Ron Barness

Real Estate Power Player, Ron Barness, Talks About the Dismissed Investor Lawsuits

The real estate market crash has devastated many around the U.S., especially in Phoenix, where prices had been drastically inflated until the real estate bubble exploded a few years ago. For Ron Barness, one of the biggest players in the Phoenix commercial real estate market, the crash meant losing everything.

In 2008 & 2009, a number of civil lawsuits were filed against Ron Barness, principal and CEO of Barness Papas Investments (the parent company of Retail Brokers, Inc.) and his business partner at the time, Alex Papakyriakou.  Those judgments were filed by a handful of investors who alleged that Ron and his partner did not accurately report earnings and the sales of property. At the time of this report, all but one of the investor lawsuits has been successfully dismissed by the Maricopa County Superior Court. The single outstanding investor lawsuit is working its way through the legal system and will likely be dismissed soon.

Any other outstanding lawsuits against Ron Barness are from lenders related to the personal guarantees that he made on his real estate investments. Barness says he is working diligently to clear his name of the suits, which came about after those few investors lost money in other real estate transactions and were hoping to take advantage of the legal system in a down market.

Barness’ 27-year real estate career includes acquisition, development and disposition of more than 300 shopping center investment properties, almost all of which included the involvement of nearly 1,000 individual investors or partners. Until the collapse of the Phoenix real estate market in 2007, not a single investor had ever lost a dollar with Barness. In fact, for nearly 15 years, investors enjoyed returns ranging from 15% – 30% every year.

When the market did begin to take a turn for the worse, all of Barness’ projects were negatively affected; each property suffered extreme vacancies that impacted cash flow. In an effort to protect each investor’s monies and to salvage his huge investment portfolio, Barness began to inject his family’s personal savings into the suffering projects.

“The sheer magnitude of the market collapse and the size of the portfolio I controlled ultimately led to the demise of my business and the loss of the projects,” said Barness.

Each of Barness’ projects were financed through a total of 27 different lenders, and most of the transactions were personally guaranteed by Barness and his wife, a testament to how deeply he believed in each deal. No investor ever had personal liability for any of Barness’ real estate loans.

“It has been a devastating ride that has taken everything I have made for myself out from under me and my family, but more than 99% of the investors I have worked with over the years have stood by my side, believing that I have done the best I could do,” said Barness. “Although I have been forced to start over, I am fortunate that I have a wonderful family who believes in me and gives me strength. And, I know that whatever any individual investor lost through investing with me pales in comparison with what I have lost trying to protect their investment.”

Barness is now working hard to re-establish his career by turning the hard truths of what happened in the real estate market into valuable lessons that make him a much more cautious operator.

Barness Donation Furthers Progress of Kids Museum

Published: June 16, 2006 – Jewish News Online

One day, months from now, children across the Valley will be able to visit a museum in Phoenix devoted solely to them.

Construction is under way for the Children’s Museum of Phoenix, which will be located at Seventh and Van Buren streets and is scheduled to open in late 2007.

In April, the Daron and Ron Barness Family Foundation announced their own contribution to the project: a $1 million donation.

The gift “enables us to focus on what we need to do, which is make the best possible museum,” says Deborah Gilpin, the museum’s president and CEO. “When we get a gift of this magnitude, it just makes a huge difference in how we can move forward.

The idea for the museum was born in 1998; the founding board of directors formed a nonprofit organization in 1999. In 2001, Phoenix voters approved Proposition 6, which gave $10.5 million to the museum to purchase and renovate the historic Monroe School building. The next few years were spent raising funds, doing research on museums around the country, brainstorming and holding events for children in the community.

In 2005, the museum came to the attention of the Barness foundation.

For the Barnesses, the impetus to get involved was twofold.

“Daron and I are very concerned about children and our community’s ability to provide opportunities to young people in order for them to be able to fulfill their potential,” Ron Barness says. “So when we find projects that speak to creating better opportunities for children, we always look at those very closely.”

Also, “we believe as members of this community that Phoenix has an opportunity to become on of the great American cities in the 21^st century.”

“Along those lines, we see that our city, as great as it can become, is the only major city in the United States without a children’s museum.”

Gilpin says the exhibit team, which includes an early childhood educator, an elementary school art teacher and a museum education director, visited about 50 children’s museums around the country to gather ideas.

The museum, when completed, will be geared toward children up to 8 years of age. The exhibits will be hands-on, and many will be arts-based. There will be a room of building blocks, a café where children can make their own meals, art projects to work on and much more.

“We expect to have about 300,000 visitors a year, but that’s probably a low estimate,” Gilpin says. “Children’s museums are the most highly visited of all kinds of museums. It’s probably because kids like to come back. They want to visit the things that they love and do it again, and then they want to try something new, too.”

Both Gilpin and Barness say the museum will be a huge asset to the community.

“We think it’ll have a tremendous impact,” says Barness. “Number one, we think it’ll help young children in their development and their educational process. Number two, we think it’ll help the psyche of the city as it strives to rise up to this level of greatness as we build a museum that will be a crown jewel of our city.”

Gilpin says “People who grow up and go to museums were typically museum-goers as children. But children’s museums are the place where the status-quo has changed; you may be a family who never goes to museums, but you’ll take your child to one of these, and it changes the future of that family.