A private landowner in western
Kuldip Verma, CEO of Vermaland LLC, is putting more than 1,900 acres up for bid in an effort to lure solar companies off the fence to start building. The parcels are spread from the
“We have found that they’re always waiting on something or another,” he said.
The land rush for solar companies looking for sites has been going on for several years.
So far, nothing has been built along what some state officials hope to develop into one of the largest solar power corridors in the world. Tight financing has bogged down projects, but recently it has begun to loosen. Potential federal loan guarantees, part of the American Recovery and Reinvestment Act of 2009, also may aid projects.
This may be the first time, however, that a private landowner will try to auction parcels to solar companies. And potential buyers need to be aware of several issues before purchasing that land.
“There really is a relatively narrow band of land available for solar development,” said Roger Ferland, an attorney who heads
Water rights and access to the power grid are a few challenges solar companies must deal with when hunting for a site, Ferland said. Vermaland’s acreage, currently used for cantaloupe farming, has water rights and access to the grid.
Buyers will have to deal with size issues, however. Utility-scale solar power plants typically require about 1,900 acres to provide 200 to 300 megawatts of power. Vermaland’s parcels range from about 80 acres to about 800. Still, Verma said he believes they could be used for smaller projects or combined with neighboring parcels. Ownership of that land runs the gamut from private holders to state and federal governments.
Vermaland bought the parcels about three years ago, when the company was looking for an area specifically for investments in solar technologies. Prices have come off their peak, and Verma said he’s more interested in getting solar companies to come to the table than turning a quick profit.
The parcels are priced below comparable properties, ranging from $1,600 to about $7,000 per acre, he said.
The company already has sold some of its more than 10,000 acres to solar developers with agreements to produce power for California-based utilities. About 40 people from various solar companies are interested in the parcels to be auctioned, said Anita Verma-Lallian, the company’s marketing director.
“A lot of companies are wanting to come here and export power to
Public land auctions still may be a year away. The Arizona State Land Department has cooperated with the U.S. Bureau of Land Management and a private landowner on the Dry Lake Wind Project in northeastern
“We’re hoping to get our land to market so we can be competitive with the private owners,” she said.
With financing issues temporarily shelving plans for many developers, the State Land Department wants to make sure it issues leases to viable projects that could last 50 years or more, Hogue said.
The BLM has numerous applications from a wide range of solar developers, with a heavy concentration of
Solar development companies have been submitting applications since 2007 for the parcels, and the combined development could yield more than 24 gigawatts of power — about 40 percent more power than Arizona Public Service Co. and Salt River Project combined are capable of producing or can buy on contract.
One of the challenges for BLM in granting right-of-way easements for the projects is making sure the companies are
capable of moving forward before the 20- to 30-year options on the land are granted, said Julie Decker, the
“You have to use (the land),” she said. “You can’t just sit there.”
Both BLM and the State Land Department said applications have decreased as the recession has gripped the credit markets, but there have been signs of increasing interest as the credit markets loosen.
Vermaland hopes the auction will increase interest by solar companies and get parcels moving closer to development, Verma-Lallian said.
“I think we’re trying to be a lot more proactive about getting solar companies to come to
SOLAR LAND AUCTION
What: Vermaland LLC is auctioning five parcels of land totaling about 1,900 acres in western
When: June 6, 1 p.m.
Where: Sheraton Crescent Hotel,
WEb: www.vermaland.com
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The RLB Quarterly Construction Report attributes the decline in construction cost indices here and throughout the country largely to decreasing structural steel costs, but also to lower bids submitted by suppliers and contractors hungry for work.
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The average construction cost of prime office space in
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Scottsdale real estate developers and shopping center owners Ron Barness and Alex Papakyriakou are facing three lawsuits related to almost $9.5 million in loans from an Oklahoma bank to the pair’s real estate partnerships. The two men also are defendants in three investor lawsuits claiming they mismanaged investments in their retail real estate endeavors.
The developers are trying to settle the investor complaints, according to several attorneys familiar with the cases. In 2008, the pair settled a similar investor suit out of court.
Barness and Papakyriakou, principals of Scottsdale-based
The pair also are involved in a number of Phoenix-area charitable organizations. Barness, for example, is active with local Jewish community causes and helped raise money for Arizona Sen. John McCain’s 2008 presidential bid.
Papakyriakou also goes by the name Alex Papas.
The
“We cannot comment on the record,” Manning said.
RBI and Barness’ charitable foundation did not respond to requests for comment. No official response to the lawsuit was filed by the defendants by press time.
INVESTOR CLAIMS
The investor lawsuits were filed in Maricopa County Superior Court against Barness and Papakyriakou’s real estate businesses.
Those three investor claims may be consolidated under Maricopa Superior Court Judge John Buttrick and settled together, according to legal sources who would not go on the record.
Barness and Papakyriakou’s attorney, Jeffrey Leonard, said he expects the investor lawsuits to be resolved soon. He said the resolutions would be via mutual agreement, but declined to say whether they would involve out-of-court settlements.
Leonard also would not comment about the resolution or settlement of the 2008 investor lawsuit. Barness and Papakyriakou did not comment for this story.
Other lawyers familiar with the investor suits said a settlement is being negotiated.
Robert Mitchell, the investor/plaintiff’s attorney in the 2008 claim against Barness and Papakyriakou, said he could not comment. “All I can tell you is that the case was dismissed,” he said.
The 2008 case claimed Barness and Papakyriakou deceived investors with self-deals and misrepresented sales and financial proceeds.
One of the 2009 in-vestor suits was filed by
The Laufer suit also contends Barness and Papakyriakou improperly used investment money in some deals between business entities they owned, and that the sales benefited the defendants but not the investors. The suit claims fraud, breach of contract and failure to meet fiduciary responsibilities.
Plaintiffs in the Laufer case say they invested $1.3 million in Barness-Papakyriakou real estate endeavors. Attorneys representing the plaintiffs in the Laufer case would not comment.
A second investor suit, filed by the Eugene and Lenore Schupak Family Trust, claims the trust invested
$10.4 million in Barness- and Papakyriakou-owned shopping centers in
The Schupak lawsuit claims Barness and Papakyriakou improperly commingled investment money, conducted deals in which they used investors’ dollars to purchase or invest in other entities owned by the defendants, and used those self-deals to collect management and broker fees. The complaint also contends the two defendants used investment entities and properties to secure loans for their personal benefit. The suit charges the defendants with fraud, misrepresentation and breach of contract, according to the case filings.
Andrew Abraham, an attorney representing the plaintiffs in the Schupak matter, declined to comment on the case, including what damages his clients are seeking.
“We have no comment on the matter we’re handling,” Abraham said.
The third suit was brought against Barness and Papa-kyriakou by investors Madeline, Nanci and Carly Goodman. Details of that claim were not available. Ivan Mathew, the
FIDUCIARY DUTY
“It’s not illegal as long as it’s adequately disclosed,” Dauber said of self-deals.
The Bank of Oklahoma and the three 2009 investor cases are active and have not yet been dismissed or finalized, according to the Superior Court docket.
Barness and his wife, Daron, head the Daron and Ron Barness Family Foundation. Ron Barness also is chairman of the American Israel Public Affairs Committee in
Papakyriakou and his wife, Roxane, also have a charitable foundation: the Alex and Roxane Papas Family Foundation.
RBI is named in the Laufer lawsuit, but none of the other claims. Barness and Papakyriakou, their spouses and the various real estate partnerships they are involved in are named in all of the pending suits.
LOCAL HOLDINGS
Locations of shopping centers owned by Barness and Papakyriakou business entities:
•
• Union Crossing,
• Southwest corner of 43rd and
• Southwest corner of Gilbert and Guadalupe roads, Gilbert
• Southwest corner of 75th and
Sources: Court documents, Retail Brokers Inc.
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