With construction of U-T San Diego publisher Douglas Manchester's convention hotel in Austin, Texas finally underway, some details of its unusual non-bank financing have become public.
As previously reported here, the hotel project broke ground last month after troubled asset mogul Thomas Barrack, famous for bailing out the late pop star Michael Jackson and celebrity photographer Annie Leibovitz, announced his Colony Capital would finance the project.
"We are looking forward to yet again working with 'Papa' Doug, his son Doug and Fairmont [Hotels] in the dynamic, growing city of Austin,” U-T quoted Barrack, a University of San Diego 1972 law school grad, as saying in an October statement.
The paper provided no details regarding terms of the deal. Manchester had long struggled to find enough cash to get the project off the ground.
"As a rule, Barrack is drawn to distressed situations," according to a New York Magazine profile from October 2010.
"One of the adages in a list of 'rules for success' that he sometimes distributes to employees is 'befriend the bewildered.' And when you start applying the thought process of a vulture investor to pop culture, suddenly the world can seem dizzy with opportunity."
"The inaugural Colony transactions mined the S&L crisis by buying packages of bad loans from the FDIC at bargain prices," the magazine reported. Jackson's bizarre demise also turned out propitiously for the financier.
“What’s amazing,” Barrack told the magazine, “is he attained in death what he could never attain in life.”
According to a document filed with the Travis County recorders office in late October, a Delaware corporation by the name of ColFin Fair Austin Funding has come up with a loan of $295 million for the hotel. The address of ColFin, apparently short for Colony Financial, is listed as Barrack's tony headquarters in Santa Monica.
U-T's October story said Hunt Construction Group had received a $247 million contract to build the project.
The identities of any others who might have an interest have not been revealed. The original developer, Manchester Texas Financial Group, LLC has handed its ownership over to a new Delaware corporation, Manchester Austin, LLC, according to Travis County records. The chief executive of both entities is listed as Richard Gibbons, second in command of Manchester's Mission Valley-based operations.
As reported here in June 2013 by Don Bauder, the U-T publisher earlier had tried to tap money from wealthy Chinese investors through a controversial federal program allowing families to buy their way to green cards insuring permanent U.S. residency by investing $500,000 in so-called job creating projects.
A brochure pitching the project to the would-be investors called Manchester "the leading conventional hotel developer in the United States."
Photos of the heavy-hitting Republican contributor standing with ex-GOP presidents Gerald Ford, George H.W. Bush, and his son George W., were included. Also featured: shots of Manchester with ex-California Republican governor and movie action hero Arnold Schwarzenegger, as well as Pope Benedict XVI.