Major Pasadena Project Reported in Financial Peril : Developer Keeps Silent on $42-Million Marketplace
Flamboyant developer John Patrick Wilson is uncharacteristically silent these days about plans for his $42-million Pasadena Marketplace, an ambitious and much-publicized shopping arcade that appears to be in financial peril, some present and former business associates and city officials say.
The 46-year-old multimillionaire, who wants to build a 350,000-square-foot mall in a downtown district where a block of dilapidated, but historically significant buildings now stands, refused comment last week on reports that the marketplace is running short on cash and that he has let much of his office staff go.
It is one of the few times that Wilson has had little to say since he began lavishly touting the project almost a year ago.
Creditors say that Wilson is looking for a new, major source of funding because he may lose the backing of one of the largest financial investors and property holders in the project. They also say that Wilson is far behind on payments owed them for services associated with the development and that Wilson has fired or laid off most of his office staff because of financial problems. One creditor, who built a replica of the marketplace, has sued Wilson over a $16,000 bill outstanding since July.
City officials said last week that they were “very concerned” after hearing such reports from various sources but said that Wilson has not informed them of any problems, nor is he required to do so at this point in the development’s planning stage.
“I think the matters are quite serious,” said City Director Bill Thomson. “I don’t know where John expects to get his financing. I think if he doesn’t have his financing in place in two or three weeks, the whole deck of cards may begin to crumble. It is a subject of much concern to the city board.”
Heralded by city officials as the bellwether development in Old Pasadena, a downtown redevelopment area where chic shops and restaurants are springing up in the midst of seedy bars, transients and drunks, the marketplace is one of the biggest projects ever undertaken in the city.
Although Wilson refused to speak to a Times reporter, some of his creditors and former associates have begun to speak out.
Doug Yates, president of Model Technics Inc. in Newport Beach, built the replica of the marketplace that Wilson proudly showed city officials last year during his high-profile campaign to gain conceptual approval for the development.
Yates, who claims that Wilson has yet to pay him $16,000 of a $35,000 contract for the model, has filed suit against Wilson in Orange County court for breach of contract. Like some others who have worked with the developer, Yates said Wilson’s arrogant business demeanor left considerable rancor between him and the developer.
“It was so bizarre working for him,” Yates said. “There were people who worked for him who put their hearts and souls into this project. Then John would turn around and just humiliate them and run them into the ground. I’ve never seen anyone treat people the way he did.”
City officials said that they are keeping a close eye on the project because Pasadena has already issued $23.5 million in certificates of participation to finance two public parking structures near the marketplace site. The structures would be filled largely by the cars of marketplace shoppers. If the marketplace is not built, city officials said they may have to delay building the parking structures.
The marketplace is designed to house a 40,000-square-foot Irvine Ranch Farmers Market, four movie theaters and up-scale shops like Papagallo and Capezio. There would be skywalks between the buildings and three trolley cars would circle the block bounded by Colorado Boulevard, Fair Oaks Avenue and Holly and DeLacey streets.
Conceptual Approval
Wilson, who received conceptual approval in July for his project, had said then that his final blueprints would be back before the Community Development Committee in January for 100% design approval--the point at which he must show proof of financing for the project to obtain building permits. Wilson, however, is behind schedule on his final plans and is expected to submit them later this month, city officials said.
According to two of Wilson’s creditors who say they are owed a total of about $10,000, the developer sent letters to those who provided service to the marketplace saying that payments would be delayed for 30 to 60 days because his property management firm, Original Downtown Pasadena Co., had not been reimbursed by the owners of various downtown properties for December and January construction costs. “I can assure you we are doing everything we can to get full payment to you as soon as possible,” the creditor quoted from letter. Besides the marketplace, Wilson has 14 other office buildings and projects under way in the downtown area. He and his two partners, Al Ehringer, president of Grand American Services, Inc. and the Omelette Parlor restaurant chain, and Robert Morris, proprietor of Gladstone’s 4 Fish restaurants, oversee the developments under the auspices of the Original Downtown Pasadena Co. The two creditors, who asked that their names not be used because they are still awaiting payment from Wilson, said last week that television producer Garry Marshall, a limited partner in the marketplace development, is the major financial backer who now wants out of the project. Marshall could not be reached for comment.
Property records show that Marshall and Grand American Services Inc. hold all of the land designated for the Marketplace, as well as other Pasadena properties. A local newspaper reported two weeks ago that Wilson denied that Marshall was pulling out of the marketplace deal.
New Source of Funding Hinted
Bob McClellan, whose architectural firm is preparing the working drawings for the marketplace, said last week that Wilson told him Marshall was not withdrawing from the partnership and that a new, major source of funding for the project had been found.
McClellan said the new partner was a “heavy duty” developer with a “long track record in Orange County.” McClellan declined, however, to identify the developer because he said he had been sworn to secrecy by Wilson.
City Manager Donald McIntyre said that Wilson has told him that the new source of funding will be announced next week. Although McIntyre said he was concerned about Wilson’s present financial problems, he added that “I’m confident that John will get his financing together and go ahead with the project.”
Said City Director Thomson: “It would be extraordinarily unfortunate if it did not succeed. That is the anchor of Old Pasadena. It is a very important development.”
And Wilson, amid much publicity and hoopla, has always touted it as such.
Last April, he threw a lavish party and parade to unveil the trolley cars. Signs promoting the event were displayed in shops across the city. Advertising packages containing a slick, seven-page brochure, maps, photos and press releases were mailed to all local newspapers.
$185,000 party
One former associate of Wilson’s said the party cost $185,000.
In July, when Wilson appeared before the Community Development Committee seeking conceptual approval for his project, a standing-room-only crowd of more than 100 supporters filled the hearing room and tried to force the committee to approve a drastically changed set of plans that it had not had a chance to review.
Wilson’s plans were eventually approved but not without considerable opposition. Originally, Wilson had said he would restore all of the buildings, but in July he presented a plan that would gut them while leaving the facades intact.
The buildings, most of them erected in the 1890s and all but one listed on the National Register of Historic Places, became the focus of controversy between Wilson and preservation groups like Pasadena Heritage and the city’s Cultural Heritage Commission.
The groups want to see the buildings, which include the old City Hall and the Ritz Hotel, restored. They remain doubtful, despite assurances from Wilson, that the facades will remain standing if the interiors are gutted.
In addition to helping rehabilitate Old Pasadena, Wilson has projected that the development’s license and permit fees alone will bring the city more than $1 million. He also estimated that Pasadena’s yearly share of sales tax revenues would bring an additional $975,000.
Legendary Reputation
Although this is Wilson’s first development project, his business reputation is legendary.
Articles about him have appeared in magazines like Fortune and Newsweek. A college drop-out from Yreka, he became a multimillionaire in the l970s by auctioning antique furnishings and real estate.
He started with toilets. At his Golden Movement Emporium in Santa Monica, Wilson auctioned everything from toilets to Tiffany stained-glass ceilings. Dancing girls gyrated on stage during the bidding, champagne and drinks flowed, and Wilson served lobster, shrimp, steak and pastries to his clients.
He was dubbed the “P.T. Barnum of auctioneering.”
Wilson has said that he gave up auctions in the late l970s in favor of development projects.
Besides his auction business, Wilson and his partner, Al Ehringer, bought up about 22 buildings on Main Street in Santa Monica, refurbished them and resold most of them, and propelled a revitalization of the street which pitted residents against business owners.
Often on Opposite Sides
Rev. Jim Conn, now a Santa Monica councilman, was part of the rent control movement at that time and said he often found himself on the opposite side of Wilson’s business dealings on Main Street.
“He was the kind of man who when he evicted the rent control office (after buying the property on Main Street), he came in with an ax and personally demolished the walls of those offices,” Conn said.
Conn, who was in the office at the time, said he remembers Wilson screaming, “ ‘No one will ever remember that there was a rent control office in this building.’ Things were flying,” Conn said. “And this was as people were still moving out.
“He certainly didn’t leave behind a community of people who missed him.”
