Memo: Unpaid contractors demanding payment from Premier Properties

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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.


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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim