Builder offers deal for debt
CCI says investors would buy problematic loans from Coast Bank.
By JAMES THORNER
Published February 2, 2007
Construction Compliance Inc. of St. Petersburg, blamed for stranding Coast Bank of Bradenton with 482 questionable home loans, is offering to help take the debt off the bank's hands.
CCI owner Jesse Battle confirmed he's found private northern investors willing to buy Coast's loan portfolio related to the homes for well below its total value of about $70-million.
"I don't know if I should go any further now," Battle said of the proposed deal during a pause in a meeting Thursday with Coast attorneys.
From 2004 to 2006, CCI and Coast partnered to sell, finance and build hundreds of no-money-down investment homes, mostly in Sarasota County's North Port community.
Last fall, CCI ran out of cash and ceased construction. Its failure to deliver the homes threw Coast into financial turmoil. When Coast first revealed CCI's troubles on Jan. 19, shareholders sliced the $676-million bank's stock in half.
Scores of CCI customers have been left with $80,000 debts on empty lots. Coast insists they pay up, though many customers have said they plan to walk away.
In a phone interview Thursday with the St. Petersburg Times, his first public comments since the loan debacle unfolded, Battle was on the defensive. He pointed the finger at Coast executives for ignoring warnings from CCI as early as May.
Battle and a New York consultant representing him indicated that about 70 homes were 99 percent complete last year and required only a final small disbursement from Coast before owners could take possession.
The bank strung out the builder for more than half a year, forcing Battle to pay hundreds of thousands of dollars in monthly interest, according to CCI.
Coast officials have declined repeated offers to comment.
Helping Battle in negotiations with the bank is a New York area consultant named James Licata.
Licata, who splits his time between Connecticut and Bradenton, calls himself a businessman specializing in distressed properties.
He's currently under federal indictment on charges of money laundering and wire fraud for $19-million he borrowed from a Long Island Bank in 2001.
Rosyln Savings Bank ended up losing $7-million on the loan that was supposed to finance an assisted living facility owned by Licata. Investigators traced $1.39-million of the money to Licata's private bank account, the indictment said.
Licata said the charges are a "blip" on his record that will prove unfounded. The bank made a bad loan and blames him for its mistake, he said.
According to Licata, the money to buy Coast's troubled debt comes from "Wall Street types" who plan to work through the Carlton Group, a national real estate banking firm specializing in loan sales.
CCI released a statement last week suggesting it was seeking other financing to put its employees back to work and restart construction. Battle wouldn't say if the same private investors would cover his shortfalls.
Battle said he was familiar with Licata's indictment but would comment no further.
In what may be a backup plan, Battle has also met with high-powered Tampa attorney Barry Cohen.
"We've met and talked," Battle said of Cohen, best known as a criminal defense attorney.
James Thorner can be reached at email@example.com or 813226-3313.
Construction Compliance Inc.
Owner: Jesse Battle III
Headquarters: 646 1st Ave. S., St. Petersburg
Employees: Until recently close to 70; now a handful
What's new: The builder has ceased operations while it tries to find a way to complete 482 houses it promised to deliver.