He’s No Angel

Locals call it the "Beirut Building,"its burnt-out appearance suggesting a war-torn locale. Even those just passing through Kansas City, Missouri, have been forced to dwell on its ugliness. Situated at the northeast corner of the downtown freeway loop, the vacant Vista del Rio apartment high-rise is a symbol, to both resident and visitor alike, of downtown's death.

Imagine the city's glee, then, when a developer came to town with a bold plan to build condominiums where vagrants slept, made fires and sprayed graffiti.

The Vista del Rio is being transformed into the View, 142 units of swank living, at a projected cost of $30 million. Construction workers are busy at the site. The developers hope to hand keys to buyers early next year. Models begin at $145,000.

Presented with the plan, a grateful city agreed not to tax the improvements. For the next 25 years, the assessor's office will pretend that the View is still the Vista del Rio circa 2003; its property taxes are frozen at around $23,000 a year.

The condominiums will generate no new property taxes, but officials believe their contribution is being felt already. "If you saw it a year ago, and you see it now, you can honestly say that there's something going on. It's helping the area," says Al Figuly, the executive director of the Planned Industrial Expansion Authority, the quasi-public agency that administered the tax break.

A tax abatement was not the only concession to be made in the name of progress, however. At some point in the process, Figuly and others had to accept the fact that a prominent member of the development team is an ex-convict.

G. Wayne Reeder is a wheeler-dealer who has spent most of his 72 years in Southern California. Born in Missouri, Reeder settled in Kansas City after his release from federal custody in 2002.

Reeder served 28 months and was ordered to pay $16.5 million in restitution for his role in the sudden failure of two insurance companies. Prosecutors alleged that Reeder and another man looted the companies as soon as they got their hands on them. A jury in Providence, Rhode Island, convicted Reeder on ten counts of wire fraud and transportation of stolen property.

At his sentencing, a defense attorney argued that Reeder had played a minor role in the fraud. Yet he was no stranger to dubious deals and questionable associations. A suit filed in bankruptcy court in 1987 accused Reeder of participating in a scheme to make off with the assets of an insolvent hotel. A year before, he was among friends and relatives who posted the $6 million bond of a Tennessee banker who was later convicted of fraud and money laundering. In the time between their respective incarcerations, Reeder and the banker sued each other over a real-estate deal gone bad.

"Wayne Reeder had a life before this," admits Bob Mayer, a former chairman of the Tax Increment Financing Commission, another city-affiliated entity that gives incentives to developers. Mayer was hired to advise the View. "But the issue is, from Kansas City's standpoint, is this a good project?"

The Planned Industrial Expansion Authority decided that the answer was yes.

Figuly says he is aware that Reeder had an eyebrow-raising past, though he isn't well-versed in the details. "I don't know if he's an ex-con or not, but I know he had some problems," he says. Accordingly, the PIEA took "extra precaution," Figuly says, before its board welcomed the View into its tax-abating bosom.

It turns out that Reeder's past cost the View nothing at the negotiating table. The property tax it received is, to use a PIEA term, "extraordinary." The 25-year full abatement on improvements is a first for the PIEA. (The owner of a typical PIEA project has to begin paying some new taxes after 10 years.)

"Sometimes," Figuly says, "unconventional people and unconventional approaches require thinking outside the box."

Wayne Reeder is on the phone."I understand you're interested in some of my ..."

The sentence pauses for a momentary chuckle.

"... activities."

Reeder dialed the Pitch after a reporter had called the View LLC's director of real estate, Larry McMillin, and inquired about Reeder's past and other matters relating to the View. McMillin answered the questions, but Reeder also wanted to take a crack.

"When you called Larry, I was most anxious to clear the air so that you would have the true facts," Reeder says at our meeting, which takes place at Interstate Underground Warehouse and Distribution Center, a storage facility cut into cliffs on Kansas City's east side, near the point where interstates 435 and 70 meet. A sign outside tells truck drivers who arrive in the dead of night to wait for the doors to open at 5:30 a.m. The reception area resembles the inside of old gas stations that sold only gum, maps and quarts of oil.

Reeder bought the warehouse in the 1970s. It was a troubled property, he says. Reeder has a reputation for buying distressed real estate. According to one newspaper report, people call him "the Garbage Man."

The warehouse is owned today by Sammy Jo Reeder, Wayne's ex-wife. She took title to the property in a divorce settlement. Reeder says he and his former wife maintain an "excellent relationship." Their marriage dissolved in 1992, a few months after a receiver for one of the bankrupt insurance companies sued Hill Top Developers, Reeder's main real-estate development and holding company. A recent court document says Hill Top had a one-time book value of $150 million. "Not all the value is gone," Reeder says today, "but the other side of the family has a lot of it."