Library-buying Mizels' ties to failed S&L, shady land deals

Earlier this year, the Mizel family offered $2 million to buy naming rights to the Encinitas Library.  Before locals knew what was going on, the city council had agreed in principle and directed staff to negotiate a memorandum on the terms.  The majority of the $2 million would go to the city's general fund, where it would be relatively insignificant compared to the city's vast road maintenance backlog and unfunded pensions.

If we're going to be checking out books from the Mizel Library from now on, it behooves us to learn about the people we are honoring.

Victoria Advocate, March 11, 1990:

Deals by Silverado Borrowers Outlined

HOUSTON (AP) - Four major borrowers of a failed Colorado thrift also made deals with individuals or savings and loans in Texas that did business with organized crime figures or CIA operatives, the Houston Post reported.

In a story in Sunday's editions, the Post said the borrowers at Denver's Silverado Savings and loan had dealings, though sometimes indirectly, with Robert L. Corson, a Houston developer who is the subject of two federal investigations and allegedly had connections to the CIA and Herman K. Beebe Sr.

Beebe, who was convicted in 1968 of bank fraud, had connections to 12 failed Texas savings and loans and is alleged to have ties to New Orleans mafia boss Carlos Marcello.

The December 1988 collapse of Silverado, now operating as part of Columbia Savings, the largest thrift in Colorado, is expected to cost taxpayers up to $1 billion

The borrowers -- Denver developer Bill L. Walters, Denver homebuilder Larry Mizel, Mizel's company M.D.C. Holdings and Denver developer Kenneth M. Good -- had many loans and ventures with Silverado, the Post reported.

[...]

Silverado, an M.D.C. subsidiary, and a New Mexico company that was a business partner with Corson were involved in a questionable deed transaction involving 300 Harris County homesites in 1996, the Post reported.  The M.D.C. subsidiary, Wood Bros. Homes, sold the sites to Silverado, which then sold them to Bellamah Community Development, a New Mexico-based joint venture.

No deeds of trust were ever recorded of the deals.  The brother of Larry Mizel, Steven, last year joined the board of Houston-based General Homes, which has done more than $100 million in land deals with Corson.  Steve Mizel was on the board of M.D.C. from 1985 until 1988, the Post reported.

Corson is the subject of two federal investigations involving failed savings and loans, including Vision Banc Savings of Kingsville, which went bankrupt four months after he bought it in 1986.

Corson died supposedly "of natural causes at 45" but more obviously of a drug overdose while a target of a federal investigations.  His mother, Billie Jean Garman, was sentenced to 6 years in prison after spending 10 years on the run.

More at the LA Times.

The documents show that the committee approved Silverado-Elektra's role as a phony buyer of some Houston residential lots from MDC Holdings Inc., a Denver home builder, the newspaper reported.

The SEC documents indicated that the Silverado committee knew Silverado-Elektra was to be a straw buyer. Straw buyers typically are employed to disguise property ownership and do not use their own money.

"During the course of its internal review, representatives of the party (Silverado-Elektra) that purchased the residential lots from MDC stated that they would not have purchased the lots had they not felt assured of selling them to the third party," the documents said.

The Post said previous testimony by then-MDC President David Mandarich showed the home builder wanted to sell several hundred lots in the depressed Houston market to Bellamah Homes of New Mexico. MDC also wanted to buy lots near Castle Rock from a Bellamah Homes subsidiary.

Because MDC is a publicly traded company, federal securities laws prevent it from exchanging properties with Bellamah and then recording a profit on the sale of the Houston lots.

The SEC documents indicate that MDC asked Silverado-Elektra to buy the Houston lots for $3.7 million. The same day, MDC contracted to buy the Castle Rock land from Bellamah Homes, and three days later, Silverado-Elektra sold the Houston lots to Bellamah homes, the documents showed.

The SEC disciplined MDC in September, 1989, for its handling of eight real estate transactions between 1985 and 1987, including employing Silverado-Elektra as a straw buyer and booking profits on the Houston sale. MDC neither admitted nor denied guilt but agreed to make changes in some of its accounting practices.

And still more including MDC's ties to Charles Keating, Neil Bush, and Michael Milken in the New York Times bestseller Inside Job: the Looting of America's Savings and Loans.

Wonder if any of the council members knew any of this when they jumped at the chance to rename the Encinitas Library.  And the Planning Commission, when they voted to allow the Mizels to erect two monuments to themselves on city trails.

Once the precedent for selling naming rights in Encinitas has been set, maybe we can go for some serious money. Do you think Angelo Mozilo or Franklin Raines might be interested in paying $10 million to rename Moonlight Beach or Swami's?