Premier Properties USA Inc. is scrambling to keep up with bills for basic services including snow
removal, security and interior design—more signs of financial troubles for the developer of Metropolis
in Plainfield and the proposed Venu project in Indianapolis.
The local firm is facing liens of more than $3.5 million for unpaid work on its Plainfield retail properties, and an internal e-mail obtained by IBJ suggests Premier’s problems don’t stop there.
The e-mail, from Premier executive Mike Diamantides, says pressure from unpaid contractors “heightened” after a Dec. 17 IBJ story that detailed Premier’s mounting financial and legal troubles. Diamantides, who did not return a phone message, said in the e-mail that partial payments should help persuade several vendors to continue service.
A few examples: Diamantides suggests $5,000 to get locally based Studio 3 Design “off the critical list.” Premier owes the company between $8,000 and $10,000 for tenant build-out at the Woodfield Crossing office complex.
Others owed money include Maryland-based property maintenance firm Brickman Group ($54,000 for snow removal at Woodfield Crossing), and Cincinnati-based Blue Chip Pavement Maintenance ($70,000 for work on Premier’s 635,000-square-foot Bridgewater Falls retail center in suburban Cincinnati). Diamantides suggested payments of $26,000 and $25,000 for the maintenance firms.
The memo goes on to say that paying $4,000 on a $9,000 invoice should get Cox Advertising “off our backs.” And it says payment of $15,000 should suffice for Rocky T’s Security in Las Vegas, which is owed more than $30,000 for securing a development site.
“Seedy area,” Diamantides wrote. “If security pulls off and problems develop we could get unwanted media attention.”
The firm’s owner, Roland “Rocky T” Thurber, said in a phone interview that Premier will get more than bad press if it doesn’t pay up.
Premier hired Rocky T’s in October to secure a run-down development site with vacant homes a few blocks from the Las Vegas strip. Vandalism was rampant, and homeless people were starting fires.
Premier ignored Thurber’s first invoice, for $5,300. After a second invoice, for $12,240, and an angry phone call, the company sent Thurber a check for $10,000. But Premier still hasn’t paid for December or January.
Thurber said he’s done working with Premier if he doesn’t get his money by the end of January.
“If you’re a company that has resources to buy properties, I’m not understanding why they aren’t paying their bills,” Thurber said. “If they don’t pay, we will go to court and get our money. To me, it’s just bad business. If you’re coming into Vegas trying to do projects, the last thing you want to do is screw people over.”
The Premier e-mail discusses three Premier properties. It says employees at three other high-profile developments—Plainfield’s Metropolis, Marquis in Virginia, and The Foundry in Pennsylvania—are putting together their own lists of service providers that are owed money. IBJ could not obtain copies of those lists.
Premier CEO Christopher P. White did not return phone messages for this story. In a December interview, White acknowledged tightening credit markets had taken a toll on Premier. But he said troubles have not hindered the viability of the 300-employee company.
In late 2007, contractors filed more than $3.5 million in liens against Premier’s retail properties in Plainfield, including the $120 million lifestyle center called Metropolis. On Jan. 18, Indianapolis-based engineering and surveying firm Schneider Corp. added another lien, for $12,500. None of the liens had been released as of Jan. 23.
The unpaid bills seem to call into doubt Premier’s ability to develop its $750 million Venu, a 2.4-million-square-foot retail, office and residential proposed for the southwest corner of 82nd Street and Keystone Avenue.
But not everyone working for Premier has gone unpaid. Locally based Halakar Properties has been paid in full for brokering lease deals at Premier’s Woodfield and Metropolis office buildings, said Todd Maurer, Halakar’s president.
Maurer said Premier’s financial outlook remains strong.
“They were affected by the credit crunch, as most companies are,” he said. “They’re working through it. They always end up paying everybody everything they owe.”
Officials at most of the companies trying to collect from Premier declined to comment.