The real estate company owned by U.S. Rep. Robert Pittenger’s family has pulled back from a deal to sell property to a Florida company after investors raised questions about the terms of the sale.
Pittenger, a Charlotte Republican, confirmed Tuesday that the FBI is looking into Pittenger Land Investments but said he was confident that he and the company he once owned have done nothing wrong.
An FBI spokeswoman declined to comment. It is unclear if the proposed deal with Tampa-based Landeaver has any connection to the FBI’s probe.
The company has struggled to sell properties it has acquired over the years because the land does not have zoning and other approvals that make the parcels ready for development, according to documents and emails obtained by the Observer, as well as interviews.
Three of the company’s investors told the Observer they put money into properties years ago, but they have received little to no return. In the meantime, they have been paying property taxes as well as management fees to Pittenger Land Investments. The investors agreed to talk about their personal finances only on the condition of anonymity.
Pittenger said he sold his part in the business 21/2 years ago before taking office as the representative for North Carolina’s 9th District. His wife, Suzanne, is CEO of Pittenger Land Investments.
“PLI serves at the benefit and service of our member-partners,” Suzanne Pittenger said Wednesday in an email to the Observer, when asked about the proposed sale to Landeavor. “We provide them offers from potential buyers, and they have the choice to accept or reject the offer. The decision is theirs.”
According to documents obtained by the Observer, Landeavor proposed taking seven-year options to buy properties or to sell them to another party. But investors expressed concerns about the terms of the complex deal and the speed at which they were being asked to approve it.
“We have had significant concerns and confusion expressed in regard to the Landeavor proposal,” Suzanne Pittenger wrote in a memo emailed to investors Tuesday evening. “While negotiations have been conducted in good faith in an effort to achieve results we believe to be in the best interest of all member-partners, there appears to be substantial sentiment for maintaining the status quo.”
The memo indicated the company is ending discussions with Landeavor and will work with brokers for the sale of its individual properties. Landeavor did not respond to requests for comment.
In a July memo to investors, Suzanne Pittenger said the family’s interest was aligned with investors because it has $4 million of its own money invested in the properties and a right to share in any profits.
In the past year, the company’s staff appears to have grown smaller. While seven staff members were listed on the website earlier this year, as of Wednesday, two staff members – Suzanne Pittenger and an administrative manager – were listed.
Suzannne Pittenger is the daughter of the late Cy Bahakel, who founded Bahakel Communications, which owns radio and TV stations, including WCCB.
Son Bobby had once been Pittenger Land Investments president but now works at Bahakel.
In a statement, Bobby Pittenger said he left the company 10 months ago to run the real estate portfolio at Bahakel “and to spend more time with our five children, but am grateful for my previous time at PLI and especially the privilege of serving the investors during my tenure.”
Some investors the Observer interviewed Wednesday said they were puzzled by Bobby Pittenger’s departure from the company. One investor said the younger Pittenger appeared to be running Pittenger Land Investments after his father was elected to Congress.
“He very definitely was the … guy at all the sales events – the guy who negotiated the deals,” said the investor, who said he put $25,000 into a tract of land in Raleigh about three years ago. “He ran the sales events. He spent time pressing the flesh. All of the emails and communication came from Bobby.”
A complicated deal
Pittenger Land Investments, founded by Rep. Pittenger after he moved to Charlotte in 1985, raises money from investors to buy undeveloped land. The company then holds those tracts in individual limited liability companies – corporate records show almost 60 such LLCs – and attempts to sell the land to developers at a profit.
A brochure on the company’s website says it has earned annual returns of 18 percent for its investors.
The investors include some well-known local names, including Republican state Sen. Bob Rucho, Donna Lewis, wife of former Bank of America CEO Ken Lewis, and Katie Belk Morris, who chairs the Belk Foundation board, according to emails obtained by the Observer.
“That’s the first I’ve heard of it, and I don’t have anything to say,” Rucho said Wednesday of the FBI probe. Lewis declined to comment; Morris could not be reached.
As an example, one of the companies Pittenger Land Investments uses to hold property is named Highway 218-Mill Grove Road LLC. Records show it owns 304 acres off N.C. 218, southeast of Charlotte. Under the proposal obtained by the Observer, Landeaver would have a seven-year option to buy the land, during which time Landeavor would pay property taxes and work to get the land ready for development. The deal, however, didn’t require Landeavor to purchase the properties.
An investor the Observer spoke with said similar offers were made by Landeavor to purchase Pittenger Land Investment’s other properties, held in the various LLCs.
To help win support for the deal, the company last month sent letters to investors from Charlotte brokers John Culbertson of Cardinal Partners, Bailey Patrick of MPV Properties and residential developer Stephen Pace of Pace Development. All three letters, dated in early July, stressed the importance of getting the land ready for developers, a task that would be handled by Landeavor.
The three didn’t return messages seeking comment Wednesday.
“Finding a future buyer for each of the properties is challenging under circumstances outlined by the letters from Stephen Pace, Bailey Patrick and John Culbertson,” an email the company sent to investors read.
Staff writer Jim Morrill contributed.