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Federal regulator says Belleville Crossing owner did fraud
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Editor’s note: This story was originally published by the Belleville News-Democrat.The U.S. Securities and Exchange Commission has charged the company that owns the main strip mall at Belleville Crossing shopping center and its CEO with fraud for allegedly engaging in a multiyear scheme to “misappropriate” more than $35 million in investor funds.The strip mall, which has shown signs of neglect and mismanagement in recent years, and five of the company’s shopping centers in other cities have been in court-ordered receivership since May due to defaults on bank loans.The SEC filed charges on Nov. 28 in U.S. District Court for the District of Arizona against Architerra Companies, described as a “complex of entities (mostly limited-liability companies) involved in commercial real estate, development and management,” based in Phoenix; its CEO, Jonathan M. Larmore; and some of the entities.“Instead of protecting client assets, Larmore and his related entities took advantage of investor trust for his and his family’s personal gain,” SEC Asset Management Unit Co-chief Andrew Dean stated in a press release.The agency’s complaint lists five claims, which are similar to counts in state lawsuits. It’s a civil case involving alleged violations of antifraud provisions of federal law, including the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.The case remains under investigation, according to the press release. It’s unknown if the allegations will result in criminal charges by the FBI.Larmore couldn’t be reached for comment.
Teri Maddox
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Belleville News-Democrat Overgrown weeds and a scraggly tree surround a giant pylon sign for Belleville Crossing shopping center in November. It stands next to property with new landscaping where a Take 5 car wash is being built.
More than 1,000 investorsArchiterra Companies owns 81 retail properties in 26 states, according to its LinkedIn page and promotional materials. Larmore, 50, divides his time between Arizona, Indiana and Florida.The SEC complaint alleges that Larmore raised about $45 million from 1,045 investors for two private investment funds, beginning in 2006, but started diverting much of the money to Arciterra Strategic Retail Advisors, a company he owns with his mother, Marcia Larmore, as early as 2017.“(Jonathan) Larmore used the (ASRA) account as his multi-million-dollar slush fund, taking money from the various entities he controlled — including from real estate holdings owned by the (private investment funds) — to pay for other cash needs of his businesses, and to fund his lavish lifestyle of private jets, yachts, and expensive residences,” the complaint states.This mirrors claims made by four Belleville Crossing investors in May, when they filed a civil lawsuit in U.S. District Court for the Southern District of Illinois against Jonathan Larmore, his mother (identified as “Marsha” Larmore in that case), his wife, Michelle Larmore, two of their companies and four other executives.The shareholder derivative complaint alleged that the defendants had been breaching their duty to properly maintain the strip mall for five years while transferring cash to pay for “exorbitant family expenses,” and that they had stopped paying dividends to 177 investors in 2019.The complaint pointed to the Larmore family’s 12 residences, two airplanes, boats, vehicles and other “luxury toys” and accused Jonathan and Michelle Larmore of hosting “six-figure” parties, including one for their dog’s birthday.The investors voluntarily dismissed the lawsuit, which had asked for $2 million in damages, in October without prejudice, meaning it could be refiled at a later time or in a different jurisdiction.“We believed that the SEC was going to be coming in and filing an action, and it would have essentially halted our lawsuit,” said their Indiana-based attorney, Mark Maddox. “And we were probably going to have to refile in Arizona anyway due to a jurisdictional issue.”Mall owner for 12 yearsBelleville Crossing is on the northeast corner of the intersection of Illinois 15 and Frank Scott Parkway West. The 50-acre shopping center consists of a main “inline” strip mall of retail stores, two smaller “outlot” strip malls and several free-standing businesses, mostly restaurants.AT Belleville Crossing IL Inline bought the main strip mall (excluding The Home Depot and Target) in 2011, according to St. Clair County records. Belleville IL Outlot 6 owns one of the smaller strip malls. Both limited-liability companies are part of Arciterra with the same Phoenix address.For the past few years, Belleville Crossing tenants and city officials have complained about chronic problems such as tall grass and weeds, malfunctioning signs, overflowing trash receptacles, potholes in the parking lot, leaky roofs and empty storefronts. In addition, delinquent property-tax bills were sold at auction before being redeemed.Jonathan Larmore gave up managerial duties at Arciterra in September and quickly created another limited-liability company, Cole Capital Funds, for a new “scheme” involving stock manipulation, according to the SEC complaint.“On November 3, 2023, Larmore sought to have disseminated through a wire service a press release riddled with false and misleading statements announcing a purportedly imminent Cole Capital tender offer for WeWork shares, a transaction that Larmore did not have the actual intent or ability to execute,” the complaint states.“Larmore mistimed how long it would take to have the press release published, and it did not go public until 5:12 p.m. EDT. Shortly after the press release was published, WeWork’s stock price increased by close to 150% in afterhours trading.“Unbeknownst to the public, however, two days before dropping his press release, Larmore had purchased a large quantity of out-of-the-money WeWork call options that could have made Larmore hundreds of thousands to millions of dollars if the price of WeWork stock had increased significantly before they expired. Because he mistimed the press release, however, his options expired just over an hour before the WeWork stock price spiked as a result of his manipulative conduct.”
Teri Maddox
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Belleville News-Democrat A landscaping island, shown in November 2023, is filled with weeds and trash in front of the former Dressbarn clothing store, which closed in 2019, in the main strip mall at Belleville Crossing shopping center.
Long list of penaltiesThe other defendants in the SEC case are the limited-liability companies Arciterra Note Advisors II, Arciterra Note Advisors III, Arciterra Strategic Retail Advisors and Cole Capital Funds.The complaint names Marcia Larmore, 77, and Michelle Larmore, 50, who now is in divorce proceedings with Jonathan Larmore, as “relief defendants,” meaning they aren’t being charged with wrongdoing but allegedly benefited from it. Other relief defendants are the limited-liability companies CSL Investments, MML Investments, Spike Holdings and JMMAL Investments.The SEC is asking the court to:Prohibit defendants from further violating security laws.Appoint a receiver over defendant companies.Stay pending cases and stop filings of any new bankruptcy, foreclosure or receivership actions.Freeze assets of defendants and relief defendants.Limit acceptance, deposit, disbursement, withdrawal, transfer or other movement of funds.Request a verified accounting of assets by defendants and relief defendants.Permit expedited discovery.Order defendants not to destroy, alter, conceal or otherwise interfere with SEC access to relevant documents, books and records.Require defendants and relief defendants to give back “ill-gotten gains” from wrongdoing.Levy fines, as specified in securities laws.Prohibit Jonathan Larmore from serving as officer or director of any entity with SEC-registered securities.“Protecting investors from fraud by their financial advisers is a priority for the SEC, as is protecting the market from false press releases aimed at manipulating the stock of a publicly traded company for personal gain and leaving unknowing investors to lose out,” Dean stated in the press release.The main strip mall at Belleville Crossing is now being managed by Trigild, a national company appointed as receiver for six of Arciterra’s shopping centers in May by the U.S. District Court for the Western District of Louisiana. Trigild had been serving as property manager since December 2022.It’s unclear how the SEC charges will affect civil lawsuits against Arciterra by banks and investors in other cities and states or the default case that led to the receivership. First Guaranty Bank in Hammond, Louisiana, alleges that Larmore and 11 companies under the Arciterra umbrella defaulted on more than $35 million in loans, including a $8.6 million loan in Belleville Crossing’s name.Teri Maddox is a reporter with the Belleville News-Democrat, a news partner of St. Louis Public Radio.
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Laclede’s Landing is moving from nightlife hub to neighborhood
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Laclede’s Landing has cycled through many identities throughout the history of St. Louis. Now, some people involved with its redevelopment in recent years hope the landing’s next one will be as a residential neighborhood.The small district tucked directly north of the Gateway Arch National Park has quietly undergone a massive redevelopment with more than $75 million pouring into the rehabilitation of many of the historic buildings at the landing.“We are starting to feel that momentum, especially in the last really 60 days. Things have drastically changed around here,” said Ryan Koppy, broker and owner of Trading Post Properties and the director of commercial property for Advantes Group.Advantes alone shouldered the rehabilitation of six of the historic buildings, which now sport a mix of apartments and retail or office space, he said. Four of those buildings are completed, and of the 119 apartments available, about 90% are filled, Koppy said.“It just shows you what kind of demand we do have for the area,” he said. “We’re separated from downtown a little bit, and for the tenants, their local park where they’re walking their dogs, it’s a national park.”
Sophie Proe
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St. Louis Public RadioInterior of the Peper Lofts at Laclede’s Landing on Aug. 16
Another 40 apartments are set to come online next year along with some retail space, Koppy said. He added he’s noticed a wide range of people who are considering and moving into the newly refinished apartments.“It’s very mixed, surprisingly,” Koppy said. “We have a lot of young professionals, maybe on their second job out of [university], we have some empty nesters too.”Part of the newfound momentum comes from a new market, the Cobblestone, and coffee shop, Brew Tulum, opening recently and bringing more foot traffic to the area, said Brandyn Jones, executive director of the Laclede Landing Neighborhood Association. She added that more apartments are set to come online within the next few months.“We have a great riverfront area here and so there are plans in the works to activate those spaces, bring people in,” she said.That could be more daytime events, like a farmers market, music festivals (one of which is happening this weekend) or just bringing in food trucks to Katherine Ward Burg Garden, Jones said. It’s a departure from the identity the district held a few decades ago as a hub for nightlife and entertainment.“That’s part of what connects so many people to Laclede’s Landing,” Jones said. “It’s important to tell the story of where we’re evolving. It won’t be what it was in the same exact way, but it will still be fun, and it can be fun early morning, midday or late night.”It’s a view shared by Koppy.“It’s grown up, it’s a bit mature,” he said. “We’re not going to have 3 a.m. bars here anymore because we have residents here.”Koppy added that Advantes is joined by other developers working to rehabilitate buildings in the district.“We all work in unison,” he said. “If I get a call and [a client is] asking for something and maybe the square foot doesn’t really match up with what I have available, but I know it matches up over there, they’re getting a very warm welcome and introduction.”
Sophie Proe
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St. Louis Public RadioRyan Koppy looks out the window of Brew Tulum Specialty Coffee Experience on Aug. 16 at the Cobblestone on Laclede’s Landing in downtown St. Louis.
This push toward making Laclede’s Landing a residential neighborhood also comes alongside broader conversations about the future of downtown St. Louis more generally as it looks to move away from a dependence on office space. While the city as a whole continues to lose population, downtown added about 1,700 people between 2010 and 2020, according to U.S. Census data.“It’s been wonderful timing to have all that going on, that stress that you’re not just in downtown to work has been critical to part of this rejuvenation and energy down here,” Jones said. “Sometimes people forget Laclede’s Landing is part of downtown, really the original downtown.”And success in the small district could spread beyond its small confines and potentially serve as a model for success, Koppy added.“My idea is, if we could get all the great things of St. Louis coming in through here, we can eventually spread that,” he said. “We understand we can’t change the whole world, but we’ll just make the effort to try and change the world around us.”
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St. Louis barbecue festival Q in the Lou canceled
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The largest barbecue competition and tasting festival in St. Louis, Q in the Lou, has been canceled. The event was planned for Sept. 6-8, but organizers decided to cancel it due to poor ticket sales and insufficient corporate sponsorship.The traveling festival had low attendance in Denver last week, said Sean Hadley, a festival organizer.“We made the tough decision to cancel Q in the Lou,” said Hadley. “We’re seeing a lack of support … it’s just not there.”The traveling event first came to St. Louis in 2015 and drew hundreds of people to downtown St. Louis for barbecue, live music and a “major party.”“It shut down out of the blue … I’ve gone every year,” said Scott Thomas, local chef and food blogger. “It’s brilliant. You could take a tour of some really amazing barbecue restaurants and competition barbecue guys all in one place.”In a late July news conference, city officials touted Q in the Lou as a significant tourism draw and a boost for downtown revitalization.“Bringing a signature national festival back to downtown St. Louis … is making us stronger,” Greater St. Louis Inc. CEO Jason Hall said then.Less than a month later, ticket holders from every festival stop learned they’d be refunded. On Monday, organizers privatized the Q in the Lou website and deleted its social media accounts.Conner Kerrigan, a spokesperson for Mayor Tishaura Jones’ office, said city officials are disappointed the festival won’t be back this year.“St. Louis knows how to throw a festival … bringing people together to celebrate our culture is one of the things we do best as a city,” Kerrigan said in a statement. “Should Q in the Lou try to come back next year or any year after that, they’ll have the support of the Mayor Jones administration.”
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Alton’s Jacoby Arts Center likely to relocate permanently
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The Jacoby Arts Center, a staple of Alton for many in the Metro East community, will likely permanently move out of its downtown building at the end of September.Its departure and relocation from the historic building that the arts center has called home for the past 20 years has created a tense situation for not only the arts center’s supporters but also the local development company working to revitalize Alton’s downtown that owns the building.“It’s an unfortunate situation,” said Chad Brigham, the chief legal and administrative officer with AltonWorks, the real estate company owned by another prominent local attorney working to develop the town. “I wish there wasn’t misunderstanding and disappointment in the community. It’s difficult sometimes to clarify that.”When news of the likely departure spread in June via a letter from the Jacoby Arts Center to its supporters, an outcry on social media quickly followed. Some assumed it would be the end of the arts center.“There’s a lot of feelings right now that I think are more about the building itself than there are about the Jacoby Arts Center,” said Valerie Hoven, vice president and treasurer of the nonprofit arts center’s board.For supporters of the Jacoby, moving from the building and likely never returning will be a sad affair. Exactly what’s next for the arts center remains unclear. However, Jacoby board members believe this will not be the end of the organization. It will likely look different though.
Sophie Proe
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St. Louis Public RadioThe Jacoby Arts Center earlier this month in downtown Alton
Sophie Proe
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St. Louis Public RadioThe Alton-based Jacoby Arts Center features more than 75 St. Louis-area artists and their work.
The history of the buildingFirst dubbed the Madison County Arts Council, the nonprofit arts center renamed itself after the Jacoby family gave it the current building in 2004. AltonWorks founder John Simmons purchased the Jacoby Building in September 2018, according to property records from the county.Managing the large building, at 627 E. Broadway, became too expensive for the Jacoby Arts Center. In 2018, the organization approached Simmons to purchase it, said Dennis Scarborough, a past president of the board and a downtown business owner.“Of course, it sounded really, really good,” Scarborough said of Simmons’ purchase. “He took over the insurance, property taxes, all those kinds of things that were really, really getting into our budget, and he rented it to us at a fair price.”The two parties entered into a lease agreement initially for five years. Since then, Simmons has spent more than $1 million in upkeep, taxes, insurance and more on the building. The lease has been extended twice until the end of September this year.Over the six years, Jacoby paid $1,500 per month, which covered a portion of the utilities.“It’s been wonderfully generous of AltonWorks,” Hoven said.Because the building is aging and needs repairs, Brigham with AltonWorks and those connected to the arts center have long known the Jacoby Arts Center would need to relocate — at least temporarily.
Renovations on the Jacoby building will begin this fall. They’ll include modernizing the aging building, repairing the old elevator and putting in apartments on the second and third floors.
News of the likely departure and controversyRenovations will begin this fall. They’ll include modernizing the aging building, repairing the old elevator and putting in apartments on the second and third floors.In May, it became clear that a preliminary proposal for the arts center to return to the building after renovations finished in 2026 would not work for them, Hoven said.She estimates the first floor and basement of the Jacoby Arts Building span roughly 20,000 square feet.
Chad Brigham is a business and legal adviser for AltonWorks.
AltonWorks’ initial idea floated to the arts center would only provide 2,553 square feet, according to both Hoven and Brigham. While the board calculated the price for the new space to be at least triple the current payment, Brigham said there was never a specific price discussed.“No discussion in terms of actual rent price,” he said.AltonWorks didn’t make a specific rent offer because the organization doesn’t even know itself, Brigham said.In addition to cash from John Simmons, there will be loans, tax increment financing and state tax credits to cover the $20 million in building renovations. The entities financing the cost of renovations will also help determine the rent when the construction is complete, Brigham said.Regardless, the price required to return will be too much for the arts center to pay, Hoven said. Also, the organization would like to maintain the many programs it offers to the community — a rentable event space, a dark room and a clay studio, for example — in the future.“For us to really meet the needs of the community and be sustainable, we need a space where we can offer some of those programs — the artists’ shop, and other spaces that offer some kind of income as well — so that we can continue to give money back to the community,” she said.AltonWorks offered at least two other locations as possible alternatives from their vast stock of buildings along Broadway to house the arts center during the roughly 18 months of construction. Those alternatives came with similar deals requiring the Jacoby to cover only utilities, Brigham said.“We did put in a great deal of work behind the scenes in trying to find an interim solution,” Brigham said. “We wanted to find a place for them to go, where it was easy for them to continue programming, whether it’s 100% of it or some portion of it, that would work for them.”Initially, the arts center hoped to keep the basement during the renovations, Hoven said. When it became clear the preliminary offer to return was for much less space than the arts center anticipated, the letter to the community was sent.“The letter that came out was merely showing our surprise,” Hoven said. “Don’t misinterpret it as panic. Don’t misinterpret it as desperation.”
Sophie Proe
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St. Louis Public RadioA smorgasbord of radios are displayed at the Jacoby Arts Center in Alton.
The commentary on social media was passionate. Some critics of AltonWorks said the organization has good intentions but hasn’t executed those plans. Others said Jacoby hasn’t planned well enough for the future.For Brigham and the AltonWorks team, some of the criticism has been disappointing.“I thought that there were some decent solutions. Were they perfect? No, but they were very, I thought, very good solutions,” he said. “And the fact that it has come to the point that it is right now is a bit hurtful.”AltonWorks remains committed to the arts, Brigham said. John Simmons remains one the largest donors of the Jacoby Arts Center, Hoven and Brigham said.“I don’t think there’s ever been a question of our support of that organization — of our affinity for that organization,” Brigham said. “While some of the events were unfortunate, some of them were encouraging. The entire community rallied around the Jacoby Arts Center. That’s a good thing. It’s a good thing to have a love for the arts like that in a downtown community.”Sara McGibany, the executive director of Alton Main Street, an organization aimed at preserving the town, said AltonWorks should be commended for its vision. In many ways, her organization and AltonWorks share a vision for a thriving downtown.Even though AltonWorks hosts public meetings, McGibany believes the current situation lacks true community engagement.“We really think that if AltonWorks can get past some of the communication hurdles — and harness the community’s passion and shift to more of a bottom-up decision-making process that centers on community input — then we can turn around the growing sentiment of distrust that’s happening now,” McGibany said.Scarborough, the past board president and downtown business owner, echoed the praise for Simmons and his support of the Jacoby Arts Center. With the Jacoby likely moving, the future looks bleak, though.“It’s a community arts center that does a lot of good work,” Scarborough said. “The community is going to suffer, and they’re going to be missed by the community if they’re not there.”
Eric Lee
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St. Louis Public RadioShalanda Young, director of the federal Office of Management and Budget, talks to Illinois U.S. Rep. Nikki Budzinski, D-Springfield, during a tour of a construction project by AltonWorks last April in Alton. AltonWorks, who is building the LoveJoy Apartment Complex is receiving over $1 million in federal funding.
What does the future hold?AltonWorks will continue forging ahead with its ambitious plans to revitalize Alton. The organization hopes to conclude construction on the Wedge Innovation Center, which will have a restaurant, retail and co-working space, this fall. Lucas Row, a mix of apartments and retail space, is scheduled to be completed next spring.The remainder of the arts and innovation district, currently named after the Jacoby, will also move forward.“I believe in two years it’s going to be a much different place,” Brigham said of Alton. “It’s going to be thriving. It’s going to be new businesses, new tenants — and it’s going to be a nice proof of concept for what you can do in a small community like that.”The Jacoby board recently formed a strategic planning committee. Its task: figuring out what’s next for the arts center. The committee will reevaluate what space the Jacoby needs, what programs it wants to offer to the community and how they want to make that a reality.Keeping the arts center is essential for board members like Hoven. In her experience, it’s been a place where local aspiring artists get their start.“Art is one of the only ways to show your true authentic self,” Hoven said. “And there’s more people than I realized who do not get that opportunity every day.”The Jacoby will shut its doors to pack over the next month. Hoven said she’s optimistic the board will have concrete plans by the end of September when their lease officially ends.“Alton is such a fabulous and supportive community,” she said. “We still have lots of great options, so that the Jacoby Arts Center will continue to thrive in Alton and beyond.”
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