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Whatever happened to Sidney Weniger? Developer wheeling, dealing despite $66 million bankruptcy.

Whatever Happened To Sidney Weniger?

Developer Wheeling, Dealing Despite $66 Million Bankruptcy

This will be the fourth yuletide season to come and go without Sidney Weniger throwing one of his famous Christmas parties. The guest list was a veritable who's who in Arkansas business and politics.

Folks haven't forgotten those elegant soirees at the Pleasant Valley Country Club with the posh spread of fine foods and spirits laid out for the hundreds of bankers, lawyers, business people and politicians.

It was the Christmas party -- one that grew bigger and better with each passing year. "It got to be out of hand because once you invited someone you ended up inviting others, and it kept growing every year," Weniger recalls.

All good parties must end sometime and a few months before filing Chapter 11 (in which creditors list claims of $66 million against assets of $18 million) is as good a time as any.

Weniger takes exception with that figure, describing it as very inflated. Nonetheless, that's where the number stands on the public record in a Chicago bankruptcy court in the Northern District of Illinois, Eastern Division.

End To Extravaganzas

Budget cuts and austerity measures brought an end to Weniger's Christmas extravaganzas, and some wonder whether those days will ever return. At least one man believes such a comeback is possible.

"Well, if I live long enough, yes," laughs a 70-year-old wheeler dealer from New York named Sidney Weniger.

He's guarded as to exactly what he's up to these days, but will concede that he's still on the lookout for troubled or incomplete projects. That's what attracted Weniger to local developments like Vantage Point Apartments, Holcombe Heights Apartments, Riviera Apartments in Little Rock and Royal Chalet Apartments in Jacksonville.

Weniger's bankruptcy petition includes: himself, Wengroup Equities Corp., Wengroup Development Corp., Schuykill Guardian Corp., Convent Guardian Corp., Schoolhouse Apartments Inc. and Reservoir Terrace Corp.

These are but a few of the myriad of business identities that Weniger used. All of the satellites revolved around Wengroup Companies, which employed a staff of 40 at its peak in its New York City and Little Rock offices.

A creditor's committee representing a group of banks with unsecured loans that include Arkansas Bank and Trust in Hot Springs and Simmons First National Bank in Pine Bluff forced Weniger into an involuntary Chapter 7 liquidation in July. He's fighting to change that.

"I hope to reverse that decision by early next year," Weniger reports. "The things that are pending are significant."

What is the rest of Weniger's clan up to?

"Basically, I'm about to go into something, but I don't want to talk about it at this time," reports Earl Weniger, 45, a former VP with Wengroup Management. He's called Little Rock home since May 1982 and has maintained his roots here despite his father's financial travails.

His younger and lesser known siblings are Bruce, 42, an AIDS researcher in Thailand and Cynthia, 39, who stays busy working with charities in New York.

The Beginning Of Trouble

Weniger doesn't lament coming to Arkansas and ultimately making financial contacts with FirstSouth, even though that relationship proved painful when the Pine Bluff-based thrift went belly-up.

"I was able to get seven-digit financing elsewhere on a signature-only basis," Weniger recalls. "Obviously, I was doing all right before I met up with FirstSouth."

Things haven't been the same since 1986 when federal regulators took over the operation of FirstSouth. With total assets of $1.68 billion, FirstSouth ranked as the largest S&L failure in the nation at the time, but others since have surpassed that benchmark.

"Virtually on the very day that a final version of a letter of understanding between the parties was ready for execution, FirstSouth was closed down by the Federal Home Loan Bank Board, and we found ourselves back to square one," Weniger wrote in a press release after his Chapter 11 filing in February 1987.

The press release also quoted Weniger as saying, "The continuing downhill state of flux and paralysis within FirstSouth's management structure during the year, and especially since it declared insolvency in September, has made it impossible for us to take definitive actions to bolster our FirstSouth related properties or to find replacement financing."

Weniger says he was current on all of his debts with FirstSouth when the regulators cut him off from financing and demanded payment in full. Some describe the Whitehall Park project, a high-profile, big-buck development in Oak Brook, Ill., as the first domino to fall in his line of real estate ventures.

FirstSouth brought him in on this $17 million development that involved converting a former Franciscan seminary into condominiums.

With the project in chaos, Weniger couldn't understand why FirstSouth wouldn't remove Milton Zic as the developer per their agreement. FirstSouth's reasoning?

"We've been sued too many times, and we're afraid he might sue us," a FirstSouth exec told Weniger.

"You better be afraid that we're going to sue you," he responded.

Weniger made good on his threat too, filing a $25 million lawsuit against FirstSouth and its descendants -- the Federal Savings and Loan Insurance Corp., Federal Insurance Deposit Corp. and Resolution Trust Corp.

In addition to Illinois and Arkansas, Weniger had his choice of filing Chapter 11 in five other states where he has holdings -- New York, Connecticut, Pennsylvania, Florida and California.

"I hate to see anybody get into the kind of situation he's in," remarks Rick Ashley, president of Ashley Co. in North Little Rock.

A former board of director at Pulaski Bank and Trust, Weniger is considered to be gracious and honorable -- a man who was well-connected politically and businesswise and thought big and moved fast.

He is not without his detractors though. Some consider him to be arrogant and showy. His list of enemies grew after promises of payment weren't met when his financial troubles began mounting.

Collecting from him was made even tougher since he had what seemed like most of the Little Rock law firms on retainer.

"That's the only guy that's stiffed me and laughed in my face," states Clark McGlothin, president of CBM Construction in North Little Rock.

Other Weniger Deals

Wengroup ventures and/or Weniger are still listed on the county tax rolls as having an ownership position in Royal Chalet Apartments, a 90-unit complex covering 1.48 acres in Jacksonville; four condo units at Treetops and 1.34 acres of land off Sherrill Road above Rebsamen Park Road.

His first deal in Little Rock was Vantage Point Apartments, a 228-unit complex on Rebsamen Park Road formerly known as Country Club Manor.

Weniger raised eyebrows when he was able to obtain $6.1 million in loans-to-lenders revenue bonds issued to FirstSouth through the Residential Housing Facilities Board. The financing was controversial because the funds typically went to new projects, not existing ones, and there also was a requirement that 20 percent of the tenants have low to moderate incomes.

He later sold the complex through Mountain Woods Apartments Ltd. to Vantage Point Assoicates Ltd. in 1983. The project was syndicated by T.J. Raney & Sons.

Weniger's fingerprints are on a variety of other local projects that include:

* Little Rock Land Co. Medical and Commercial Park, a 30-acre development at the northwest corner of I-630 and University Avenue that is home to Doctor's Hospital, the eight-story Doctor's Office Building and the Sears Building.

Weniger was the ramrod on this deal, which closed on Nov. 1, 1978. The Associated Press picked up word of the buy and touted it as the largest real estate transaction in Arkansas, weighing in at $27 million.

The vehicle for this acquisition was Little Rock Medical Associates Ltd., which bought the development from Little Rock Land Co. -- a group of 42 doctors and dentists.

This is Weniger's biggest Arkansas deal to date, and the purchase garnered him lots of publicity and name recognition.

* Freeway Medical Building, a nine-story office condominium project. The six-acre site was once home to the ill-fated Circus Bazaar, a three-level shopping center never completed.

Weniger acquired the property for $950,000 in 1981. Freeway Medical was financed with a $12.7 million loan from FirstSouth and is now on the market through the RTC.

There's currently an offer on the project running the bureaucratic gauntlet. Insiders describe it as a 50/50 prospect that will do or die by January.

The price tag is said to top $6 million and finish-out costs could bump up that figure half again as much. The proposed acquisition involves 75 percent of the condo office building, and the would-be buyer is a local player.

* Treetops Condominiums, a 51-unit complex developed on 5.13 acres. Weniger initially financed the project through a $5.9 million loan from FirstSouth in 1980.

The bankruptcy trustee, Joseph Baldi of the Rosenthal & Shanefield law firm in Chicago, recently sold four condo units in the Treetops development for an estimated $326,000. About 32 more units in various stages of completion are for sale at the hillside project off Rebsamen Park Road.

* Brightwaters Apartments, a 256-unit complex on Riverfront Drive. Weniger bought the site for $429,000 in 1982 under the name Wengroup Riverdale Corp. and began developing the apartments with the aid of $3.65 million from FirstSouth.

Several more million dollars later, the FSLIC took over the project in 1988. At that time, the project reflected a value of $5.1 million, down from $8 million. Earlier this year, Bailey Corp. bought Brightwaters out of receivership for $5.47 million.

* Riviera Apartments, a 111-unit highrise off Cantrell Road. Weniger picked up this troubled property in 1977 from Graceland College in Iowa.

The property sold for $3.125 million to Wengroup exec Larry McCraw operating as Heartland Properties Corp. The transaction included $2.89 million cash plus 26.3 undeveloped acres in west Pulaski County near Studer Road and Ferndale Cutoff Road.

* Beacon Hill Apartments, a 168-unit complex on Reservoir Road. Weniger developed the project after acquiring the site for an estimated $350,000 in August 1985. The deal was financed with $4.85 million by FirstSouth and is now up for sale by the RTC.

* Holcombe Heights Apartments, a 125-unit complex off Rebsamen Park Road. A Weniger-led investment group picked up the development for $1.65 million in 1977 and sold it for $2.25 million in 1979.

The property came back to the Weniger group in a default and subsequently returned back to Connecticut Mutual Life Insurance. The Wilson Co. bought it for $1 million and sold it to Dr. Roy Millican for $1.7 million.

* Kramer School, a 1.48-acre property located in downtown Little Rock at 715 Sherman. Using the name Schoolhouse Apartments, Weniger bought the old educational facility from the Little Rock School District on Nov. 4, 1983 for $355,000 ($5.50 per SF). He had plans for a $2.9 million project to renovate/convert the school into a 66-unit apartment complex. On April 5, 1988, the property was turned back to Pulaski Bank and Trust, which had provided $350,000 in financing. Dr. F. Hampton Roy picked up the property a year later for $330,000.

* An 8.78 acre tract at the southeast corner of Cantrell and Rodney Parham roads. Weniger assembled the land in three purchases totaling $780,000 on Nov. 5, 1982.

The idea of developing an office park on this property was kicked around but never reached fruition. The property was tied to a $1.12 million line of credit with FirstSouth and is now in the hands of the regulators.

Deals That Didn't Get Done

Among the deals that Weniger looked at but never got off the drawing board was an exclusive residential development. Plans were drawn up for the 38-acre tract across from the new Dillard's headquarters on Cantrell Road.

The paper project included a canal link to Arkansas River for boating enthusiasts. Choo Choo Partnership, a venture by Flake, Tabor, Tucker, Wells and Kelley, has yet to unveil its development plans for the site.

In 1983, Weniger made a highly-publicized pitch to convert the old Mt. St. Mary's Academy into a 94-unit apartment complex geared toward retirement-aged tenants.

Several ideas were discussed to float the $3.5 million proposal, including a tax-free bond issue and placing the structure on the National Historic Register to qualify for tax credits.

Without the tax credits, it was reported to be just as cheap to tear down the building and build anew. Despite public outcry to save the historic structure, the Sisters of Mercy opted to raze the 75-year-old building rather than lease the property to Weniger.

Weniger also had thoughts of developing Wengroup Square Apartments, a proposed 17-story highrise at the northeast corner of Rodney Parham and Reservoir roads.

He assembled the 11.93 acres in 1979 under the name Utilities and Financial Corp. for an estimated $800,000 ($1.54 per SF). He was successful in obtaining a 75-foot waiver so the 200-foot proposal could proceed.

After the highrise project proved to be unworkable, Weniger sold the property in December 1985 to Square Associates (Ashley Co. in North Little Rock) for $1.56 million. The site is now home to Ashley Square Shopping Center.

PHOTO : MAN WITH THE UNSPOKEN PLAN: Bankruptcy proceedings have slowed down Sidney Weniger, but the 70-year-old developer still remains on the go jetting to and from business deals.

PHOTO : NEW OWNERSHIP?: Some local players are making a takeover bid on the Freeway Medical Building, developed by Sidney Weniger and lost through foreclosure. The Resolution Trust Corp. could approve the $6 million-plus deal as early as January.

PHOTO : RUSTLING LEAVES: The bankruptcy trustee overseeing Weniger's properties has finally begun to move some of the condo units at Treetops, which has suffered low sales since Day 1.
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Author:Waldon, George
Publication:Arkansas Business
Date:Dec 10, 1990
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