Do developers lie even more than realtors?
Denver Post - Denver Landmark developer Zachary Davidson’s fall from grace:
“But Davidson wasn’t everything he appeared on the surface — a fact that became tragically clear when he took his life Jan. 8.
His audacious plan grew in scope to a $500 million development of condos and luxury homes, but he was in over his head and, Arapahoe County prosecutors say, embezzling money.
Davidson became known for his over-the-top parties designed to sell properties and a luxury lifestyle normally reserved for ritzy hotels, but the money he spent wasn’t his.
The Landmark began to unravel in 2008 amid the real-estate crash, and Davidson and his companies filed for bankruptcy over the next two years. Lawsuits and a criminal indictment followed.
Accused of stealing $3.1 million in public funds and on the run from authorities, Davidson last month drove his silver 2003 Mercedes to a state forest in northern Florida’s Hernando County and hanged himself from a tree.
As a newcomer to Denver, Davidson threw a series of increasingly lavish parties to boost his reputation and draw attention to his development.
Davidson boasted to The New York Times in late 2008 that he spent $3 million on 13 parties over the years. One of his first in 2006 set up tents and hosted former Cirque du Soleil performers, creating a buzz among brokers, buyers and investors.
The 135 condos in the first Landmark tower were snapped up on the day they hit the market. The 141 units in the second tower, called the Meridian, took longer to fill, but presales eventually reached high levels.
The project’s design won multiple national awards and maintained a high price per square foot as other developments faltered. That success emboldened Davidson to push forward with the Landmark’s second phase. The European Village was an 11.4-acre planned development of 240 homes based on continental designs that topped out at $3 million for nearly 5,000 square feet.
A 2007 fete to promote the European Village was among the most extravagant he hosted. It offered guests chateaubriand, veal scallopini and lobster salad piled high in martini glasses.
Davidson loaded the model home with artwork and valuable antiques designed to impress. He flew in a rock violinist from Atlanta to entertain the crowd of 700 and gave guests a giant bouquet of market-fresh flowers and a stash of Belgian chocolates on the way out.
“He was an incredible showman. Who in Denver has thrown parties of that magnitude and created a brand that was unmatched?” said Werner, who compared Davidson to the Great Gatsby.
When Davidson couldn’t get the high-end microwaves promised to condo buyers, he put false labels on cheaper models and ended up the subject of a Channel 7 investigative report.
To avoid paying for expensive bathtubs, he copied a high-end design and had a factory in China create a knockoff. Davidson had to replace the tubs and settle a lawsuit with the manufacturer.
Johnson said he advised Davidson to complete and sell out one tower before moving forward on the second, but he refused. Others later warned him he was too stretched to move forward with the European Village.
He argued that wealthy buyers could weather any downturn and took a seven-person design team on a 10-day trip through Europe to study classical architecture.
Despite being severely behind schedule, Davidson would have his construction crews drop everything to set up for the promotional parties.
Unfinished condos meant sales couldn’t close, leaving less money to pay contractors, Johnson said. More buyers dropped out as the delays got longer.
Curtis said her building came in 18 months late, a delay that cost her $1.7 million extra and pushed her into the heart of the mortgage crisis.
“Our relationship started to fracture. He shoved me into such a difficult, difficult position,” Curtis said.
Davidson seemed blind to the harm his delays were causing. He offered to bring Jay Leno out for the grand opening of the Comedy Works South, which would have cost $250,000 or more, Curtis said.
Like so many other broken promises and grand gestures Davidson made, he didn’t follow through.
“He had attributes of a megalomaniac,” she said.
“I think his ego got the better of him as the project went on,” Johnson said. “It was almost like he was a rock star with the hangers-on.”
Davidson would always pick up large tabs for his entourage at frequent visits to Denver’s finer restaurants, Curtis said. He furnished his home with the expensive antiques bought for the Landmark and would later sell them on consignment under his own name, bankruptcy records allege.
The grand-jury indictment claims Davidson was taking more than $90,000 a month in payments from various accounts.
In his February 2010 personal- bankruptcy case, Davidson reported $1.3 million in assets and $164.6 million in liabilities. Despite that huge shortfall, he tried to get the court to declare his wine collection as provisions or food exempt from creditors. He purchased a used Maserati for $60,000, perplexing family and friends.
A family member, who asked not to be named, said Davidson wiped out his mother’s $200,000 in life savings on fix-and-flip deals gone bad and other failed ventures in the final years of his life.”
http://www.denverpost.com/business/ci_22656011/fall-from-grace-zach-davidson-landmark-denver
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