NEW INVESTORS****MUST READ*************
reposted from yeasterday
Feature Article on DRGI in todays Raleigh News&Observer!!
Angling for piece of housing pie
A Cary developer and a penny stock company find room for another North Raleigh community.
By DUDLEY PRICE, Staff Writer
RALEIGH -- Cary developer Mike Matheny and a Florida penny stock company, which emerged recently from bankruptcy reorganization, want to build an upscale golf-course community with as many as 1,600 homes in the Falls River area in North Raleigh.
The question of whether they can succeed is nearly as big as their plans.
Diversified Resources Group of Sarasota, Fla., and Matheny Development of Cary have contracted to buy 607 acres bounded by Falls of the Neuse, Durant and Dunn roads. The tract is just north of the 600-acre Falls River subdivision that East West Partners of Chapel Hill began developing in 1996.
The 607-acre site is owned by PCF Falls, an investment group headed by apartment magnate David Falk Sr. PCF Falls bought the land in November for $9.5 million from Duke Management.
Diversified Resources plans to close on the property in December and is planning a mix of apartments, townhouses and single-family homes priced from $200,000 to $400,000, as well as retirement housing, a commercial area and 200-room hotel, offices and a championship golf course, according to company news releases. The project would begin next year, be built over five years and bring in an estimated $5 million a year in profits from land sales, the company said.
Diversified Resources said it has contracted with Westminster Homes, a division of Washington Homes, to buy 300 single-family and multi-family building lots valued at more than $15 million, and has an agreement with Ocean Golf Group to buy the golf-course property and hotel site for $2 million.
Diversified said it also has a letter of intent from Drucker & Falk, the Triangle's largest apartment management and development company, to buy land for 800 apartments in the project. According to the Diversified Web site, it has commitments from national tract builders for the remainder of the property.
But will it happen?
Neither Matheny nor Diversified officials could be reached for comment.
Several people active in Cary's real-estate community said it would be Matheny's largest project in this region. They said Matheny, who has been made director of real estate for Diversified Resources, has developed smaller projects in Cary such as Heritage Pines, a 96-acre, adults-only community on Carpenter Upchurch Road; Ivy Creek, a 150-townhome project off Kildaire Farm Road; and a townhouse project on about 18 acres at the Preston development.
And Diversified Resources only emerged from a Chapter 11 reorganization on July 13. The company, which had filed for bankruptcy protection in September 1997, said it had reduced nearly $6 million in debt to less than $500,000 but had assets of only $42,576.
The company, which formerly operated under the name Data 1 Inc., was founded in 1984 and has offered a variety of products and services, including a marketing operation for MCI, computer chips and sports marketing for NASCAR. It now sells electronic batteries and a saliva-based HIV screening test.
The company changed its name to Diversified Resources in May, the same month it paid its president and chief operating officer $100,000 for his resignation. Two months later, the vice president of finance received the same buyout.
According to an audit done in June by Jones, Jensen & Co., a Salt Lake City accounting firm, Diversified "essentially has reverted to the status of a start-up company."
Diversified Resources apparently is banking on the North Raleigh land deal along with its battery sales and HIV tests to raise its stock price. Over the past year, its shares have fluctuated from a high of 29.5 cents to a low of 1.5 cents and closed Friday at 9 cents, up .9 cents from the day before. Shares are traded on the OTC Bulletin Board, an electronic quotation service.
In an Aug. 6 news release, Diversified Resources said it was in the process of filing documents to be listed on the Nasdaq Stock Exchange and that one requirement was having a minimum share price of $5. |
