Project X

[TheCityGuy]

I was just emailed these thoughts from someone closely following the events. Any comments?

i am beginning to put some pieces together. i can see clearly

now...and i don't think the emperor is wearing any clothes.

1. this developer wants options on everything. what does this mean?

no money out of his pocket.

2. london's property hasn't closed. why? because this developer will

not buy anything (point 1 above). he just wants options that he will

then sell later. no money out of his pocket. see point 3.

3. the developer doesn't want to buy city land. he wants a three year

lease agreement so that he can then sell the land later. no money out

of his pocket.

4. woodtv's just talked with the guy. sounds like he has liens on his

property in california. what gives? sounds like no money in his

pockets.

i think that this is turning into a big snow job on the city of gr.

mark my words. i hope they are not true but i am beginning to think that

this is some big bait and switch scheme.

Of course they don't want to buy any properties out right. The key to the whole development is the City property and there are absolutlely no guarantees that their bid will be accepted.

Until they secure the city property, we will only see options.

And as for the lease agreement for the city property. That's just the beginning of the negotiating.

[PBJ]

I am starting to feel the same way, but I think we should all sit tight until the reveal more details. If Mr. Faust really is just enamored with Grand Rapids, then maybe he is trying to make this work all on his own. It's just the initial reports, and the quotes from Joel Langlois at the begginning that have me still thinking it really could be something big. But do you guys remember the last "big" out of town Developer that wanted to build something in Grand Rapids. Well he was successful, but I think he's in jail now, and the "big thing" that he built, had to have it's skin refitted, and is still scrutinized, after all the law suits that came out of it in the mid 90's. Does anyone remember what project that was?

pop quiz folks!

Plaza Towers

[GaryP]

Of course they don't want to buy any properties out right. The key to the whole development is the City property and there are absolutlely no guarantees that their bid will be accepted.

Until they secure the city property, we will only see options.

And as for the lease agreement for the city property. That's just the beginning of the negotiating.

Then what was the 15 day deal with ML?

[GRDadof3]

I assume the key to increasing the value of the land is getting it rezoned to commerical/PUD status, which should provide a boost in value. Does anyone know what's involved in getting the property rezoned?

In the ESNA Report:

"Demonstrating the impact that zoning changes may have on property valuations, Grubb & Ellis has identified two land parcels that were purchased in the Grand Rapids metropolitan area as agricultural parcels and later rezoned to residential and commercial/PUD parcels. Each parcel appreciated at least 10 times its previous value by moving from the least valuable to the most valuable zoning (see appendix)."

Can any developers here explain if this is standard operating procedure???

Can Faust grab a sooner flight to GR than "later this week"?????

[downhill-racer]

I am starting to feel the same way, but I think we should all sit tight until the reveal more details. If Mr. Faust really is just enamored with Grand Rapids, then maybe he is trying to make this work all on his own. It's just the initial reports, and the quotes from Joel Langlois at the begginning that have me still thinking it really could be something big. But do you guys remember the last "big" out of town Developer that wanted to build something in Grand Rapids. Well he was successful, but I think he's in jail now, and the "big thing" that he built, had to have it's skin refitted, and is still scrutinized, after all the law suits that came out of it in the mid 90's. Does anyone remember what project that was?

pop quiz folks!

havnochek

[TheCityGuy]

Then what was the 15 day deal with ML?

IMO it was a powerplay on the part of the developer. London didn't blink, but instead got the media involved. London decided to play hardball, and the developers weren't ready. That was a mistake on their part and it made them look sloppy.

I've stated before that London is a savy businessman. He knows that the developers need the city property. And he knows that the longer he holds out the more money he gets. Sounds logical to me.

[GRGyp]

There is a reason that Faust become known to the media. And my guess is that it's simply to buy time. I have a feeling that the real people behind this want to have every little detail worked out before going public. And I still don't think we'll no the real plan until closer to the RFP deadline.

If you're simply trying to buy time, I don't see why you would throw this guy out there to cover for you. You want positive press at this point. Nothing but positive feedback to the government, communitee, and your backers that this is a good development.

How does Duane Faust achieve that? He obviously isn't a big player. He has tax problems on properties he does own.

That type of strategy is like burning all the life boats on the Titanic because they don't inspire confidence that the ship will float.

[GaryP]

IMO it was a powerplay on the part of the developer. London didn't blink, but instead got the media involved. London decided to play hardball, and the developers weren't ready. That was a mistake on their part and it made them look sloppy.

I dont follow the powerplay logic. What were they trying to accomplish?

[TheCityGuy]

In the ESNA Report:

"Demonstrating the impact that zoning changes may have on property valuations, Grubb & Ellis has identified two land parcels that were purchased in the Grand Rapids metropolitan area as agricultural parcels and later rezoned to residential and commercial/PUD parcels. Each parcel appreciated at least 10 times its previous value by moving from the least valuable to the most valuable zoning (see appendix)."

Can any developers here explain if this is standard operating procedure???

Can Faust grab a sooner flight to GR than "later this week"?????

This is often true if there is already demand for the property. You can't just pick any old AG parcel, rezone it and expect a big change in value. There has to be an existing demand.

[TheCityGuy]

I dont follow the powerplay logic. What were they trying to accomplish?

They thought that if they threw the extra 100 grand at London, he'd snatch it up and jet off to the Keys. The 100 grand was a drop in the bucket to them. Many property owners would've seen the 100 grand and taken it as soon as possible. They obviously didn't have a problem securing options on other properties.

London simply called their bluff.

He quickly realized that if they were willing to part with the 100 grand, their pockets must be much deeper. Too me, Londons been the smartest person in this whole fiasco.

[Phizzy]

But Sharona Justman, managing director of Step Strategy Advisors office in Los Angeles, said the company still was working with Faust.

"He's the driving force," she said of Faust.

Perhaps not on this project, but other projects? Maybe there is some confusion...

[MJLO]

I just have this feeling, that they might try and work this deal the way Blue Ridge has in the past. That feeling worries me, and if that is true, I think we need to focus our energies on the good things that are happening around town. Not the could be's, because they have a tendency to turn into the never weres.

[TheCityGuy]

Maybe I missed this, but do we know how the media obtained a copy of the Ensa Report. Was it Faust who gave it to them? Or the city?

[Rizzo]

I can't say for sure in these matters about developing land, but something of this magnitude seems "off." Is this whole operation professionally run? I would think that Interscope or some kind of huge tenant or "they" would have a very tight PR operation followed by a developer who WONT answer questions and refer them to his PR manager? I'm not making the assumption this man is not professional, this whole boat looks sloppy. This is an opinion of an average citizen, just think there is 1.3 million of us looking at this situation like :huh?:

For some reason I highly doubt that a tightly run ship would throw this guy in as bait to hold public opinion. I mean look at some of you already, and if thoes opinions are expressed already, don't you think the community is having thoes same opinions also?

I believe "they" would issue some kind of statement leave it as that and ignore growing speculation and other outside opinion and care on with the mission... Not just giving the public what she wants.

[GRobserver]

I agree Rizzo, if they were going "throw someone to the wolves" that someone would most likely be squeaky clean, in every aspect.

I'm getting a bit of a sinking feeling about this.

[MJLO]

I can't say for sure in these matters about developing land, but something of this magnitude seems "off." Is this whole operation professionally run? I would think that Interscope or some kind of huge tenant or "they" would have a very tight PR operation followed by a developer who WONT answer questions and refer them to his PR manager? I'm not making the assumption this man is not professional, this whole boat looks sloppy. This is an opinion of an average citizen, just think there is 1.3 million of us looking at this situation like :huh?:

For some reason I highly doubt that a tightly run ship would throw this guy in as bait to hold public opinion. I mean look at some of you already, and if thoes opinions are expressed already, don't you think the community is having thoes same opinions also?

I believe "they" would issue some kind of statement leave it as that and ignore growing speculation and other outside opinion and care on with the mission... Not just giving the public what she wants.

Rizz, right now, if there is a large tenant, they have stayed completely out of view. If this project is as serious as they say, with 10,000 jobs and what not. Something that could change the cities Moniker. If this is all true, then there would be a good chance that they are trying to hold the dogs off before they actually go public. It would make sense. However, If Duane Faust is solely behind this, then all I see is a pipe dream, a bait and switch for some quick cash. and I dont see it happening. The city commisioners, tend to be very scrutinizing, and unless there is concrete proof that this thing couldn't fail, I don't see them signing on to it.

[Phizzy]

Perhaps Faust and Centex (who registered "Rivergrand" with the United States Patent and Trademark Office) are only involved with the residential part of the development? From the research that has been done, their experience has been with homes. There might be other, more prominent, players involved with the other aspects of this mixed-use project, individuals or companies who have yet to be revealed.

[GaryP]

They thought that if they threw the extra 100 grand at London, he'd snatch it up and jet off to the Keys. The 100 grand was a drop in the bucket to them. Many property owners would've seen the 100 grand and taken it as soon as possible. They obviously didn't have a problem securing options on other properties.

London simply called their bluff.

He quickly realized that if they were willing to part with the 100 grand, their pockets must be much deeper. Too me, Londons been the smartest person in this whole fiasco.

They paid him $100,000 for the right to have 15 days to buy his property for a set amount. He won't go anywhere until the property is actually sold. Don't you think?

[Rizzo]

Rizz, right now, if there is a large tenant, they have stayed completely out of view. If this project is as serious as they say, with 10,000 jobs and what not. Something that could change the cities Moniker. If this is all true, then there would be a good chance that they are trying to hold the dogs off before they actually go public. It would make sense. However, If Duane Faust is solely behind this, then all I see is a pipe dream, a bait and switch for some quick cash. and I dont see it happening. The city commisioners, tend to be very scrutinizing, and unless there is concrete proof that this thing couldn't fail, I don't see them signing on to it.

Then God saved Tormala. A grounded city official looks at this like "wow maybe theres another side to this other then 10,000 jobs and billions." Hood's nice little stinging addition to this equation makes even more sense now. "too good to be true..."

[TheCityGuy]

I agree that this whole thing has been sloppy so far. I'm glad that we have a mayor/commission that will look at all possible aspects (at least I hope they will ).

The Minkin/Faust connection still baffles me. I have the feeling that Faust knows people. Perhaps people that could put together the kind of leverage that is required for a project of this magnitude.

Or perhaps Faust is simply taking GR and "they" for a ride.

The more I think about it, the more unsure I feel about Faust.

[MJLO]

On the flip-side, the mayor Knows what's going on, and he's decided to keep quiet. I would hope that the mayor wouldn't buy into this thing unless it was legit. I just think we should wait and see, and save our praises, and our criticisms until something concrete comes out of it. We're still in the speculative phaze of it. I think all of us are tired of hearing a whole lot of nothing. The only thing we have heard concrete is Duane Faust, and even tho we know he has leins on some properties, we still know nothing about it.

There still is very little Who, Why for and what!

[TheCityGuy]

They paid him $100,000 for the right to have 15 days to buy his property for a set amount. He won't go anywhere until the property is actually sold. Don't you think?

And they may have if London didn't turn it into a media circus. Perhaps they decided that buying the property outright in front of the media wasn't worth it. Even if it was Minkin or Faust who showed up at the closing, they would've looked very supicious buying the property and then refusing to speak to the media.

Don't you agree that if they were willing to drop $100,000, that there must be some serious players involved in this? Or is $100,000 chump change for the average developer?

[Phizzy]

I agree that this whole thing has been sloppy so far. I'm glad that we have a mayor/commission that will look at all possible aspects (at least I hope they will ).

The Minkin/Faust connection still baffles me. I have the feeling that Faust knows people. Perhaps people that could put together the kind of leverage that is required for a project of this magnitude.

Or perhaps Faust is simply taking GR and "they" for a ride.

The more I think about it, the more unsure I feel about Faust.

Do you think Faust would be able to take Heartwell, Grubb & Ellis, David Minkin, et al. for a ride? Perhaps, but it seems unlikely.

Referring to my post above, it's possible Faust and Centex are only involved in the residential portion of the project.

[Rizzo]

^I'm starting to think the same. On a side note Heartwell is in the Mortgage buisness.

[TheCityGuy]

Do you think Faust would be able to take Heartwell, Grubb & Ellis, David Minkin, et al. for a ride? Perhaps, but it seems unlikely.

Referring to my post above, it's possible Faust and Centex are only involved in the residential portion of the project.

Very true. And the residential portion would be the least difficult to arrange. If he's only involved in the residential, I'd be much more at ease.

Perhaps the past year has been spent on selling the project to various retail/entertainment/corporate tenants. Faust has been the one sharing his vision with them. He does come accross as somewhat of a salesman. Hell, he's involved in the mortgage industry.