Barnett Building Update

[tufsu1]

The owners always made it clear they would need public investment to pull it off. Sadly the city never made it happen under the current mayor and council.

I'm not sure that is a sad thing.  I had major reservations about a private project that wanted $20+ million in cash from the city

Did you have reservations about Sleiman's Landing project and Khan's Shipyards? Those are/would have been a lot more city money than the Trio.

I did...and I do

That said, at least both of those developments are on city-owned property

[bill]

deliberately screwing outside financing deals so that you can foreclose on the property and take your partners investments away from them. It gets much much uglier.

Stephen, do you have a full story on Khan "deliberately screwing outside deals" that you can report/share or is that another one of your "secrets"? That is a pretty heavy accusation to make and most would consider it unfounded without a proper story to back it up.

SOP for Stevie. But let me see if I can follow the evil plan. Khan loans 3+MILLION dollars and never received any repayment. He "screwed" outside deals so he could go through the cost and pain of foreclosing. At best he receives a decrepit building with no tenants. He then either sells the property or develops it. But either scenario would be a horrible investment without massive public monies.

This ruse was set up by his investing(and losing a lot of money) with Buffoons at Edgewood Bakery and charlatans of One spark Very shrewd.     

[bill]

deliberately screwing outside financing deals so that you can foreclose on the property and take your partners investments away from them. It gets much much uglier.

Stephen, do you have a full story on Khan "deliberately screwing outside deals" that you can report/share or is that another one of your "secrets"? That is a pretty heavy accusation to make and most would consider it unfounded without a proper story to back it up.

I'd love to hear whatever story there is.  I don't doubt your sources or that this is true, it just seems far fetched to me that Khan would do that-- why not just buy the building out right and save himself time, energy, bad PR and lots of attorneys' fees?  Admittedly, I dont know jack about real estate, so maybe i am missing something? I'd really just like to hear what caused all this as it sucks that such a building is just totally falling into further disrepair.

a million dollar loan + foreclosure costs that gives you a giant commercial downtown building?  Not a bad gamble.

3.9 mm for a building that needs 30mm of work=terrible return

SOP=Standard Operating Procedure

Do not know where you get anything homophobic out of that but you are always the smartest guy in the room.

[ben america]

It feels as if what Jax dealmakers lack is a sense of urgency. That sounds like the basis for the mojo comments Khan made.

[acme54321]

A cheap way to get real estate that you already paid for?  Khan loaned them the money for the buildings.  If he loaned them the money he certainly could have just used it to buy them himself, no?  I don't follow.

[bill]

It feels as if what Jax dealmakers lack is a sense of urgency. That sounds like the basis for the mojo comments Khan made.

Or its a good reason why he should personally own a lions share of a city's downtown in his own view.


and btw, 3.9 for all four buildings. Not for the single building. If you are going to get something wrong, try not to fudge a fact that is literally on the front page of the daily newspaper.

Not according to the LP filing, but you are the smartest guy in the room.

Maybe this could have been resolved by the developer PAYING his mortgage, just saying.

[JaxJersey-licious]

Any thoughts on wether the lawsuit is just a back-handed way of forcing they city's hand on subsidies for the buildings? This story is so intriguing and heartbreaking all the same.

[bill]

If the locals are that dumb, why not take advantage of them?

because you know: football.

there is a larger story here and its been going on for about 18 months.  Steve Atkins has mortgaged his entire life in order to develop this building,  family home, savings and all.

Khan is racking up quite a reputation as a fatal business partner or backer.

First One Spark and now this.

I don't know how public the various individuals are going to make this, and I haven't been given permission to discuss the details, but they aren't savory.

But, again, why not buy the buildings out right instead of loaning the money to someone and tanking him on purpose? I don't follow.

You know, because it's much more fun to spend 700mm to buy a NFL team (cash), then deceitfully destroy locals entrepreneurs (whose support you must have for your primary local investment) rather than just buy (which you have the cash for) local real estate.

Or...the noobs at Edgewood Bakery were just that... noobs and perhaps Atkins has done nothing with the building since taking the loan 2 years ago, and has nothing lined up in the near future (other than press releases that we all know are useless) for the building which he has been trying to do something with since 2010.

Big bad billionaire. At least we won't have any more issues of this sort, my money is on the bet that says Shad loans zero more dollars to Jacksonville entrepreneurs thanks to these two dolts.

ah.  Im sure your right apache.  the common denominator is the idiots that khan inexplicably financed, not khan.

In fact, I think Elton, Steve Atkins (and others) and the bakery people were all from the same factory lot.

Im not sure how much more financial backing from Khan the City (or its entrepreneurs) can afford to have bestowed on them.

You do know the difference between an investment/loan and a gift?

Jacksonville's entrepreneurs will be fine, it is the charlatans, grifters and those not paying their debts that Khan should be done with.

[hiddentrack]

Any thoughts on wether the lawsuit is just a back-handed way of forcing they city's hand on subsidies for the buildings? This story is so intriguing and heartbreaking all the same.

if so, he's kept it a closely held secret. even from atkins and others.

Keeping it a closely-held secret would seem like a smart decision to me, with how freely some things are being shared here.

[simms3]

I rarely take facts and figures related to real estate deals in news outlets at face value.  At best these facts and figures were sourced internally by a PR person/department to begin with, passed to an agent in well-crafted quotes, then passed on to the news, in a game of numbers telephone.

If someone read an LP Filing that presented something else, then the original LP Filing is either out of date and has been amended/restated (or canceled with new filing in place), or the media never did their homework.  Either case could be just as likely.

Anyone on these boards knows I am not a Khan worshiper (nor am I a hater).  I don't have any facts and I certainly don't trust all the southern gossip queens on a site like this.  But I highly doubt that Khan is trying to become the city's most hated man by screwing all the poor mom and pops.  Unfortunately, even at higher ends of sophistication in Jacksonville, Khan is dealing with mom and pops.  I don't quite know enough, but in what I have read and what I can garner, I would even call Atkins a mom and pop developer.  Based on the City's experience, I would call the City a mom and pop city.

I think Atkins, Edgewood Bakery, the City of Jacksonville, DIA, etc etc should all go on Shark Tank.  I think Khan should be one of the sharks.  They should all work together to pitch some idea.  See if it gets bought and at what price.  Hahahaha

[Papa33]

I'm for as much downtown development as possible, but it seems too much at one time for the city/demand to absorb.  I agree that Laura Street should be top priority and I'd like to see the "Landing redevelopment" combine with the Laura Street somehow where it may work for everyone.  That is, maybe move some the Landing retail and restaurants to Laura Street project while the Landing is being "redeveloped".  Where will the Hooter's go when the Landing is demolished? Someone needs to introduce Kahn and Sleiman.

[hiddentrack]

To borrow from the Jaguars recent history, the London games and stadium renovations have helped the team with its local revenue. Development downtown needs a similar nudge to get going. Even without enough demand to absorb all of the projects being talked about, if there can be movement on 1 or 2, and people can see progress happening, there might be a greater willingness to take on a little extra risk if we can see a reward in sight. Right now, these projects are just sitting there with no apparent movement. Maybe it's that lack of movement, compared to what Khan has seen happen with the Jaguars, that has him less-willing to wait it out, that's what motivated this action.

[Non-RedNeck Westsider]

I'm still not following the Khan hate...

He loaned SEHoldings $3M that they used to purchase the buildings:

He bought the four buildings with a loan from Stache Investments Corp., headed by Jacksonville Jaguars owner Shad Khan[/b].

The $3 million mortgage for the sale was provided by Stache Investments Corp. Records filed with the Florida Department of State show that Khan is the president of Stache Investments.

And SEHoldings has apparently defaulted on said loan.  Where's the nefariousness?  There may have been a wink-wink, nudge-nudge regarding the actual payment terms, but there's always a line in the sand. 

What happened to the 'in-place financing'?

Total price tag: $30 million to restore the exterior to its historical beginning and to create the living and working spaces inside. But Atkins said he won't be asking for any city money. Financing is in place, he said, but didn't say where it's coming from. He bought the four buildings with a loan from Stache Investments Corp., headed by Jacksonville Jaguars owner Shad Khan.

[SunKing]

Which story makes more sense?  Rich, industrial, self-made immigrant success story buys NFL team in the second smallest market in the country.  Hires a guy to vet and make investments on his behalf locally.  Guy does a poor job vetting (IMO), makes poor choices, investments don't produce, guy gets fired, investments get called.

OR
Evil Kahn spends $700 million so that he can then destroy a family's dreams of owning a bakery, swindle a man out of have a buildings (that he wasn't paying any interest or taxes on) and then have the city help finance the largest TVs in the world for his own private viewing pleasure when he happens to be in Northeast Florida.

This Atkins guy didn't have a prayer in hell and he only was able to borrow from Kahn because Kahn was the only person to loan him money in the first place. 

[Non-RedNeck Westsider]

apache people would describe this as sharp and opportunistic business practices.  That doesn't make someone 'evil'. It means that you have to carefully consider how you do business with them.

In the words of a frequent poster on this site, "meh".

From my vantage point (behind my keyboard), he was a successful business person long before he floated into town;  He has put together a team that has pulled an absolute 180 with the perception of the jaguars franchise.; And the other moves Khan has made that I've read about, on the local scene and including those that are non-Jaguar specific, have had the look and feel of being genuine.   He has fronted money that, in many cases, the banks have or would decline.  The only ones that we continually read about in the [sarcasm]news[/sarcasm] are the deals that have gone sour:  Edgewood Bakery, KYN & (now) the Trio.  All 3 cases have one similar theme

Khan has pulled the plug and cut ties after non-performance. 


That doesn't seem 'sharp and opportunistic' as much as it seems common sense.  He's given a few people the rope they asked for; what they've done with it has been totally on them.