Sunday, October 18, 1992

Pyramid Dreams: Pyramid Schemes, Part 3 of 3

How did Sidney Shlenker's Promise Die?

Commercial Appeal
By Louis Graham

Part 3 of 3 (Continued from Part 2)

Fuji, the huge Japanese lender, bowed out over fear the company would not get the project completed. This wasn't another apartment development. It would be hard to find someone to step in and complete the pyramid additions. The Japanese would reconsider, but only if the city and county would guarantee completion.

The National Bank of Australia expressed interest both in a construction loan and permanent financing. But it, too, required city and county participation. If The Pyramid Companies missed a payment during the first five years, the Australian bankers wanted Morris and Hackett to ask the City Council and County Board of Commissioners to make the payment. But the political risks, particularly with Hackett facing re-election, made it an impossible request.

Finally, at an April 1991 meeting with an increasingly restless City Council, Shlenker predicted financing in two to three weeks.

The Pyramid Companies paid SoGen $75,000 in January to conduct its investigation. The engineers returned a favorable report. The pack of lawyers and finance people seemed to have the major details worked out.

A sample press release was even faxed to the mayors. It announced the process of due diligence, or an investigation of the financial background, was to begin.

Eighteen days later, SoGen dropped the deal like a hot potato.

An anonymous letter, written in French but from a Memphis resident, was mailed to the bank's Paris office. It suggested Shlenker would be unable to assemble the rest of the deal that required Memphis banks share a portion of the loan; that the deal was a can of worms.

AS publicity about the difficulties grew, individuals claiming they could help walked in off the street. Invariably, they knew someone who could make the loan. There was this guy in Buffalo. . . . Every lead was investigated. It meant kissing some frogs in search of that one prince.

Shlenker flew off to Canada with one Memphian who said he could help, to South Florida with another as the hourglass emptied.

An El Paso company led them to one would-be prince in Lakeworth, Fla.
The Florida man provided Shlenker with hope and a Memphis broker with the promise of a large fee. Then the Floridian requested $200,000 in advance.

Up-front fees were a common practice in the 1980s, often of con men who took them for loans that never materialized. Today, Florida law makes it a felony to collect such a payment even if the loan is eventually made. There was no such law when Shlenker met the loan broker.

Shlenker immediately balked at the up-front payment. He would not take the chance. It was one thing to pay SoGen, a multibillion, multinational bank, to conduct due diligence; it was entirely another to pay this Floridian a 'commitment fee.'

But while Shlenker searched elsewhere, brokers in Memphis raised the funds from other clients.

Shlenker was uncomfortable about the deal. He met face to face with the investors and urged them not to do it. When they persisted, he joined up, putting in $20,000 of his own money.

The $200,000 was wired.

But the loan never came.

Shlenker went to the FBI. Now, more than a year later, the white-collar crime unit continues its investigation. A federal grand jury in Memphis has heard testimony.

THE Pyramid Companies had millions of dollars' of debts and no way to pay them. Shlenker was under siege.

The city and county had begun acting like a jilted lover.

"When historians look back at the positive results which the pyramid produced," Morris said in a 1989 letter, "at the top of the list will be its part in bringing you into our city."

Now, two years later, the county mayor faced a decision between two far less flattering letters. One began the legal process to remove The Pyramid Companies from the deal. The other gave the company a two-week extension to cure its most serious financial problems.

He signed both, leaving the decision to Hackett. Hackett chose the extension.

Forget the grandiose plans. Shlenker needed $3 million to replace the GOI stock in the escrow fund as promised. He needed another $5 million just to get the arena ready for basketball. There was no floor, not even rims and goals.

He could not turn to the man who brought him to Memphis.

As Tigrett said in a January 1991 letter to his partner:

"With much regret, I must say that if you wish to continue running The Pyramid Companies, you will have to borrow on some of your own assets for funding or find funding from other sources."

SO as word spread through the offices at 245 Wagner of a hastily planned staff meeting on May 28, 1991, there seemed to be only two possibilities. Either Shlenker had miraculously found a loan. Or he was giving up.

The Great American Pyramid was to have opened the following morning. But at best the opening was months away.

The crush of 3 million tourists a year would not begin at restaurants, bars and high-tech museums in the 32-story, stainless-steel pyramid and next door at a remade Mud Island. Four acres of space sat empty in the shell of the pyramid.

He made the dramatic announcement to his employees first. Then he rushed off to meet both mayors in Morris's office in the county administration building.

He had a loan, he told them. But he wouldn't name names. He wouldn't risk another SoGen fiasco. This time no one could be trusted. He handed Hackett and Morris a copy of the commitment letter, but with the lender's name removed. It was crudely typed and bore an illegible signature.

Morris fumed. He viewed it as another last-minute tactic, just like the NBC proposition that rainy day in May 1990, just like a deal only days before in which Shlenker offered a $3 million surety bond from an unlicensed company.

Shlenker borrowed a phone and dialed a Las Vegas telephone number. He spoke briefly, then put Morris on the line.

Morris was never certain who he spoke with. But the man at the other end - perhaps Shlenker's genie, as Morris suggested - confirmed what the letter said. The first money would arrive in two weeks.

It didn't.

The mysterious company that was the conduit to an $80 million loan in exchange for 20 percent of Shlenker's company was Universal Financial Service.

The company operated from a small suite at Flamingo Executive Park in Las Vegas. It had one secretary, sparse furnishings, and suspiciously few files.

Eleven days before making its last-minute offer to Shlenker, UFS received the first of three cease-and-desist letters from Nevada authorities. It had no license to operate as a lender but argued it did not need one since it was a joint venture partner, not a lender. State Commerce Department officials knew nothing of the Memphis deal; their actions resulted from other complaints.

Universal Financial had a Nevada corporate charter. But the address its founders gave, 100 East Tropicana, Suite 138, was actually that of the company's president: Space 138 in a Las Vegas trailer park.

Nevada Commerce Department investigators said the man behind the company was not Albert Feink, the Tropicana Mobile Park resident whose signature appeared on Shlenker's letter, but Louis Pihakis, who had been linked to several loan scams.

It was not Feink, but Pihakis, who spoke with Morris on the telephone.
Though unknown in Memphis, Pihakis was well known among white-collar crime investigators. He was featured in a 1973 book, The Fountain Pen Conspiracy, which linked him to an Alabama loan scam and a real estate deal with Detroit mob bagman Peter Lazaros.

Authorities said Pihakis touted two sources of cash: insurance companies and the fortunes of several Greek shipping families.

In 1988, Pihakis, representing the Greek shipping trust, surfaced in Charlotte, S.C., trying to provide financing for evangelist Jim Bakker's $172 million purchase of PTL. He surfaced in Las Vegas as the possible source of funds for a 1991 bailout of the Alladin Hotel.

Shlenker grew hopeful. Pihakis did not ask for any advance fees. That hope was only bolstered when he ran into Pihakis at a Las Vegas coffee shop meeting with a longtime friend of his father. The man was a successful Houston real estate developer and he, too, was discussing a loan.

State files, though, revealed complaints from several of the company's customers who paid large, up-front fees for loans that had not materialized.

Pihakis was among several people indicted in February 1992 as part of an alleged advance-fee loan scheme in Columbia, S.C. He is scheduled to be tried in January.

His name did not appear on Universal's corporate records. He was not an executive or even a director. Yet Deputy Commerce Commissioner Glen Walquist made an unannounced visit and found Pihakis sitting behind a desk in the largest office, discussing possible loans with customers.

Walquist said Pihakis agreed to divulge the names of his insurance company backers once he received their permission. The state investigator dictated this sardonic note to the state file:

"In the course of a one-hour conversation, Pihakis challenged Bud Abbott and Norm Crosby as a champion of gibberish speak. He was unable to tell of a single deal he had closed. . . .

"I feel confident in predicting that he will be unable to obtain (the insurance companies') permission. Or, the insurance companies will be located in caves without phones."

Shlenker saw salvation in this pot of gold at the end of the desert trail. But Nevada authorities viewed it as a mirage.

ON June 17, 1991 - 794 days after their deal began - the city and county terminated their contracts with Shlenker and Tigrett, thrusting the celebrated deal into court, where it remains today. City and county legal costs, already in excess of $300,000, continue to mount.

On July 23, 1991, the six companies comprising The Pyramid Companies filed a Chapter 11 bankruptcy petition, claiming $16 million in debts. After a year of legal maneuvering, five of those companies were ordered liquidated by U.S. Bankruptcy Judge Bernice Donald. Should the order stand on appeal, creditors may recover only a portion of what they are owed.

The sixth company, Pyramid Management Co., clings to life on a ruling from Donald that the city and county did not properly terminate the management contract.

At 6 p.m. on July 9, 1992, The Pyramid Companies orphaned Mud Island, abandoning its responsibility to operate the park and pay its annual operating loss. City taxpayers again assumed that responsibility, although efforts are under way to find another company to adopt the $63 million park.

Shlenker, now 56, continued to pursue financing for months after the bankruptcy, traveling to places such as Las Vegas, New York, Seattle, Geneva, Luxembourg, Milan, Paris and Stockholm. As he did, the company continued its assurances that a loan deal was imminent, even to the bankruptcy examiner.

But increasingly bitter about his dealings in Memphis and the new city administration's unwillingness to settle legal action, Shlenker moved to Los Angeles in August. His East Memphis home remains for sale.

John Tigrett, now 79, continues his regular practice of jetting to New York and London. When in Memphis, Tigrett remains aloof and secluded, but through his lawyers is heavily involved in the legal battle.

Isaac Tigrett, 42, has become an investor in Dan Aykroyd's planned New Orleans blues club. He works on that project, and others, from an office on the rails - a private railroad coach pulled from city to city by Amtrak.

Bonham, 41, is president and majority owner of Bonham Communications and continues to sell sponsorships on other ventures around the United States, including Memphis.

Omnis has remained in business, although it is owed an estimated $600,000 (disputed by Shlenker) for pyramid work. Lindsey, one of the company's founding partners, has left the firm.

Leisure Management survived its involvement with Shlenker to become the city and county's arena manager. It is paid an annual fee.

The Great American Pyramid, known today as The Pyramid, opened Nov. 9, 1991. It had an operating loss of more than $450,000 last fiscal year. By the time a final debt payment is made on the building in 2010, principal and interest on the project will be an estimated $110 million.

The Cast of Characters (opens in separate window)

About this report

Reporter Louis Graham spent more than a year preparing this story of the Memphis Pyramid. He reviewed thousands of letters, statements, contracts and other legal documents left in the wake of the pyramid plans and the collapse of The Pyramid Companies. He interviewed scores of people involved in the project.

Graham, 35, is a special projects reporter who joined The Commercial Appeal in 1979. He has reported extensively about the pyramid and promoter Sidney Shlenker since 1988.

Copyright 1992, 1994 The Commercial Appeal, Memphis, TN

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Pyramid Dreams: Pyramid Schemes, Part 2 of 3

How did Sidney Shlenker's Promise Die?

Commercial Appeal
By Louis Graham

Part 2 of 3 (Continued from Part 1)

"At 76, I have no obligation to anyone in the world except my family - certainly not to politicians. In fact, if there is any obligation, it is the other way round. If my position is not crystal clear, please advise."

Clearly chafed, Morris fired back. But his letter was never mailed.
"In eleven years of office, I have never received a letter quite like yours of February 24, 1989. . . .

"While I applaud your strong leadership for this project, I think that Mayor Hackett and I deserve equal credit for demonstrating a willingness to risk our careers for this project. Without our support, this pyramid would still only be a novel picture postcard drawing with little hope for construction.

"Both Mayor Hackett and I have staked our political lives on this project despite influential supporters urging us to do the contrary. If it fails, others can return to their everyday business dealings, but we will be left to defend and justify it."

TIGRETT would turn his guns toward Shlenker. But not for months. For now he continued to lead the search for financing, make regular trips to 245 Wagner, sit in on meetings, and, as Shlenker insisted, use the largest office in the suite, if only for 30 minutes.

The central concern for now was to recoup on the first design faux pas. Nothing better illustrated the growing strain of doing so than a December 1989 meeting in Los Angeles with Battaglia's successor, The Jerde Partnership.

Jon Jerde had faced such pressure before as coordinator of design work for the 1984 Olympics in L.A.

As Jerde described the situation in Memphis much later: "In short, even though you (Shlenker) had insufficient money and (an) impossible time frame, we would 'do our best.' "

The project's dominant music theme gave way to Jerde's fascination with Egypt and the pyramids. He and Isaac Tigrett had only months before traveled to Egypt to view the pyramids at Giza. That trip led to Jerde's vision of Rakapolis rising from the banks of America's Nile, the Mississippi.

A script introduced the design's centerpiece, a dark ride named The Netherworld:

"Suddenly, there is another precipice. You plummet downward again. Another door is encountered. It opens just in time as you fly through. A god looms on the other side. He holds two living eyeballs in his outstretched hands."

But meeting with Jerde in Los Angeles in December, Shlenker railed at the estimated $16 million cost for the ride. He had just come from a trade show in Atlanta. He could get one for $2 million. And in days he faced another presentation of his ideas to Morris and Hackett. This time the budget had to be right; they could not afford another embarrassing misfire.

The meeting dragged on so long that other clients began lining up outside the conference room - not to meet with Jerde, but for the company's Christmas party. A bar was rolled into the hallway. The party began there.

To cut the price, a new building would not be erected for The Netherworld. It would come crashing through roof and floors of Mud Island's main building and into the Mississippi River Museum. Ironically, it was there, in the Rivercenter, that Shlenker and Jerde presented their plan on Dec. 19.

But Jerde would not reveal the estimated cost of the project for months. When he did, Rakapolis died a quick death. The $110 million price tag was far better than Battaglia, but still twice the projected budget.

Jerde was fired in June 1990 as the Mud Island designer. But not before the construction fences had gone up on Mud Island. Not before the bulldozers moved in, peeled back some dirt and crashed through a $1.1 million playground.

THE company grew ever more starved for cash with each month that passed with no final design and no construction loan.

Now into its second year with no steady source of cash, the company survived on periodic, and most often last-minute, transfusions.

Tigrett anted up. Then Shlenker or companies in which he had an ownership stake. PACE provided $1.15 million. A company chartered to distribute the proceeds of the Nuggets sale, WSIH, wired funds to Memphis. Most often the money went out to pay a bill as soon as it came in.

For three nights in April 1990, Shlenker wined and dined potential members of a private club he planned for the pyramid. At stake was another source of cash.

True to the adage that it takes money to make money, he spared no expense. He was frustrated, in fact, that there were no juggling bartenders for hire anywhere in Memphis.

Instead, guests were greeted by Mike Carnahan, by day a trucking company sales account executive, by night an actor. Carnahan, dressed first as Groucho Marx, then as Father Guido Sarducci, then Billy Crystal's Fernando, set the mood each night.

"You look maaaahvelous, darling!" Carnahan exclaimed to the arriving guests.
Would-be members sipped champagne and savored caviar. A small boat held hundreds of pounds of fresh seafood. The aroma of $4,000 worth of fresh flowers competed with the scent of the food prepared by three caterers.

A pianist played in the dining room, an acoustic duo strummed in the living room, and The Bluebeats, a popular Memphis rock band, pounded away in the upstairs ballroom.

Memberships trickled in.

Of the 66 who signed up, either at the parties or over the following weeks, few paid the $10,000 in cash; most made $500 down payments. Just $291,000 was raised.

But the bills for the three extravagant nights rolled in just as they had for the Big Dig. The cost: $84,093.

The promotional material described the club as "refuge for the deserving." But those who signed on are members of a far less exclusive club today. They are among 200 unsecured creditors in The Pyramid Companies' bankruptcy.

In deepest are 18 individuals - doctors, lawyers, businessmen - who paid the $10,000 fee in cash. Among them: City Councilman Jack Sammons.

WITH Shlenker as ringmaster, Tigrett content in the background, Memphis flirted with national prominence.

Flattering publicity rolled in from Buffalo, Orlando, Seattle and dozens of other cities - even Denver.

Shlenker told the Memphis City Council of a plan to bring $1 million worth of talent to Mud Island for a weekend jazz festival.

He said plans for a new hotel on the island were just weeks away.

He promised the world's largest video scoreboard, a $5 million wall of computer-controlled television monitors, would be installed in the arena.

He unveiled the pyramid's first major sponsorship and concession agreements, with Pepsi and Pizza Hut, that together guaranteed the project $10 million over 10 years.

But in a driving rainstorm on the Memphis riverfront May 11, 1990, Hackett and Morris were confronted with a harshly different view.

During a reception at the Memphis in May Barbecue Festival, Criss appeared unannounced. The Pyramid Companies lawyer and chief operating officer had just come from a meeting with County Atty. Brian Kuhn and arrived at Morris's tent before Kuhn could warn his boss.

The company had arranged a $3 million loan with National Bank of Commerce. The money would go to keep the designers working and to keep the company afloat. But they could not close the loan without the mayors' signature. There had been previous discussions of this. Then Criss appeared, needing the signatures there, on the spot.

The deal pledged revenue from the arena's private-seating skyboxes for a $3 million loan from NBC. The mayoral signatures assured the lender it would get its money even if Shlenker lost his contract.

The company that made ever more brazen promises, that chased $55 million in loans, needed a last-minute loan to pay its bills. And it needed the city and county's help to get it.

Hackett signed. After a tirade, so did Morris.

One crisis after another unfolded. Each time, it seemed cash from another deal arrived just in time to avert disaster.

A deal with Memphis State University freed up $1.5 million. The money was so badly needed that Bonham, Shlenker's Denver business partner, hand-carried the contract to Nashville for the required signatures of state education officials and the governor.

Federal Express and Pizza Hut paid up-front fees on sponsorship deals. The money went straight out to creditors.

In a strangely masked deal in March 1990, $900,000 arrived from Banque Paribas in Paris. The source of the funds was carefully protected. But quietly, Tigrett told key members of the company, and later outsiders, the money came from his friend Goldsmith.

The bank served as nominee and was pledged a 1 percent share of profits from the venture, just as was Perenchio.

A few months earlier, Houston Sports Association, the parent company of Leisure Management International, loaned the venture $1 million. Shlenker later hired Leisure Management to manage the arena for him. More than $370,000 immediately went out to partially repay Shlenker for a loan.

The financial vise tightened. But not just for The Pyramid Companies.

The young Los Angeles company hired to take over from Jerde perched perilously near the brink. The Omnis Co. had hired outside contractors and devoted nearly all of its small staff to the pyramid project. But its bills stacked up while monthly payments from The Pyramid Companies trickled in and Shlenker disputed some of the charges.

Omnis President John Lindsey sent an SOS:

"Sidney, you are watching the slow death of a company. Our creditors are knocking at our doors. I am dying out here and do not see any relief in sight. You have given me your word that I would not be killed by this project, but I am telling you now that it is happening.

"We have once again been unable to meet payroll this week. People are here only out of their support for Omnis. Next we will see liens and other forms of financial impact upon us. We have two pregnant women on our insurance policy, and we have infringed upon their demands as well.

"I need your help if we're going to survive."

Four days later, $60,000, enough to slow the bleeding, was wired to Los Angeles.

THE Pyramid Companies survived day to day, week to week, month to month. As it did, pieces of Shlenker's plan fell into place.

Omnis chopped millions of dollars from Jerde's over-budget design.

Teachers Insurance & Annuity, a huge national pension fund, agreed in August 1990 to provide permanent financing, the equivalent of a mortgage, once the project was built.

An exhaustive search for construction financing - beginning with the New York banks, then anyone who would listen - led Shlenker to the giant French lender Societe Generale. Negotiations progressed enough that SoGen assigned an engineering firm to evaluate the project's costs and feasibility.

Sponsorship and concession deals rolled in.

This kind of progress reassured Hackett and Morris. It gave them reason to think the deal was still possible, that sophisticated businessmen had enough faith in Shlenker and his plan to commit millions of dollars.

But a hairpin turn lay just ahead.

In early October, Tigrett was rushed to Baptist Hospital suffering from bleeding ulcers. There, on what was feared his deathbed, he tape-recorded a request to his partner - bring his son, Isaac, back into the project. The tape was dropped at Shlenker's doorstep next to his morning newspaper.

Isaac Tigrett had not had a hand in the project or its design since Shlenker emerged. He secured the Hard Rock franchise, then handed it off. A devout Hindu, he went off to help build a hospital in Andraha Pradesh, India, for the Sai Baba.

He was as much a contradiction as his father. One moment he would display his business savvy, the next describe how the Sai Baba had made a diamond materialize in his hand.

Despite a fascination with the offbeat, Shlenker wanted no part of Isaac Tigrett's idea, for instance, to install a crystal skull atop the pyramid.

Still, Shlenker thought highly of John Tigrett. And he did as his partner asked.

"Isaac, I am really excited to have you on board," Shlenker said in an October 1990 letter. "I know that your creative efforts on our behalf will yield wonderful results."

Isaac Tigrett made his fortune by marrying music with hamburgers at Hard Rock. Long before Shlenker was involved, he had hired a company to build a model of the pyramid's interior attractions. It focused heavily on music and its deep roots in Memphis.

He balked at the changes Omnis made. He said the project was off-balance. There was too much emphasis on the Egyptian theme, too little on music.

He had a strong supporter in his father. John Tigrett walked away from the hospital after the ulcer scare. He was concerned that the music theme had been all but lost in the cost-cutting move.

Isaac Tigrett coordinated yet another change in design, moving it back toward the first concept. As he did, U.S. troops moved into the Middle East.

Bankers, already nervous about the economy, now had a possible war to use as an excuse not to make the loan.
A ground war had been brewing at 245 Wagner, as well.

On Dec. 22, 1990, Shlenker confronted his partner. As the clock ticked, and as SoGen investigated the project, Isaac had made numerous changes. He had to go, Shlenker said. They had to move forward with Omnis' plan; additions could be made later.

That set John Tigrett off. He already was irritated about the company's spending. Now this.

Sixteen months had passed since Union Planters loaned the company $350,000 on his and three other signatures. The Pyramid Companies had gone through millions of dollars, but it had not repaid the loan. The bank was demanding a payment.

From the outset, Tigrett insisted Shlenker take control of the project. Shlenker owned controlling interest, and as president he was responsible for the company's day-to-day operation. Now, ironically, Tigrett wanted Shlenker removed from daily control.

Tigrett showed up at a Jan. 2, 1991, meeting in Shlenker's home in East Memphis and rattled a saber. He threatened to jump from the project unless the company's expenses were brought under control. He pushed for management changes.

There, before several members of the staff, he handed a sealed envelope to Shlenker. He asked his partner not to open it until the meeting broke up. Inside was a photocopy of a letter Tigrett planned to deliver to the mayors the next day. It carried the usual "Highly Confidential" label and was written with Tigrett's trademark brusqueness:

"At the outset, as I see it, three people have their reputation at stake in the pyramid - Richard Hackett, William Morris and Sidney Shlenker. All I have at stake is a few bucks, and I can pack up my family tomorrow, move back to London and never look back this way even once . . . I mention this only to indicate my views about this matter are quite objective. . . .

"When I looked at this project long-range, I decided it could end up as a dull municipal failure or that with a P.T. Barnum it might be a striking success. I asked my friends on the West Coast to send me their best Barnum, and they did.

"I brought him here. I convinced him to stay. And I alone stand responsible for him.

"I think he has done an exceptional job thus far for what he was brought in to do. You may not like his personality - his continued media coverage - or his management style, but you cannot deny he has given this town and others an excitement and anticipation they have never had before.

"Whatever judgment failures he may have made, he is an honest man, working every hour of his life on behalf of this project that can make you two fellows big heroes. Whatever criticism you have doesn't go to him - for in this matter the buck stops right here with me."

THE letter's defense of Shlenker obscured Tigrett's intentions. Seven days later, he formally suggested what had been discussed for weeks: that Shlenker step aside from day-to-day control of the company.

The written proposal was delivered via Federal Express to Orlando where Shlenker and his young son, Josh, were visiting Disneyworld.

"The hopes we had for this project have been turned into ashes," Tigrett said in a prelude to his offer.

He proposed Bonham be installed as chief executive and take over the firm's daily operation. Both partners would give him 2.5 percent of their stock, making him a critical swing vote in any disagreement. Shlenker would move up to chairman.

Bonham became a go-between as the partnership unwound.

He came to Memphis as Shlenker's business partner and friend. But through his work, the sale of $40 million of sponsorships, he had dealt extensively with Tigrett and gained his trust. And like Shlenker, Bonham became captivated by the man. Bonham and Shlenker shared ownership of a Denver marketing company. They made Tigrett a partner. The company was paid $15,000 a month for its courtship of pyramid sponsors. The importance of those deals gave Bonham sweeping power in the company even thou gh he was not an executive as were Criss and Richards.

Bonham added yet another strong-willed, offbeat personality to the cast. He was intense and aggressive, a physical fitness fanatic. He once trained vigorously for months to set a record for situps in an hour: 3,200.

Bonham and Shlenker already had experienced several rocky moments. Bonham had, for example, quit his job with the Nuggets after only a year.

Months later he came back, wanting Shlenker to join him in a new sports marketing firm. He did, and the Nuggets became a client.

Now, Shlenker smelled a power play. He sensed that the man who made many of those early trips with him to Memphis was trying to steal his deal.

Bonham could manage the company, Shlenker said, but he rejected any change in stock ownership. He was not going to do anything that might give John Tigrett majority control.

REJECTION of the deal fueled Tigrett's growing anger.

At much the same time, details of his partner's business background appeared in the newspaper, further angering him. He had not investigated Shlenker. He brought him to Memphis purely on his friend's recommendation.

Tigrett mailed one article to Perenchio. He attached a note. The man he had sent, the man John Tigrett once viewed as a godsend, was "dead meat" in Memphis.

But Shlenker was not about to be bullied. If he left, it would be on his own terms. His lawyer, Clarence Mayer of Houston, made a counteroffer.

He proposed Tigrett reimburse Shlenker for a personal, $250,000 investment and remove him from personal liability for more than $1 million in debts.

Tigrett gagged on what he viewed as ransom.

THE fight spilled outside The Pyramid Companies offices, into the business community, and into City Hall and the Shelby County Administration Building.

With each round, the partners increased their calls to Hackett and Morris. Most often Tigrett called to complain about his partner; Shlenker to defend himself. True or not, Morris became known as a Tigrett man; Hackett a Shlenker man.

The more of this Kuhn heard the more he worried. He cautioned Hackett and Morris to stay out of the fight, to avoid taking sides. They were a party to the contract and had a legal obligation to stand clear.

Kuhn repeated two words over and over: tortuous interference, legalese for 'Don't get involved or you'll get sued.'

It put the mayors in an awkward position. They feared the deal was in peril. But they could not interfere. It had to self-destruct.

The phone calls and the bickering were more than worrisome; they grew tiresome. Hackett and Morris didn't care who hit whom first. They just wanted the company to fulfill its obligations.

Kuhn and Morris aide Tom Jones delivered that message to Tigrett and Shlenker on Feb. 15, 1991. They found Shlenker in the cardiac unit at William F. Bowld Hospital. In 30 minutes at his bedside, they told him the mayors could not be drawn into the fracas. They did, however, expect the company to perform as promised.

Shlenker, hospitalized for a reaction to medication, was upbeat. He understood.

Tigrett served his guests coffee and cookies in his Wagner Street penthouse but reacted less charitably.

After hearing Kuhn and Jones out, he sent them back with a message for the mayors:

The "liver lillied (sic) sons of bitches" were going to have to choose sides. They were going to have to do what was best for Memphis. And for the project. Shlenker had run through millions of dollars. He had personal problems.

The mayors got the message.

At a public gathering several days later, the pair approached Tigrett after having altered the nametags provided at the door. Morris's tag identified him as 'LL1,' Hackett 'LL2.'

It might have confused the other guests attending a reception for Sun Records producer Sam Phillips, but Tigrett understood.

THE war brought on an interesting realignment.

Criss had come to the project as Tigrett's lawyer. He left private practice to become an executive of The Pyramid Companies. He now answered daily to Shlenker.

That posed a delicate problem. Having represented Tigrett, Criss knew much of the man's personal business. In March, as the war raged, Criss appeared on Tigrett's doorstep to announce he could not support the action Tigrett was taking.

An angry exchange of letters followed.

Tigrett accused his former lawyer of leaking information protected by the lawyer-client privilege.

Criss fired back: he had not taken sides, but as an officer of the corporation, he had very specific obligations.

Just the opposite occurred with Bonham.

His marketing partnership with Shlenker brought him to Memphis. He was the first to follow the promoter from Denver. In the early days, he stayed in Shlenker's home when on business in Memphis. But as the feud heated up, he began staying with the Tigretts, one clear barometer of his switched allegiance.

Bonham officially broke ranks in February after having sold $44 million in sponsorships. His company had $4.4 million in commissions riding on the deals, yet he bailed out, providing the first public indication of how serious problems were.

He bought Shlenker's interest in the marketing company and quickly struck his name from the door and letterhead, leaving Tigrett his partner.

He blamed Shlenker's mismanagement for the project's deep troubles. He accused him of a breach of ethics over a decision to collect full sponsorship fees despite a dramatic scaling back of the project. He phoned Hackett and Morris with a warning.

Much later, Shlenker accused Bonham of instigating negative publicity. A Denver Post story detailing the company's problems appeared one day before Shlenker's wife, Denise, was sentenced in Denver on a drug charge.

"You have done many despicable things since January, but you have reached an all-time low now," Shlenker said in an angry letter.

"I promise you that I intend to devote a substantial amount of my time, energy and money to pursue all actions and remedies available to hold you legally accountable for your conduct."

Bonham denied any role in the story. But he did not kowtow:

"On several occasions in the last few weeks you have threatened me. As you know, I have not responded to those threats, primarily because in any confrontation, I prefer to let the opposition do all of the talking.

"However, in this instance I am just plain getting tired of it. If you are so tough and so willing to sue me or try to damage me in some other way, what in God's name is holding you up? Let's get this show on the road!"

MORE than reputations were at stake now. Both partners had sunk far more of their own money into the project than ever intended. Shlenker was responsible for more than $2.6 million in cash that went into the project; Tigrett, $2.4 million, plus the Hard Rock franchise. Plus the stock both men had tied up in the escrow account.

They were not alone.

The Pyramid Companies ran up debts to a long list of suppliers, making them, in effect, unwitting financial backers of the project. Then there was the money committed by sponsors and concessionaires.

Wang, the computer company, had never considered a sponsorship deal before. But Shlenker's proposal turned executives' heads. The resulting contract meant more would come in computer purchases than would go out in sponsorship fees.

The computer company sank thousands of dollars into design plans for an elaborate, underwater computer line between the pyramid and the island. But without a loan, The Pyramid Companies could not afford to purchase the equipment it promised to buy.

Federal Express was in the midst of serious financial problems. But after a rigorous review process, the company signed and anted up $500,000.
Still, the companies controlled by a little known Kansas millionaire, O. Gene Bicknell, had far more at stake than the others combined.

Bicknell's National Pizza Co, the country's largest Pizza Hut franchisee, had signed three agreements, committing $30 million to the project.

A 10-year food and beverage deal guaranteed $21.5 million. It also provided The Pyramid Companies $2.5 million to buy and install kitchen equipment.

A second deal gave Pizza Hut restaurants controlled by Bicknell exclusive rights on the property for 10 years. Another $5 million. Pizza Hut signed on as a corporate sponsor as well.

The investment put Bicknell squarely in the middle of the partners' fight.

"After three years when the city and county had finally agreed and the Public Building Authority had taken over construction, I stepped aside feeling my efforts were complete," Tigrett said in a letter to Bicknell.

"Regretfully, the man I had brought in to run the project (who) we all were told had the funds to finance the attractions turned out to have a bad case of the 'shorts.' "

Bicknell visited Tigrett's penthouse. Hackett and Morris were asked to stop by and meet him. Because of Kuhn's warning, neither stayed long. Morris was there long enough to have a scotch, Hackett a 7-Up.

Tigrett had not given up on removing Shlenker from control, either by buying him out, or through a management change. It would leave him as chairman of the board and spokesman for the project.

Bicknell seemed a good replacement. He liked the project. And he had money. Lots of it. His holdings in National Pizza were worth at least $200 million. He was conservative with his money. There were very few excesses. Yet he was anything but bland.

He had been bitten by the acting bug and bankrolled two movies in which he appeared. In Gypsy Angels, a film about a stunt pilot and go-go dancer, Bicknell appeared in a bed scene with then unknown actress Vanna White.

He was bitten, too, with the political bug. He was the former mayor of Pittsburg, Kan. He spent an estimated $1 million of his own money on an unsuccesful bid to become Kansas governor. The money went down the drain as he and his running mate sparred. The pair finished fourth in the August 1986 Republican primary.

That eccentricity didn't prevent Bicknell from becoming a cog in Tigrett's plan. Tigrett lobbied Hackett and Morris about a new group that would step in, infuse $5 million, lash together the loan and complete the project.

Bicknell made a second trip to Memphis, this time meeting Hackett at his office in City Hall. Hackett drove him back to the airport.

History was repeating itself: Tigrett worked the political system as he had in 1987 to win public funding for the pyramid.

Morris and Hackett seemed afraid to listen. And afraid not to.

LESS than six months remained before the scheduled May 29, 1991, opening.

As the partners' war raged and financial problems intensified, the project resembled a cancer patient. The prognosis was grim, but there remained hope for a miracle.

Tigrett pushed the new ownership group. Shlenker fought back by hiring Memphis lawyer Bobby Cox, who had deep roots in the city's corporate warrens. Cox and his partner Frank Watson, if nothing else, could counter Tigrett's quiet, behind-the-scenes offensive. At best, they could resolve the feud or put together a new group of investors.

Tigrett put his own lawyers to work. Later, in an April 11 letter dictated to Morris at 4 a.m., Tigrett put it this way:

"The best idea, after some consultation, is for me to have the lawyers do the trading and for me to stay as far away as possible (but available). One sound reason is that this man's (Shlenker's) record is that he sues everybody, and there is no sense in giving him material if things go wrong and no agreement is made."

Federal Express Corp. Chairman Frederick W. Smith, perhaps the city's most powerful businessman, became heavily involved. Cox and Tigrett were members of his board of directors. Smith spent time with Shlenker, reviewing his business plan. Despite his efforts, Smith could not push through a compromise or a new group of investors.

More than anything, the nagging problem with the escrow account - that $3 million safety net for taxpayers - drove down the mayors' confidence.

Shlenker and Tigrett twice had bought time by agreeing to replace the GOI stock. The city and county couldn't be sure what it was worth; they wanted it out of the account. Each time they failed to do so.

With the partnership in tatters, Tigrett was not about to help Shlenker.
If Shlenker was to survive, he would do it on his own.

Hackett, facing re-election, watched the game of boardroom chicken with growing alarm. If Mud Island didn't open for the '91 season, his political opponents could stand in front of the park's locked gates and rile voters about the deal he'd struck.

The mayor made a spur-of-the-moment visit to assess the condition of the park in March. There, on the grounds, he worried aloud that the deal had cost him the election, his career.

It was Hackett's second visit to the park. The first, in September 1990, had stopped the bulldozers. Don't tear anything else out until you've got the money to build something in its place, he told Shlenker.

That first visit, coincidentally, took place the same day the morning headlines revealed Denise Shlenker had been arrested in Denver on drug charges.

When he arrived in Memphis, Shlenker was married. But the young blonde he introduced around Memphis as Denise Shlenker was his live-in girlfriend, not his wife. The couple had a child, and Denise Paladino had legally changed her last name to Shlenker.

They did not marry until Shlenker's divorce in Houston and until Denise returned from the Betty Ford Clinic after her arrest.

This might have gone unnoticed in Denver or Los Angeles or even Houston. But this was Memphis. The Buckle of the Bible Belt. It provided an uncomfortable association for a politician such as Hackett, who built a reputation on conservative values.

Hackett first met Denise Shlenker during an uneasy few moments at a Memphis State football game. It was there, in his private box, that Shlenker introduced her to Hackett and his guests, including Rev. Adrian Rogers.

Now, as the partnership unwound, Shlenker's personal life, too, became cannon fodder.

EACH time Hackett and Morris accepted Shlenker's confident reassurances that a loan was near, they edged further onto a political limb.
At one point the city mayor told a Memphis television reporter he'd been assured the loan was forthcoming "any hour."

Shlenker called Hackett regularly, sometimes late at night, to report his progress. With each "daily call," as Hackett began calling it, the reassurances became less believable.

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Pyramid Dreams: Pyramid Schemes, Part 1 of 3

How did Sidney Shlenker's Promise Die?

Commercial Appeal
By Louis Graham

Part 1 of 3

SIDNEY Shlenker faced his anxious employees with evidence of salvation in hand.

He unfolded a one-page letter, apologized for the hardship and uncertainty, then began to read aloud. The letter confirmed Shlenker had landed an $80 million loan.

Cheers, even tears of relief, burst from many of the 30 employees at The Pyramid Companies office on that May morning last year.

Shlenker rushed off to deliver the letter to Mayors Dick Hackett and Bill Morris. The city and county mayors had been exuberant allies, but as one promised loan after another fell through, they had grown impatient and cynical.

The loan was big news in Memphis. For 25 months, Shlenker - his dealings with local government, his plans for the pyramid arena and Mud Island and his own personality - attracted constant media attention. He appeared in this newspaper 92 times in 1990 alone. Even his lost dog was news.

Until today, many details, including the story of that loan, have not been told. The critical events and bitter confrontations that shaped the outcome of an unparalleled deal between the city, county, Shlenker and his partner John Burton Tigrett took place well out of public view.

This is the behind-the-scenes story of Shlenker's rapid rise in public stature and his dramatic crash.

Shlenker's meeting with anxious employees on May 28, 1991, was one of his last public acts before disaster. Two months later, his company and its promises crashed into a Chapter 11 bankruptcy, owing more than $16 million and holding 200 creditors at bay.

He was desperate. The loan meant survival of his company and its plans to turn a pyramid-shaped basketball arena and adjacent Mud Island park into a national tourism magnet.

His intoxicating overnight celebrity in Memphis had given way to the despair of deep financial trouble and a brawl with Tigrett. The city and county wanted both men out of their celebrated partnership with taxpayers.

Desperation had led Shlenker to Las Vegas and into the grasp of a man Nevada authorities viewed as a notorious con man. Shlenker did not know that at the time of his announcement. But the loan never arrived.

Shlenker, unlike other businessmen who desperately needed financing, had not paid an advance fee for the loan. So he lost no money, only precious time.

He had not always been so lucky. Earlier, when much of Memphis focused on the headlines of how his partnership was unwinding, Shlenker and a small group of Memphis investors paid a $200,000 loan commitment fee.

That loan never arrived, either.

Shlenker went to the FBI, where the case is still under investigation.

Memphis's hopes for a riverfront revival had burned brightly. But one such event after another began to dim the light.

Tigrett and Shlenker had chased a dream, together at first, separately after their feud broke out in public.

Their plan could have worked.

It didn't.

SIDNEY Shlenker.

Just the sound of his unusual name troubled the irascible John Tigrett at first, in November 1988.

John Tigrett did not know him personally. He was only a friend of a friend. But he was majority owner of the Denver Nuggets of the National Basketball Association. That took money. That was salve enough.

Tigrett needed someone with money to adopt the pyramid project he had ramrodded into existence just four months before.

Known as little more than a wealthy socialite in Memphis, his home for years, Tigrett had pulled a coup by winning public funding for a 321-foot-tall pyramid on the Memphis riverfront. When others had pushed the idea of building a pyramid, local politicians had listened politely, then put the drawings in a corner and forgotten them.

They could not ignore Tigrett. If only by association, Tigrett had power and wealth. He was a board member of Federal Express Corp., Memphis's largest employer. His wife, Pat Kerr Tigrett, was a successful designer and a member of the city's social elite. His friends included some of the world's richest men.

Tigrett pushed the project through the cumbersome city-county funding process with a simple pledge: If taxpayers would pay to build the pyramid, he would deliver a $10 million private investment in restaurants, two museums and a unique ride to the top.

He called it a turnkey deal: A private company would build the structure for a guaranteed amount, originally $39 million, then hand the keys to the city and county mayors. He'd even throw in the balloons for the grand opening.

Though Tigrett forged the deal, his name did not appear on the contract requiring the private investment. That responsibility fell to his son, Isaac Burton Tigrett, the colorful, eccentric co-founder of Hard Rock Cafe International Inc.

Promise of that investment and a Hard Rock Cafe, with its cult-like following, pushed the project over the top with a 7-to-4 vote of county commissioners.

Soon after, the Tigretts pursued a second deal, one that was not publicly disclosed and that made it difficult to deliver on the first.

Ultimately, this second deal - the August 1988 sale of Hard Rock Cafe International - led John Tigrett to Sidney Shlenker and changed everything.

Soon after striking the pyramid deal in Memphis, Isaac Tigrett walked away from Hard Rock with an estimated $32 million.

But he also walked away without an agreement from the new owner to follow through on his plans in Memphis. British restaurateur Robert Earl wanted nothing more to do with John Tigrett after the sale negotiations.

Isaac Tigrett salvaged the pyramid deal without a long legal fight by buying a franchise from Earl. His father didn't like it. John Tigrett viewed the $2 million franchise price, twice the going rate, as blackmail.

But Isaac's deal kept the pyramid project alive.

THE franchise deal, in effect, prevented John Tigrett from playing any role in the Memphis Hard Rock venture. That put him in a corner.

The city and county expected the first architectural drawings in 90 days. With Hard Rock under someone else's control, he had no company prepared to make the $10 million investment.

Tigrett, then 76, turned to a friend.

A. Jerrold Perenchio had struck gold as co-creator of the television show All in the Family. Showy, even by Hollywood standards, he had a circle of wealthy friends. Tigrett had met him through a mutual friend, singer Andy Williams, and maintained a friendship for years.

If anyone knew someone who could help, it would be Perenchio. Tigrett phoned him with a plea: Send me your best Barnum.

Someone came to mind.

Perenchio's call found Shlenker home in Denver, on the couch watching football. They had known each other for years, since the overhyped tennis match in The Astrodome between Bobby Riggs and Billie Jean King. Shlenker was dome president, Perenchio the promoter.

He had a friend in Memphis, a real Southern gentleman, who was, unbelievably, building a pyramid, Perenchio said. His friend needed help.

The proposition gave Shlenker a place to land. The Nuggets had proven very expensive, and within months, they would be sold.

It also tweaked Shlenker's fascination with the offbeat. Few public buildings since The Astrodome could compare with it: 321 feet tall, its base covering six football fields, a 2,100-ton steel frame and 2,800 truckloads of concrete, wrapped in eight acres of stainless steel.

The Astrodome transformed Houston; Shlenker thought the pyramid could do the same for Memphis.

He became fascinated, too, with Tigrett, whom he'd first met at Memphis International Airport.

Few people could match Shlenker's experiences from 30 years in the trenches. John Tigrett could.

Shlenker had paid $125 to swap airline seats with a stranger in order to meet Astrodome creator Judge Roy Hofheinz and wound up Astrodome president. He had coaxed motorcycle daredevil Evel Knievel from his trailer just moments before a scheduled jump at the dome. He had made $35 million on a single television deal. He had bought the Nuggets over the phone.

Tigrett had faced off against dictators over oil drilling rights for Occidental Petroleum. He had been given immunity, but provided Watergate investigators no help in their investigation of Occidental chairman and friend Armand Hammer. He had played roles in several major business deals for British corporate raider Sir James Goldsmith.

Night after night, usually in Tigrett's ornate Wagner Street penthouse, talk of the pyramid gave way to the good old days.

THE camaraderie made their obvious difference in style and intent seem insignificant.

But from the start Shlenker's vision of the project stretched far beyond Tigrett's.
The promoter and pro basketball team owner did not come to Memphis to become a restaurateur or the developer of two museums. Yet that was all Tigrett could offer; that was the portion of the project he controlled.

That alone proved a bother to Tigrett. But to Shlenker it was too little to bother with, a sure money loser.

Shlenker envisioned the Ninth Wonder of the World, using state-of-the-art entertainment technology not only in the pyramid but on nearby city-owned Mud Island.

His plans increased the cost of the promised private additions fivefold, to an estimated $55 million. They required that he also gain management control over the taxpayer-owned portion of the pyramid - the 20,000-seat arena. Control of the arena, through a management contract, would be up for grabs soon.

Competition was stiff. Several big firms vied for the job. Among these was a venture formed by Memphis cotton magnate William B. Dunavant and San Francisco 49ers owner Edward DeBartolo.

But each competitor showed up in early 1989 with the usual legion of lawyers. Each pitched the same deal to Hackett and Morris: They expected taxpayers to pay them to manage the arena.

Not Shlenker. He flew in a magician. Poof. A small model of the pyramid disappeared. It reappeared in a young woman's hands.

The professional pitchman had the mayors' attention. Now for the deal.

Give him exclusive control of the property, and he would make the taxpayers' annual debt payments. First $3 million a year, then $4 million, then $5 million. More than $150 million over the 25-year life of the contract.

Presto. The mayors' biggest concern about the project disappeared. Shlenker would pay for the right to lose money. Perhaps as much as $1 million a year.
Quickly, he struck a second deal to take Mud Island, a perennial money loser, off Hackett's hands.

On the surface, both deals looked liked financial suicide. But over six months, since his first trip to Memphis, Shlenker had devised a meticulous plan.
He had met repeatedly with Tigrett and Tigrett's lawyer, Marshall Criss, at Graceland to pore over details. They had met Hackett and Morris.

Shlenker was the salesman; Memphis a captive, eager buyer. For decades the city lusted for a tourism boom, for a professional sports franchise, for a recognized symbol of major league status, anything to catapult it to national prominence.
Shlenker promised to deliver on that dream. To do it, though, he needed other people's money.

Shlenker's plan required him to control the pyramid; the management contract gave him that. It required that he have room to expand; Mud Island gave him 52 acres.

Once completed and while still the subject of curiosity, the project might even be sold to a major corporation. That wasn't an idea he talked about openly, but the profits from such a deal would ensure Shlenker could maintain his lifestyle - even in retirement.

AS lawyers fine-tuned the pyramid contracts, a public relations firm prepared a script of Shlenker's first public act: the April 14, 1989, signing ceremony at the Holiday Inn Crowne Plaza downtown.

Shlenker starred. Hackett and Morris were bit players, each with lines to read.
These weren't just any contracts. By signing them, Shlenker, then 52, was taking Hackett and Morris off a political hook. Newspaper editorials supported the huge public expenditure, but it was not universally embraced by voters.

"That is one of the dumbest ideas that Memphis has thought of since Mud Island," one constituent wrote Morris. "Why do you want to spend more of our hard-earned money on a project like that?

"You had better stop to think that we can't even pay the utility bill on the Cook Convention Center, so how in the heck do you think we can build something like the Pyramid and pay the upkeep of it?"

The PR firm's script and posterboard props made it clear. Not only would Shlenker's company assume Hard Rock's minimum $10 million obligation, it would take over the city and county's debt payments. Over the 25-year life of the deal, it meant a profit for taxpayers, not the huge annual drain on government budgets common to other major arenas around the U.S.

Scene I:

Hackett: Who could possibly do all of this?

Morris: A person who first recognized 24 years ago this month the economic impact of civic arenas by developing the Astrodome and Astro World in Houston as its president and chief operating officer.

The script heaped praise, hailing Shlenker's arrival as if he were a marshal dispatched to a troubled cowtown in an old western.

The city erupted in Shlenker-mania. Hackett called him the "definition of a class act." The media fawned over him.

In supermarkets and restaurants, people who only weeks before had not heard his name lauded Shlenker. A woman interviewed by a Memphis television station dubbed him Santa Claus, presumably for taking the taxpayers off the hook, not his trademark vibrato laugh or his rotund profile.

Shlenker basked in it all. The Denver press had not been nearly so kind. His and son Andrew's push to bring Grand Prix racing to the streets of downtown Denver had not been widely cheered. Nor had a taxpayer subsidy for the race.

Much later, Denver Post columnist Woody Paige wrote that he had warned a "naive cousin" - Bill Morris - of Shlenker's "traveling medicine show/ shell game/flim-flam act."

Paige said he had whispered words of caution into his relative's ear at a family funeral: "Don't trust Shlenker."

SHLENKER'S majority ownership of the Nuggets guaranteed him great notoriety,
not great wealth.

He lacked the personal assets to finance his elaborate plans in Memphis. Not that he or any other developer would have risked his own money anyway.

Still, he had no guaranteed source for the estimated $55 million to $80 million he needed to build additions to the pyramid. He had no real estate to mortgage, since he owned neither the pyramid nor Mud Island.

The Pyramid Companies had no assets to speak of. Union Planters National Bank provided a small operating loan, $350,000, but only after Shlenker, Tigrett and two other ranking executives, Marshall Criss and Walter Richards, signed personal pledges.

The lack of cash was a strain, but time put Shlenker under ever greater pressure. The company's telephone number, 529-1991, provided a constant reminder that the clock was ticking. On May 29, 1991, the doors had to swing open.

From the outset, Shlenker operated as if the doors were open, as if the tourists waited in line with wallets open. The company looked and acted flush, sluicing through more than $10 million in cash and running up millions more in debts.

Criss, involved in the pyramid deal since its infancy in 1986, left his private law practice to become chief operating officer of the company. Hired in May 1989, he was paid $78,000 that year. By 1990, that had reached $120,000 as the employee ranks swelled dramatically.

Chief financial officer Richards, who followed Shlenker from a Houston investment company to the Nuggets, then to Memphis, was paid $124,000. The vice president of finance got $77,000; the vice president of construction, $57,000; the vice president of marketing, $80,000; the vice president of merchandising, $50,000.

Shlenker's personal spending habits set the tone. He had homes at Denver Country Club and on the water in Malibu. He threw parties for friends at Sardi's in New York. He had traveled Houston's streets in a Rolls Royce.

Shlenker didn't change just because the company lacked cash. He still flew first class and stayed in posh hotel suites. He routinely exited airports by climbing into a waiting limousine and reaching for the cellular telephone.

The bills rolled in. From the Ritz Carlton in Atlanta, the Beverly Wilshire Hotel in Los Angeles, the St. Bonaventure in Fort Lauderdale.

One day Shlenker was billed for 13 hours of limo service: $503 for the car and driver, $260 for the phone, $100 for the tip.

Five nights at the Beverly Hills Hotel totaled $12,126. Shlenker's room was $475 a night. Two other rooms were billed to his account. Ancillary charges quickly mounted: $5,000 for limousines, $547 for room service, $524 for a babysitter, another $703 at the drugstore.

In all, Shlenker spent more than $258,000 on travel during his tenure, although only $56,000 was reimbursed by the company.

The expensive travel partly reflected longstanding personal style. But appearances mean a lot in the business world: No one trying to borrow as much as Shlenker would stay at Motel 6.

SUCCESS of the deal depended on the willingness of lenders to finance Shlenker's vision of the Ninth Wonder of the World. But the venture took shape near the end of a decade now reviled for its excesses.

Unkind economic times loomed as Tigrett convinced local officials that a pyramid-shaped arena deserved their favor, and more importantly, public funding.

Hackett and Morris had a ready source of cash for their commitment - the taxpayers. Shlenker and Tigrett did not.

To finance the private portion of the project, they were forced to negotiate with banks that were, more and more, balking at speculative ventures. Federal regulators had increased their scrutiny of such deals as bank losses mounted and savings and loans died by the hundreds.

It was a bit ironic. Shlenker had owned 5 percent of two huge Texas savings and loans declared insolvent and seized by regulators. Now his company faced the tougher lending climate that followed such regulatory action.

Yet he needed a lender that could afford the $55 million to $80 million construction budget.

He needed a designer who could provide architectural drawings of a project that met Shlenker and Tigrett's vision yet did not exceed the budget.

He needed collateral for the loan.

Above all, he needed cash to pay the designer and stay afloat until the loan closed.
Time did not allow him to complete one step then move on to the next. He also had to get the arena ready for use. All the plates had to spin at once. Drop just one and the deal crashed.

SHLENKER took great pains to wrest control of the entire pyramid. Not because he relished the role of arena manager, but because it allowed him to approach sponsors and concessionaires without competition.

With exclusive control he could wring a higher price from them. If Pepsi or Budweiser wanted their names in lights, it would cost them top dollar.

Sponsors were expected to sign long-term contracts guaranteeing The Pyramid Companies annual minimum revenue from each deal.

These pieces of paper were as good as real estate because banks would accept them as collateral for the construction loan.

In a sense, all he and Denver business partner Dean Bonham were selling was the chance for major corporations to get their name before the public and to market their products. The more visible the display, the higher the price. Virtually everything that could display a corporate logo was for sale. Even The Great American Pyramid name could be changed if the price was right.

The Chrysler Pyramid. The nearest auto plant was 250 miles away. And it was Japanese-owned. But a proposed 20-year, $50 million deal made it a more logical fit. It was a long shot but the pitch was made. Sketches were drawn.

They tried everything. The Federal Express Pyramid. The Kodak Observation Point. Pepsi Festival Island. The Transamerica Inclinator.

Contracts with concessionaires added to Shlenker's borrowing power. Any company wanting to sell anything on the property - from T-shirts to soft drinks - would have to make a deal with him. They, too, would be required to sign long-term contracts that provided his company annual minimum guarantees. More building blocks for the loan.

By selling other companies on his vision, then using their money to pay his loan, Shlenker worked to build a huge project without risking his or his partner's personal assets.

SHLENKER'S business plan resembled a Rube Goldberg invention. But it was far less complicated than it appeared on paper. It was nothing more than a series of linked sales.

He already had sold Tigrett and the mayors. Now he faced selling sponsors and concessionaires on deals that could, in turn, be used to sell a lender to make the loan.

Shlenker prided himself on being a master salesman. He never held himself out as a business executive or manager. He could create the right mood, then deliver a compelling pitch. The magician had captured the mayors' attention with his sleight of hand.

The Big Dig, an oversized groundbreaking ceremony, was designed to captivate on a far larger scale.

Even without financial problems, others might simply have recruited the politicians to don hardhats and turn a few spades of dirt. Not The Pyramid Companies. It spent an estimated $440,000.

The planning was left to Pat Kerr Tigrett.

Instead of the usual gold-plated shovels gripped by men in suits, a huge, lighted shovel was dropped from a city police helicopter. Lasers cast a nighttime silhouette of the building's triangular shape. There was live entertainment for the thousands who braved a rainstorm the first night and came back a second.

Bankers, potential sponsors and concessionaires were flown in for the Sept. 14, 1989, ceremonies.

The event seemed prophetic.

The company had no revenue to fund the groundbreaking. So, on a much smaller scale, the company did what it hoped to do on the overall project. It raised money elsewhere by selling sponsorships and striking deals with companies wanting a piece of the concession business. More than $283,000 was raised.

But with no cost controls in place, expenses spiraled wildly. Hotel and airline bills stacked up. It cost an estimated $15,000 to send the Federal Express corporate jet to New York and return with entertainer Dan Aykroyd. Another $100,000 went for fireworks. The one-night rain delay added another $31,000.

Months later, when the bills were finally paid, the company swallowed a $150,000 loss.

Still, the public spectacular gave Shlenker an effective sales tool. Before thousands of Memphians enjoyed the show on the riverfront, Shlenker staged a different show for potential sponsors and concessionaires - out of public view in the Acuff Building in South Memphis.

Again, the setting was carefully chosen. There, in the Acuff building under police guard, the city was reproducing the Ramesses statue on loan from the Egyptian government. With the colossus towering in the background, designer Rich Battaglia, whom Shlenker hired, divulged his design plan.

Battaglia came highly recommended. He had extensive experience with Disney and had taken Shlenker and Tigrett's thoughts and created something of a Disney on the Delta:

Pick a date in history. Interactive juke boxes take visitors to the music of that day. A hidden elevator drops to a water ride exploring the ancient pyramids. Special technology allows visitors to steer a Lincoln Continental through the streets of Memphis, racing a Cadillac, as the song Hot Rod Lincoln fills the room.

But Battaglia's ideas carried a Disney-like price as well. Two weeks after the wowed guests went home, Battaglia unveiled the cost estimate to a stunned Shlenker: $250 million. Five times his target budget.

Battaglia was fired. Six months and $60,000 were lost.

LIKE the pressure that builds beneath the surface, then erupts into an earthquake, the differences between John Tigrett and Sidney Shlenker began to grind away at their partnership.

Initially, there had been such kinship, such trust in one another, nothing was put in writing. No documents spelled out what had been agreed to in those early one-on-one sessions in Tigrett's library.

But as the alliance shook, two sharply different accounts surfaced.

Shlenker insisted his partner took the lead on financing, that money was not a problem.

Tigrett's version could not have been more different: He recruited Shlenker to take over the deal, leaving himself in the background as the man who launched it, then handed off.

He presumed Shlenker was wealthy. But, much later, as the fissures appeared, Tigrett described his partner to a prospective investor as having a "bad case of the 'shorts.'"

Shlenker came from a wealthy Houston family. The entertainment booking company he founded and maintained an interest in, PACE Management, was valuable. He also parlayed a small investment in two Texas television stations into an estimated $35 million profit.

But a subsequent broadcasting venture ended in a huge bankruptcy, costing him its chairmanship and a personal $3 million investment. That was preceded by the debacle of his savings and loan investment.

The Nuggets put him under even greater financial pressure. During the first year of operations, the company recorded a net loss of $6 million. Shlenker's elaborate renovation of McNichols Arena went wildly over budget and cost an estimated $13.5 million.

Surprisingly, these losses only bolstered Shlenker's image in Memphis. They were seen as proof of his deep pockets and a willingness to dip into them when necessary. The Nuggets' $65 million sale price reinforced a belief that Shlenker was among Memphis's wealthiest residents - just as the president of one Memphis bank had quietly assured the city and county.

When the team's sale finally closed Nov. 30, 1989, Shlenker celebrated by drinking Dom Perignon 1982 from a Donald Duck coffee mug.

But he was not toasting the windfall some thought.

First, an estimated $24 million in debt was paid before the remaining proceeds were split among the owners. And though he was the majority partner, Shlenker owned only 40.8 percent of the team. He shared that equally with his wife in Houston. Their subsequent divorce enabled Marti Shlenker to collect $2 million (tax free) from the sale.

Selling the team had dragged on for months as The Pyramid Companies faced one financial test after another.

By the time the Nuggets sold, Tigrett had sunk $1 million cash into the new company; his new partner, $100,000. Those investments began evening out in early 1990 as Shlenker anted up cash or took personal responsibility for large loans, but as cash poured through the sieve, the partners' resolve was seriously tested.

The city and county's first real test of the company's financial strength came 90 days after Shlenker, Hackett and Morris signed the deal.

The contract required the company deposit $3 million by July 14, 1989, in a special account at Union Planters. The fund provided a safety net, of sorts, for taxpayers. If the deal disintegrated, the taxpayers would get the $3 million.

But the lawyers had taken a major detour as the deal was drafted. The city and county agreed to take publicly traded stock in lieu of cash.

At the time, it was an insignificant detail. Shlenker and Tigrett were best of friends, the city and county buoyant about their plans, and, most important, a loan to finance those plans was imminent.

Into the account went 242,363 shares of International Broadcasting Services Inc., owned by Shlenker, and 375,000 shares of General Oriental Investment Ltd. (GOI) controlled by Tigrett.

GOI provided a window onto Tigrett's closely guarded world.

Though Tigrett was perceived as wealthy, it was difficult to track his assets. Few were in his name.

He did not, for example, own the GOI stock that went into the account at Union Planters. They were registered to Jovest Foundation, based in Liechtenstein.

GOI was traded on the loosely regulated Vancouver Stock Exchange. The company was headquartered in the Grand Caymans, a place known for its wide- open business atmosphere and tax shelters.

The stock was publicly traded as required by the contract. But it rarely changed hands. Britain's Goldsmith, a billionaire, dominated ownership, controlling nearly all of the stock either through trusts or a closely knit group of friends and business partners.

As the city and county would discover later, that dominance made the stock difficult, if not impossible,to value.

The link with Goldsmith and the company he used as a vehicle for corporate takeovers helped outline the basis for Tigrett's presumed wealth.

In what amounted to a second life in business, beginning in middle age, Tigrett was secretive, did business most often outside U.S. borders, and normally with some of the world's richest men.

Previously, he had been a book salesman, executive vice president of American Burlington Bus Lines and an investment counselor.

Much of his reputation centered on a knack for buying patents, then cashing in on the products. His Jackson, Tenn., company, Tigrett Industries, became so well known an estimated 16,000 unsolicited ideas a year arrived on his doorstep or in the mail. While media-shy today, his story was splashed on the pages of Time, Newsweek and Saturday Evening Post in the early 1950s.

"Glub-Glub," the drinking bird, made an estimated $100,000. Sales from the "Pitch Back," a mesh backstop that returned a baseball to the thrower, reached $1 million in 1959. He introduced U.S. consumers to mesh playpens and retractable measuring tapes.

Then he walked away.

He signed on as European representative of Holiday Inn. There, he became a confidant of Goldsmith, Hammer and J. Paul Getty.

Accustomed to working in such circles, Tigrett turned testy at local government's cautious pace on the pyramid project. He never ran into such hurdles in Europe, he insisted. At times he referred to key members of the city and county administrations as "helpers" or "mental midgets."

His gruff, bullying business manner contrasted with a gentlemanly, even soft-spoken private persona. But business was business, and friend and foe alike felt his trademark poison pen.

At first his letters stunned their targets, but as one after another arrived, they began to lose their impact. Never did they leave room for misinterpretation.
He believed his son was due a partial repayment once the Hard Rock franchise was transferred to Shlenker. He railed when the city and county blocked the payment. He did not like the mayors' request that all pyramid- related communications be directed to the county attorney.

"My dear Bill," read Tigrett's large, handwritten salutation to Morris.

"You have requested that any letter which I may write to you as Mayor should be addressed to your legal staff. My comment to this insult is that I will write whomever I want, whenever I want to and I will always expect the courtesy of a gentlemanly response. You are certainly no exception!!"
The first shot had come much earlier, in February 1989.

"If you two (Hackett and Morris) are attempting to imply that in any matter relating to the Pyramid or any other project, that I have not been completely honest with both of you - then you are lying.

"I have successfully conducted important business in every major country in the world with never a question of my integrity or skill. I expect to continue to do business in my own way as long as I live, and I am not taking instructions from you two or anyone else....

The Cast of Characters (opens in separate window)

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Pyramid Dreams: Pyramid Schemes: Cast of Characters

Commercial Appeal
By Colin Ruthven

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1. Sidney Shlenker. Controlled the day-to-day management of The Pyramid Companies as president and majority owner. Under Shlenker, the company took on responsibility for managing the taxpayers' arena in April 1989 and making millions of dollars' of additions. Also controlled city-owned Mud Island.

2. John Burton Tigrett. Recognized as the father of the pyramid project. Lobbied for tax dollars to build the project with commitment of private investment. Recruited Shlenker, then became minority owner and chairman of company resulting from their partnership.

3. O. Gene Bicknell. Chairman and majority owner of National Pizza Co. Company committed millions to project as sponsor and concessionaire. Bicknell evolved as possible replacement to Shlenker.

4. Isaac Burton Tigrett. Hard Rock Cafe co-founder and John Tigrett's son. Original signator on a deal requiring a minimum of $10 million private investment in the pyramid.

5. Dean Bonham. President of a Denver sports marketing firm responsible for selling $44 million in sponsorships and concession deals for the project.

6. A. Jerrold Perenchio. Wealthy Hollywood mogul and friend of both Tigrett and Shlenker. Responsible for introducing the two in late 1988.

7. James Goldsmith. British billionaire and longtime friend of John Tigrett. Controlled General Oriental Investments Ltd., whose stock figured prominently in the pyramid deal. Reputed source of a $1 million loan to the project.

8. Dick Hackett. Former Memphis mayor. Heavily involved from the outset
because of the use of city funds in project. Defeated for re-election by W. W. Herenton in October 1991.

9. Bill Morris. Shelby County mayor. Heavily involved from the outset of the deal in 1987 because millions of county tax dollars were invested in construction of the pyramid.

10. Walter Richards. Chief financial officer, The Pyramid Companies. Followed Shlenker from a Houston investment firm to the Denver Nuggets, then to Memphis.

11. Marshall Criss. Chief operating officer and general counsel, The Pyramid Companies. Initially involved as John Tigrett's lawyer.

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