The main organizers of a plan to build a minor league baseball stadium in Burnsville have run into serious financial trouble in their personal affairs, the Star Tribune has learned.
Terry DeRoche of Prior Lake, co-owner and developer of the proposed $30 million stadium for the Metro Millers, has numerous tax delinquencies, liens on his home and failed business ventures that left him nearly $2.4 million in debt, according to court documents in Scott and Hennepin counties.
DeRoche said his problems are largely tied to the collapse of a plan to run a casino and build three hotels in Cripple Creek, Colo., in the 1990s. That $25 million proposal led to several lawsuits against DeRoche and his partners.
Tony Pettit of Burnsville, the other co-owner and developer, has two houses in foreclosure in Dakota County, with three mortgages taken out for more than $1.1 million. He also was sued Nov. 20 for $108,000 over a delinquent home-equity credit line.
The financial affairs of the developers raise questions about their ability to bring the ballpark to Burnsville or anywhere else in the south metro area. A land deal for a site at Interstate 35W and Hwy. 13 in Burnsville fell apart in late November, and the developers now say they have been eyeing a number of potential sites along 35W in Dakota and Scott counties.
DeRoche and Pettit insist their financial situations do not affect their ability to pull off the stadium plan. DeRoche, who founded Touch 'Em All Sports, a limited liability corporation formed to own the Metro Millers, said his work as facilitator is largely done and his ownership stake will be transferred to Pettit and Burnsville investors.
Pettit, a 31-year-old investor in land deals and other ventures, said he ran into trouble this year after renters in a Lakeville house that he owns paid half of their security deposit and half of their first month's rent, then stopped paying. They fought eviction, a lengthy process. The $100,000 equity line was on that house.
So, he said, that home went into foreclosure, as did another where Pettit and his family live in Burnsville. Pettit said he's reached an agreement with lenders that will stop the foreclosures by mid-January and settle the equity-line suit.
When DeRoche, a 61-year-old Duluth native, and his second wife, Sook Choi, divorced in 2006, they were in debt nearly $2.4 million, though much of that stemmed from business deals, purchases and delinquencies involving only him, according to papers filed in Scott County District Court.
Choi alleged in divorce papers that DeRoche mismanaged their money, kept banking statements and other finances secret from her, and forged her name on documents, including one that named her the top officer of a firm, A+ Vending.
"I didn't know nothing about it," she said. "I trust him because he was my husband. I trust him, and I didn't read the papers."
Garnished for taxes
Choi's wages at a rubber company remain garnished at $155 a week for unpaid business taxes in Minnesota, records show. The DeRoches owed a total of $246,921 in Minnesota, Wisconsin and federal taxes.
DeRoche said he did not forge his wife's name. "She and I were partners in business and in marriage. And we operated our company together with full disclosure."
He said he has settled several lawsuits relating to real estate.
"That $2.4 million in debt and the tax liens are the product of a company that I worked on developing during the 1990s," DeRoche said. "We built and developed hotels across the Midwest, and managed the hotels. In 1999, the founders in control of that company wanted to take the company in another direction than myself ... and we had a parting of the ways."
The company was National Lodging, owner of several Country Suites, Days Inn and other hotels. From 1991 through 1999, he said, "I grew a company that was worth $35,000 to an equity value of approximately $50 million." He also said he had $27 million in personal guarantees on mortgages.
DeRoche wanted to sell National Lodging, but the company's president disagreed, so DeRoche left the company while it was still in good standing, he said. But that left him with no income. His debt, tax liens and divorce stemmed from that decision, DeRoche said. By 1999, DeRoche, National Lodging and other defendants had been sued for failing to pay a $3.56 million loan for the casino project.
DeRoche and shareholders of National Lodging also were sued by Fargo, N.D., entrepreneur Duane Rogne, who had invested in the Cripple Creek project. Rogne contended in his 1998 suit that he was fraudulently persuaded by DeRoche and a business partner to exchange his stock in Cass Motel Corp., valued at $836,633, for stock in National Lodging, along with $150,000 in cash and a promissory note.
The case was settled. Rogne said he lost money but declined to say how much.
DeRoche also was sued in 1996 over an ownership dispute involving an Eden Prairie warehouse that went into foreclosure. And in 2002, De-Roche's attorneys obtained an $11,301 judgment against him for not paying them.
'Going to be a home run'
Pettit said he remains confident in the stadium project.
"I get the economics of this, and pardon the pun, it's going to be a home run," he said. "When you can take your family to a baseball game in a brand new stadium, 10 minutes from your house, for 50 bucks, it's something that people are going to support."
The stadium project remains "very much alive," said Jim Marchessault, a Burnsville business owner who helped form the local investment group. But Marchessault also expressed concern after learning of the suits and delinquencies involving the developers.
DeRoche and Pettit had announced in June that they had private financing arranged to acquire an 18-acre site in Burnsville and have the Metro Millers on the field in the spring of 2009. The team was to play in the Northern League, but those plans are now one hold.
The owner of the land the developers wanted to buy told the Star Tribune that no one from the Millers has contacted his firm in months, and the offer has been withdrawn.
Joy Powell 952-882-9017