Complaint Review: Duane Phillips - Waterford Development - Phillips Construction - Phillips Slaughter Rose - Tulsa Oklahoma

My husband a proud and successful chiropractic physician in practice for 15 years at the time had came to a point that he no longer wanted to throw his money away with renting. He was ready to invest and hopefully find somewhere he could own.

So in the summer of 2003 we started to look at properties and found ourselves searching in the South Tulsa region. We came across some land out at 101st and Sheridan; we did our research and found our best bet was to speak with Mr. Franklin whom owned the Franklin Plaza next to the land for sale.

This is when we were introduced to Duane Phillips; he was the actual developer of Mr. Franklins building. Mr. Franklins building was around the sq. footage we were looking to own or possibly build which was around 7,500 sq. ft. We thought that size and no larger than 10k sq. feet would be perfect, that would leave 2,500 to 3,000 sq. feet for us and the rest we could lease out. We could build equity and a possible retirement with a building this size.

At one point Mr. Franklin even offered to sell his building to us hind site that is exactly what we should have done. But by this time Duane Phillips had already had us convinced and excited about building and starting from the ground up.

By fall 2003 we had looked at several pieces of land, one I remember we could have bought for 25k.if only we would have known. So we get a call from a good friend of ours who at the time was in the process of building his own gym, and guess who was building it.Duane Phillips, our friend suggested that we check out the remaining piece of land that he didnt purchase and see if it might work for us. October 2003 we put our first 10k down on the land at 91st and Sheridanwe were ecstatic. The property was on the market for $750,000.00.

At this point we had to get serious and show and have proof to a bank that this land was worth building something on. In November 2003, we had drawings made up, Joel Slaughter of Phillips Slaughter and Rose came to our office and I told him a vision of what I wanted. he did a perfect job, we loved the drawings. We paid Phillips Slaughter and Rose $5,000.00 for the drawings. However I should say, we were convinced that 17,000 sq. feet would profit much more that 10,000 sq. feet, Duane felt 10k feet is not even worth the time or energy, plus he had us convinced the monies dont change that much at that point.

January 2004, we were having dinner with our friends Robert and Michelle, when it came up about not having a name for our shopping center. So Michelle had a great idea and pulled out all her and Roberts travel books of all the places they have lived and we just started scanning through all the great cities of the world. I told her to find Ireland; it would only make since to find an Irish name, since my husband is mainly Irish and some Swedish. We came across Waterford. that was it.The Waterford Plaza. We called Duane first thing Monday, told him we named our shopping center, we went to quick prints, had a packet made and bond together, with drawings of Waterford, a description and inside you found stats, footings and future letter of intents. We had at least 50 packets made up to present not only to banks but to future tenants.

In April 2004, we had to pay down another $25K to hold land. Duane Phillips had us again convinced we will find someone to fund this project. At this point we were getting pretty shaky on the deal; we had already liquidated our retirement and pulled money from our line of credit. June 2004, Duane said he had a banker that owed him a deal and he is willing to take a look at our Shopping Center, the banker wanted a $1K for a drive by appraisal, we called Duane and said No More..we just need to take the hint, its not going to happen, I remember him saying, What is another $1K at this point, so we agreed only for the deal to be turned down again.

We finally stumbled upon a banker at Spirit bank that was willing to do the deal.the big deal was, the bankers did not feel South Tulsa was growing that well and big to see a shopping center of our design and style go in and profit. Please stay with me; you will be shocked in the end.

So July 2004, we put down another $15K until loan closed, at this point we though we could possible split it up, keep part of it and sell the other half. We closed on Land August 2004 at a borrowed amount of $491,782.55, less $253,620.63, Duane briefly loaned us $238,620.63, the remaining amount of $15,000.00 was money we had already put down to hold the land. Duane said soon as the other loan is closed and land is rolled over we can pay him back with those funds, also in August we had paid Phillips Slaughter and Rose another $21,250.00 for more thorough plans to present the bank.

We started doing more research and getting more statistics together to present to the bank and future tenants.

The banks wanted at least half the shopping center full before they would consider the deal. So between 2003 and 2005, we had spoken with the following companies for possible future tenants: Under the Sun, Panera Bread, Camilles, Advance Dance Studio, Starbucks, Off the Grill, New Balance, Ricks Caf, Phillips Slaughter and Rose, Caf Cubana, Nordaggios Coffee house, Seigi Sausage, Wine and Spirits, A nail Salon, and Emerge Medical Day Spa. Which Six of those companies either signed a lease proposal or a letter of intent.

By April 2005, spirit bank was convinced we had a great idea along with a great shopping center, however again Duane changed the numbers on us once again, convincing us that in order to get a good return on our money we need to increase it to 28,500 sq. ft.

We told Duane we had no more money to give, we cannot afford to go larger; we liquidated out everything, not to mention the business we have lost because we have focused on this project so heavy. Duane said it can be done, so again we put our faith into him. Since we had nothing left to liquidate, Duane said he would come in as a main investor and my partners Joel Slaughter and Paul Rose that left us at a 5% ownership. Joel and Paul never put hard cash down; their investment was considered their time spent.

ay 2005, we broke ground and Duane promised no later than Nov/Dec 2005 we would be in our new office. August 2005 Footings was put in. Duane started working with a real-estate company by the name of Chinowath and Cohen; they were interested in leasing space and also wanted to list the property. December 2005, have not moved in, our office at this point was loosing a lot of business due to advertising in new location. I was also pregnant and under a lot of stress due to financial and nervous I didnt want us to go over the allotted time the bank gave us to build it and plus Duane said it looks as though he is going to go over budget therefore there wont be any extra money to build out our space. Duane presented an inflamed amount of $100 and sum thousand to do our build out. Which I should mention we dont have any documentation of numbers and not even a K-1, so we are still clueless about most of the money spent because we never had monthly stat meetings, he said he had it handled.

January 2006 I became extremely stressed, pregnant and due the 11th, and Duane breathing down my neck out needing more money for our build out. Finally, my doctor said no more, the stress is affecting you and the baby, turn off all phones and tell him to leave you alone. Finally, almost four weeks late and delivered by C-section, due to all the stress, our son was born along with $20K in medical bills.

pril 2006, met with Duane at Java Daves coffee house to go over more numbers and again I told him, it was not our fault you went over budget. Our build out was suppose to be included; finally he said he would make it work and we would be in no later than June 1st. Our foundation was poured and then Chinowath and Cohens foundation was poured.

May 2006 I met with Joel Slaughter at the Shopping Center to go over awning colors and I presented him our sign to see if he liked it. Joel thought it look great, said he like the gold color with the smooth lines.

May 2006 Chinowath and Cohens sign goes up, which was a little crazy we thought, we kept asking their build out isnt going to be done before ours and the answer every time was no. July 2006 Chinowath and Cohen moved in, we were mad and Duanes excuse was Chinowath and Cohen has straight walls and yours are angled and therefore that takes longer.

June 2006 Duane asked if we could borrow money from our parents for our build-out and we said no, he said then he wont build it out, we are being unacceptable. A Friday in June I was driving to the office with my new baby in the back, I called Duane to see if we can get together and find out the businesses he uses, so I can choose carpet, paint, tiles etc..and he immediately started cursing at me..calling me this name and that name, saying I wanted to put $3K in a bathroom, I even offered to paint the office myself and stain the wood myself just to cut cost.

Bills started piling, we were loosing business left and right, the good news was, we were getting tons of calls for our new location but we werent there yet and I was slipping into post partum depression, between being a new mom and not having the funds to pay our bills, we were at our ends wits.

Duane came to us and said the only way he could do our build out was to use our invested interest and the remaining amount we would put in a side note for us to pay out, at this point we were in the devils hands, we felt it was the only way. Duane said once it is paid back or if the shopping center sold, we would make our return and he would be paid in full, sounded a little shady to me, not to mention we still at this point had seen no stats or numbers.

August 2006, Duane called and begged for us to stay at our current location, and he would even pay for Septembers rent if we stayed, he needed us to hold off moving. We told him we put in our notice and we have no where to go, plus we scheduled to have our x-ray equipment moved the week before Labor Day weekend. He said the flooring isnt done, hold them off, he would pay the overture amount for working on a holiday weekend (which he still hasnt paid).

Labor Day weekend we move in, ceiling tiles were not all in because the electricians were still up in the ceiling; we only had one bathroom operating. We did not have electrical or plumbing permits, and we did not have occupancy permits. Duane asked us, if a supervisor or city official comes by, if we could lie and say we are not operating our business, that we are only training our staff. The Remaining month of September we were asked to take Wednesdays off, so the construction crew could finish up our space, so we lost more money and time due to that, not to mention the patients that would not come in because of the fumes and wood dust.

Our Sign was still not up at this time, so we had to buy a banner in August to show where we are located. This is when Chinowath and Cohen stuck their noses into it, they wanted us to change our color, our size and they thought our name took away from the Plaza. Joel and Paul came over to argue the point and had to remind Joel that he had seen these letters way before Chinowath and Cohen had their sign up and plus this is our name and that is how we present our Clinic. They said as long as they disapprove then the sign wont go up because they own more in the plaza.

So we filed to go to mediation because we couldnt take the childish behaviors any longer, we wanted our sign up, it is how our patients know us and we are again loosing too much money. At this point we had to go to my in-laws so they would co-sign on a consolidation loan so we could feel at somewhat of an ease.

January 19th 2007 went to mediation, he said, she said went on. They said we havent paid any rent, which at that point we hadnt, it was the leverage we had to get our build out completed, which as of today still isnt done, plus we still hadnt got our sign. Also financially, we hadnt hit a point that we could afford the rent due to being drug under and stomped on.

So Joel, Paul and Duane made us out as these horrible people that dont pay our rent, at this point principle was coming due on the property and Duane wanted us to pay it plus our rent, plus all our back rent, plus our build out we owed him.

We did not over spend on the project, we started the project, we did not extend the footage, we were happy with the 17k sq feet. Between our marriages in shambles, to not getting out of bed because I cried through out the night trying to figure out how we will ever financially be on top again because before we met Duane Phillips we had no debt, we had retirement, we had equity in our home, and we had a free line of credit, completely debt free.

I remember I turned to my husband, his eyes once full of hope, he had been beaten down by a crook and at that time we turned to the mediator and said we want outafter five hours of complete hell with the three guys that cared nothing about our hopes, dreams and money we invested. The comp our rent from September to December minus some funds here and there, they gave us some credit towards rent due to getting tenants to sign a lease, so our lease would begin January 2007, we would loose our interest in the property but we would still owe our build-out to Duane.

We got completely screwed and the funny part is it was never about the sign come to find out, in the end they said oh and you can have your sign just the way you want it.

I recalled just recently a phone call that took place back around November 2006, we had heard through the grapevine that that Waterford Plaza sold, so my husband called Duane to ask about it and Duane called back yelling, commenting that he can sell the property if he wants, we have no say. I grabbed the phone from my husband and started yelling back at Duane, that we were not attacking him, we just wanted to know. Supposedly it was a company out of town in a different state; this was right around the time of the mediation.

Now..the good stuff, I truly think this was completely pre-meditated, they had their minds made up, they wanted us out and they were going to cause as much havoc and stress as they could and they succeeded.

The shopping center sold June 21st, guess for how much youll never guess. $6.25 Million dollars. You tell me this was not pre-meditated? Yes, we sold out in January, but know how Duane works, he had this company, he knew.after working with this man for almost four years; you see how he works. He scams his way in and manipulates everything he can and that is exactly what he did with us. Check out the MFE online Calif. Investors Pay $6.25M for Tulsas Waterford Plaza it is a write up by Kirby Lee Davis. It would have never happened if we didnt make it happen, we pushed, we got excited, we had high hopes. Look at that number and the bankers told us that South Tulsa would never generate a Shopping Center like the one we started only to loose to a crook like Duane Phillips.

Shannon

Tulsa, Oklahoma

U.S.A.