A Charlotte real estate firm on Friday closed a deal to take over management of land investments made by Rep. Robert Pittenger’s former property company.
The transaction is the latest chapter in a months-long drama over the future Pittenger Land Investments, founded three decades ago by the Charlotte Republican and run by his wife, Suzanne, since his election to Congress in 2012.
Investors in 51 of the 52 land deals approved the settlement last month, and South Street Partners had a month to review the deal before signing off. Investors in one of the deals did not approve the transaction, meaning PLI will continue to manage that investment unless removed in the future.
South Street, best known for buying the company that developed South Carolina’s Kiawah Island, now will be charged with selling off the properties. The company, which was formed in 2009, specializes in buying distressed or under-performing properties and real estate loans.
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“Homebuilders and developers who are interested in purchasing tracts of land between 50 acres and 1,200 acres should contact us directly, but only if they are interested in market-rate transactions,” said South Street partner Will Culp in a statement. “These are well located properties in growth cities throughout the Southeastern United States.”
Under the agreement, investors in the land deals agreed to forgo potential legal claims against PLI in return for bringing in new management. PLI is to receive $6 million in the deal but will give up an investment stake that could be worth as much as $30 million, according to notices sent to investors.
Over the years, PLI has gathered investors to buy raw land with the objective of later selling the property to developers. But in recent months, some investors have complained about the slow pace of land sales and what they called a lack of transparency around PLI’s operations. Suzanne Pittenger has said she believed PLI has “always acted in the best interest” of the company’s investors.
Attorneys who negotiated the deal for a group of major investors had raised concerns about the company’s operations, including undocumented expenses, undisclosed loans and markups applied to land purchases, according to documents sent to investors in March. An Observer story last summer detailed markups that were applied to more than a half dozen of the deals.
In August 2015, the Charlotte Republican, who is running for a third term in the 9th Congressional District, disclosed the company was the subject of a federal investigation, but he has repeatedly denied any wrongdoing. Challengers in Tuesday’s Republican primary have alluded to the probe in the campaign.
“We are pleased that matters with Pittenger Land Investments have now been resolved,” attorneys Jim Cooney of Womble Carlyle and Adam Doerr of Robinson Bradshaw said on behalf of their clients, Michael Haley and the Vineyard family. “The investors now have a new manager and more insight and rights, a solution made possible only through the overwhelming support of the investors.”
PLI said in a statement that it was pleased with the closing of the transaction, which came after investors voted down an earlier deal with South Street in December.
“PLI began its search to find a new manager over 3 years ago, and initially contacted South Street about assuming this role,” the company said in its statement. “PLI is very pleased with this transition and it represents a ‘win-win’ for all parties involved.”
The status of the company’s operations going forward is unclear. Company email addresses no longer worked on Friday afternoon.
The Observer has previously reported that federal investigators are looking into personal loans and contributions Pittenger made to his 2012 congressional campaign. The FBI and IRS are examining whether Pittenger improperly transferred the money from PLI.
Pittenger’s attorney, Ken Bell, has said that 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.