Analysis, Renegotiation Saves Developer More Than $2 Million, in Project Stalled By Real Estate Downturn

ST. PETERSBURG, FL --- In November 2009 development of the Meres Town Center (middle left photo)  grocery-anchored retail project in Tarpon Springs, Florida nearly ground to a halt when the site contractor – crippled by the real estate downturn – filed Chapter 11 bankruptcy and stopped paying subcontractors working on the project.

For investor/developer Forge Capital Partners, Meres Town Center was a $12 million, 55,000 square foot headache and a 20 year lease with a major grocery anchor hung in the balance.

Forge Capital Partners oversees Community Reinvestment Partners II, a real estate investment fund, and had little time to sort through the morass of details that endangered the Meres Town Center project.  

They turned to WeinPlus Real Estate Advisory Services in St. Petersburg for help.

Racl Elias Wein, AIA (top right photo), who heads WeinPlus, is a former development manager with the Sembler Company in St. Petersburg and senior associate with Ernst & Young’s Construction and Real Estate Advisory Services in Philadelphia.

With a Bachelor of Design, Master of Architecture and Master of Science in Real Estate Degrees from the University of Florida, Wein has the academic credentials to match her background in project analysis, management, finance, accounting and construction.

Wein started with a thorough review and analysis of the Meres Town Center project documents, including contracts, work orders, change orders and leases.

She identified ways Forge could cut losses, collect reimbursements, and negotiate new contracts to eliminate unnecessary fees.  She was hired immediately.

Wein oversaw the transition to a new contractor, assisting in negotiations and ensuring that the new contract protected Forge from any future legal complications.

An agreement with the city tested Wein’s forensic skills. Forge was owed substantial reimbursements for a nearly-built road, but the progress of payments required volumes of documentation proving project costs---an administrative nightmare.

Wein spent months working with subcontractors to segregate invoices that proved the reimbursements were due. 

She established relationships with a local government agency holding the reimbursement funds.

“The goal was to arm ourselves with information so that when the government asked for proof, we were able to respond in a very expeditious manner,” a Forge official says. “Our weapon was information, lots of detailed, verifiable information.”

Wein then turned her attention to the anchor tenant relationship, a critical one. Forge was at the beginning of a 20 year relationship with the anchor that could affect future Forge projects as well.

Wein identified LEED certification costs and construction utilities that could be recouped if Forge could document numerous payments. Wein worked with the anchor tenant to prepare documents that maximized reimbursements.

The  result?  Wein was able to recover or save more than $2 million for Forge, including $250,000 in defrayed contractor costs, $1.3 million for roadway reimbursements from the city and $500,000 in reimbursements from the anchor tenant.

Most importantly, Wein shored up a strong and trusting relationship with the tenant that promises future partnerships.

“I’m very familiar with bankruptcy situations and technically I could have done this on my own,” a Forge official explained, “but it would have been physically impossible. With Rachel on board, we could focus on deals that will yield a higher return on investment.”

Retaining a consultant with expertise in complicated construction projects was well worth the cost.  “The WeinPlus fee amounted to about five percent of the recovered monies, or a 20-fold return,” the official at Forge said.

Wein’s expertise and skills saved Forge time and money.   “We didn’t like the situation, but doing nothing wasn’t an option,” he said.

For more information, contact

Rachel Elias Wein, AIA, Founder / Principal, WeinPlus, 727-403-1595, http://www.weinplusassociates.com/;

Larry Vershel or Beth Payan, Larry Vershel Communications 407-644-4142, lvershelco@aol.com.