Tulsa developer Zachary Davidson walked into HW Home, a high-end furnishing store in Cherry Creek, in the spring of 2005 and complimented co-owner Ron Werner on his taste.
Davidson began pitching his plans to build a pair of luxury condo towers, complete with stores, restaurants and theaters, in Greenwood Village. He boasted that it would blow everything else in metro Denver out of the water. He told Werner he wanted his store as a tenant.
“He had a lot of energy; he was almost bouncing off the walls. It was almost like he was Ricochet Rabbit,” said Werner, who initially didn’t know what to make of Davidson.
As would happen with so many others, Davidson’s charm and enthusiasm, not to mention the project’s prime location near Interstate 25 and East Belleview Avenue, persuaded Werner and his business partner Jim Hering to join the Landmark development.
In over his head
But Davidson wasn’t everything he appeared on the surface — a fact that became tragically clear when he took his life Jan. 8.
His audacious plan grew in scope to a $500 million development of condos and luxury homes, but he was in over his head and, Arapahoe County prosecutors say, embezzling money.
Davidson became known for his over-the-top parties designed to sell properties and a luxury lifestyle normally reserved for ritzy hotels, but the money he spent wasn’t his.
The Landmark began to unravel in 2008 amid the real-estate crash, and Davidson and his companies filed for bankruptcy over the next two years. Lawsuits and a criminal indictment followed.
Accused of stealing $3.1 million in public funds and on the run from authorities, Davidson last month drove his silver 2003 Mercedes to a state forest in northern Florida’s Hernando County and hanged himself from a tree.
The Denver Post has obtained Davidson’s suicide letters written to friends and family members, found in the car with a picture of Jesus and biblical quotes, and the police report on the case. In the letters, which have not been published before, he talked about his mental illness and confessed that he had done wrong, without specifically admitting or denying the allegations.
“A considerable amount of what was concluded in the indictments has another story that is materially different,” he wrote. “But in the end, I have sinned at a deep and profound level, and I see that very, very clearly.”
Davidson, 46, said he suffered from bipolar disorder. It was not an excuse for what he did, he said, but it caused him “to be very out of control in my actions many times, contributing to many, many very bad and ungodly decisions.”
Davidson wrote that he probably could have explained and prevailed on 16 or 17 of the 20 counts against him. But the remaining counts involved a complex financial trail that would have left him vulnerable to a 20-year sentence, given that he would be relying on a public defender, he said.
He expressed fear that he might not survive in an environment where rapes, stabbings and death were constant fears.
The letters, however, are mostly filled with messages of thanks and remorse to his friends and family, and reassurances that he was at peace with what he was about to do.
“Please know that long before the events of the past week, God has brought me to my knees and humbled me over these past three years,” Davidson wrote. “He has shown me my sin in so many areas, including but not limited to the indictments that were passed down from the court.”
Smart, talented, energetic
When Davidson arrived in Denver from Tulsa, Okla., he had the résumé and financial backing of a legitimate real-estate developer, although he was short on construction-management experience.
Born in Georgia and raised in South Carolina, Davidson had an undergraduate degree in corporate finance from Clemson University and an MBA from the University of Tennessee at Knoxville.
He worked for much of his career on the investment-banking side and developed a specialty for cleaning up bad real-estate deals that followed the savings-and-loan crisis.
“He was a very smart and talented individual and extremely energetic,” said Mike Patrick, who hired Davidson in 1997 to help him build the U.S. real-estate portfolio of Daiwa, a Tokyo-based investment bank.
In 1999, after Daiwa sold its U.S. real-estate holdings, Davidson started Dallas-based Eikon Investments with the backing of wealthy investment partners, mostly from Texas and Oklahoma.
Eikon’s biggest project, one that would set the stage for Landmark, was One Embarcadero South, a twin-tower condo complex next to AT&T Park in San Francisco.
Another developer had converted the apartments to 233 condos, but Davidson added high-tech upgrades to further boost the value of the units, which started at $750,000.
The project won numerous awards but had bad timing. The technology downturn and the 2001 recession crimped sales. Davidson moved to Tulsa, where he did smaller real-estate deals before setting his sights on Colorado with a new company called Everest Development.
“He was one of the smartest guys I knew, and his approach to development was amazing,” said Marty Johnson, a commercial-real-estate broker in Manitou Springs whom Davidson approached to find properties to buy in the area.
Johnson was so impressed with Davidson’s ability to turn around distressed properties that he asked to become a limited partner, which initially proved profitable. Johnson then put a couple million dollars in the Landmark, money he’s unlikely to see again.
Bold projects, lavish parties
As a newcomer to Denver, Davidson threw a series of increasingly lavish parties to boost his reputation and draw attention to his development.
Davidson boasted to The New York Times in late 2008 that he spent $3 million on 13 parties over the years. One of his first in 2006 set up tents and hosted former Cirque du Soleil performers, creating a buzz among brokers, buyers and investors.
The 135 condos in the first Landmark tower were snapped up on the day they hit the market. The 141 units in the second tower, called the Meridian, took longer to fill, but presales eventually reached high levels.
The project’s design won multiple national awards and maintained a high price per square foot as other developments faltered. That success emboldened Davidson to push forward with the Landmark’s second phase. The European Village was an 11.4-acre planned development of 240 homes based on continental designs that topped out at $3 million for nearly 5,000 square feet.
A 2007 fete to promote the European Village was among the most extravagant he hosted. It offered guests chateaubriand, veal scallopini and lobster salad piled high in martini glasses.
Davidson loaded the model home with artwork and valuable antiques designed to impress. He flew in a rock violinist from Atlanta to entertain the crowd of 700 and gave guests a giant bouquet of market-fresh flowers and a stash of Belgian chocolates on the way out.
“He was an incredible showman. Who in Denver has thrown parties of that magnitude and created a brand that was unmatched?” said Werner, who compared Davidson to the Great Gatsby.
Local investors, some after attending the promotional parties, agreed to provide Davidson with more than $20 million. The Highland Capital Real Estate Fund out of Dallas would tie up $18 million.
Hypo Real Estate Capital Corp., an affiliate of the German bank, would provide a $182 million construction loan, about half of which was paid off from sales before the bank took over the project in 2010.
Despite not having anything close to enough to make good on his pledge, Davidson personally guaranteed those and other loans.
For the first few years, the two projects seemed to defy the teetering real-estate market. But cracks began to emerge.
There were numerous construction delays — including the collapse of the top floor of the first tower in 2007 — followed by a series of missteps and a rising chorus of complaints.
When Davidson couldn’t get the high-end microwaves promised to condo buyers, he put false labels on cheaper models and ended up the subject of a Channel 7 investigative report.
To avoid paying for expensive bathtubs, he copied a high-end design and had a factory in China create a knockoff. Davidson had to replace the tubs and settle a lawsuit with the manufacturer.
Johnson said he advised Davidson to complete and sell out one tower before moving forward on the second, but he refused. Others later warned him he was too stretched to move forward with the European Village.
He argued that wealthy buyers could weather any downturn and took a seven-person design team on a 10-day trip through Europe to study classical architecture.
“He wouldn’t listen to anyone,” Werner said.
Broken promises
Wende Curtis, who purchased a building within the Landmark development to house a new Comedy Works and a restaurant that are still there, said she can now see the red flags more clearly. Project managers came and went, unable to work with Davidson, who would dress down contractors in public.
“He has to be the biggest and most powerful person in the room. He knew everything, more than anybody,” she said.
Despite being severely behind schedule, Davidson would have his construction crews drop everything to set up for the promotional parties.
Unfinished condos meant sales couldn’t close, leaving less money to pay contractors, Johnson said. More buyers dropped out as the delays got longer.
Curtis said her building came in 18 months late, a delay that cost her $1.7 million extra and pushed her into the heart of the mortgage crisis.
“Our relationship started to fracture. He shoved me into such a difficult, difficult position,” Curtis said.
Davidson seemed blind to the harm his delays were causing. He offered to bring Jay Leno out for the grand opening of the Comedy Works South, which would have cost $250,000 or more, Curtis said.
Like so many other broken promises and grand gestures Davidson made, he didn’t follow through.
“He had attributes of a megalomaniac,” she said.
Davidson’s goal in the Landmark was to create a lifestyle that others would see and want for themselves, a concept he called looking through the glass, Werner said.
Court records show that Davidson, too, wanted to be inside the glass, and he spent lavishly on himself even as his creation was falling apart.
He bought a $1.9 million home near Congress Park in November 2007. Other purchases included a Porsche, a Range Rover, a fine-wine collection and a corporate jet bought with a $3.2 million loan.
“I think his ego got the better of him as the project went on,” Johnson said. “It was almost like he was a rock star with the hangers-on.”
Davidson would always pick up large tabs for his entourage at frequent visits to Denver’s finer restaurants, Curtis said. He furnished his home with the expensive antiques bought for the Landmark and would later sell them on consignment under his own name, bankruptcy rec-ords allege.
The grand-jury indictment claims Davidson was taking more than $90,000 a month in payments from various accounts.
In his February 2010 personal- bankruptcy case, Davidson reported $1.3 million in assets and $164.6 million in liabilities. Despite that huge shortfall, he tried to get the court to declare his wine collection as provisions or food exempt from creditors. He purchased a used Maserati for $60,000, perplexing family and friends.
Meanwhile, Davidson was leaving a trail of destruction in his wake.
The Highland fund, his biggest backer, went into bankruptcy liquidation in February 2011. In total, equity investors are expected to lose $60 million.
Regulators took over Louisville-based FirsTier Bank, which was owed $26.7 million between the two projects.
The Marin Metropolitan District — which Davidson created to sell $31 million in bonds to fund the European Village — remains in limbo. Nearby property owners are making payments for the money that the district borrowed, including the $3.1 million Davidson allegedly misappropriated.
Davidson initially blamed his lenders for his problems, especially Hypo’s refusal to extend additional credit or rework loan terms after the German government took it over during the financial crisis.
A family member, who asked not to be named, said Davidson wiped out his mother’s $200,000 in life savings on fix-and-flip deals gone bad and other failed ventures in the final years of his life.
In his farewell letters, Davidson apologized for the harm he caused friends and family members.
“So sincerely sorry”
“I am absolutely clear that ‘I am sorry’ doesn’t work so many times in life,” Davidson wrote. “I regret so much, so very much. Truly I do. I am so sincerely sorry to each of you.”
Today, the Landmark and Meridian towers are close to selling out, with about 12 percent of their units listed for initial sale. Several are listing at prices 15 percent to 20 percent below their original value.
The nearby Village Shops at the Landmark has some empty storefronts, but tenants say they’re gaining traction and traffic is rising. An attorney familiar with the bankruptcy said it is close to resolution.
The site for the European Village to the south remains an empty field, surrounded by a long fence. An abandoned sales office and model home look aged beyond their years. Its grand driveway of red cobblestone, granite curbs and tiered marble fountains speaks of a lost grandeur.
People who thought they knew Davidson say they now see his high energy and eccentric personality in a different light. The image he portrayed, the reflection through the glass, hid a broken man.
For many of the investors and contractors burned by him, Davidson will be remembered as a self-indulgent con artist.
“He was a psychopath, without conscience. He had a feeling he was entitled to live this high lifestyle,” said Erik Fischer, a Fort Collins attorney representing a group of local investors who lost $20 million. “He had zero empathy for his investors.”
Others will remember Davidson as a visionary, generous and genteel, and driven to build something grand and beautiful that would outlast him.
“He burned a lot of people. But I think he was a brilliant man with a tragic ending,” said Margaret Youssef, whom Davidson talked into leaving Washington, D.C., to manage resident relations at the Landmark.
“Whatever has gone down, the towers are there, and aesthetically they are beautiful,” Youssef said. “He brought some life and stepped up the game for this part of town.”
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
