The federal agency overseeing the thrift industry cleanup is expected today to award its first major contract, the job of managing and disposing of $2.4 billion in loans and real estate from a failed Texas institution.
The Resolution Trust Corp. is expected to engage J.E. Robert Cos. of Alexandria, one of the nation's largest managers of distressed real estate, to sell off the assets of University Federal Savings in Houston, sources said.
The long-awaited contract award marks a new phase of activity for the RTC, the agency created by Congress last year to dispose of failed thrifts. Up to now, the RTC's actions have centered on closing thrifts and selling deposits. Industry and congressional critics have charged that the agency has moved too slowly in hiring the thousands of private sector contractors needed to sell off billions in bad loans and real estate.
Steve Katsanos, a spokesman for the RTC, confirmed yesterday that a bidder had been selected for the University Federal contract, but he said he would not identify the firm until the contract actually is signed. However, sources identified the Robert firm as the successful bidder and said the signing is expected today in Texas.
"This would be the first really big ... contract," said Katsanos. "We've been working for a year to get the contracting phase up and running. ... Now we're entering a cycle where this is going to happen pretty regularly."
The Robert company will be charged with managing and selling nonperforming commercial loans -- loans that do not earn interest -- and commercial properties in Texas and around the country. Company officials would not comment yesterday.
L. William Seidman, chairman of the RTC's board, has set a 1990 goal of hiring managers to handle $30 billion in RTC assets. Agency director David Cooke said this week, however, that he does not expect to meet that figure. "I'll be happy with $20 billion," he said.
The RTC has spent months developing regulations and standards that will govern such contract awards. Officials have tried to create incentives for managers to sell, rather than hold onto, the bad loans and foreclosed real estate to minimize the government's financial losses.
Efforts by the now-defunct Federal Savings and Loan Insurance Corp. to dispose of assets from the first wave of failed thrifts in 1988 resulted in contracts that were financially structured to actually discourage the asset managers from selling.
"There are incentives to sell built into the contract," said Teresa McUsic, RTC's spokeswoman in Texas, who described its terms but did not identify the bidders. "It is weighted to liquidation rather than day-to-day management. There are disposition fees built in based on speed of sale and price."
The Robert company's contract with the RTC will be for three years.
All told, 20 firms responded with 50 proposals for the University Federal contracts, with 15 proposals for the $2.4 billion portfolio.
The asset managers will oversee thousands of properties, hiring subcontractors that range from appraisers and real estate agents to gardeners and plumbers.
The Robert company's University Federal asset portfolio is to include 441 nonperforming commercial real estate loans with a book value of $975 million; $160 million in nonperforming land loans, with a book value of $568 million; 110 foreclosed commercial properties, valued at $266 million; and 297 parcels of land valued at $569 million.