right, Hillguy. The

Right, Hillguy. The developers had too thin of a credit line. It's very much like what is going on at Marshall Square.

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