Posted on Mon, Mar. 07, 2005





Fowler's wealth a moving target

How much money does Vikings owner's have? His many business dealings make that hard to answer.

BY TIM HUBER and JENNIFER BJORHUS

Pioneer Press


The National Football League this week begins to answer the crucial question about Reggie Fowler, the Arizona businessman who wants to own the Minnesota Vikings.

Does he have the money?

Fowler says he does, estimating his wealth at $400 million. But his enigmatic finances are not easy to grasp.

He owns so many companies — more than 30 in all — and wheels and deals in everything from supplying grocery stores to building aircraft simulators, that it's difficult to piece together much more than a crude snapshot of his wealth.

It includes a 10 percent ownership stake in an Arizona bank that includes prominent Minnesota bankers. Lending money is a key part Fowler's businesses; some is conventional, much is less orthodox, and by its nature risky.

That fuzzy picture shows a man who has amassed a multimillion-dollar fortune, though it's unclear whether Fowler is rich enough to lead a $625 million buyout of the Vikings, the state's highest-profile sports franchise.

As head of a five-man partnership, Fowler is in the spotlight because he must come up with roughly $150 million for his 30 percent stake in the franchise. The NFL Finance Committee is scheduled to consider the proposed purchase at a meeting Wednesday in Florida.

Some of Fowler's net worth comes from readily identifiable sources, such as a grocery-supply business with reported annual sales of $137.5 million, and numerous real estate investments in warehouses, vacant land and office buildings, including two in Douglas County, Colo., that were assessed at more than $21 million.

His lending business is less visible. Public records in Arizona and Colorado portray Fowler as a prolific financier who dips into his own pocket or uses his companies to finance individual mortgages, the construction of condos, homes and office buildings and to buy warehouses. Fowler also regularly makes business loans, financing everything from $92,000 worth of audio-visual equipment for an entrepreneur in Arizona to a $5.1 million loan to a Colorado real estate company.

Indeed, the vast amount of selling, lending and borrowing makes it all but impossible to verify Fowler's wealth or to determine how liquid it is.

BUYING INTO THE GROWTH

A good portion of Fowler's apparent riches comes from wheeling and dealing in the fast-moving real estate markets around Phoenix and Denver, two cities that are enjoying rapid growth and soaring property values. On paper, at least, Fowler has gotten rich buying and selling properties in both places.

Often the deals take place at a rapid clip — and produce nifty profits. For instance, just days before Fowler agreed to buythe Vikings, he turned a quick $455,000 profit on a land deal. The windfall came from a piece of property in Tempe, Ariz. One of Fowler's myriad companies, Weet Fowler LLC, bought the property for $2.4 million in April and sold it for more than $2.8 million in early February, according to Maricopa County records. Another company, Trent Fowler LLC, picked up $27,525 in similar fashion from the sale of a $2.5 million property it held in Scottsdale from May to October.

Property records in Arizona and Colorado are replete with similar deals dating back to the mid-1990s and involving numerous companies, including F-Square Corp., a business he owned in the 1990s with former NBA point guard Lafayette "Fat" Lever, who introduced Fowler to Vikings owner Red McCombs.

Fowler also retains a large real estate portfolio that he has said includes $300 million worth of land in Colorado, where he says he's developing homes. How much he's borrowed to buy land is unknown, but public records show the land in Fowler's real estate portfolio is worth tens of millions of dollars, most of it through various companies.

The properties include an $11.5 million, three-story office building on six acres in Lone Tree, Colo., a $10 million, three-story office building on 6.1 acres just down the street, and a $2 million, 66,000-square-foot warehouse in Denver.

Not all the real estate deals have gone smoothly. Fowler is involved in a dispute with Frederick Ross Co., a major Denver real estate company. Ross is suing Fowler and two of his companies for allegedly stiffing it on a commission.

Fowler agreed to pay Ross about $150,000 when the company found a renter and obtained a lease for the Park Meadows Corporate Center, an office building Fowler was constructing southwest of Denver, according to the complaint, filed in Douglas County District Court in December 2002. Fowler allegedly paid Ross $50,000, but still hasn't paid the balance of $99,742.

At issue is a restrictive endorsement on the back of the check Fowler's company gave Ross stating that cashing the check indicates payment in full has been made.

... AND LENDING, TOO

Fowler's real estate business goes beyond buying and selling properties. Often, he serves as a one-man bank in the rough-and-tumble world of trust-deed lending — fast, short-term loans to builders, typically for one to five years and often at above-market rates. Such loans are popular with small and midsize developers.

Sometimes Fowler lends money directly. That was the case with an unfinished condominium project in downtown Phoenix that Fowler sold to developer Charlevoix Homes LCC for $3.5 million. Fowler lent Charlevoix at least $10 million to finish the project and a separate office building according to interviews and Arizona public records.

The 107-unit complex is half-finished and sold out, said Charlevoix Vice President Kristina Thoreson, who praised Fowler's acumen. "He's a very, very, very wise businessman," she said.

Sometimes Fowler invests indirectly. Court records show Fowler owns pieces of at least two real estate investment funds set up by Phoenix-based Mortgages Ltd. The funds, MP032004 LLC and MP052005 LLC, have invested in well over 100 loans in Arizona since 1999, according to Arizona Secretary of State records. Borrowers range from individual homeowners to businesses.

A
ZNorth Development was one of the borrowers. Owner Tom Brewster said the loan was to develop town houses in Flagstaff and that he's already paid it off. The interest rate was around 10 percent to 12 percent, he said, and he had no problems with it.

Other loans have not gone as smoothly. One led to a lawsuit with a development company that tried to subpoena Fowler's bank records. The dispute involved a pair of loans totaling $5.5 million. Fowler owned a piece of the action through his involvement with MP032004.

While Fowler fended off the effort to get his bank records, another lawsuit has potentially bigger implications: fraud. That suit was filed by IndyMac Bank, a Los Angeles-based savings and loan with $16.8 billion in assets, alleging that Bank of the Southwest, a small Tempe bank that Fowler co-founded with a group of Minnesotans, participated in a scheme to help Mortgages Ltd. avoid taking a multimillion-dollar loss on a home loan to a Phoenix couple, Eugene DeWitt and Mary Zoltanksi, who had defaulted.

Rather than foreclose, IndyMac alleges that Mortgages Ltd. loaned the couple an additional $3.4 million and retained control of the money in an account at Bank of the Southwest so payments would be made. The clean record supposedly allowed Mortgages to hoodwink IndyMac into buying the troubled loan before DeWitt and Zoltanski ultimately defaulted again. Bank of the Southwest also is accused of lying to IndyMac, which alleges that the bank told IndyMac that Zoltanski had more than $300,000 in her account when it actually was empty.

Fowler, a director at Bank of the Southwest with an estimated 10 percent stake, is not named in the lawsuit. But Fowler has direct business ties to both parties at the heart of the dispute: Mortgages Ltd., a Phoenix mortgage bank, and the couple who took out the loan. Two of the multi-lender real estate investment funds Fowler is part of were arranged by Mortgages Ltd. At least two of those funds were invested in companies owned by the couple.

Edina resident John Lohmann, Jr., who sits on the bank's board with Fowler, says the fraud claims have no merit.

LOCAL CONNECTIONS

Lohmann and St. Paul banker Arthur W. "Bill" Sands, president of Western Bank on University Avenue, are among a group of Minnesotans, most of them bankers, who founded Bank of the Southwest with Fowler in 1998.

Sands was bemused by Fowler's arrival on the Minnesota scene.

Sands met Fowler when he and his fellow Bank of the Southwest investors went looking for investors and board members in Arizona. Fowler came highly recommended, said Sands, who still holds Fowler in high regard. Sure, Fowler is low-key, even shy. "But he's a tough, successful businessman," Sand said. "I think if this works out, he'll be a good owner."

To Sands, Fowler already has proven to be a conscientious and involved board member. Bank of the Southwest's board has met monthly since its inception and Fowler is never absent — even for a recent meeting that started at 8:30 the morning after Fowler attended a Minnesota Timberwolves basketball game in Minneapolis. "That's another example of Reggie. I mean he's going from morning to night all the time."

And Sands has reason to believe Fowler can afford the Vikings. Unlike almost everyone but the NFL, Sands has seen Fowler's finances, which happened during the process of setting up the bank. "The only thing I remember is that Reggie's net worth is pretty frickin' huge," Sands said.

Fowler's initial 5 percent stake in the bank has since grown to about 10 percent or a little more, Lohmann said. Sands and Lohmann said they had no idea about Fowler's Vikings plans and weren't involved. "I was just as surprised as anybody when I heard Reggie wanted to buy the Minnesota Vikings," Lohmann said.

NOW IT'S THE NFL'S TURN

By the middle of the week, members of the NFL's Finance Committee will have joined Sands in having peeked at Fowler's finances. And unlike the media and Vikings fans, the committee members should have far more concrete information.

The league requires audited financial statements and uses forensic accountants to scrutinize them. The league also demands bank statements, court records, essentially any public record — and the private records to back them up, said Minneapolis businessman Irwin Jacobs, who owned a piece of the Vikings from 1984 until 1991.

"They have the equivalent of their own kind of internal FBI kind of thing. They go back to your tax returns. Kind of everything you have, they want to see. Making sure where you make a living, you make it legitimately, as well as the businesses that you run and the people who are behind your investments," said Jacobs, who endured a three-hour interview as well.

"They wanted to know that you had the ability to own the team and didn't leverage it up to the point where it would be impossible to hold on to the investment."