Cameron Kuhn: The downtown redevelopment baron who went bust

[Basstacular]

I agree where you're coming from hoop.  I am neither as well, but in the case of the Barnett tower.  If a little under 10 million is owed.  Let's say a developer can come in and get it at a discount on the auction block for 8 million.  Spend a million gutting the lofts and putting the necessaries in the building and sell the true loft space at an affordable working class price.  I would assume there is somewhere around 100 units in the tower.  If they could sell them in the $150,000 range, which would sell.  I would jump all over that price.  Simple math tells me $150,000 x 100 units = 15 million.  Profit.  I am sure there is more costs involved, but many people on this site are strong advocates of affordable real estate in Downtown and not a $400,000 loft at Churchwell or $500,000 condo on the river at BP2.  These buildings seem to provide that opportunity.

[vicupstate]

Truly amazing.

You would think John Rood's company, Vestcor would buy the Barnett for another Carling / 11E. project.   Maybe, he is waiting for a better deal, though. 

Hasn't a lot of gutting work already been done?  I know all the windows have been replaced, at considerable expense no doubt.   

What is the square footage of this building?  I use to know, but I have forgotten.  I think around 100 units were planned originally.   

The Laura trio has had one deal fall through after another.   
 

[RiversideGator]

It would cost considerably more than $1 million to rehab the Barnett into a habitable condition for apartments.  Also, you need very deep pockets to make this sort of deal happen these days because the banks are afraid of their own shadows when it comes to making loans for real estate of any kind. Basically, you would have to bring a lot of your own money to the table.

[Basstacular]

I understnad a million was a lot lower than necessary, but the point was a developer coming in and offering a loft space and not spending the money on flooring, cabinets, appliances etc.  As a buyer I would seriously consider buying a "shell" in the $130 - $150 / sq. ft. range and finishing it out myself.  I did not realize the building was in that bad of condition.  Being someone who would be interested, I would want a developer to come and finish out the lobby area and provide me with four walls and a concrete floor and I can do the rest with.  Maybe there are not that many people out there that would like to purchase a shell, but I am one.

I keep looking at the Churchwell prices at $330 / sq. ft. and even the studio I purchased at BP2 at $260 / sq. ft and the opportunity to purchase a shell in the mid $100's a square foot plus plus turn key costs and it is appealing.

[TREE4309]

I agree with Basstacular, however I'd be more interested in the building across Laura St. from the Barnett Building...part of the trio.  One loft per floor...could be a stellar project vs. the Barnett Building which (in my opinion) is way too big to be an appealing "loft" project.  Much better suited for apartments or more traditional condos.

[thelakelander]

Jacksonville Bank buys Dyal-Upchurch building for $100

The Jacksonville Bank has taken back ownership of the Dyal-Upchurch building for $100.

The building at 6 E. Bay St. had been owned by developer Cameron Kuhn. It went to auction Jan. 22, but there were no other bidders.

full article: http://jacksonville.bizjournals.com/jacksonville/stories/2009/02/02/daily48.html

[Jason]

Did they forget some zeros in that figure?

[JeffreyS]

Wow!

[JeffreyS]

That building already has tenants right?

[Joe]

Was Jacksonville bank one of the lien holders? That might explain it.

Otherwise, the building was purchased for over $4 million by Khun, but apparently only valued at $3.5 million today. It's conceivable that, regardless of who owns the liens, theres enough debt on the building to make it a worthless investment.

[heights unknown]

Then is it right to say that one of us could have bought that building (had we known that there was an auction)?

Heights Unknown

[DONTBELIEVETHEHYPE]

Won't that kill the comps downtown?

stephendare: do you think $18/sf is overpriced or underpriced?

[Joe]

The "Dyal-Upchurch for $100" story is on the front page of CNN right now.
http://www.cnn.com/video/#/video/us/2009/02/10/lindgreen.cheap.building.wtlv

I can't believe how bad journalism is getting. That video report is typical garbage reporting - spending 2 minutes talking about how a buidling "sold" for $100, and then spending the last 20 seconds halfway explaining why they just lied to you, and in fact it wasn't really sold for $100 at all.

As I suspected in my above post, it turns out that Jacksonville Bank was the lien holder foreclosing on the mortgage in the first place. This means that Jax Bank didn't spend $100 on the building, they actually "spent" the $4,000,000+ they originally loaned Kuhn. Since no one else wanted to spend that much at auction, Jax Bank is simply taking over the property they already paid for.

I can't f'ing believe this got all the way to the front page of CNN. This is a typical real estate foreclosure. No one bought a building for $100. They essentially bought it for over $4 million.

[Joe]

They did. It was a foreclosure auction. That's the law.

Generally, all properties that are foreclosed in Florida have to go through public auction. Usually, the mortgage holder is the only bidder.

That's what makes it all the more frustrating that the news is reporting this nonsense. What happened was an extremely typical foreclosure. Nothing more.

[ChriswUfGator]

Friday, April 30, 2010  |  Modified: Monday, May 3, 2010

Former real estate giant sheds debt, pounds and plans his return

Orlando Business Journal - by Anjali Fluker Staff Writer

Just three years ago, Orlando real estate mogul Cameron Kuhn was on top of the world.

The president of Orlando-based Kuhn Development Co. LLC in 2007 completed The Plaza, a $160 million, mixed-use development featuring a long-awaited downtown movie theater.

He then turned around and bought the struggling iconic Church Street Station entertainment complex in downtown for $34 million out of bankruptcy that same year, leaving many to view him as a white knight.

But not long after that, he found himself overwhelmed by $220 million worth of debt, liens, lawsuits and foreclosures.

He had about $650,000 per month in overhead at his Church Street Station office with 70 employees, as well as high mortgage payments on his ambitious downtown projects, and vendors and contractors filing liens because they weren’t getting paid on time.

His solutions: Reducing costs by laying off all but four staffers, allowing the banks to foreclose on various commercial properties in Orlando and Jacksonville, selling off some properties and filing for bankruptcy reorganization for his related firm, The Plaza LLC, of which he's a minority owner. These actions reduced his company's debt and repaid its creditors.

As those lawsuits, foreclosures and the bankruptcy case worked through the courts, Kuhn turned to improving his personal life.

He gave up his private helicopter for an energy-efficient Mini Cooper and last March began a 47-day bicycle trek across the southern U.S., from San Diego to Jacksonville. It proved to be quite a physical challenge due to his weight of 344 pounds. But Kuhn ended the trip 15 pounds lighter and lost another 60 pounds since then.

Moreover, he decided he was ready to get back to business basics as an entrepreneur. So he chipped in $33,000 for his wife, Traci Sihle, to launch The Crepe Co. LLC, a street-vendor operation in downtown Orlando. Kuhn, 50, also began dabbling in global commodities, looking into selling soy meal overseas.

And now he’s stepping back into the real estate world more cautiously, wiser and as an owner-operator rather than a CEO. “I’m out of debt and I have no more personal obligations,” Kuhn said. “I’m not going to build any more Plazas â€" I’ll work on one building at a time, finish that and then move onto the next one.”

He wants to invest in new projects with little debt and private investor money. “I did some really great things and some not so great, but I learned from it all. I believe in me, and for that reason, I feel very optimistic.”

The rules of the real estate world have changed, he said, and the 80 percent loan-to-value ratio is no longer an option. That’s why he believes he’ll be able to keep his sights on a single project and not “take my eyes off the ball,” which was what got him into trouble in the first place, he said.

His new philosophy has drawn the attention of some of the banks that repossessed his properties. Some, in fact, have asked him if he wants to buy back the properties, Kuhn said.

Despite his past financial troubles, Kuhn has a proven track record of success in renovating and redeveloping small, older commercial buildings in downtown Orlando into vibrant and tax-producing operations, said Frank Billingsley, economic development director for the city of Orlando. In fact, Kuhn has done about 20 such projects throughout downtown since 1994.

“He had a knack for seeing potential in abandoned or underused buildings, and his work has had a tremendous impact on downtown,” said Billingsley, who’s glad Kuhn wants to get back into developing small projects. “It’s a logical and good strategy for Cameron to take.”

Kuhn even has earned respect from those who were pitted against him in court. Orlando attorney Denise Dell-Powell, who represented a lender on one of Kuhn’s former developments, said she believes he will make it back into the real estate world.

“He really tried to do the right things, find a buyer and work with the bank, but the debt was too much,” Dell-Powell said. “But he knows what’s going on with Orlando real estate. I think people will lend money to him again.”

Cameron Kuhn
Title: President, Kuhn Development Co. LLC
Contact: (407) 540-9966; ckuhn@kuhncompanies.com

afluker@bizjournals.com | (407) 241-2910

Read more: Former real estate giant sheds debt, pounds and plans his return - Orlando Business Journal

http://masshightech.bizjournals.com/orlando/stories/2010/05/03/story5.html