MANATEE COUNTY -- Add Wachovia to the list of banks that have made multimillion-dollar loans to partners of Sarasota real estate investor Neil Mohamed Husani during the past 15 months.
On Feb. 13, the giant North Carolina-based financial institution provided $9.3 million to G&T Land Development LLC.
G&T is owned by Michael Tringali, a builder and developer who has participated in five other multimillion-dollar real estate transactions with Husani since January 2005.
The deal involving Wachovia bears hallmarks of those previous transactions.
Husani, who pleaded guilty to writing bad checks in 2002 and to grand theft in 2003, paid just under $6 million for 20 acres of commercial land in Creekwood Commons West, which is near the intersection of State Road 70 and Interstate 75. He then sold the property to G&T for $14.37 million, and Tringali got a $9.3 million loan from Wachovia on the same day.
What makes this deal slightly different from the others completed by Husani is that nearly half of the 20 acres were not purchased from a stranger. Husani bought them from Robert J. Martin, who has done two other deals with Husani since the beginning of the year.
The price for those 9.7 acres was $5 million, or more than five times the $851,162 that Martin paid for the land just one year ago.
It's also more than five times the $956,577 Husani paid for 10 adjacent acres from Creekwood Investors Ltd. the same week.
Husani, Tringali and Martin did not return phone calls seeking comment about the transaction.
For their part, Wachovia officials declined to comment about the bank's $9.3 million loan to G&T Land Development.
"We can't comment on customers or customer relationships," said Wachovia spokesman Kevin Bezner.
Big profits in a short timeThe deals involving Husani and his partners have raised eyebrows in Southwest Florida's real estate community for several reasons.
First, they have involved transactions in which land values more than double in a short period of time -- usually the same day.
Second, when Husani sells the land to one his partners, no money changes hands. The partners simply use the increased purchase price to obtain lofty appraisals.
The appraisals are then used to get bank loans that not only cover Husani's original purchase price but leave the partners with millions of dollars in additional cash -- $41 million to be exact.
That
That figure comes from the fact that Husani bought land for $43 million in seven separate transactions since January 2005 and sold that land to his partners for $117 million. His partners then obtained $84 million in bank loans from seven different banks, or $41 million more than what Husani originally paid.
Bankers and market analysts say such a pattern of land acquisitions and appreciation is a cause for concern.
"There's good reason to worry," said Grant Thrall, a University of Florida land economist and member of the National Academic Board of The Appraisal Institute. "These sort of deals can expose banks to loan defaults."
If borrowers are unable to make interest payments on loans and banks are forced to foreclose, the banks could be left with property that is worth less than the appraised value, Thrall said. That means the banks might not be able to sell the land for enough to recoup the money it loaned in the first place.
"We don't want banks exposed to default. It hurts all of us," he said.
In addition to the inherent risk of loans made on lofty appraisals, it has become clear in recent weeks that false information was included in some documents used by Husani and his partners to obtain loans.
The appraisal used to get a $16.25 million loan from Fifth Third Bank, for example, states that Husani bought land in downtown Sarasota from three owners for $24.6 million when the actual purchase price was $10.35 million.
Similarly, Husani's attorney, John A. Yanchek, filed a deed in Manatee County stating Husani had bought 224 acres of ranch land for $5.6 million. But the former owner of that land says Husani only paid $2.2 million.
It's not clear who is responsible for including the false information in these documents. But Thrall says that when false information is used to get loans, there is even more reason to worry.
"That's definitely something federal bank regulators would want to look at."
Developing Creekwood
Martin bought his 9.7 acre parcel in Creekwood Commons long before meeting Husani.
He paid $851,162 for the land in April 2005 and financed it with a $1.9 million loan from First State Bank. He then used the loan money to clear the land and install infrastructure in preparation for the construction of a 60,000-square-foot office building.
In January, Martin signed on to help Husani and Tringali develop a $125 million condo tower in downtown sota. A month later, Husani bought 10 acres of raw land alongside Martin's parcel in Creekwood Commons for $956,577 and combined it with Martin's land, which he bought for $5 million.
He then sold the combined parcel to Tringali for $14.37 million.
That price comes to nearly $720,000 per acre, or $16.50 per square foot.
"That sounds huge," said Jack Cox, the president of Lakewood Ranch-based Halfacre Construction. "I've never heard of that kind of price in Manatee County."
Still, it seems Tringali believes he can get more. He recently put the land back on the market for $15 million.
MORE
SARASOTA -- Neil Mohamed Husani has an uncanny ability to get big dollar real estate deals done in Southwest Florida.
Since January 2005, he has bought nearly 2,100 acres of land in Manatee and Sarasota counties for $43 million, resold it to partners for $117 million and his partners have secured $84 million in bank loans from seven different banks.
But one deal that Husani was not able to close involved two city blocks on Tamiami Trail between Fourth and Sixth streets across from the Sarasota Quay.
Husani offered $62 million for the property, or $281 per square foot. But the price wasn't high enough.
The land, which runs from Tamiami Trail to Cocoanut Avenue, is owned by 22 entities that banded together three years ago to better negotiate with developers.
The group is headed by Robert T. Anderson, a Re/Max Premier Services agent who owns 31,500 square feet in the two-block area.
Anderson declined to comment on the proposal, saying he had signed a confidentiality agreement with Husani.
"All I can say is that we passed on two offers because they were inconsistent with the requirements of the neighborhood," Anderson said.
Owners of land in the two-block area were approached in early January by Peter Bartys, a Michael Saunders & Co. agent who was representing Husani.
Bartys never explained what Husani intended to do with the land. He simply offered $35 million for a 126,000-square-foot block between the two streets.
When that offer was rejected, Bartys came back with a $62 million offer for the entire 220,574 square feet contained in a two-block-area between Fourth and Sixth streets.
It still wasn't a big enough price. So the 22 owners opted to pass.
Husani did not return calls from the Herald-Tribune, while Bartys denied that he was involved.
"I don't know anything about that," he said when contacted by the Herald-Tribune. "I'm not dealing with any of those properties."
After confirming his involvement, the Herald-Tribune tried to contact Bartys again, but he did not return a second round of calls for comment.
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