U.S. Rep. Robert Pittenger’s former real estate firm did not receive enough votes from investors to approve a proposed management change, according to a company memo Wednesday evening.
Pittenger Land Investments plans to meet with key investors “to explore the best way forward,” which could include a revised transaction with South Street Partners, a Charlotte-based real estate investment firm, the memo said.
Pittenger Land Investments reached a deal last month with a South Street subsidiary to run PLI’s 52 limited liability companies, which own properties in the Carolinas, Tennessee and Texas. But the memo said preliminary tallies show “the vote is not sufficient in enough of the partnerships to facilitate the transaction.”
PLI has been in the spotlight since August when Pittenger disclosed the company was the subject of an FBI investigation. The Charlotte Republican, who is running for a third term next November, has repeatedly denied any wrongdoing.
After being elected to Congress in 2012, Pittenger shifted management of the company to his wife, Suzanne, to meet House ethics rules. The deal with South Street would have turned over management to the Charlotte firm in return for undisclosed compensation to PLI.
Over the years, PLI has gathered investors to buy raw land with the objective of later selling the property to developers. In recent months, some investors have complained about the slow pace of land sales, markups on the properties and what they call a lack of transparency around PLI’s operations.
Some investors, while favoring a management change, had urged fellow investors to vote against the South Street transaction, the Observer has reported. They argued it was too early to let PLI monetize the company’s ownership stake in the properties amid an ongoing investigation. They also said they needed more details about the deal.
The voting deadline was Friday. The Cherry Bekaert accounting firm is tallying the results.
In a memo emailed to investors Wednesday evening, PLI said “there was substantial member sentiment in favor of South Street’s management capabilities,” but that “a number of the LLCs did not achieve the majority approval required to approve the transaction.” PLI and South Street did not immediately respond to requests for comment.
The Observer has reported that the FBI and IRS are looking into personal loans and contributions Pittenger made to his 2012 congressional campaign and whether he improperly transferred the money from PLI. It’s not clear if any charges will result from the probe.
Pittenger’s attorney, Ken Bell, issued a statement last month saying he has not seen anything that “even suggests criminal activity” by his client and that he hopes authorities “act quickly and publicly to absolve” the congressman. Pittenger has also asked the House Ethics committee to investigate his activities, saying he was confident the review would confirm that he has been in compliance with all rules.