Tuesday, September 27, 2011

TCI's outlook is "bright". Share price down 75%, $52 million loss, Nearly 100% leveraged. Very bright.

The Jackson City Council approved the convention center hotel deal with Transcontinental Realty Investments (TCI) yesterday by a 5-0 vote. Ward 1 Councilman Quentin Whitwell did ask TCI Vice-President Al Cozier about the company's health. The Clarion-Ledger reported:

"Crozier told Whitwell some of Transcontinental's subsidiaries have had to file for bankruptcy in recent years, but the parent company is in good shape, with about $1.4 billion in assets.

He said all real estate firms have faced a downward trend.

"I think our outlook is bright," Crozier added.
"

One can only wonder if Mr. Crozier uses a braille Kindle as the future of TCI is anything but bright. Take a look at S&P's analysis of the company below. Read it carefully.



First thing that pops out is the share price: $2.54 per share. While some may argue REIT's have suffered, TCI performed worse than its peers as shown in the graph at the top of page 2. The company has a YTD return that is a NEGATIVE 62% while the industry has a positive 2.6% return on investment. The industry has actually outperformed the S&P 1500 this year. The one year return is a negative 75% while the industry was 1.1%. One figure jumps out from the chart: $10,000 invested with TCI five years ago is only worth $1,954 today while the industry is $7,218 and the S&P 1500 was $9,424.

Still think the future is bright? Take a look at the income:
2010: -76.1 million
2009: -81.9 million
2008: -30.3 million
2007: .93 million PROFIT
2006: 1.95 million PROFIT
2005: -17.2 million
2004: -11.2 million
2003: -27.7 million
2002: -36.9 million
2001: 29.8 million PROFIT

This company has turned a profit only three times in the last ten years. Its June 30, 2011 SEC 10-Q filings show the outlook for TCI is not getting any better. The consolidated balance indeed shows assets of $1.2 billion. but liabilities of 1.1 billion. In other words, the company is leveraged at nearly 100%. In contrast, Parkway Properties has assets of $2 billion and liabilities of $1.2 billion and is leveraged at 60%.

S&P's notes state (p.3): "Transcontinental Realty Investors Inc. announced unaudited consolidated earnings results for the second quarter and six months ended June 30, 2011. For the quarter, the company reported net loss of $40.83 million..

For the six months, the company reported net loss of $52.88 million
...."


Tell me, does this future smell "bright" to you, Mr. Crozier? Did I mention the market cap for TCI is only $20.6 million dollars? Yup. Jackson is going to buy the land from TCI for the hotel at a price that is roughly three/fourths of what the company is worth.

Time to recap what we know about our new partner. The partner has lost $52 million this year and lost over $76 million each year for the last two years. The company has only earned a profit three times in the last ten years. It is leveraged at nearly 100% if one examines assets against liabilities. The share price has performed substantially worse than the industry average and is trading at around $2.50 per share. The company has been accused of committing mortgage fraud by at least three lenders in three separate lawsuits filed this year. A bankruptcy court in Texas twice this year threw out a TCI subsidiary's (FRE Real Estate) bankruptcy petition filed this year after lenders showed the court other TCI subsidiaries were transferring properties to FRE even though they were secured by nearly $100 million in loans provided by those lenders. Does this sound like a partner whose future is "bright"?

5-0 vote. Remember that, folks. 5-0 vote.

Calls to Mr. Whitwell were not returned.

Earlier post
Copy of resolution




17 comments:

Anonymous said...

I did not know Jackson wanted a beef plant downtown?

LeBeau0605 said...

Thanks, KF, sharing to FB and Twitter.

Anonymous said...

Is "reported" the right word to use for what the Clarion Ledger is doing? How about "repeated."

Anonymous said...

Again, Quintin Whitwell has some explaining to do. Why did he vote for this? He is furiously Twittering nonsensical updates today, but nothing over the last two days regarding this very serious vote he took.

Jeff said...

Wow. A part-time blogger can dig all this info up (I assume from his home computer) and the city attorneys and local newspaper "journalists" have no idea. In local matters, this website is the place for real journalism.

This game TCI plays moving their losses to "subsidiaries" is exactly what Scott Sullivan and Jeff Skilling did at Enron.

Anonymous said...

Sullivan's deception was different but we get your drift.

Anonymous said...

Why doesn't the city use one of its own bright spots, that being Parkway Properties to build and mangage a hotel/ commerical venture like it has been successfully doing for some time??? Its locally owned and operated, they are one of the few non government entities that employ tax paying citizens while servicing other private companies downtown. Seems like it would be playing favorites but with Jackson trying so hard to bring people and business back, you might just consider partnering with someone who is successful year after year, supports the local economy all while giving you the greatest chance to make one project actually work.

Anonymous said...

Calls to Mr. Whitwell were not returned.

No surprise. Whitwell is an empty suit. He'll carry as much water for the downtown crowd as they command him to shoulder.

Whitwell still has a number of votes to make to catch up to the level of antagonism Ben Allen showed for taxpayers but voting to loot Jackson's meager and dwindling resources to finance a boondoggle hotel the private sector won't touch puts him well on his way to closing the gap.

Anonymous said...

All city council members should resign over this and Gannett should replace the whole lot at Clarion Ledger. We have a crowd who either isn't smart enough to oversee the city's business or is too lazy to do the work that is necessary to Jackson's well being.

Anonymous said...

You're no molder of consensus Whitwell. You're a purveyor of bullshit who can't back up his RINO vote.

Anonymous said...

The City Council, and the Mayor, should all be imprisoned for this vote. Any public body that enters into a deal like this is responsible to check the financial stability of the private entity it is dealing with. Musgrove/Spell/McCoy and the Beef Plant taught that lesson to the legislature - in an afterthought - but evidently the City Council has not learned the lesson.

This vote shows full well what QW is worth - nothing. He has his 'feel good moments' in gating streets and putting taco stands downtown. But when the real money deals come around, he is right in there with Harvey and the other clowns. Guess his mentor, Ben Allen, won't let him loose with the real issues.

Anonymous said...

I still blame the CL. Politicians are going to be politicians. You have to have a legitimate, viable press to keep them honest. This site does a great job of that but, unfortunately, the people who would raise the most hell about this (old people), don't read blogs. How about some radio ads targeting the blue hairs? "Want to know where the news gets their news? Get your grandkids to show you Jackson Jambalaya on the Interweb. Plus, get them to show you how to push the 'refresh' button, and it's like getting a whole new paper every couple of hours - for FREE!" (Old people love free stuff.)

Radio is cheap, and I bet those ads during TV church services aren't too bad.

Anonymous said...

Bet you that the JFP has comments disabled on their piss-poor reporting.

No comments, just crickets.

Kingfish said...

From the November 4, 2008 minutes:

"ORDER authorizing the City of Jackson to loan said funds and the Mayor to execute and the City Clerk attest documents needed to close and consummate an additional Three Million Dollars ($3,000,000) loan to TCI-MS in accordance with HUD rules and regulations (Walker, O’Reilly-Evans, Melton) (11/04/08)"

Kingfish said...

November 18, 2008:

"ORDER authorizing the City to advance proceeds of the section 108 Loan to
TCI-MS in an amount not to exceed 80% of the appraised value of the property
for the project used as collateral of the loan for the acquisition of such property
and closing costs related thereto and to further provide funds for architectural and
engineering fees, planning costs, and legal fees directly related to the development of the project, subject to adequate documentation of any such costs and verification that such costs have been expended in accordance with HUD
rules and regulations, but otherwise in accordance with the prior order entered by
the City Council on September 17, 2007 (Walker, Holbrook, Melton) (11/18/08)

John said...

One has to wonder what was in it for them....

(As always, "follow the money".)

Anonymous said...

Looks like the Bugle is engaging in "revisionist" publishing. "Not my fault, I was out of town."

Got to love this quote from Margaret Barrett-Simon:

It's very difficult politically to be dealing with something like that if we are just getting details in ripples

It is funny how the Bugle celebrated the decision just the other day and now have done a complete 180 degree turn.


Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel

Archives

Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
.