Abner Renta.......Setting the Hook

Abner was broke.

Flat busted, tits-up, in the hole, impoverished, financially depleted, in the red, destitute, insolvent….you get the picture.

However, of paramount importance to this story was the fact that I didn’t get the picture, or worse and more to the truth, I knew but refused to get the picture.

Abner hadn’t paid his property taxes for three years. I learned, after not paying my property taxes the second year we owned The Riverside, that this wasn’t the end of the world. Kind hearted individuals would step up and pay your taxes, and when you could finally pony up with the money, you would pay your taxes to the County, plus a penalty and interest, which the kind hearted knights in shining armor would reap. CD’s were earning 2% and the stock market was anywhere from losing 100% to breaking even if you were lucky; buying up late property taxes and cashing in on the interest when finally paid netted the investor 10% interest – risk free.

Here was the ugly part, and the reason why Abner pleaded with a total stranger over the phone for a loan of $10,000. You had three years to get right with the County, at which point the kind hearted soul who saved your ass with the County by paying your taxes, at the worst case would gain 10% interest, but a best case scenario they would have first lien against your property when they sold it on the courthouse steps, 3 years to the date of your delinquency.

Simply put, let’s say I owed the County $6000 in property taxes on February 10th, 2004. I didn’t pay the money, but some nice guy did, and the County is cool, as they get their six grand and don’t even bother sending me a nasty notice. I pay $7000 one year later, for the 2003 tax, of which the nice guy gets $6600, and the County gets the $400 penalty. If I can’t pay the $7000 the following year, the compound interest grows into the next year and the next, until you hit three years past due. Let’s say I pay nothing for three years, as was Abner’s case, then on February 10th, 2007, on the courthouse steps in the County of Grand, CO, my property is auctioned off to the highest bidder – the nice guy that plopped down that initial $6000 investment three years ago gets the first grab at his six grand and 10% compounded interest over three years – that’s almost $2000 on a $6000 risk-free investment. In these and any times, buying up property taxes is a good investment. Instead of buying a dilapidated haunted shithole of a hotel, possibly I should have looked at that as a means to making a buck in Grand County…..but alas!

Abner was two weeks away from that three-year delinquent courthouse steps auction. He was about to lose the thing that he’d put 20 years of blood, sweat, tears and all of his monetary wherewithal into - his financial life was literally flashing before his eyes, and the ending was a cataclysmic event, from which there was no recovery; at best we’re talking homeless shelters, if they would have Abner and his cantankerousness.

The first $10,000 got Abner out of immediate trouble with the County and the really unpalatable ‘sale on the courthouse steps’ thing, which was bearing down on Abner to the point where it made Father Time look like a lazy good-for-nothing slacker. The next $10,000 that we sent went towards the next year of unpaid taxes and “a little credit card debt that I’ve compiled….”, a nervous little laugh accenting this profession. After submitting this second financial resurrection, now $20,000, we were a little more serious about buying the place, and we figured worst case, we’d get it back with interest if we didn’t buy The Riverside and one of the multitudes of interested parties that Abner had on the hook did buy the place.

A few blogs back I took a personal break to relate a childhood incident, possibly directly unrelated to the purchase of The Riverside, but probably subliminally related to the purchase of The Riverside – i.e. my early in life failed quest for the attainment of Sainthood. While I didn’t have a sit down with myself to discuss this, again subliminally, the notion of redemption and being back on the active board for Sainthood-liness festered in the dark recesses of my red-flag ignoring, financially deficient mind.

A visit to my banker in KC to discuss my wild notion of buying The Riverside wrought the following discussion. This was a banker that had financed my business for years, through times both lean and hardy – we’d become pretty good friends…as friendly as a banker can become with a borrower.

“We’ve found this place in Colorado that we’re considering buying. It’s a historic hotel in a beautiful little town. It’s something we’ve always considered doing, and now with the sale of the business, I think we’ve got the wherewithal to make it happen. I’ve got cash flow projections and pro formas for the next five years that I’d like you to look at. Any chance UMBig Bank would be willing to consider this?”

“Without even looking at your numbers, I’d be pretty certain that it’s not a loan we’d consider. Let’s be honest…you don’t have any experience in this type of business, and it’s in a remote spot that we wouldn’t be interested in investing in” said my friend, the banker, really looking out for me at this point and of course I FAILED TO SEE IT!!!

“But you’ve got locations in Denver! You’re trying to establish interests in Colorado.”

“Right, but they’re pretty selected investments in Colorado. Here’s the deal…we’re hesitant to loan money to established Kansas City restaurateurs with locations around the corner from our banks, let alone your venture, someone new to the business trying to make a go of it in the middle of nowhere.”

(A financially savvy friend, whose financial opinion I’d sought and trusted as Gospel for the past 20 years had just sat me down, looked me in the eye and told me in a fashion that a five-year old would have understood, that this was a bad deal and to make it but a funny point of cocktail party conversation in my future.)

“So, how serious are you about this deal?” my friend, the banker, inquired.

Sheepishly, “I’ve loaned him $20,000 to pay his delinquent property taxes, of which he’s guaranteed that he’ll pay me back when he sells the hotel.”

I’d known this banker for 20 years, and I’d never heard him cuss, not once. He was a Catholic, but his demeanor and apparent disdain with regards to booze, gambling, profane banter and all of the other fun things that Catholics are able to do whilst still being faithful to the their religion, would have made him a pretty solid Baptist.

“Tell me you are f-ing kidding me? You loaned him money to pay his property taxes so the place wouldn’t be seized and sold? Please tell me you didn’t do that? Do you realize you could have gone out there and bought that place for nickels…maybe pennies.. on the dollar??”

This is where the Sainthood thing comes back into play.

I knew damn good and well that I could have done that. I knew that I could have told old Abner that I too had not a pot to piss in and he was at the mercy of the State. I could have shown up two weeks after denying him his $10,000, and probably bought the place for 1/5th of what we ultimately paid for it. I knew this, I thought about it, and St. Richard decided against it as a course of action – a course that would hopefully define me and my future, a course that would give me good karma going forward, knowing that I allowed a human who’d given his heart and soul to this place, to walk away from that place with his head held high and some money in his pocket. I didn’t want to take ownership of The Riverside under any other scenario.

OK, so my Saintly actions weren’t reciprocated by the seller – after the deal, on paper, I am not Saint Richard, I’m Schmuck Richard. But to this day, as of this writing, I look into the mirror with aplomb, hoping that someone of a higher pose, someone beyond a banker, will note the good thing that we did; not for the purpose of a favorable reply, but for the sheer purpose of doing good.

To Be Continued…………..