Colt Gateway Developer Robert MacFarlane says his property taxes are up to date and his entanglement with a bankrupt lender is resolved.
By DANIEL D'AMBROSIO, Hartford Advocate Staff Writer
January 10, 2008
Colt Gateway developer Robert MacFarlane told the Advocate on Tuesday, as the paper was going to press, he had wired the City of Hartford the money for the first half of his 2006 property taxes on the historic project — about $450,000 — which were originally due in August.
"The tax bill as of today is paid up to date," MacFarlane said. "It's current."
In a Nov. 1 story in the Advocate, MacFarlane said the first half of the 2006 taxes would be paid by Nov. 6, and that the second half, due Jan. 2 but not delinquent until February, would be paid on time.
MacFarlane, chief executive officer of Homes for America Holdings, Inc. based in Yonkers, N.Y., also said in November that his debt to bankrupt lender USA Capital, based in Las Vegas, would be cleared up in weeks and that construction would begin again on Colt Gateway by the end of November. That didn't happen, and the renovation of famed gun maker Samuel Colt's 19th-century factory in Hartford's South Meadows into commercial and residential space by HFAH remained stalled.
But on Tuesday, MacFarlane said he has now settled with USA Capital as well, including several investors who filed a foreclosure lawsuit in October.
"We have now signed a term sheet to pay these people back," said MacFarlane. "We are paying them back $16 million."
MacFarlane said the $16 million, which includes $8 million in cash and $8 million in preferred stock in his company, will finally free HFAH to access the money it needs to continue work on Colt Gateway.
"What stopped the construction was as soon as these guys (USA Capital) filed bankruptcy and started suing each other we couldn't draw down our construction loan," MacFarlane said. "There's nothing wrong with the site or the buildings."
The Colt factory and related structures such as Armsmear, the former Colt mansion, did get a thumbs-up for National Historic Landmark status from an advisory committee to the National Park Service last month, after being denied by the committee a year earlier.
The National Park System Advisory Board must still sign off on the committee's recommendation, and Colt won't officially be a historic landmark until Secretary of the Interior Dirk Kempthorne puts his signature to it, which could take several months.
But the endorsement by the advisory committee virtually guarantees the prized status, according to James O'Connell, the National Park Service project manager who has been shepherding Colt through the landmark process.
"Once it gets a thumbs up from the landmark committee, the rest is a pro forma thing," said O'Connell.
National Historic Landmark status for Colt is a vital step toward establishing a national park on the site, which both MacFarlane and city and state officials have said will bring much-needed tourism dollars to Hartford.
As for the $8.7 million foreclosure lawsuit brought against four buildings on the property, MacFarlane said his attempts to repay the plaintiffs were thwarted by the infighting among the hundreds of investors involved in the USA Capital bankruptcy.
"We're capable of paying them, we gave them a mortgage commitment," said MacFarlane. "They couldn't agree as to who got the money."
One of the plaintiffs in the foreclosure, Fertitta Enterprises, Inc. of Las Vegas, is run by the founding family of Station Casinos in Las Vegas, which reported net revenues of $1.1 billion in 2005. The other plaintiff listed is USA Capital Diversified Trust Deed Fund, LLC.
According to information on the Station Casinos Web site and in the Las Vegas Review-Journal, brothers Frank Fertitta III and Lorenzo Fertitta and their sister Delise Sartini and her husband Blake recently completed a $5.4 billion buyout of the company started by their father, Frank Fertitta Jr. in 1976, returning it to private ownership. The Fertittas had gone public with Station Casinos in 1993.
Yet it hasn't been all roses for the Fertitta clan. In 2000, Station Casinos paid a $1 million fine imposed by the Missouri Gaming Commission for transgressions that included failing to prevent underage gambling or enforce state-mandated gamblers loss limits at Missouri casinos the Fertittas have since sold.
And in 1992, the patriarch of the family, Frank Fertitta Jr. was "identified as a participant" in a 1985 conspiracy to skim more than $2 million from the Stardust and Fremont casinos in Las Vegas. The federal case resulted in sentences for 12 "organized crime associates" from Kansas City, Las Vegas, Chicago, Cleveland and Milwaukee, according to the St. Louis Post-Dispatch. Fertitta was never charged in the skimming operation, and denied taking part.
Fertitta Enterprises holds $4 million of the $8.7 million debt at issue in the foreclosure. The remaining $4.7 million is split among the heirs of Daniel M. Tabas ($1 million); USA Capital Diversified Trust Deed Fund ($2.7 million); and USA Commercial Mortgage Company ($1 million).
Tabas was the chairman of Royal Bancshares of Pennsylvania, Inc., parent company of the Royal Bank of Pennsylvania, which had $1.35 billion in assets in 2006. He died on Sept. 12, 2003.
MacFarlane said all three plaintiffs were among the six parties to agree to the $16 million settlement that will clear the way for work to begin again on Colt Gateway. He said that while he's not planning to do it "today," he could sue the USA Capital investors for the costs of the delay they caused in construction on Colt.
"If we elect — and up to this point we haven't — to put a claim against them for $20 million for lost time, let me tell you something, they've got a bigger problem," said MacFarlane.
The attorney for the plaintiffs, Thomas A. Gugliotti of Hartford law firm Updike, Kelly & Spellacy, declined several requests for comments.
The foreclosure lawsuit also reveals that two local companies that did work for Colt Gateway have placed liens on the property. Tai Soo Kim Partners, a Hartford-based architectural firm, placed a lien for $112,720 on May 18, while West Haven-based Abatement Industries Group, an environmental clean-up company, placed a lien for $328,365 on June 11.
MacFarlane said "ordinary bills," such as those owed to Tai Soo Kim and Abatement Industries will be cleared up as a result of his settlement with USA Capital.
"You couldn't pay the vendors because you couldn't pay the mortgage down," said MacFarlane. "They get paid when you draw the construction note down."
In an ironic twist, both companies were named as defendants in the foreclosure because of their interest in the property.