““”.*,Il-l.“-,l”“**l--t”._l_“..I-. “.,*l”““,,,ll...II,”“l_l.-.. I iuit.wl Statw .“lll-““*l.l~.~n*11”.“1”-“~ Gt~neral Accounting Office GAO Fact Sheet for the Honorable Ikryl Anthony, Jr., House of Representatives I _.--.-- Novc~rn tm- I !I90 RESOLUTION TRUST I CORPORATION Real Estate Activities in North Little Rock, Arkansas illlllllllllll 142629 ll (;Ao/G<;D-Y l-l SE’S “------ .- .- I General Government Division B-241276 November13,1990 The Honorable Beryl Anthony, Jr. House of Representatives Dear Mr. Anthony: On March 5, 1990, Chairman J. J. Pickle, Subcommittee on Oversight, House Committee on Ways and Means, requested certain information on Resolution Trust Corporation (RTC) activities in six geographic areas. This fact sheet addresses questions on RTC real estate holdings and property management activities in one of those areas-- North Little Rock zip codes 72114, 72116, 72117 and 72118 in the Second Congressional District of Arkansas. Chairman Pickle asked that we send this information directly to you because of your interest in this area. The five other areas are being covered in separate fact sheets, including one on Pine Bluff, Arkansas, that is also being sent to you at Chairman Pickle's request. Specifically, the Chairman asked for information on (1) thrifts and real estate assets placed under RTC control; (2) real estate assets that have been sold and the purchasers of those sold for $1 million or more; (3) the number of real estate agents that has been qualified or disqualified for RTC contracts and for those disqualified, the reasons why; and (4) the managers of any high-value real estate properties in the inventory and what they are paid. The following discussion provides this information. THRIFTS AND REAL ESTATE ASSETS PLACED UNDER RTC CONTROL The Office of Thrift Supervision initially places troubled thrifts under the direct su ervision of RTC--which serves as conservator1 or receiver 9 --when certain conditions, such as insolvency, capital inadequacy, or unsafe and unsound practices, exist. lA conservator is appointed to, among other things, operate the thrift as a going concern, and preserve and conserve the assets and properties of the thrift. 2A receiver is charged by law with the duty of winding up the affairs of a bank or savings association. B-241276 In Arkansas, RTC had nine thrifts with total assets of about $2.6 billion in conservatorship as of June 30, 1990. It also controlled the remaining assets of five thrifts in Arkansas that had been resolved, that is, sold to new owners or closed if no purchaser had been found. None of the conservatorships or resolved thrifts were located in North Little Rock, Arkansas, but two thrifts in conservatorship in Little Rock, Arkansas, have branch offices in North Little Rock. Savers Savings Association and First Savings of Arkansas each had three branch offices in North Little Rock. Within the review area, we identified seven real estate assets, collectively listed for sale at about $3.3 million, that were owned by thrifts under RTC control. Table 1 shows the specific real estate assets located in the review area that are owned by thrifts in the RTC conservatorship program. Table 1: Real Estate Assets Under RTC Control in the Review Area, as of March 31, 1990 Property Asset List type rxniber Address price Apartments 1035988-5 700 N. Hills Blvd. $2,600,000 N. Little Rock, AR 72114 Residence 8308-1012 23 Mine Hill Drive 70,000 N. Little Rock, AR 72118 Restaurant 3360-01 6503 Warden Road 385,000 N. Little Rock, AR 72116 Comnercial 2608 513 Main Street 84,000 office N. Little Rock, AR 72114 Camnercial 2638 Hwy 70 and 391 34,650 land Pulaski County, AR 72116 Residential SNDL5BD Sandlewood Subdivision 36,225 lots Pulaski County, AR 72116 Land SNDL6WD Sarkdlewood Subdivision 46,725 Pulaski County, AR 72116 Y 2 B-241276 REAL ESTATE ASSETS SOLD Within the review area, thrifts in RTC's conservatorship program had sold six real estate assets for about $309,000 as of June 30, 1990. Table 2 list these assets. Table 2: List of Properties Within The Review Area Sold By RTC, as of June 30, 1990 Property Asset Sale type number Address price Residence 1040547-2 2 Dove Creek $119,000 N. Little Rock, AR 72116 Residence 10331066 10516 Old ConwayHwy 8,200 N. Little Rock, AR 72118 E&sidence 8308-1011 1217 Nicole Street 44,000 N. Little Rock, AR 72116 Residence 1283 31 Coronado Circle 80,000 N. Little Rodr, AR 72116 bsidential 2437 End of North Oaks Drive 15,400 N. Little Rock, AR 72118 Cannercial 3360 WardenRoad 42,500 tierwood, AR 72118 REAL ESTATE BROKER REGISTRATION RTC procedures do not require real estate agents to register with it because state laws and regulations require agents to work through licensed brokers. However, real estate brokers interested in handling RTC property are required to register. Brokers must certify that their employees or subcontractors, including real estate agents, meet qualification and integrity requirements. As of July 20, 1990, 502 brokers had registered to provide real estate brokerage services in North Little Rock. One of these brokers, Southern Inn Management, Inc., is located in North Little Rock--zip code 72116. An additional 27 brokers are located in Arkansas, but not in North Little Rock. The remaining 474 brokers are from other states. 3 B-241276 RTC may disqualify brokers, or any other contractors, on the basis of information provided on the Fitness and Integrity Certifications Form that must be submitted with the firm’s Contractor Registration Request. As of July 31, 1990, none of the brokers with offices located in the review area had been disqualified. In fact, as of that date, only 19 firms of any type nationwide had been disqualified from being considered for RTC work. Firms may ask for a reconsideration of their status at any time after they have been disqualified. The fact that a firm is registered with RTC and its name is included on the contractor registry simply enables the firm to be considered for RTC contracts and receive solicitations for services. Inclusion in the registry does not imply that the firm is qualified to do work for RTC or that it is an approved RTC contractor. RTC contracting procedures require contracting officers to determine qualifications and obtain additional ethics certifications from potential contractors each time a firm is considered for a contract. PROPERTYMANAGEMENT RTC-controlled thrifts owned only one high-value real estate asset in North Little Rock--the Country Club Apartments. The owner, Savers Savings Association, contracted with First Capital Management Group of Pine Bluff, Arkansas, for property management services for the property. Under the contract, First Capital received 5 percent of gross revenue for its services. OBJECTIVES, SCOPE, AND METHODOLOGY To obtain information requested by the Chairman, we gathered data primarily from RTC’s Central Regional Off ice; thrifts under RTC’s control in Little Rock, Arkansas; and RTC’s national real property inventory database. We used information from RTC’s March 31, 1990, database and updated it to June 30, 1990, with data obtained from thrifts under the RTC’s control in Little Rock and Batesville, Arkansas. We did not verify the computerized data; therefore, we cannot attest to the completeness or accuracy of the property listings. RTC has experienced considerable problems with its real property inventory system. It was aware that data in the system were not always complete and accurate and has been trying to clean up the data as it updates the inventory. v Because of these data quality problems, RTC placed a 4 B-241276 disclaimer on the database magnetic tapes and floppy disks. The disclaimer stated that II . .information . contained in the computer product is not guaranteed and is submitted subject to, without notice, correction, errors, prior sale or withdrawal from the market. The RTC, now and forever, makes no guarantee, warranty, or representation, expressed or implied, as to the location, quality, kind, character, size, description, or fitness for any use or purpose, of any property listed and/or described in the computer product.” RTC is in the process of hiring a contractor to develop and operate a completely new system for its automated real property inventory records. It expects this new system to be in place during the first quarter of 1991. Since RTC solicited for a system that was operational, it does not expect the delays sometimes experienced in systems development. We discussed the results of our work with the managing officials of RTC*s Central Region, who agreed with the facts presented in this document. We did our work from April through July 1990 in accordance with generally accepted government auditing standards. As agreed with the Subcommittee, no further distribution of this fact sheet is planned; however, we will make copies available to other interested parties upon request. The major contributors to this fact sheet are listed in the append ix. If you have any questions, please contact me on 275-8387. Sincerely yours, Di’rector, Federal Management Issues 5 APPENDIX APPENDIX MAJOR CONZRLBUTORSTO..TMIS FACT SHEET GENERAL GOVERNMENTDIVISION,, WAS- .D.C, Gaston L. Gianni, Jr., Associate Director, Federal Management Issues Ronald L. King, Assistant Director, Federal Management Issues Stuart M. Kaufman, Senior Social Scientist KANSAS CI-TY .REGZONALOFFICE George Jones, Evaluator-in-Charge Raymond E. Hiel, Evaluator Hye Y. Meador, Evaluator (247014) Ordc!ring Information ‘l’hc~ first. five copies of each GAO report are free. Additional copies arc $2 each. Orders should be sent, to the following addrctss, accompanied by a check or money order made out to t,hc Supctrint,c?I~(j~~nt, of Documents, when necessary. Orders fur 100 or more copies to be mailed to a single address arc discount~~d 25 percent.. 1J.S. Gcueral Accounting Office I’. 0. Box 6015 (;ait,ht!rsburg, MI) 20877 Ord~vs may also be placed by calling (202) 275-624 1.
Resolution Trust Corporation: Real Estate Activities in North Little Rock, Arkansas
Published by the Government Accountability Office on 1990-11-13.
Below is a raw (and likely hideous) rendition of the original report. (PDF)