Charlotte-based South Street Partners is in talks to become the new manager of properties overseen by U.S. Rep Robert Pittenger’s former real estate firm.
Robert Pittenger founded Pittenger Land Investments three decades ago but transferred the company to his wife, Suzanne Pittenger, to comply with House ethics rules after he was elected to Congress in 2012.
The Charlotte Republican confirmed in August that the company is being investigated by the FBI but has denied any wrongdoing. The Observer has also reported that some investors have been unhappy with the company’s recent performance.
South Street Partners “reached out to Suzanne Pittenger for the first time on Aug. 24 after reading about Pittenger Land Investments, and we have expressed interest in taking over PLI’s role as administrative manager,” South Street managing partner Patrick Melton told the Observer on Tuesday. Suzanne Pittenger did not immediately respond to a request for comment.
The company is in “preliminary discussions with PLI and many of their investors,” he said. Melton said he couldn’t comment on a timeline for a possible deal.
South Street, founded in 2009, is best known for buying the developer of South Carolina’s Kiawah Island in 2013.
Pittenger Land Investments identifies raw tracts in potential growth areas and gathers investors to buy the properties, which are held by limited liability companies. The goal over time is to make a return by selling the properties to developers. As manager, PLI also collects annual fees from investors for property taxes and other expenses.
This year, the company stopped buying new properties and instead has focused on selling its existing portfolio. PLI explored a deal with a Florida-based company called Landeavor but canceled the transaction in August after concerns from investors.
The Observer reported last month that Suzanne Pittenger had begun the process of finding “a new and well-qualified real estate developer” to succeed her as administrative manager, according to a letter signed by some of the company’s investors, including state Sen. Bob Rucho and former Gov. Jim Martin, both Republicans.
Melton, the South Street managing partner, said his company is interested in all 52 PLI properties but “wouldn’t necessarily need to take over all of them.” If a deal goes through, South Street would look to sell “market-ready” properties immediately but could hold onto others, he said.
“We would do what the investors want us to do,” he said.
Melton did not disclose terms of a possible deal but said it’s possible South Street could assume part of the 10 percent stake that PLI holds in each LLC. That interest represented a profit that PLI could make once it successfully sold a property.
The Observer reported last month that federal investigators are looking into personal loans and contributions Robert Pittenger made to his 2012 congressional campaign. The FBI and IRS are looking into whether Pittenger improperly transferred the money from PLI.
Pittenger has said he “acted with integrity in all respects and has consulted with multiple attorneys concerning the funding of his political campaign.”
Some investors have also told the Observer they were unhappy with the way PLI has handled their investments, including marking up the price of land that was sold to the LLCs. Robert Pittenger has said the markups were standard procedure and fully disclosed.
Investor Mike Haley, a former McDonald’s franchisee with ties to Greensboro, has served as a rallying point for upset investors. He and two family trusts have stakes in 38 LLCs.
Representatives for the trusts have been requesting documents from PLI and raising questions about its accounting, record-keeping and fees charged to investors. They are also seeking more information about loans that were made between the LLCs and PLI, according to a letter sent to investors.