SPECIAL REPORT: Financial travails dog ‘mystery man’ at helm of Premier Properties

Christopher P. White is arguably the city’s most daring real estate developer.

He’s working on
plans for more than 5 million square feet of space, including massive deals in Las Vegas and Orlando
and the $750 million Venu project in Indianapolis. He’s known in industry circles for ferrying
business associates in his private jet, throwing lavish parties at his Lake Clearwater home, and pulling
off seemingly impossible deals.

But the 50-year-old developer has another side, too.

An IBJ review of hundreds of pages of public records shows White and his Premier Properties
USA Inc. are facing major financial and legal challenges. The most glaring signs of trouble: Contractors have filed
more than $3.5 million in liens against Premier’s retail properties in Plainfield; the state of Indiana is trying to
recover $375,000 in sales taxes on White’s airplane; and the contractor who renovated his house is suing him to recover
more than $600,000 in unpaid bills.

White also has agreed to pay an undisclosed sum to settle a dispute with his former partner,
David Zoba, who in court records describes a “cash crisis” at Premier caused in part by White’s
unrealistic ambitions.

In an interview with IBJ, White said the legal and financial
problems do not affect the viability of Premier Properties, the 15-year-old company that developed Metropolis
in Plainfield. Premier employs more than 300 people, including about 80 at its local headquarters.

White
said the latest round of trouble began when credit markets seized up after the subprime mortgage meltdown—forcing Premier
to take a new look at its financing structure. Still, he said the company is on track to close on permanent loans and pay
its contractors by the end of the year.

“We’ve got a lot of little things we’re cleaning
up,” said White, Premier’s founder and CEO. “It hasn’t been a fun time. I’ve worked 13-, 14-hour
days.”

White’s aggressive approach to development—acquiring properties all over the country
and buying out rival projects such as a Whole Foods development near his proposed Venu—leaves little margin for error,
local real estate brokers and developers say. If everything doesn’t fall into place, bills can go unpaid.

That,
coupled with the credit-market turmoil, raises questions about the company’s ability to complete Venu—a
2.4-million-square-foot retail, office and residential behemoth proposed for the southwest corner of 82nd Street and Keystone
Avenue.

Yet White said he is plowing forward, even if he has to build the project in phases. A site plan
at Premier’s Woodfield Crossing headquarters already lists four Venu anchor tenants: Whole Foods; Barnes & Noble;
REI, an outdoor-gear superstore; and Arhaus, an upscale furniture retailer.

‘Mystery man’

White said he prefers the spotlight shine on Premier and not on himself. That’s why he didn’t
give the company his name and why he would not allow IBJ to photograph him for this story.

But avoiding the public eye is becoming more difficult as White develops higherprofile projects
like Metropolis and Venu. His desire for privacy also has helped fuel talk that he’s a playboy
and a partier.

He acknowledges throwing some wild parties in the past. He has hosted gatherings
with more than 400 guests at his home—including one featuring topless mermaids—but said he
doesn’t do that anymore.

These days, he’s all business.

“I’m
single for a reason,” said White, who is divorced. “There’s no woman who would marry me because I work too
much.”

White was born and raised in Indianapolis. His father was a city planner and his mother a
Christian Science practitioner. He attended Lawrence Central High School and earned an accounting degree from Indiana University.

He tried his hand at running health clubs, but that business failed. Eventually, he became a real estate
broker with locally based Cornerstone Cos. and taught himself—through trial and error—how to develop land.

He’s had some tough years. Court records show White filed for bankruptcy in December 1988, although he
told IBJ he later withdrew the case. In 1990, the Internal Revenue Service placed a $19,983 lien on his home (before
he moved to Lake Clearwater) to recover unpaid taxes; it released the lien in August 1995.

As a developer, White mostly flew under the radar until he built Metropolis, a project few took seriously.
The $120 million Plainfield lifestyle center anchored by J.C. Penney and Dick’s Sporting Goods
has stoked a frenzy of retail interest in the area.

“The guy’s a mystery man,” said Cornelius
“Lee” Alig, a principal in locally based Mansur Real Estate Services. “Metropolis was
a huge hit in a market that was overlooked. He caught everybody by surprise.”

Slow to pay

Still, success doesn’t come cheap, and Premier has struggled to keep up.

In 2004, contractors filed
a round of liens for work on the company’s Plainfield projects, which eventually were paid. Premier
faced and satisfied liens on Echelon, its strip mall near the intersection of 82nd Street and Allisonville Road.

Contractors file liens on property when they haven’t been paid for their work. Liens, which must be filed
within a few months of the work’s completion, typically are seen as adversarial because they limit the owner’s
ability to find permanent financing.

More than $3.5 million in active liens remain on Premier’s projects
in Hendricks County. Indianapolis-based Rhino Excavating LLC has filed four liens totaling more than $2.8 million for work
on Plainfield Commons and Metropolis.

Other contractors who have active liens include Indianapolis-based
Milestone Contractors LP, which is owed $254,000; Indianapolis-based Charles C. Brandt Construction Co., $224,000; Massachusetts-based
ZVI Construction Co., $203,000; and Indianapolis-based Artistic Concreations and Faux LLC, which is seeking $50,000. Some
contractors who are owed money have not yet filed liens.

Premier has borrowed money for its projects from
several institutions, according to debt filings required by the state. They include New York-based Column Financial, a subsidiary
of Credit Suisse; New Yorkbased Hypo Real Estate; and Columbus, Ind.-based Irwin Union Bank.

One filing
in particular illustrates Premier’s recent struggles. Just this year, the company has reached four separate agreements
modifying a $10 million loan with Kansas-based Hillcrest Bank, each extending the maturity date for a hefty fee. On Sept.
10, for example, Premier agreed to pay more than $100,000 to delay the loan payoff to Aug. 31, 2008.

The
delay is not a prudent move and likely is a sign of a cash-flow problem, said a local real estate broker who spoke on condition
of anonymity. Every developer takes risks, but White seems to operate more on the edge than most.

“As
a developer, you have to keep expanding and adding projects to stay alive,” the broker said. “The temptation is
to use money from a new deal to clean up an old deal.”

Despite its struggles, Premier has found a
way to pay its contractors over the years, even if it takes a while.

Pepper Construction Company of Indiana,
which built most of Metropolis, has been paid in full for all of its work for Premier, said Bill McCarthy, the company’s
president. Premier was late settling up, he said, but agreed to pay interest.

“They’ve been
great guys to work with,” McCarthy said. “They have always come through for us.”

‘Cash
crisis’

Not everyone has enjoyed working with Premier.

In May, White settled a lawsuit
he brought against David Zoba, a former general counsel at Galyan’s Trading Co. who later became
president of Premier. White sued Zoba to prevent him from releasing trade secrets and recruiting Premier
staff; they also battled over compensation.

The court file includes a May 2006 email Zoba sent to Stephen Lebovitz,
president of Tennessee-based developer CBL & Associates Properties Inc. In it, Zoba wrote that he
was planning to resign from Premier and was searching for a partner to help him buy out some of White’s
holdings.

“My partner, who controls all our assets, and I have very different instincts,
and neither I nor our core group of very talented development and leasing people like the direction my
partner, Chris White, is going,” Zoba wrote. “He is focused on some projects in Las Vegas and elsewhere that are
different … from what our core competency is, and we are experiencing a cash crisis partly as a result.”

In the e-mail, Zoba described the financial status of two of Premier’s so-called “gems”:
Metropolis and Bridgewater Falls, a lifestyle project north of Cincinnati. He said Metropolis appraised for $169 million with
about $135 million of debt. And Bridgewater Falls appraised for $100 million on debt of about $80 million. But neither project
was on strong enough financial footing yet to tap into that equity, a problem considering Premier’s development pipeline,
he said.

A Premier filing in the case revealed that every property Zoba had an ownership stake in—including
Metropolis—had negative cash flow when he resigned.

“Obviously, this is a delicate and confidential
matter, and I can’t predict how it will turn out,” Zoba wrote. “I am reluctant to hurt my partner or upset
his world, but the current course is untenable to me and our key group.”

Zoba, who now is chief operating
officer at Columbus, Ohio-based Steiner and Associates, declined to comment for this story. Most of the people who are owed
money by White and Premier also declined to comment, fearing they will never get paid.

The state also is
trying to recover money from White. White is fighting a 5-year-old sales tax bill on his private plane. The $212,500 was due
in January 2002, but now amounts to more than $375,000 with interest, according to the Indiana Department of Revenue.

White’s plane, a Cessna 750 Citation X, is registered to PAFO Inc., a corporation name that has not been
registered with the state as required by law. The new name is an acronym for the former name, Premair Flight Options Inc.,
a corporation that has White as its principal.

White still owns the plane. He said he used a tax consultant’s
strategy to minimize the sales tax when he bought it—an approach the state has challenged. Settlement talks are under
way.

Trouble at home

Even as White’s developments have made him a millionaire,
he has continued to spar with creditors in his personal life.

In 2005, Lizton-based contractor
WI Construction Inc. initiated foreclosure proceedings on White’s home to recover more than $600,000
for renovation work performed in November 2001. White signed a promissory note in November 2003 agreeing
to pay $500,000. He later claimed in court papers that the remodeling work was defective.

White
said he expects to reach a settlement, but an attorney for the contractor said his actions don’t
send that message.

“A lot of money is owed by Chris White, and he isn’t paying
it,” said Jim Bleeke, a partner in Indianapolis-based law firm Sweetin & Bleeke. “They aren’t
responding one way or another.”

White would not discuss the lawsuit further, since it is pending.

That’s not the first time one of White’s creditors took legal action. In January 2003, locally
based landscaping company Village Earth Industries filed a lien on his home to collect a $31,000 debt; the lien was lifted
in February 2004. And in August 2003, the Lake Clearwater Pointe Homeowners Association filed a lien to collect $2,700 in
unpaid dues. That lien was released in April 2004.

White said he has plenty of money to pay his bills.
And he said the disputes relating to his $2.2 million home have no bearing on Premier.

The company is on
firm financial footing, he said.

“It’s a big company,” White said. “We have a lot
of projects, and we have a lot of money.”