Trick or Treat

A white-haired man in his 70s may appear before the Kansas City, Missouri, City Council on Halloween to talk about a plan to redevelop the old Trinity Lutheran Hospital.

If he shows up, the council might ask the harmless-looking individual about the time he and another hustler looted two insurance companies. Or the millions he reportedly borrowed from failed savings-and-loan operations. Or the partner in a bingo parlor who served time for his role in a foiled murder-for-hire scheme.

A Missouri native who spent most of his life in Southern California, building and losing fortunes, suing and getting sued, G. Wayne Reeder has led a colorful life. Is there another man in town with a federal prison record (he was convicted on 10 counts relating to the collapse of the insurance companies) and an award from a city economic-development agency?

Shortly after his release from a Kansas City halfway house in March 2002, Reeder redeveloped the eyesore Vista del Rio apartments into a luxury condo tower. (He was a “consultant” to the official developer, the Reeder Family Trust.) Now he wants to take a crack at the old Trinity Lutheran Hospital site at 31st Street and Wyandotte. The plan, which is eligible for a tax break, goes before the city’s Planning and Zoning Committee on October 31.

I’ve written about Reeder’s past (“He’s No Angel,” September 16, 2004). But if I were on the P&Z Committee, I wouldn’t dwell on his reported involvement in a 1981 scheme to manufacture military gear on an Indian reservation and sell it to the Contras.

Instead, I would ask Reeder about more recent events — such as his role in the dereliction of a downtown Kansas City office building, the purchase of which has raised an accusation of tax fraud.

Reeder rehabbed the Vista del Rio (now called The View) with the help of Richard Turner, a longtime business associate from California. In 2004, as The View was being fixed up, Turner purchased another Kansas City property, the Brookfield Building, at 11th Street and Baltimore.

The Brookfield Building is now at the center of a lawsuit. A contractor, Timothy Bowman, claims that he helped with the purchase of the building, only to have Turner and Reeder turn their backs on him when it came time to put his ownership stake in writing. In court papers, Turner says there was never a partnership.

Filed in 2005, the case is still wending through the system. I’m not interested in Bowman’s ownership claim as much as I am in his attorney’s suggestion that Turner tried to use the Brookfield Building to avoid paying taxes.

I’m no tax expert. But I know enough about capital gains to think that the sale documents look really fishy.

A company called DMI Investment bought the Brookfield Building on September 3, 2004, for $810,000. The deed lists DMI Investment as a Texas corporation, yet its address is an apartment building near the Plaza where Turner and Reeder lived at the time. Margaret Lineberry, Bowman’s attorney, says in court papers that DMI is a “nonexistent” corporation “headquartered in Turner’s living room.”

Four days later, the Brookfield Building changed hands again. DMI sold the property to Pioneer Village Estates, which is owned by Turner and another company under his control. Only this time, the building fetched $5.5 million.

How does a property’s value increase nearly sevenfold in less than a week? Lineberry suggests that Turner was trying to avoid paying taxes on the sale of an apartment complex in Bakersfield, California.

The IRS allows property sellers to defer taxes on their profits if they invest the proceeds in another property. But there are rules. The bought and sold properties have to be of like value, for instance.

It’s pretty easy to believe that the Brookfield Building’s magic transformation into a $5 million piece of property had something to do with the sale of the Bakersfield apartment complex. According to court papers, Pioneer Village Estates sold the Bakersfield property less than two months before it wound up with the Brookfield Building. (In an affidavit, Turner says he learned about the Brookfield Building’s availability from Reeder.)

Court papers indicate that Lineberry wants to use the alleged tax fraud to impeach Turner’s credibility. Kip Richards, the attorney for Turner and Reeder, accuses Lineberry of trying to sensationalize unrelated facts. In a motion filed earlier this month, Richards said a jury could “erroneously” conclude that the transaction was undertaken to evade taxes “when that was not the case.” (Writing in an e-mail that his clients regard Bowman’s claims as “frivolous,” Richards declined additional comment.)

There’s other interesting information in the court file, though it may not be heard in court.

Bowman worked on The View renovation for a time. According to his deposition, it was a dangerous place to work. Bowman claimed that day laborers were sent into an elevator pit full of dead mice and rats. He said he saw improperly removed asbestos in the gutters of a neighboring hotel. (The View paid a $20,000 fine for asbestos violations in 2005.)

Bowman also recalled Reeder having said he can’t own anything. (The U.S. government put a $16.5 million lien on Reeder in 2005, an unpaid judgment stemming from his conviction.) Reeder’s daughter, Leslie, was officially The View’s owner representative. To Bowan, she was just a ghost. “I don’t know if Leslie Reeder exists,” he said in his deposition.

She exists, all right. I met her once, when Reeder was trying to convince me that he was, in his words, “absolutely retired.” That was a lie.

The View got swankified in downtown’s condo-building binge. The city’s Economic Development Corporation recognized the conversion with one of its Cornerstone Awards.

The stately old Brookfield Building, meanwhile, went downhill after Reeder’s pal Dick Turner took over. First the office tenants fled, complaining about bad service. Flooding caused by a burst pipe drove out the remaining ground-floor merchants, including my barber (“Water Worked,” March 16, 2006).

With its chained doors and grimy windows, the Brookfield Building looks forgotten. I hope that members of the City Council remember it when Reeder or his minions show up on beggar’s night.