State senate banking chair has property in foreclosure, and other commercial real estate misadventures

Credit is tight, demand is weak, and the commercial property bubble burst right after the residential one did.

I have followed housing issues primarily over the last few years, but the commercial market has been tough too. Take a look at another great graph from Calculated Risk; this one shows the lag between residential and commercial values:

No one is immune, not even Georgia Senate Banking Committee Chair Jack Murphy. According to the AJC:

State Sen. Jack Murphy, R-Cumming, owns a one-acre tract along Tribble Gap Road in downtown Cumming that has been listed for foreclosure on July 5, according to a legal notice published earlier this month in the Forsyth County News.

The loan was originally issued for about $228,000 by Integrity Bank of Alpharetta, which failed in 2008 and where the senator was once a director. Investors later bought the loan.

Murphy, in an email, said he acquired the property in 2005 with plans to build an office building. He said its value has since dropped to 35 percent of the purchase price.

Murphy’s problems with banks and business deals don’t end there:

In January, Murphy was appointed chairman of the Senate panel that considers changes in banking law.

Later that month, the FDIC sued Murphy and seven other insiders of the failed Integrity Bank, accusing them of various breaches of fiduciary duties, including violations of state lending limits. The suit seeks more than $70 million in damages.

The Integrity co-defendants are fighting the suit. Murphy and three other Integrity insiders have cast blame at the FDIC for the bank’s failure.

The Atlanta Journal-Constitution reported in February that Murphy also had been sued in recent years for defaulting on other bank loans. Murphy has said he settled debts with one, an Alabama bank that said he owed about $50,000.

Atlanta’s Silverton Bank also sued Murphy, claiming he owed $193,000 on a loan. Silverton failed in 2009 and the case was taken over by the FDIC. Murphy has sought to dismiss the Silverton case.

That suit was moved last month from Forsyth County Superior Court to federal court in Atlanta, according to court records.

Does the Republican leadership of the state Senate think he’s an appropriate choice to head the banking committee?

Here in Savannah, Calvary Baptist Temple, which planned a massive relocation and expansion of its Waters Avenue campus, is dealing with foreclosure of 200-plus acres off Veterans Parkway, according to the Savannah Morning New today.

Another SMN story — Pirate’s Cove water park still planned for this year — has a hopeful headline and includes the following:

Martin had expected to be putting in slides by now, but said Thursday that rainy weather delayed work last winter and design changes have prevented work this spring.

Financing is in line, he said, and the park will be built.

But the delays can hardly be seen as a hopeful sign.

And it’s not like there’s a shortage of construction labor: construction jobs have continued to dwindle in Georgia.

1 comment for “State senate banking chair has property in foreclosure, and other commercial real estate misadventures

  1. Bud Rosser
    June 18, 2011 at 2:17 pm

    Very questionable appointment. Right up there with Jeff Notrica on the DBA Board of Directors.

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