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Wed, Dec. 11

Figure in scandal linked to Crossing
Beecher says Wolfswinkel’s connection to Vanderbilt Farms no reason for concern

KINGMAN - The Tempe-based company that recently purchased 200 acres on the north side of where the Kingman Crossing interchange is proposed has strong ties to a former Phoenix-area real estate tycoon who was convicted of fraud in 1993 for bilking taxpayers in an infamous savings and loan scandal.

Although his nearly $2 billion in outstanding debt to taxpayers keeps him from claiming personal ownership of any development or real estate companies, Conley Wolfswinkel still plays a major role as a consultant and advisor to his sons, Ashton and Brandon, who own Vanderbilt Farms, LLC, which recently invested in Kingman by buying up land around the proposed Kingman Crossing interchange.

The primary investment arm to the Wolfswinkel family, Vanderbilt Farms closed a $12 million deal with local developer Bill Nugent in early January on the 200 acres - land that Vanderbilt announced during a Feb. 13 City Council meeting it intends to develop into a retail mall.

The city of Kingman owns 168 acres on the south side of where officials have proposed a traffic interchange - approximately 1.5 miles east of Andy Devine Avenue on Interstate 40.

Between the city land and I-40 sits 640 acres of state-owned land, which will be up for auction before the end of the fiscal year, June 30. City Manager Paul Beecher said in a Feb. 21 interview that investor Richard Campana is lobbying for the land, but he added that because it's a public auction, it could attract other interested parties.

Vanderbilt could be one of those, and it may be interested in buying the city-owned land.

Some residents are unhappy with the city's planning of the proposed Kingman Crossing project, which has been in the works about two years. One city official expects that Wolfswinkel's investment past will fuel some residents' criticisms of the plans.

But Beecher said Tuesday he's not concerned with what the father of two business owners did 20 years ago, and he doesn't think Kingman residents will be either.

"They don't have to be developers on our side, so to me it's not that big of an issue, personally," he said.

The spokesman for Vanderbilt Farms, Stuart Goodman, expressed similar sentiments, stating that the focus should not be on one man's history but on the current project and the successes of recent ones in other parts of the state.

"There's no question that he is a consultant," Goodman said Tuesday about Conley Wolfswinkel, "and the sons recognize the value of the experience in the real estate market that Conley brings to the conversation. But I want to be clear that the decision-making is done by Brandon and Ashton."

The East Valley Tribune reported in October 2005 that Conley Wolfswinkel controls the deals, negotiates terms, pulls together partnerships, manages properties and deals with outside investors for Vanderbilt Farms - assertions "that neither he nor his sons dispute."

"I have zero ownership whatsoever," Wolfswinkel told the Tribune. "You can check every deed and document there is."

Goodman put it a little differently.

"Do they take advantage of Conley's real estate knowledge? Absolutely. But the real-estate process is done by the boys," he said Tuesday.

Vanderbilt is the land investment half of the joint project with Vestar Development Co., a Phoenix-based firm that specializes in commercial malls.

Kingman plans

On Feb. 13, representatives of both firms spoke to the City Council about the land acquisition and their plans to collaborate with the city to develop the area north of the proposed Kingman Crossing interchange. Kevin Petersen of Vanderbilt and David Larcher of Vestar repeated throughout the presentation their intentions to make public participation an integral part of the project and that residents' feedback will be cornerstone to the north side development's success.

The interchange being an asset to both the city and Vanderbilt, it's still in the city's best interest to do business with the firm, Beecher said.

"The decision for the city to make is do we want to go into partnership with them to build an interchange, and that's it. It's just that simple," he said.

"We still can do whatever we want to do with our side of the property. I mean, our partnership with them would be to construct an interchange, and that's the extent of it right now," Beecher said.

Conley Wolfswinkel has been instrumental in Phoenix-area development since the 1980s. Dealings with Charles Keating Jr., who was charged with fraud, racketeering and conspiracy in both state and federal courts between 1992 and 1993, resulted in Wolfswinkel being convicted of fraud in 1993. According to news reports, Wolfswinkel owed approximately $200 million to investors. Some of this debt came from a $60 million loan from one of Keating's savings and loan industry firms that went under. He was charged with fraud and eventually sentenced to five years of probation.

Bankruptcy filings

Wolfswinkel filed for corporate bankruptcy in December of 1990 and personal bankruptcy two months later. Civil lawsuits followed the court proceedings, and although his sons paid off some of his debt, according to the East Valley Tribune, Wolfswinkel still owes taxpayers $1 billion plus interest, which in 2005 was approaching $2 billion.

According to reports from the Arizona Corporation Commission, Wolfswinkel holds managerial titles with his sons in ABCDW Holdings, LLC and Vanderbilt Holdings, LLC. Petersen, the Vanderbilt Farms representative who visited Kingman's City Council meeting on Feb. 13, is also a manager for these companies, according to ACC reports. Vanderbilt Farms is listed as a member of Vanderbilt Holdings. According to Goodman, only members hold ownership interests.

Neither Wolfswinkel's behind-the-scenes role nor his criminal history have sparked community opposition in other places, Goodman said.

"The question has always been about the project itself, about the land use, about entitlements, the zoning ... and through the public participation process, we've always managed to work with the neighbors," Goodman said.

"That has always been the discussion. And again, from our perspective, that ought to be the discussion in Kingman as well."

In the broader context, Goodman said, Ashton and Brandon Wolfswinkel should be judged by their own actions rather than by "what may or may not have occurred over 20 year's ago" with their father.

According to Goodman, communities have "welcomed" and "embraced" the projects pursued by Vanderbilt and Vestar. A recent one in Queen Creek brought in enough sales revenue for a self-reliant community, he said.

"They are looking to bring that same energy to Kingman."

Staff did homework

Although Beecher didn't know about Wolfswinkel's dealings with the savings and loan scandal, he said his staff did do its homework. It looked at previous deals, community projects and retail developments "just to see what kind of things we'd be looking at" for Kingman, Beecher said. "But as far as their integrity? No."

Kingman Crossing would be a benefit to both parties, Beecher said, and given the recent track record, which "speaks for itself," he doesn't expect Wolfswinkel's history to be a problem.

"It'd be kind of hard to pull that kind of a deal with what we're doing here," he said about Wolfswinkel's fraud charge.

"I'd rather do business with these guys than Rhodes (Homes)," he added jokingly.

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