Brandon Barber worked his way up from a bank teller to become one of Northwest Arkansas' most successful developers. These days, he's waiting tables, unsure how he'll ever repay $54 million in debt.
Posted: April 17, 2011 at 5:53 a.m.
Brandon Barber proved himself willing to gamble on real estate and with high-stakes games of chance in Las Vegas casinos. He rode Northwest Arkansas’ growth bubble for 10 years until it popped, leaving him with an astonishing debt of $54 million.
Young, energetic and with access to easy loan money, Barber made a name for himself with plans to develop $750 million worth of luxury, mixed-use commercial/residential projects in the hearts of area cities.
He started off small, building homes with loans from his father-in-law’s Chambers Bank, then launched into a series of high-end condominium, hotel and retail ventures with backing from financial institutions in Arkansas and elsewhere.
He housed his growing family in a million-dollar home and partied with the who’s who of Northwest Arkansas.
But when the party was over, Barber and his investors were left holding a bill he couldn’t pay.
With two bankruptcy petitions denied, he’s on the hook for more than $50 million and is trying to build a new life in New York City with his young children.
At 35, Barber is finding his way in the city slowly — waiting tables at a restaurant that he declined to name on Manhattan’s Upper East Side, and searching for a better-paying job.
Admittedly humbled, Barber said his priority now is his two children, who moved to New York with their mother, Keri Barber, after the couple divorced.
“I hope the last few years are a footnote in my obit,” he said. “If there is any positive thing that came out of the past five years — and there have been some positive and some negative — then my kids are it.”
Barber grew up in Jonesboro, the son of a salesman and the oldest of four siblings. After high school, he moved to Fayetteville in 1994 to attend the University of Arkansas and was a full-time journalism student until 1999, when he married college sweetheart Keri Chambers.
Summer jobs during high school and college included working as a teller at a Jonesboro bank, so Barber fell naturally into banking when his new father-in-law bought the Bank of Elkins, which later became Chambers Bank of Danville. Barber went to work as a loan assistant.
He benefited from his high-profile family connections. Not only did his wife’s father own a bank, she is a niece of Dallas Cowboys owner Jerry Jones.
“I got to sit in on a lot of meetings with really good businessmen, people like J.B. Hunt and others who got Northwest Arkansas growing,” Barber said. “I was incredibly lucky.”
A single “spec house” — one built without a buyer lined up — in the Covington subdivision of Fayetteville was his ticket into construction and development in 2001, when the robust economy was driving the market upward, Barber said.
He made a small profit and graduated to building townhouses near the UA campus.
He went on to buy a number of lots to build homes in the Clabber Creek neighborhood in Fayetteville with a loan from Chambers Bank.
By 2004, Barber was readying his first subdivision for construction.
Launching an image
The Barber Group formed in February 2004 with sights set on developing posh, mixed-used ventures in the downtown portions of area cities. Barber was chief executive officer and brother-in-law Seth Kaffka was president.
Barber sought to establish the company’s name as a brand synonymous with hip, urban, luxury living. Slim and 6-foot-2, he was at the center of a young and trendy crowd, many of whom worked for him.
What the company lacked in experience, it replaced with youthful energy and image.
Part of The Barber Group’s brand-building was its reputation for flashy, expensive parties.
In 2004, Barber and business partner David Dallas hosted a Christmas gala at the Springdale airport to thank investors and vendors. A bare airplane hanger was transformed with plush, red carpet, silver chairs and tables draped in rich fabrics. More than 600 guests danced under a canopy of Christmas lights and swilled custom-made cocktails.
The following year, the Christmas party grew even bigger, with 1,200 guests and entertainment by recording artists Kool & the Gang.
That party included a live charity auction for a trip to Las Vegas to see Jermain Taylor defend his middleweight boxing title against Bernard Hopkins.
A group headed by National Home Center’s Joe Frame and Brent Hanby paid $34,000 for the jaunt, leaving aboard a private Pinnacle Air jet that very night.
The travelers included Barber and Keri; Kaffka and wife Laura; and the father of the two women, John Ed Chambers of Danville.
The next day, the group jetted from Las Vegas to New York to watch the Dallas Cowboys play the Giants.
Barber looks back at the party days as a lesson learned about the dangers of excess.
“It snowballed into something ridiculous,” he said. “It was a very foolish time. The best advice we got at that time was from the ones — and they were the minority — who were saying, ‘Cut that out!’”
Early in his firm’s existence, Barber shopped a couple of projects to Larry Daniel, a Rogers alderman who worked as a loan officer with Regions Bank.
“I didn’t loan them any money,” recalled Daniel, who later worked at Arvest Bank. “There seemed to be too many moving parts to the business. I just couldn’t get my arms around it.”
Daniel said the projects looked good in the prospectus and business plans, and they might have been good developments. But The Barber Group lacked a proven track record to give an investor or bank a sense of security for their money.
Other banks, though, had no problem loaning money to the young business, Daniel said.
“At that time, a lot of people were doing that. And they were making money doing it,” he said. “Everybody was making money until, suddenly, nobody was.”
living the legacy
In August 2005, Barber had broken ground for the seven-story Legacy Building in Fayetteville — 37 condominiums with retail and restaurant space in the heart of the Dickson Street entertainment district.
Legacy National Bank provided the financing.
First-class dining and shopping were planned at the Legacy, and the condos were to be “the most opulent residences ever built in Northwest Arkansas,” according to a news release from The Barber Group. The construction budget was more than $17 million.
To help pre-sell the condos, with floor plans ranging from 800 square feet to 3,700 square feet and prices of $300,000 to $1 million, Barber hosted a lavish dinner for more than 100 real estate investors at Bordinos restaurant down the street.
“Only 37 will live the legacy,” the private invitation said. “The dawn of a new era on Dickson Street — your legacy starts here.”
Barber got 23 commitments that night.
Before long, the investors who signed up to buy Legacy condominiums gradually began backing out, Barber said.
“The economy was already in trouble and some people couldn’t afford to buy them anymore,” he said. “They were more willing to lose their earnest money than to end up owing the entire amount.”
Greg House of Houses Inc., a Fayetteville-based developer whose Three Sisters and The Bakery buildings contributed to the changing face of Dickson Street, watched Barber rise and fall.
“He was young and inexperienced; I can see how he got caught,” House said.
“He had a wealthy wife, the support of a wealthy family — he thought he was the new sultan around here. He thought he could do whatever he wanted.”
In spring 2006, Barber was feeling heat over another Fayetteville hotel and condominium project called Divinity on Dickson.
Named after the candy he enjoyed as a child, Barber was trying to push plans for the Divinity project through the city’s Planning Commission against growing opposition.
Opponents said a 15-story hotel was wrong for Dickson Street’s quaint vibe. They said it was too big for the location and would create traffic problems.
The Planning Commission denied Barber a permit, so he appealed to the City Council, sparking a round of protests and petition drives.
The City Council chambers in June 2006 were packed with people stepping up to the microphone and giving their opinion.
Ultimately, aldermen approved the project, but that sparked a lawsuit from a would-be Divinity neighbor Michael Shirkey, who ran a business from his historic home.
Barber insisted he wouldn’t let Shirkey’s suit stop his plans, but by 2007 he abandoned Divinity, citing high monthly interest payments related to the project.
In May 2006, Barber had announced his company’s plans to build a 19-story Westin Hotel in the Lower Broadway area of Nashville, Tenn.
In some ways, Nashville was a replay of Divinity, including some people not wanting a tall building towering over their historic area. The plans drew criticism that the project would overshadow its old honky-tonk surroundings.
After a lengthy debate among residents, Nashville officials approved the Westin in 2007, but Barber backed out, leaving the project to partner Sage Hospitality Resources in Denver.
The hotel has yet to materialize.
In Barber’s private life, problems were percolating, too.
In 2006, he’d gone into default on a payment schedule to a Las Vegas casino, and in September of that year he was charged with driving while intoxicated after an accident in Fayetteville.
Barber leveled three mailboxes, a utility pole and an elevated driveway on West Deane Street in his 2002 Land Rover, according to a police report. He was convicted of DWI, served 24 hours in jail and completed 16 hours of public service.
heading to auction
With the recession that hit the nation in late 2007, Northwest Arkansas’ economy was tightening. Barber’s projects were getting squeezed.
Nine supply and construction companies filed mechanics liens against the Legacy Building in September 2007.
Despite a promised occupancy date of May 14, 2007, construction was behind on the 26-acre Bellafont condo-retail village, also in Fayetteville, that was to feature two 12-story office/retail towers and two 16-story condominium towers.
The Bellafont development on the north side of Joyce Boulevard near Northwest Arkansas Mall had an estimated completion value of $18.41 million, according to a business plan.
The economy and a lack of demand laid waste to those plans, and only portions of the retail village saw construction begin, Barber said.
“When we began to go through [Bellafont’s] cash flow analysis, we could see the problems,” he said. “The interest just wasn’t there for the rest of the retail space and the condo and office towers. We didn’t have any tenants for the towers, and some of the tenants we had signed to space in the village began to back out because of delays.”
Fayetteville upscale fashion retailer Masons announced it would open an exclusive “flagship store” — Masons at Bellafont — in August 2007.
But owner Mason Hiba sued Barber, CB Ventures and John Ed Chambers on Nov. 13, 2007, claiming liens for nonpayment of construction bills had been filed against the building he owned in Bellafont. Hiba opened the store in August 2009 and won a judgment of $860,562 against Barber’s company that September.
Days later, contracted tenant East Meets West Spa sued Barber, The Barber Group and Bellafont Land LLC, seeking release from the lease because its building in Bellafont remained unfinished, too. It later constructed a building near the mall on the west side of College Avenue.
Barber deeded the 26 acres of Bellafont property to Metropolitan National Bank in 2008 to satisfy an outstanding September 2006 mortgage debt of $14.47 million. Much of the retail village was finished after Barber relinquished control.
In January 2008, Legacy National Bank foreclosed on the Legacy Building, seeking to recover a mortgage debt of $18.17 million.
Keri Barber said the months spent in legal wrangling with bank officials were the most stressful of her life.
“The George family [owners of Legacy National Bank] was completely ruthless. You can’t imagine the way they attacked and harassed us, me and my sister. They chose to come after us publicly and nastily,” she said. “We were served papers in the middle of the night.”
Marshall Ney, attorney with Mitchell, Williams, Selig, Gates & Woodyard in Rogers that represented Legacy National Bank in the foreclosure, responded that the bank pursued a collection action against all guarantors of its loan when that loan went into default.
Ney said the bank’s actions in the case are public record and that people can decide for themselves.
In 2008, Brandon Barber sued Legacy National Bank and Flake & Kelley Management Inc. for fraud. The suit claimed the bank and management company hindered his ability to reduce liability in the Legacy project by not accepting contracts from potential condominium buyers.
Barber eventually withdrew the suit, and in August 2008, the Legacy Building was first scheduled for auction.
The sale, however, was delayed when a business entity solely owned and controlled by Barber filed for Chapter 11 bankruptcy protection in U.S. District Court in Fayetteville the same month.
Barber sought to reorganize $31.62 million in debt for his business entity — Lynnkohn LLC — which had between 50 and 99 creditors and assets estimated at $35.37 million, according to the bankruptcy petition.
A federal judge dismissed the bankruptcy, clearing the way for Legacy National Bank to auction the Legacy Building.
In September 2008, Barber was arrested a second time on a drunken-driving charge in Fayetteville. Police found him at 5 a.m. asleep at the wheel in the intersection of Joyce Boulevard and College Avenue. Before he was released from the city jail, his attorney had him surrender on a felony warrant from Las Vegas. Barber owed the Venetian Hotel Resort and Casino for a $16,000 bounced check drawn on Chambers Bank.
In April 2009, the Bellagio casino registered a $124,000 default judgment against Barber in Washington County Circuit Court for gambling debts he accrued in June 2007. The judgment also demanded $10,000 in attorney’s fees.
In June 2009, the Atlantis Paradise Island Resort and Casino filed a foreign judgment in Washington County for $98,683.60 of unpaid gambling debt — the same month Barber faced extradition to Nevada on a warrant for a $48,000 gambling debt to the Venetian.
Barber conceded that time of his life was fraught with “personally poor decisions.”
The biggest personal disaster, he said, was the breakup of his marriage and separation from his children. Barber filed for divorce in May 2009.
Keri Barber was awarded custody of the children — son Sloan, 8, and daughter Olivia, 5. Brandon has visitation rights.
In July 2009, Barber filed for Chapter 7 personal bankruptcy, claiming no assets and more than $53 million in debt.
In the preceding year, Barber had been a party in more than 34 legal actions, including 13 default judgments totaling more than $28 million against him, according to the documents filed with his bankruptcy petition.
Some of those actions have now been settled, satisfied or written off, he said. He said he sought buyers to take over properties in financial trouble and negotiated returns of some properties back to the banks that had funded the purchases.
Legacy National Bank challenged the bankruptcy, alleging Barber concealed funds from creditors. Barber still owed the bank about $9.9 million after the sale of The Legacy Building in November 2008.
On Nov. 10, 2010, Barber’s personal bankruptcy petition was denied by U.S. Bankruptcy Judge Ben Barry, who ruled that Barber had tried to defraud his debtors by concealing property.
Specifically, Barber transferred and concealed thousands of dollars using a bank account in the name of a company he formed in October 2008, Barry said in his order.
“... Barber was actively using [the account] for his personal expenses before and after he filed his bankruptcy petition,” the order stated.
Barber testified that the money was from personal loans from friends, but he didn’t provide any documentation to help prove it.
Judge Barry ruled that Barber is responsible to pay back the $54.2 million he claimed on his petition that is owed to 10 local banks and former business partners.
Asked if he had referred the ruling against Barber for possible criminal charges, Ney said, “No comment.”
A luxury hotel planned for south Rogers would have been the first Westin Hotel in the state and the tallest building between Little Rock and Tulsa — had funding been found for its construction.
The Barber Group planned to break ground for the 22-story, 700,000-square-foot hotel and condominium building in early 2007 and to open it in late 2008.
The $100 million hotel would have been part of The Barber Group’s Forty-Fifth, a retail and office development just south of New Hope Road. The unfinished retail subdivision remained an empty lot crisscrossed by finished roads until October, when new construction was begun by new owners.
The Westin, Forty-Fifth, unfinished residential subdivisions and other development plans were dropped, stopped or shelved as the economy faltered and banks cut off construction and development loans.
Barber said one of his primary regrets comes down to trying to build one $20 million “spec building” — The Legacy Building — instead of building to suit an investor. If he’d had an investor at the start, someone who was guaranteed to lease or buy the building when it was completed, he wouldn’t have gotten in such deep financial trouble.
“I regret how big we got so fast,” Barber said. “I had some great partners but I take full blame. I was the person in charge.”
He also regrets not listening when more successful businessmen offered advice, especially former father-in-law Chambers.
“He is a brilliant businessman. I should have taken every opportunity to gather advice from his wisdom as a mentor,” Barber said.
Today, Barber carries a sense of the great hurt he caused his friends and family, both personally and financially, he said.
“That is something that’s hard to get over, if you ever do,” he said.
He’s starting out with the clothes on his back, a handful of contacts and — something he can’t forget — a huge debt hanging over his head.
Barber said he doesn’t know how but he will comply with the judge’s ruling and start trying to pay off his debts.
Ney said that he continues to look for opportunities to pursue any assets that Barber might have as he learns about them.
Meanwhile, Donna Stewart, managing partner of Realty Title and Closing Service LLC, has come to know Barber better by working with him during closings of some of his troubled properties this past year.
“I didn’t want to do business with him when they were doing well,” Stewart said. “I thought he was too arrogant. I like the Brandon Barber after the fall a lot better than the one before the fall.”
Stewart said she believes Barber truly regrets the financial pain he has caused.
“He really didn’t do anything that anybody else didn’t do. Nobody looks for this kind of thing to happen,” she said. “I believe he is more humble now than he has ever been.”
In trying to restart his life in New York City, Barber said he is less tolerant of risk than he once was but is willing to do anything to create a new direction for his life.
Barber moved north in December, saying it was inevitable with his children being there full time since the summer of 2008.
He said the sheer size and relative anonymity of the big city gives him a chance to start over without too much of his past holding him back.
“I think I can be an asset to someone, to some company, with my wide experiences — both positive and negative. And I would be a bargain to them,” Barber said.
In the meantime, he’s a waiter at the American-style restaurant in Manhattan, networking and looking for his next career break.
“I’m waiting tables. I’ll pour the coffee, pick up the cleaning, anything. That’s what I’ll do to get a chance to do something that I’ll love,” he said.