furious with the federal
government for selling off a condominium project he has been developing in downtown Los Angeles.
He has launched a loud campaign to get his building back, advertising in The Washington Post to try to be heard in the capital.
The main target of his fury is the Federal Deposit Insurance Corp. (FDIC), the federal agency that insures everyone’s bank deposits.
Astani had his $260 million project to build condos underway in a 30-story building. He had put in $60 million of his own money. But most of the financing came from a bank.
And then the recession hit. Astani says he was in good shape. But his bank wasn’t. It sank. The FDIC than took it over to protect depositors.
“The FDIC comes—the government—they’re gonna help me,” he told the Los Angeles Times. “I thought, they’re going to be so glad that here’s a guy who’s self-funded. They don’t need to do anything.”
But then Astani ran into an issue that drives many people crazy. The FDIC isn’t equipped to deal with all the people a bank has loaned money to. It just wants to convert all those assets to cash and move on.
And so the FDIC sold the failed bank’s portfolio to Starwood Portfolio Group. Astani calls Starwood “the worst possible buyer—a Wall Street firm.”
Astani is furious and accuses the FDIC of sinking the American dream and only operating to help the big guy, not small firms.
“If I didn’t have the money I have—and the experience—I would have been crushed,” he said. “It’s shameful. Survival of the fittest has become survival of the fattest. Whoever is big and fat, like Wall Street and banks, they’re surviving—and that’s the problem.”
Astani sees Starwood as a wolf just waiting to gobble him up and sees the FDIC as a collaborator with Starwood.
He says he got a letter from the FDIC saying it had to sell the failed bank’s portfolio because it doesn’t have the manpower to deal with small projects—and it apparently sees Astani’s quarter-billion dollar project as small.
As for Starwood, it “has no incentive to work with me,” said Astani. “They’re waiting until I run out of money. By January, February, they put me in default and take over the building.”
Astani says he came to the United States in 1976 to get a master’s degree in engineering and fell in love with Los Angeles. But he says he realized that engineers were underpaid and not respected. “I wanted to make money,” he said. “People said to get your real estate license, and that’s what I did.” He then started learning how to develop properties. For a time, he was living in his brother’s Volkswagen Rabbit, but eventually everything came together.
Now he’s hit a bump in the road. But he’s not fearful of moving back into a VW again. “Luckily, I’m well-off enough that I don’t have to,” he said. “But I have to spend money on legal fees for the next year or so. All this because of the bank. Those guys make so much money, they go all out and take this guy to the cleaners.”
He says he has the money required to finish the condos and put them on the market. He has filed for Chapter 11 bankruptcy to help deal with the immediate financial crunch and get him over the hump. But he needs to get ownership of the condo project out of the hands of Starwood before he can move forward.
