Developer bounced checks to backers
By BRYAN GILMER, Times Staff Writer
ST. PETERSBURG -- For two years, Paul Koehler Morris preached his vision of two elegant 20-story condominium towers on the city's treasured waterfront.
But Morris bounced nearly a million dollars in checks to those backers about six months ago, the St. Petersburg Times has learned.
Now he is losing their support.
One check was written for almost $472,000 to CSJM, the architectural firm that produced the renderings. Another, for $358,000, was to John Hamilton, the patriarch of the family that owns the project site. And a third check, for $75,000, was supposed to repay a local group of small investors.
The checks were written about six months ago on Morris Development's account at the Bank of St. Petersburg. The bank has since closed the account, an official said Wednesday
Morris did not return phone calls seeking comment Thursday.
Initially, Morris' backers stood by him after the checks bounced. And they remained steadfast when the Times revealed in September that Morris had gone bankrupt in 1999 and had no real estate development experience.
They hoped he could still get a big loan to repay them and build the Villas towers, a $76-million project on the 400 block of Beach Drive NE. Plans called for 200 condominiums over stores and parking.
Despite putting a fence around the property, Morris has not applied for building permits. Last month, he defaulted on his 99-year lease with the Hamilton family.
Thursday, family spokesman Bob Churuti said the family will find a different developer.
"Our attorneys have advised us not to do business with him," he said.
Churuti initially declined to talk about the bounced check. But after being shown a copy of it Thursday, he explained that Morris made his first rent payment on May 1. He said the next payment was not due until Oct. 31.
The $358,000 check that bounced arrived in late May and was to cover an early $250,000 rent payment plus $108,000 Morris owed the family for other lease provisions, Churuti said. The family could have declared Morris in default then but chose to wait.
Churuti said the family's hope of being paid wasn't the only reason. The Hamiltons had depended on their close community ties to win city approval for the project. They felt a duty to others who were financially involved, he said.
If Morris defaulted, they knew he probably wouldn't get financing. And if that happened, they feared, no one would be paid, Churuti said.
"We did place the family at far greater financial risk," by continuing, Churuti said. "But we had heard of others who had received (bad) checks. We wanted to help potentially anyone else who was in this situation."
Churuti estimated the Hamiltons have lost $2-million since they began dealing with Morris. The amount includes lost revenue from Dr. John Hamilton's closed plastic surgery practice on the block and lost rent from the businesses around it, he said.
Architect Calvin Samuel said his firm, CSJM, has been paid nothing.
"We were obviously hoping (Morris) would be able to (pay) and giving him as much opportunity to do that as possible," Samuel said Thursday.
Samuel hopes to recover some of the nearly $500,000 in fees represented by the bounced check if the Hamiltons find a replacement developer.
Churuti said Thursday that discussions with several developers are encouraging, and the family remains committed to building the project Samuel has designed. He would not name the developers.
Even while Samuel has gone unpaid, he has allowed Morris to use a private office in his firm's suite. Now that the Hamiltons are unwilling to work with Morris, that will have to change, Samuel said.
"It can't continue indefinitely," Samuel said by phone from a business trip. "I just don't know how much longer we'll continue. I'll have to talk to Paul face to face. I haven't had a chance to do that in the last week or so."
Presenting a worthless check is a third-degree felony, and more serious felony charges and prison time can apply in cases where a suspect steals from people by writing a bad check, Pinellas-Pasco assistant state attorney Mary Handsel said.
But to prosecute, a victim must cooperate with authorities, she said.
"Sometimes these investors don't want their names in the paper," Handsel said. "I've had cases where people have had a million dollars taken from them and they don't choose to prosecute. But a lot of people say, "I'm not getting my money one way or the other, but at least he's going to jail.' "
Sue Cooper-Street led a group of small investors who lent Morris money. When his $75,000 check for repayment bounced, she was stunned.
"The fact is, when this all happened, he didn't call us to tell us it happened," she said. "We had to find out through our banks or through businesses. I just think that the lack of communication is insufferable."
For more than six months, Cooper-Street has hounded Morris to make the check good, she said. Now she has hired an attorney.
"Last Tuesday, (Morris) said he was getting (financing) because of giving up 70 percent of the project," she said. "He said he would get the money Tuesday evening, and he would call me.
"I haven't heard anything from him."
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