Catalyst for Carson Stadium Deal Has Tangled History

A developer whose deals in the 1980s sent a South Bay councilman to prison and plunged an Orange County thrift into insolvency has emerged as the catalyst for a billion-dollar proposal to lure an NFL team to a combined stadium and shopping mall in Carson.

Robert A. Ferrante, 49, would become a limited partner in the mall development--a potentially lucrative prospect he now dreams of from his trailer office on a corner of a 157-acre former landfill.

The mall is the economic engine driving Hollywood deal-maker Michael Ovitz’s flashy proposal that would not only bring NFL football back to Southern California but, Ovitz hopes, would become a Universal Studios-style resort destination. Carson is competing with the Los Angeles Coliseum and the city of Houston for the newest NFL franchise.

If the Carson deal goes forward, it would serve as a testament to Ferrante’s tenacity in maintaining ties to the property since the 1980s. It also would write the latest chapter in a most remarkable life.

An Irvine savings and loan that he owned collapsed in 1986 at an estimated cost to taxpayers of $43 million. Regulators blamed the failure largely on bad loans involving the 157-acre site in Carson. The S&L;’s collapse triggered federal criminal charges, but Ferrante was acquitted.

The Ovitz proposal marks the most recent in a series of grand designs for the property at the intersection of the Harbor and San Diego freeways--a parcel with a history as colorful as Ferrante’s.

The dump on the property closed in 1964. Since then, proposals have included a mobile home park, an auto dealership, a high-rise hotel, condominiums and a stadium for the Rams. All the proposals have fallen through.

The property also has been mired in legal entanglements. In 1986, former Carson City Councilman Walter “Jake” Egan went to federal prison after he was convicted of demanding money in exchange for his vote on a plan to build a mobile home park there.

Behind that plan was Orange County fireworks magnate W. Patrick Moriarty, whose dealings with Egan and others in the mid-1980s made him the central figure in one of the largest corruption scandals in California history. Moriarty headed a partnership that in the early 1980s leased the Carson site. He later spent about two years in federal prison for mail fraud unrelated to the Carson deal. Egan’s conviction was overturned in 1988.

Ferrante’s troubles may not be behind him.

Search Warrant Is Executed

Federal agents on March 9 executed a search warrant at Ferrante’s office trailer, carting off records and files. A onetime associate has been notified that he is a target of an investigation, sources said. Ferrante said he has not received any such notification. The scope and subject of the inquiry, which involves federal prosecutors, remains unclear.

Ovitz aides and attorneys see Ferrante’s role in the mall deal as having little relevance, if any, to the overall project. They say Ovitz and his partners have no direct legal or financial ties to Ferrante. Speaking on condition of anonymity, they downplay Ferrante’s role.

Ferrante said he understands. “They seem to attract good press,” he said. “I attract bad press.”

Ferrante was born and raised in Orange County, and still lives there. He amassed a personal fortune in real estate. Then in 1993, Ferrante filed for personal bankruptcy, listing debts of $24.2 million and assets of $777,300. In that filing, he and a colleague, Peter Sardagna, were listed as owners of nearly two dozen companies.

In 1983, Ferrante was in the news when Redondo Beach City Councilman Walter L. Mitchell Jr. was indicted by a Los Angeles federal grand jury on mail fraud charges.

Evidence introduced during the trial showed that Mitchell, a painting contractor, had accepted $108,000 in work from companies controlled by Ferrante in exchange for influencing the City Council to approve a Ferrante project to convert an apartment complex into condominiums.

Ferrante, who was never charged or called into court, has said the whole affair was a mix-up.

Mitchell was convicted and sentenced to 18 months in prison for tax evasion and six counts of mail fraud. He was released early for good behavior, and in 1989 a federal appeals court overturned the fraud convictions.

In 1984, Ferrante opened Consolidated Savings Bank in Orange County, putting up $2 million to launch it. Two years later, regulators declared the thrift insolvent.

Thus began a series of court cases.

In 1990, Ferrante settled a civil lawsuit in which federal thrift regulators had alleged wrongdoing. His lawyers contended that the government had insufficient evidence.

In 1992, Ferrante was acquitted of criminal conspiracy and fraud charges in Consolidated’s failure. At the trial, prosecutors dropped other charges. Ferrante had long denied any wrongdoing and accused authorities of overzealousness.

In 1994, a U.S. judge threw out the government’s $5 million in civil penalties against him. Ferrante’s attorneys successfully argued that the civil case violated the constitutional protection against double jeopardy.

In its brief life, Consolidated was often part of Ferrante’s other deals, investing in properties or lending on significant projects. Among them:

* Control of Pyrotronics Inc., a major Anaheim fireworks maker once run by Moriarty. Consolidated loaned the company money while Ferrante associates from Consolidated ran the company. Ottavio A. Angotti, Consolidated’s chief executive, was convicted in 1993 of falsifying the thrift’s loan records to hide proceeds funneled to Pyrotronics, then fled the country. He was captured in Hong Kong in 1996.

* Land acquisitions, including the purchase of the 157-acre Carson landfill.

Complex Legal Proceedings

In Carson, Moriarty, through a limited partnership called Casa del Amo, had leased the land in 1980, intending to build a mobile home park. That plan was scrapped because of concerns over the landfill’s underground waste.

In 1985, an entity called World Industrial Center--controlled by Ferrante and created to develop the 157-acre site--bought the property. Consolidated’s biggest asset was World Industrial Center.

Consolidated’s collapse a year later triggered a separate series of complicated legal proceedings. This go-around involved bankruptcy courts, civil lawsuits and a slew of federal thrift regulators. At the same time, Ferrante plowed ahead with plans for the site--although it now, technically, belonged to the government.

In the late 1980s, Carson Realty Projects, an investment group recruited by Ferrante, proposed an outlet mall for the site.

In 1994, Carson Realty Projects--also known as Commercial Realty Projects--obtained control of the property, buying it from the Federal Deposit Insurance Corp. for $5 million. Carson city officials had agreed to float $62 million in bonds for the mall development.

Underwriting the purchase was the Southern California and Arizona Glaziers, Architectural Metal & Glass Workers pension plan.

Ferrante said he and the pension plan’s administrator, William Seay, have long had ties. At one time, Seay was a limited partner in the World Industrial Center project.

During Ferrante’s most turbulent years--the late 1980s to early 1990s--the pension plan was there to help. In the early 1990s, the plan paid him hundreds of thousands of dollars in consulting fees, according to pension plan tax records.

Within the past few months, Seay stopped serving as pension plan administrator. He did not return phone calls.

In 1995, the property’s deed was transferred to LA Metromall, another entity controlled by the glaziers’ pension plan. It still owns the land, according to county records.

Ferrante said he believes the March search of his office trailer is connected to a government review of the pension fund’s investments.

“All I can tell you is they asked for all the documents and we provided them,” he said.

Asked--or seized? “Both,” he said. “We’re cooperating 100%.”

The cleanup costs for the landfill are estimated to be about $35 million. Needing a deeper pocket, Ferrante turned to the Columbus, Ohio-based Glimcher Realty Trust, which has extensive experience building and running malls nationwide.

In what capacity Ferrante was acting remains unclear--since the pension plan--through LA Metromall--owns the land. He said he had signed a confidentiality agreement that covers his dealings with Glimcher, and could not comment.

According to George Schmidt, Glimcher’s senior vice president and general counsel, Ferrante “brought the site” to their attention in 1996, along with another parcel in New Jersey.

Glimcher is now building a mall on the property that Ferrante showed them in New Jersey.

Schmidt said Glimcher has entered into a contract with the pension plan to buy the Carson site, subject to various contingencies. He declined to elaborate.

Ferrante, Schmidt said, “has a limited [partnership] interest with no decision-making power.” He explained that Ferrante’s interest is “to compensate him for his pre-development work in bringing the property to us.”

Development plans for the project have largely proceeded on the assumption of four components--land, mall, stadium and an NFL team. Glimcher has been responsible for the first two, Ovitz the latter pair.

This distinction is why Ovitz’s representatives stress that Ferrante’s involvement is, according to one lawyer, “just on the mall side.”

As presented to the NFL at an owners meeting last month in Kansas City, the stadium and mall were a package. The Carson stadium--which Ovitz has dubbed the Hacienda--would cost about $300 million, the mall another $250 million and the cost of a new NFL franchise could surpass $500 million.

Should the deal proceed, Ovitz and Glimcher will become legally enmeshed on any number of fronts.

For instance, should Glimcher finally buy the land, it is assumed that Ovitz would then buy or lease a portion of the parcel for the stadium, one of Ovitz’s attorneys said.

Then, the lawyer said, Ovitz and Glimcher would have to draw up contracts for matters both mundane--say, allowing football fans to park in mall lots--and profound, such as dividing the costs of the $35-million toxics cleanup.

Ferrante said he hopes the deal goes through soon--so he can stop attracting what he calls “bad press.”

“I’m a simple guy with a nice family,” he said.