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Prosecutor Brizzi a big player in real estate

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Since he took office in 2003, Marion County Prosecutor Carl Brizzi has participated in more real estate deals than some full-time developers.

Records show he partnered in 2005 to develop a new Key Bank branch in Broad Ripple, and in 2008 he took an ownership interest in an office building in Elkhart that has the state as a major tenant.

He bought a 10-percent stake in downtown’s Harry & Izzy’s restaurant in 2007, flipped two condos in Broad Ripple’s Reserve development between 2004 and 2009, and joined local real estate heavyweights in an attempt to launch a $30 million vulture real estate fund in 2007.

Brizzi

And this year, the Republican prosecutor considered buying a minority interest in a retail building anchored by the restaurant Café Patachou at 49th and Pennsylvania streets before ultimately passing on the deal.

Brizzi, 41, has come under fire in recent months for investing in public companies connected to his friend and largest donor, embattled businessman Tim Durham. But Brizzi’s next headache could involve questions about his real estate dabbling—much of it done in partnership with another friend, Venture Cos. President John Bales, who last year won a no-bid contract to handle the sale of surplus city property.

Neither Brizzi nor Bales returned phone messages from IBJ, but a review of dozens of public records show their business relationship runs deep.

Bales led the effort to find new office space for the Prosecutor’s Office in 2003, settling on 72,000 square feet at 251 E. Ohio St.

He also handles lease deals for state agencies and has a knack for buying buildings where the state (a reliable and lucrative tenant) eventually leases space.

One such building is at 1659 Mishawaka St. in Elkhart, where the Department of Child Services agreed in July 2008 to lease 13,000 square feet for $19.12 per square foot, or $248,500, per year. It’s one of the highest per-square-foot rates for a state agency, and well above the $6-$10 range for available Elkhart office space listed on LoopNet. Other state agencies pay less for space in downtown Indianapolis.

 

Brizzi has a stake in the building’s owner, L & BAB LLC, that’s worth $50,000 to $100,000, according to a federal disclosure he filed in May in preparation for a possible run for the 5th District U.S. House seat now held by Dan Burton.

He also disclosed an interest in Curtailing Investments LLC, which developed the Key Bank branch at 6410 N. College Ave. Records show the developer took out a loan for $1.15 million, secured by a long-term land lease with Key Bank, when it bought the property. Bales led the effort.

The investments are perplexing to Republican blogger Paul Ogden, who worries whether Brizzi’s business interests make him less likely to go after white-collar criminals. He also questions how Brizzi can afford such investments.

“He’s putting himself in a situation where he could have a conflict of interest should he have a need to prosecute anything related to these properties,” Ogden said. “The prosecutor more than any other office has to have his financial dealings above board.”

Company you keep

Brizzi has managed to build his real estate portfolio without a lot of money or extensive assets. He earns $125,000 per year as prosecutor, and he’s still paying student loans. A divorce settlement filed in February shows Brizzi and his wife had three residences, each with first and second mortgages. He pays about $1,000 per month in child support for his four children.

The common thread in Brizzi’s deals, with the exception of Harry & Izzy’s, is a connection to Bales. The building at 49th and Pennsylvania is owned by a partnership led by Bales.

And while Brizzi turned to Bales for real estate advice, he may have turned to Durham for stock ideas. Brizzi invested in two Durham-affiliated firms—Red Rock Pictures Holdings Inc. and CLST Holdings Inc.—both of which have drawn recent scrutiny from federal investigators.

Brizzi also briefly served on the board of Akron, Ohio-based Fair Finance Co., a company the U.S. Attorney’s Office says operated as a Ponzi scheme. FBI agents on Nov. 24 raided Durham’s Indianapolis office and Fair’s headquarters.

Durham, 47, has not been charged with a crime, and through his attorney he has denied doing anything wrong.

The disclosure statements said Brizzi also has held stakes in real estate holding companies called Vergina LLC and CJB Management LLC, although it wasn’t clear what assets they hold. Both companies were registered with the Secretary of State’s Office by attorney Patrick Dietrick, a former private-practice partner of Brizzi’s who said he doesn’t know anything about the companies.

Let’s make a deal

In his most ambitious real estate undertaking, Brizzi in 2007 joined a group led by Bales and Venture in an attempt to raise $30 million to buy up distressed commercial and residential properties. But the effort, dubbed Venture Value Fund I, fizzled with just a few million dollars in commitments.

That same year, Brizzi took out a loan from Kansas City, Mo.-based Commerce Bank so he could buy the stake in Harry & Izzy’s, which now is worth between $100,000 and $250,000. Brizzi was one of five shareholders, along with Peyton Manning and the owners of St. Elmo Steak House.

Brizzi’s first deal as prosecutor came in 2004, when he borrowed $325,000 to buy two units in The Reserve in Broad Ripple, a condo project developed by Bales and several partners, including Steve Pittman and Barnes & Thornburg partner Ben Pecar.

The developers did not file sales disclosures for the units Brizzi bought, but loan documents show The National Bank of Indianapolis valued the condos at roughly $161,000 and $156,000. Brizzi sold one condo for $185,000 in 2006, landing a $24,000 profit. He sold the other in June 2009, but did not file a sales disclosure.

The investments don’t appear to violate local ethics guidelines, said Robert Wechsler, director of research for CityEthics.org in Jacksonville, Fla.

“If not an ethical issue, it could be an appearance and political issue,” Wechsler said. “It’s a matter of judgment.”•

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  • Brizzi Condo Tenant
    In regard to an earlier comment from December ..

    "Of course, rumor is he has a g/f (the one his wife allegedly filed for divorce over) in one of those condos, so that would actually be negative income. He's probably deducting her apartment, too."

    Brizzi sold the condo in question in the summer of 2009 and did not own it at the time this reader left his comment. And, the tenant in question is not and never was dating Brizzi - she is simply a paying tenant who is now subject to rumor and speculation all because she happens to live in a condo he once owned.

    Please stop spreading such rumors.
  • Is it ever enough
    Being a former employee at the prosecutor's office, I can personally state that the office is lacking in equality to the employees as well as the public. I went to school for a number of years for the judicial system and have since found that this is not where I want to be. You have a prosecutor having an affair with an employee, takes money from a father of someone and then decides he will give it back, what part of the attorney ethics is this???
    Too many times people get so caught up in who they know or how they can get ahead they have become immuned to what is really important and that is the truth. Where is the voice for human rights at if your own employer being the prosecutors office can't be fair who can?

    I am just in awe at how many employees at the prosecutors office are so afraid to bring up issues, for fear of being terminated. Where is the open door policy and where is the protection for Title VII?

  • My point exactly
    The condo's started as spec flips, then the market went south. One being sold in 06 was a rush deal, were even pushing for staw buyers to purchase, the deal on the restaurant's is a sweet heart one, probably has a buy sell agreement option to purchase it when he is out of office, so he doesn't really have the income now. He's tight with Huse....they certainly didn't need him, or anyone elses money for that deal. I am surprised the Blade got involved with this, he is normally smarter than that....
  • re
    $2500 x 52 weeks = $130,000. His salary as a prosecutor is $125,000. So, the author points out Brizzi claims his non-prosecutorial income is a mere $5,000 a year, which means he claims no income from two restaurants, multiple condos, etc.

    Of course, rumor is he has a g/f (the one his wife allegedly filed for divorce over) in one of those condos, so that would actually be negative income. He's probably deducting her apartment, too.

    I'd like to know when the local tax assessor, or the DMV head Don Cloud, who has ignored repeated requests to do something about Tim Durham's phantom Diamond Auto Sales, located in an empty building at 117 N. East Street and designed only to help him avoid paying sales tax, is going to do something about these white collar criminals.

    Someone needs to call GHOST BUSTERS since it's clear that the local prosecutor is conflicted out, the local US Attorney believes Tim won't liquidate when 117 N. East Street is for sale (as an example) and the Governor hangs out with Durham, his biggest contributor. Don't forget who is brokering the investment trades. All of it is enough to write a book about.

    Oh yeah, someone already did. "The Firm."

  • Math?
    Not sure how $2500 a week equals $130,000 a year....either way, he seems to have a nice business sense, or he is hanging with people he can help and gets it done that way. He had a nice line of credit at Indys only local bank for his real estate ventures, wonder how he got that?
    • Very nice article by Chris Worden on Carl Brizzi
      http://ipopa.blogspot.com/

      know I said I would, but I can't....because either (1) Harry & Izzy's isn't doing so well; or (2) Carl Brizzi may have committed perjury.

      Carl Brizzi is a silent partner at Harry & Izzy's with a 10% stake.

      On February 23, 2009, Carl Brizzi listed his "gross weekly income" on his child support worksheet under "penalties for perjury" as $2,500. That's $130,000 annually.

      "Gross weekly income" under the Indiana Child Support Guidelines includes "income from any source including salaries, wages, commissions, bonuses, overtime, parnership distributions, dividends, severance pay, pensions, interest, trust income, capital gains, gifts, inheritances, and prizes. "Gross weekly income" also includes "imputed" income based on in-kind benefits, such as a company car, or say, a health club or country club membership.

      Carl Brizzi earns $123,000 as our Marion County Prosecutor, which means that, for him to have been truthful on his worksheet, his income from all other sources could not have exceeded $7,000. (I've put aside completely the cash value of the complimentary memberships to the Columbia Club and Highland Country Club - $6,300 value alone - and the sports tickets).

      Everybody knows that Harry & Izzy's is not St. Elmo's, which had $13.4 million in sales in 2007 and $12.9 million in 2008. But if you go to H&I's in the evening, it's almost always packed. I'm no expert, so I will defer to industry folk, but I've heard profit margins are 4-5% of sales on most restaurants, and if you're really doing it right, you can get up to 20%. If H&I did only $6 million in sales, Brizzi would have made $30,000 (10% of 5% of $6 million), not $7,000. Also, he has a real estate holding company. Did those properties not make money?

      Anyway, working the math back, if the profit margin is 5%, it means Harry & Izzy's would have only had $1.4 million in sales last year ($1.4 x .05 x .10). For that place? Sorry, but there's no way Jeff Smith doesn't have his place humming better than that.

      (I might add that I recall reading in the Wall Street Journal back in June that this is the first time in a long-while that restaurants are increasing their profit margins because they've been raising prices 3% annually to cover transportation costs that have now fallen off).

      So how do we account for such a paltry profit for Brizzi?

      In fairness to Brizzi, I suspect a lot of people shave their numbers to reach some agreed upon result between the parties. But don't tell me it's not perjury. Just say nobody cares about that type of perjury because it's "personal business"-justified lying, a la Bill Clinton. Of course, if anybody should care about perjury, wouldn't it be a prosecutor? I recall Ken Starr caring a great deal when he held that title.
      • Can someone help with the glare
        I'd like to read the article but I continue to be blinded by that shiny scalp of Carl's that glares out every time I access this page.

      • ethics 001
        in the creation of heaven and earth yarway sang creating light within darkness. Creating all that is known, all that is not known. and all that is not known that is known. In this very creation also was a seperation one universe to any and all others.exact oppisute of we are all one.Ethics was created and its oppisute religion is activated.a disease has its cause within.when one goes all the way down to the last,or only one ,Like the good brizzi or who ever is lime lighted for a day,is judged by the people, and what we decide is where the buck will stop.what we see and hear is simple betrayl after trust. We are now woundering how many cases will need to be examined.Injestigation and expulition of this person is our choice. bigd
      • Dirty Laundry
        I am reminded of the Eagles song: Dirty Laundry..."You can do the innuendo, you can dance and singe....."

        Let's be clear. Durham rightfully has problems. Brizzi isn't a choir boy. However, John Bales is a top-notch, stand-up guy that doesn't deserve the implication that he's gotten where he is via fat cat favors from politicians. His company has specialized in governmental lease properties for years, and done so totally above board.
      • Re
        Frankie, c'mon! The IBJ reporters are just that--reporters. They report the facts, the readers can form opinions.

        The FACT about Brizzi is he had basically no savings, a stay at home wife with an inhouse daycare, living over in modestly-priced Sherwood Forest in a rambler style house. Even got sued for not paying his kids gymnastics bills.

        Then he became best buds with Tim Durham and wallah! Suddenly Brizzi is swimming in cash and babes. What county prosecutor that is on the up and up goes from a modest lifestyle to multiple condos, a huge stock portfolio, more than one house, a Lexus SUV for his wife, an expensive car and Harley for himself, yada yada yada

        WAKE UP

        Someone get the DC Public Corruption team in here asap
      • Someone with an ax to grind?
        I didn't see a specific IBJ reporter's name associated with this article. Cory may be involved in writing it and, if so, I trust his ethics and think he did a great job re the Simons. Someone else is probably stoking the latest string of "introspective" reporting on Mr. Brizzi with a personal interest in trying to make him sweat.
      • Leech
        Much like he did with Chris White, Cory smells opportunity and is going to attach to Brizzi like a leech and ride him down (not to say White or Brizzi's actions are okay). I wonder which Indy businessman is next on his hit list?

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      1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

      2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

      3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

      4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

      5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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