Thursday, June 15, 2006

Major Development Plans

SEC investigators return to Paradise
Bennie Shallbetter-Staff Writer-the Sea Coast Echo
Paradise properties has asked the Securities Exchange Commission for 30 days, $600 dollars, and a per page fee to go through what they say is 20 banker boxes of records that may contain references to Richard and Donald Kern as representatives or employees of the company.
The company continues to deny that the Kerns have any ownership or control over Paradise. Paradise had proposed several high density development projects in Hancock County with local partner Mike Cure.
Local Florida counsel for Paradise Charles Franken said that attacks by the SEC on Paradise are unwarranted. The Kerns may well be associated with the company, but that association does not make Paradise a party to debts that they may owe, Franken said.
"We acknowledge that the Kerns owe money," said Franken. "But why as a debt collector is the SEC entitled to internal information about Paradise. There is not guilt by association."
Franken said Tuesday that Paradise will produce any company documents that contain mention of the Kerns. The company always agreed to cooperate by providing relevant documents, Franken said.
Franken said the judgement against the Kerns on a 1999 stock market manipulation did not indicate a criminal conviction. Franken said it was his understanding that the $9 million judgement against the Kerns in federal court was a result of a "technical violation."
"To my knowledge no one has come forward to claim they lost any money," said Franken.
SEC attorney Richard Simpson said that what Franken says is partially true.
"No one has actually come forward to sue the Kerns," said Simpson. "But the people who bought the stocks lost $6 million."
Money collected from the Kerns, or their business interests, if any, could be used to pay back those loses, Simpson said. That is one reason why his office is pursuing what they think is a connection between Richard and Donald Kern and Paradise Properties, Simpson said.
Besides documents mentioning the two brothers, the SEC is also asking Paradise to reveal the ownership of the company, said Simpson.
"We are saying if you are claiming that Richard and Donald Kern are not owners, then show us who is," said Simpson. "We are looking for documents that will prove a transfer of funds from the Kerns to family members or nominees."
The investigation into Paradise properties began when the SEC received information that the brothers were in Mississippi negotiating multimillion dollar projects for Paradise. Richard had told the SEC that he was a small time realtor and vitamin salesman and unable to pay back his fine.
On Monday the United States District Court denied a protective order requested by Kern's attorney to prevent the SEC from deposing Kern for the second time. Kern's own lawyer concedes that Kern has some association with Paradise and the SEC is entitled to explore that association, the court order states.

© 2005 Bay St. Louis Newspapers, Inc.


Found through Gulf Coast News through MSNBC
Miss. developers' murky past includes fraud
Brothers owe government more than $9 million from 1990s stock scam
By Mike Stuckey
Senior news editor
MSNBC
Updated: 4:07 p.m. ET June 28, 2006

Two brothers involved in the biggest post-Katrina development on the Mississippi Gulf Coast were key figures in an Internet stock scam that federal authorities say bilked investors out of more than $12 million, MSNBC.com has learned.
Additionally, one of the men was barred from the franchising business for life after federal lawyers sued him in a fraud case they said cost investors $6 million. The other brother filed for bankruptcy in 2002, and both have yet to satisfy a federal judgment against them of nearly $10 million.
And while the brothers said they had developed numerous real estate projects in Florida, California, Colorado and even Russia, neither they nor their associates would provide specific names and locations of any of the developments despite repeated requests by MSNBC.com.
Richard S. and Donald R. Kern are officials of the Paradise Properties Group, which has the preliminary blessing of Hancock County officials to build thousands of condominium units, apartments and resort facilities in buildings as high as 40 stories in the southwest corner of the county. And the company has more plans afoot elsewhere in the hurricane-ravaged county.
The "Paradise Bay" project, which was profiled on Fox News earlier this month, is stunning for its scope and size in a county with just two small incorporated cities and a pre-Katrina population of only 43,000 fulltime residents. The $5 billion value that Paradise Properties puts on its Hancock County projects would be more than 10 times the value of all taxable property in the county prior to the hurricane.
“Certainly it concerns me,” Hancock County administrator Tim Kellar said when told of the Kern brothers’ past legal problems. “That’s the first I’ve heard of it.”
Coastal Community Watch spokesman Bob Davis, whose group has been fighting the high-rise development for more than a year, said he was "not all that surprised" about the Kerns' background. He said county officials were "trying to go too far, too fast. They should have checked more. ... My gut feeling is that when you have this kind of uncontrolled development, these kind of people come in to take advantage of it."
County banking on project's tax revenueLast year, before Katrina struck, county supervisors changed zoning in the area to pave the way for the massive Paradise Properties development and other projects near the site of the previously approved Silver Slipper casino. Officials for Hancock County, on the verge of bankruptcy in the wake of Katrina, have been counting on the projects to generate major new property tax revenue.
While construction on the casino is well under way, with an expected opening date in December, court action by Davis' group stalled the plans by Paradise Properties and other developers. Coastal Community Watch lost the first round. The verdict was appealed, but developers are so confident they’ll prevail that they have been pre-selling condominiums and looking into incorporating the area as a new city.
The Kern brothers, who both spoke willingly and at length with MSNBC.com, said they were the unwitting dupes of others in the stock case.
“That’s an old story and it’s in the past,” said Richard Kern, 50, director of strategic planning for the company. “I didn’t do anything that I’m ashamed of.”
His comments were echoed by Donald Kern, 53, the firm’s construction manager: “It’s one of those kinds of things where whoever is in a deal gets dragged along. I never had anything to do with it.”
But the U.S. district judge who ruled in the case rejected those claims.
According to the Securities and Exchange Commission, the Kern brothers worked with two other men in 1998 and 1999 to illegally inflate the stock prices of three shell companies — Citron, Electronic Transfer Associates Inc. and Polus Inc. — in which they held most of the shares. The “pump and dump” scheme used press releases and Web sites that made phony claims to hype demand for the stock among traders, the SEC said.
Ringleader got seven years in prisonThe ringleader in that case, Peter Lybrand, formerly known as Peter Tosto, was a serial securities con artist who was awaiting sentencing in a previous securities fraud case and acting as a government informant when he engineered the 1998-99 scam. Facing criminal charges, he confessed to the pump and dump scam and was sentenced in 2001 to more than seven years in federal prison.
“I was simply greedy and thought I could get away with the lies I told," he said at his sentencing. He has since been released.
While not charged criminally, the Kern brothers and another defendant were successfully sued by the SEC for their role in the case. The court ordered them to pay more than $9 million in disgorgement — the return of ill-gotten gains — and interest.
In his ruling, U.S. District Judge Sidney H. Stein wrote that the Kerns “violated the security laws repeatedly and with regularity,” refused to take responsibility for their actions, did not cooperate with the SEC’s probe and could not explain the shrinkage of their assets after they had been frozen by the court.
The ruling also noted that Richard Kern had in 1994 been enjoined for life from working in the franchise industry. That came as the result of a Federal Trade Commission lawsuit that accused him and others of operating a franchise scam that fleeced 400 franchisees of $6 million.
As in the SEC matter, Richard Kern told MSNBC.com that he did nothing wrong in that case.
Because of their “essential and active roles” in the stock fraud and their behavior afterward, the judge tacked on civil penalties of $400,000 for each Kern brother, for a total judgment of over $9.8 million. He also found that Donald Kern’s 2002 bankruptcy filing did not relieve him of the obligation to pay.
Currently, the government has recovered $565,000 from the Kerns, as a result of Donald Kern’s bankruptcy, said Richard Simpson, an SEC lawyer, meaning the brothers still owe the government well over $9 million.
“All of the appeals are done,” Simpson said. “We won hands-down. The judgment is affirmed. So we have an impregnable judgment that we’re trying to collect.”
Asked about a claim by Donald Kern that his debt was satisfied in “arbitration,” Simpson laughed.
Richard Kern said he “of course” will pay the judgment but when he does so is “between myself and the SEC.”
The Kerns also would not divulge details of numerous other real estate developments on which they claim to have worked.
Richard Kern said he had developed “a myriad of projects” from apartments in Colorado to shopping centers in California, restaurants and strip centers in Arizona and “a really big project in Russia.” Asked to name one, he replied, “I’d just as soon not.”
'I can't remember them'Donald Kern said he has worked in construction and real estate since he was in high school. Asked to name a single project, he replied, “Off the top of my head, I can’t remember them right now.”
Other members of the firm, including its chief media representative, also would not name any projects that the men had developed.
“I’d have to check and see what I’m at liberty to give out,” said Angela Kurlander. When pressed for the name of just one project, she said, “This is your focus at MSNBC, how can we make everything as negative as possible?”
Danny Coates, a Hancock County resident and local point man for Paradise Properties Group, said that he had known Richard Kern for many years. But when asked the same question, he said “I really don’t know” any previous projects that Kern had developed.
Attorney Gerald Gex, who works for the county and was assigned by Kellar to discuss the case with MSNBC.com, called the refusal by the Paradise representatives to name past projects “just the dumbest thing I’ve ever heard in my life,” adding, “That doesn’t sound right.”
Another member of the Paradise team who would not name any projects undertaken by the Kerns is Mike Cure, a well-known local businessman and the Kerns' partner in the Hancock County developments.
Cure, whose family has been represented by Gex for many years, said he was aware of Richard Kern's SEC case and was "not at all" concerned that the brothers' past legal troubles would taint his ventures with them.
"Richard seems to be a forthright guy who looks to have a good relationship with bankers," he said. Cure added that because he and his family own all of the land involved in their deals with the Kerns, "I've got control."
"What Richard has brought to the table here is a vision," Cure said. "He also has financing capabilities and I think he's going to do some good things for the community. We certainly need it in this area."
While the company won't discuss the Kerns' past projects, it is happy to talk about its ambitious current plans for Hancock County. Kurlander said there are 14 separate projects, from luxury condos to commercial space. She said the firm plans to break ground as soon as the court case is settled -- or perhaps even before -- on The Breezes, a 983-unit condo project valued by the company at $750 million; the Shoppes at Paradise Bay, a 10-acre retail-commercial project in nearby Bay St. Louis; and a 160-unit apartment project that is the prototype for nearly 2,000 more rental units in a complex valued at $40 million.
In the next few years, Paradise Properties says it also will develop hundreds of single-family homes, 500 of them around a Robert Trent Jones II-designed golf course; a “five-star” casino-marina project with another 2,700 hotel and condo units, valued at $2.5 billion; and a second hotel-casino project with another 1,500 units, valued at $1.5 billion.
Those numbers dwarf Hancock County’s pre-Katrina property tax rolls, which totaled about $450 million, according to county attorney Gex, who said county supervisors approved the zoning change in the area hoping to provide an economic “shot in the arm.” Gex said that if just $500 million worth of property value is eventually added to tax rolls, it would provide $7.5 million a year in new revenue, approaching one-fourth of the county’s annual budget.
“The Mississippi Gulf Coast is going to become a world-class destination,” said Kurlander, adding that pre-construction sales for the Breezes condo project have been brisk, with the first of four buildings in the 983-unit project already sold out.
Chief sales agent for the project, Robin Sherman of JME Coldwell Banker in Pensacola, Fla., said prices, which she expects to increase as construction nears, range from $475,000 to $800,000. Buyers are paying 10 percent non-refundable down payments to enter into contracts, Sherman said.
The Kern brothers said one of their key goals is to help provide new homes and tax revenue for the hurricane-ravaged area and they hope their association with the project doesn’t taint it.
“If your organization is going to try to destroy the project based on my record, I’ll be happy to resign from the company,” said Richard Kern, who acknowledged that financing has yet to be secured for Paradise Bay. “If you think I’m a bad person, that’s up to you. I don’t think I am and everybody who knows me doesn’t think I am.”
Added Donald Kern: “I have been working day and night to try and get this thing accomplished and I’d hate to have an old skeleton come out and get me fired.”
© 2006 MSNBC Interactive


URL:
http://www.msnbc.msn.com/id/13561785/from/RS.2/


Developer announces plans for two major retail and office outlets on Hwy. 90
By GEOFF BELCHERJun 10, 2006, 17:49

Lauderdale-based Paradise Properties Group has much more in store for Hancock County than just a new condominium complex and incorporated city combining portions of Lakeshore and Clermont Harbor – now the company is planning $70 million in commercial development on Hwy. 90, to begin as early as this summer.
Paradise Properties announced in April that it plans to build two new apartment complexes with 1,104 housing units or "Villages,” which will be called Villages of Paradise Bay and Landings of Paradise Bay. The "Villages" will consist of 20 individual buildings which are five stories high.The company cited the need for housing in the area, and support from the Silver Slipper Resort as major factors in fast-tracking the construction. Last spring, the Hancock County Planing and Zoning Committee adopted an amendment to the zoning ordinance to allow condos and other commercial development in the Lakeshore and Bayou Caddy area.
A challenge by the property owners in the area was settled in March 2006 when a circuit court judge ruled in favor of the county, but is now in the appeal phase.
In May, the Committee for the Incorporation of Paradise Bay announced it was circulating a petition to incorporate part of Lakeshore and Clermont Harbor.
PPG on Wednesday announced several other projects, including the Shoppes of Paradise Bay, a 150,000-square food project combining retailers and office space – and hopefully, company Public Relations Director Angela Kurlander said Thursday – a major grocery store chain.
According to a press release issued Wednesday, "Shoppes of Paradise Bay, is a mixed-use commercial project situated on a approximately 5 acres of land with 700 feet of frontage on US Highway 90. The site is the closest commercial location to the Stennis NASA Space Center.
The building will consist of 150,000 square feet (under air) of commercial space zoned for mercantile/retail, with local tenants including offices, full service restaurants and retail and has an estimated completed and leased value of $40 million. "Level one will serve both as covered parking for the project as well as to augment the hurricane and flood resistant design of the building. Steel reinforced beams supporting the structure will mitigate any potential storm surge damage. Extensive landscaping will surround and obscure service views and additional exterior parking while providing views of lush greenery to enhance the lakeside setting.
Architectural design will feature traditional architectural detail for the area and extend across the lake with plans call for a large fountain and community gazebo in the middle accessible by a stylized wooden bridge that continues on and connects to an upscale residential rental complex on the opposite shore. "Also on Wednesday, PPG announced plans for a $30 million project at Hwy. 90 and Kiln-Waveland Cut-off Rd.
Chelsea Place is a $30 million mixed-use commercial project, located at the intersection of Highway 90 and Kiln Waveland Cut-off Road. According to the release, "There will be approximately 80,000 square feet of air conditioned interior space with a total building square footage of 139,000, including open area garage parking and terraces. The five story building will again feature Paradise Properties signature hurricane resistant construction and will be styled to compliment the traditional architecture of the community as outlined in the Mississippi Renewal Forum’s Pattern Book for Gulf Coast Neighborhoods. Completion of the project is slated for 2007. The project has just received site plan approval from the City of Waveland. "Paradise Properties Group is currently involved in 16 announced projects, several of which are located in or near the newly created C-4 Commercial Resort and Entertainment District in Hancock County.
Other projects in the C-4 Commercial District include:
• Breezes of Paradise Bay -983 unit, four tower resort condominium complex with deep water marina and commercial amenities. The project is located on a 6.9 acre site. Towers range from 16 to 40 stories. The project includes 2,000,000 square feet of residential space and 250,000 square feet of commercial space. Sale to the public launched in March, 2006. The project is valued at $750 million.
• Beaches of Paradise Bay – Next to be released. Beaches of Paradise Bay is a 1500 unit,five-star condo/hotel resort and casino complex situated on the Elegant Coast of the Gulf of Mexico in Hancock County, Mississippi. Beaches of Paradise Bay is located on a 10-acre site within the Paradise Bay Master Plan within the newly created C-4 Resort and Entertainment District. There is approximately 900 feet of beach front on the property. Two towers, consisting of 44 stories each, totaling 3,500,000 square feet, will feature views of ocean, golf course, lakes and pristine natural habitat reserves. The project is valued at $1.5 billion.
• Waves of Paradise Bay – Waves of Paradise Bay is a unique, state-of-the-art five-star resort / casino / marina complex situated on The Elegant Coast of the Gulf of Mexico in Hancock County, Mississippi. Waves of Paradise Bay is located on a 12-acre beach front site within the Paradise Bay Master Plan within the newly created C-4 Resort and Entertainment District. The project is to contain 1500 condo hotel units and 1200 individual condominium units. The value of the project is $2.5 billion. Completion is slated for Fall, 2009.
• Paradise Links – 500 single-family luxury residences surrounding an 18-hole Robert Trent Jones, II golf course with country club. Commencing 2007.
• Estates of Paradise Bay - the first of three single family residence projects planned for development by Paradise Properties Group adjacent to the newly created C-4 Commercial Resort and Entertainment District in Hancock County, Mississippi. Estates of Paradise Bay is located on the east side of Lakeshore Drive, just south of Highway 90 and will consist of up to 220 executive-style residences ranging from 1,200 to 3,000 square feet with pricing up to $350,000 per home.
• Paradise Woods and Paradise Villas – “sister” communities featuring affordable housing with 150 two and three bedroom villas ranging from 1,100 to 1,800 sq.ft.
• Paradise Cove – median priced single family homes. Commencing 2007.
• Paradise Pines – acreage estate homes. Commencing 2007.
• Villages of Paradise Bay – Villages of Paradise Bay is a luxury, gated rental community situated on the Elegant Coast of the Gulf of Mexico in Hancock County, Mississippi. Villages of Paradise Bay is located within the Paradise Bay Master Plan adjacent to the newly created C-4 Resort and Entertainment District. The community is designed to incorporate extensive green spaces and will feature state of the art concrete panel construction for energy efficiency as well as hurricane resistance. The conceptual site plan allows for up to 1,920 individual apartments in 40 individual buildings with 48 apartments in each building. 1000 units have received site approval from Hancock County. Building heights will be five stories. Estimated completed and leased value is $40 million.
• Landings of Paradise Bay – the prototype for Villages of Paradise Bay, this four acre site is approved and ready to commence. Soil engineering is complete and the project will soon break ground. Due to the desperate need for rental communities post Katrina, Paradise Landings will be stewarded by the Hancock County Supervisors and Planning and Zoning. The urgent need for housing has brought about an agreement to immediately begin construction of four buildings with occupancy expected by fall, 2006. The 160 unit project will feature 1, 2 and 3 bedroom units 36 apartments in each building. Building height is 4 stories.
Originally targeting a 15-year build-out for the Paradise Bay projects, Paradise PropertiesGroup recently announced plans to accelerate all Mississippi Gulf Coast projects to a five-year build-out citing a "company commitment to the rebuilding efforts of the community and a desire to play their role in the urgent demand for housing."

© 2005 Bay St. Louis Newspapers, Inc.

Labels: , , ,

5 Comments:

At 11:01 AM, Anonymous Anonymous said...

Updated an accurate Associated Press details of story @
http://www.gulflive.com/newsflash/regional/index.ssf?/base/news-10/1152210555232610.xml&storylist=miss_news

 
At 11:02 AM, Anonymous Anonymous said...

You can get updated and accurate reporting on this matter through the Associated Press at
GulfLive.com

http://www.gulflive.com/newsflash/regional/index.ssf?/base/news-10/1152210555232610.xml&storylist=miss_news

 
At 1:30 PM, Anonymous Anonymous said...

The first story on the list was written by me and I just now saw this blog-you removed my name as author-not a very honest thng to do-Bennie Shallbetter-Staff Writer-the Sea Coast Echo

 
At 3:11 PM, Blogger Leslie said...

Dear Bennie,
Omitting the author has little to do with me directly and those who send me the articles. I have asked repeatedly for full disclosure, but as long as they give me the copyright information, I usually let it slide.
I'm not the only one researching for these blogs, particularly at this moment. So, if items are omitting something, it is not with ill intent. I'll add your byline with thanks for correcting the situation.

Leslie

 
At 2:36 PM, Anonymous Anonymous said...

A lot of people ask me how I like living in Costa Rica. My answer is, it was the best decision that I made in my life. I came to Costa Rica 7 years ago on a vacation and quickly fell in love with the beauty of the country and the hospitality of the people here. I couldn't wait to come back. I started coming here about 4 times per year and always had a great time and didn't want to leave. Two years ago, I decided to leave Arizona and come live in Paradise. I can not tell you how happy I am that I made that decision. Today, I wake up next to the ocean and run on the beach every morning. I eat the most delicious fruits, vegetables and fresh seafood. My stress levels are much lower than when I was living in the States and the potential here for investing, truly is unlimited. The best part of living here is showing our clients this country. I really don't feel like I have a job for the first time in my life. The joy I receive when I see the look on people's faces when they get into the warm water of the Pacific ocean is truly priceless. For those of you that have come and discovered paradise, you know what I am talking about. For those of you that are on the way, I can't wait to get you here. And to those who are thinking about Costa Rica, please do yourself a favor and come down. You will have the time of your life.


We invite you to take a tour on our website, and if should more information is required:





Great Jaco Costa Rica, Quepos real estate, jaco beach condos, costa rica mountain and ocean view properties, jaco beach real estate, beach condos rentals costa rica, condo for sale in costa rica. Visit us for more info at: http://www.costa-ricarealestate.com

 

Post a Comment

Links to this post:

Create a Link

<< Home