100 North Main figures embroiled in Florida controversy

April 23--Would-be developers of 100 North Main, the tallest skyscraper in Downtown Memphis, are targets of a Florida regulatory action alleging they mismanaged a troubled senior housing community.

Florida officials are trying to wrest control of Tampa's University Village from a company affiliated with Eli T. Freiden, a Boca Raton-based, Memphis-born real estate investor and consultant, who represents 100 North Main's owner; and John W. Bartle, an Indiana-based development consultant on the Memphis project.

The Florida proceedings are relevant in Memphis because of questions being asked about the future of 100 North Main, a Downtown landmark that has sat vacant and deteriorating for nearly two years. The building overlooks City Hall and offices of the Downtown Memphis Commission, Downtown's redevelopment agency.

Elsewhere in Memphis, Bartle and Freiden worked in management roles for Ridgecrest apartments, a government-subsidized housing complex in Frayser that recently emerged from a two-year bankruptcy reorganization.

And Bartle was point person for another Memphis complex, Hilldale, that defaulted last fall on payments on tax-exempt bonds issued by a city housing board.

Ridgecrest and Hilldale were Nos. 1 and 3, respectively, in a 2014 Memphis Police Department ranking of HUD-subsidized housing with most offenses per unit.

Bartle's previous legal entanglements include taking an Omaha, Nebraska, senior housing community into bankruptcy in 2014 and unsuccessfully seeking bankruptcy protection to avoid a federal tax judgment more than a decade ago.

In an interview, Bartle said his specialty -- rescuing distressed properties -- occasionally puts him in adversarial situations. "I'm going to be the person who's in the forward position, if you will. I'm going to be the restructuring officer."

Owners of 100 North Main are due back in Environmental Court Thursday to face allegations of code violations and to respond to a request, made in court March 24, to produce a financial plan for rescuing the building.

Bartle said developers hope to present project details, including financing plans, to Memphis Mayor Jim Strickland in May.

Bartle is identified in Florida records as president of BVM Management Inc., a nonprofit holding assets in affordable housing and senior housing and providing consulting services to approximately 40 skilled nursing facilities and continuing care retirement communities. BVM's 2013 tax return listed $27.3 million in revenues, $23.7 million in expenses, total assets of $51.2 million and total liabilities of $45.7 million.

Freiden started a background screening company, Human Assurance LLC, in Memphis in 2012 and has held real estate and finance jobs over the past 13 years, according to an affidavit filed in Florida. He told the court he was an analyst and office director for Greystone Financial Group in Manhattan and a senior account manager for Primesource National, where his duties included financial oversight of 30 skilled nursing homes in the Midwest.

The Florida Office of Insurance Regulation accused University Village owners of multiple violations of the state insurance code including failure to pay more than $4 million in refunds owed to residents. The office took aim at Freiden's lack of credentials in insurance and health care industries.

University Village is under the insurance regulator's purview because it's a continuing-care retirement community providing independent living, assisted living and nursing care. It has more than 600 residents.

The office on March 11 denied an application by Freiden's group to acquire control of University Village. An appeal is pending in state court of two initial orders of suspension that attempt to halt the group's continued involvement in the community.

In a release announcing the orders, Insurance Commissioner Kevin McCarty said the allegations include failing to comply with a target examination, filing false information, continuing to take on new residents while being financially insolvent and "engaging in fraudulent or dishonest practices of management in the conduct of business."

Meanwhile, Freiden's group is fighting an attempt by the Florida Department of Financial Services to put a receiver in charge of University Village.

Owners have maintained the state has no grounds to take over the facility. They say it's being run by "competent, experienced persons" who have made progress in solving financial problems. They've complained that regulators have hamstrung their turn-around effort.

Freiden declined to comment for this article and said he would be available at a later time.

Bartle, a longtime consultant to multifamily housing developments, retirement communities and nursing homes, described himself as a representative of Americare, a development group that's working on a plan to revitalize 100 North Main.

Bartle denied involvement in management of University Village in Tampa, despite numerous claims to that effect by Florida officials. Bartle said Florida officials "don't like" Freiden.

Bartle put together a group of limited partners, including Freiden's IMH Healthcare, to acquire 99 percent interest in University Village in 2014. At the same time, BVM Management guaranteed two loans totaling $24.5 million intended to finance a two- to three-year turnaround.

Freiden is the point person for a limited liability corporation, IMH Memphis, that bought 100 North Main last August from a group led by Isaac Thomas, a Memphis investor. Thomas's company bought the building in 2013, emptied it of tenants and proposed a nearly $100 million redevelopment that never got off the ground.

Thomas is no longer listed as an owner, but he has continued to represent building owners in dealings with contractors.

Individual members of limited liability corporations do not have to be identified in public documents, but developers of major projects in Downtown Memphis in recent years have disclosed owners' names as part of the process of winning public incentives such as property tax freezes. Owners of 100 North Main have not made formal application for incentives from the Downtown Memphis Commission, which has offices directly across Adams from the building.

Bartle said IMH Memphis has a Miami-area architecture firm working on the 100 North Main project. Bartle said he's working on the financing package, and he has been talking with "a couple of investment banking firms."

In recent years, Bartle took Omaha's Skyline Manor community into bankruptcy. Bartle was removed from management when a bankruptcy judge appointed a trustee to run it and oversee its sale to new owners.

The trustee has been trying to recoup $600,000 that was distributed to Bartle's family members, business associates and others. The trustee considered the payments "fraudulent transfers," a civil law term for efforts to evade creditors by transferring money to other people or companies.

"Probably John Bartle took advantage of a nonprofit company, and instead of focusing on the mission of the company, which is to provide housing to seniors, he focused on trying to get money out of it, and that's not really what you're supposed to do with a nonprofit," said T. Randall Wright, a lawyer who represented the Skyline Manor trustee.

Bartle has been a key figure in two government-subsidized Memphis housing developments, Ridgecrest and Hilldale, that received tax-exempt bond financing issued by the Memphis Health Educational and Housing Facility Board.

Ridgecrest filed for bankruptcy to head off an attempt by a lender, Federal National Mortgage Association or Fannie Mae, to get receiver appointed. Bartle was involved throughout the process as the owner's representative.

After Fannie Mae objected to an attempt to hire Bartle's BVM Management as property manager, the owner agreed to hire LEDIC, an apartment management firm with deep Memphis roots.

Ridgecrest bank records filed in bankruptcy court showed Freiden received payments totaling $27,500 over five months of 2014. A handwritten note by one entry said "manager."

Bartle sparred with the IRS for more than a decade over claims of unpaid taxes, prompting a federal judge to appoint a receiver to monitor his personal finances and enforce payment of more than $1 million in delinquent taxes.

Bartle said he's current on his federal income taxes. He attributed the tax case to a heavy-handed IRS.

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