Russell Vandenburg’s and TVO’s Condominiums In Foreclosure

tvo_foreclosureOne of things that has always bothered me about El Paso is the mentality that you have to be connected in order to remain in business. Professional business in El Paso is not about the best service or the best price rather it is about who you know and who’s wallet is being stuffed. Although it bothers me that private businesses act this way I really have no right to complain because a private business uses the owner’s money and therefore they have every right to spend it as they see fit. However as I explained on my blog post “Why a Politician Advocating Holding the Line on Taxes Can’t Get Elected in El Paso” I shared with you the vicious cycle that is the economy in El Paso. It relies on government largesse. Therefore a taxpayer-funded government entity needs to be a steward of the people’s money.

As such, a government entity should do everything it can to maximize the taxpayers’ monies. Besides getting the best value for the dollar, a government entity should look to see whom it does business with. Unfortunately, it seems that the city, along with other government entities, finds a way to do business with business entities that heavily supports the city’s initiatives yet are fraught with serious business problems.

This gives rise to the notion that it doesn’t matter how your business acumen is or your business viability as long as you kowtow to the politicians your business will be fine. Case in point is TVO.

On May 29, 2012, the city awarded a Real Estate Management Services contract to TVO Management Services. The contract was for brokerage services and consulting services to compile a real estate book of city-owned property. As you might remember in my blog post “Why Is Leeser Asking to Cancel TVO Contract?” I pointed out that TVO’s CEO, Russell Vandenburg and his company were contracted by the city to relocate city services to new locations, including the El Paso Times building.

Considering the city’s rush to relocate the award of the contract to TVO bypassed the usual bidding and documenting processes a taxpayer funded project normally requires to safeguard taxpayer monies. We can assume that the city’s contract to TVO may have been lucrative to them. However, because of the lack of competitive bidding it is impossible to determine how lucrative it was.

On my December 5 blog post, “Russell Vandenburg Follow Up” I shared with you that Vandenburg has been involved with the Paso del Norte Group (PDNG) that has led the downtown revitalization projects that use the fiasco of the ballpark as a major cornerstone. I pointed out how in 2007 and again in 2009 TVO was involved in two controversial projects; the Garden Inn at UTEP and the Cliff Inn property.

Even though controversy surrounded TVO they were still able to land taxpayer funded contracts with the city. To me it seems that Vandenburg’s support of city initiatives is somehow connected to contract awards to his company. Why wasn’t another real estate company able to provide the services for the city? And if so, why weren’t they given the opportunity?

Now it seems that TVO has its Stanton 4433 Condominiums in foreclosure. They are scheduled to be auctioned off at the county court house this morning. According to the foreclosure filing on December 17, 2013, TVO has defaulted on its loan to the bank on the condominiums. The Trustee’s Sale states that TVO Development Services, LLC defaulted on its loan with Plains Capital Bank.

The foreclosure sale is scheduled for today between 10 and 1 this afternoon.

Keep in mind that although the city voted to terminate the real estate contract with TVO on December 3, 2013 the city was quick to point out that it would still contract TVO on a case-by-case basis. Also remember that Vandenburg is part of the group spearheading the city’s economic development through the Borderplex Alliance.

Let that sink in a little, the city’s economic development initiative is being spearheaded, in part, by an individual that is in the midst of numerous bankruptcy proceedings and whose projects have been mired in controversy. I didn’t even mention that his wife filed a restraining order against him demanding that he not spend the family’s money.

With a business record involving controversy and foreclosures it boggles the mind how anyone involved in these businesses would be leading the city’s charge for economic development. Or, is it a simple case of one “business leader” scratching the back of another?

13 thoughts on “Russell Vandenburg’s and TVO’s Condominiums In Foreclosure

  1. You may recall that Vandeburg did the appraisal of the Times building that Wilson then purchased for the city. Does anyone know the actual price the city paid for that building and what was the per square foot cost?

    Because in the emails that Ortega provided recently, a Sept 11 2012 email to Wilson (“Thanks Joyce”) asserts that the going price for downtown buildings is $40/ft sq. Is that what we paid to the Times or was there a premium for their “cooperation.”

  2. Martin; what role did Vandenburg have in the sale? I recall him being caught short about the appraised value when the Times found some descrepancy. Also, do we know the cost per ft sq? It was Josh Hunt in his email to Wilson and Ortega who gave the $40 number as the going rate downtown.

    1. Rotten,
      There were three appraisals for the El Paso Times building.
      1. Hoover Appraisal Company provided two appraisals in August 2012, one for $10.3 million and the other for $11.87 million.
      2. Cushman & Wakefield Texas, Inc., on behalf of the owners of the paper prepared an appraisal for $9.5 million on October 3, 2012.
      3. On October 8, 2012, Wilkinson Pendergras & Beard, LP appraised the building at $12.97 million.

      The building was purchased for $9,375,500 on November6, 2012 by the city.

      I do not have access to the square footage at the moment so I apologize that I cannot offer you a square per foot figure. Russell Vandenburg was contracted to provide real estate services to the city including the purchase of the Times building.

      Thanks,
      Martín

    1. Michael,
      I’m not sure if it is the whole complex or just a few condominiums. It is hard to determine from the legal filings that I was able to access. However, as I understand it, some the condominium units were sold therefore I believe those are not included in the foreclosure. What I do not know is whether every unit under the control of TVO is up for auction or only a few. I believe I did not write the whole complex was up for foreclosure however it is very possible that I was not very clear so thank you for the opportunity to clarify this.

      Thank you for bringing this to my attention and for your participation,
      Martín

  3. From your response, more so TVO is the managing company that takes care of the facility. Individuals owners that could be you or I own the units. With utmost respect this is a very careless assertions you make in this post without really disclosing correct information.

    1. Michael,

      I must not be understanding what you are trying to tell me. The legal filing clearly shows that TVO Development Services, LLC is the debtor who is being foreclosed on. If there are owners in the complex who own property then they would not listed in the foreclosure. Whether they are managing or not is irrelevant as they are the named party in the foreclosure proceeding as a debtor. Please let me know what I’m missing here.

      Thanks,
      Martín

  4. Michael may have a point….TVO may be a cross defendant or something…it may help if Martin would post the legal document here.

  5. From my understanding their bank was taken over by another bank and that bank is no longer giving loans on condos. The only thing they could do was sell them off. This article is very misleading and tarnishes their image. You need to be careful about how you phrase these articles because you do not have your facts straight.

    1. Thank you all for your comments. I can see there is confusion regarding my post; therefore, here is a link to the Notice of Trustee’s Sale by Substitute Trustee filed at the courthouse on February 17, 2013 announcing the sale of the property on Tuesday, January 7, 2014.

      The document is at: http://mtin.be/1eUQTXo

      I am not an expert on commercial finance and therefore my commentary is based on my understanding of the public documents. As you can see, it clearly states that TVO Development Services, LLC is referred to as “Debtor”. The document also states; “by reason of the failure of Debtor to timely cure a default under the Deed of Trust”.

      I look forward to your comments on the document I posted.

      Thank you for your participation in my blog.

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