MIAMI -- The Resolution Trust Corp.'s decision to cancel a $300 million auction of failed savings and loans' property was the culmination of what many analysts had long presumed: The auction was doomed from the start.
"It didn't have a chance," said Stephen B. Norman, of Real Estate Enterprises of Miami Beach.
The cancellation was a major blow for the RTC and its chairman, L. William Seidman. It was perhaps a bigger setback for Miami's AuctionCo. of America, which four months ago won the coveted contract.
James Gall, chairman of Auction, says the RTC botched the auction by removing prime properties, and by not setting minimum prices as investors asked. Mr. Seidman said Mr. Gall didn't meet the contract terms.
Analysts, however, say the blame should be shared.
Auction Co. of America wasn't the right pick, Mr. Seidman said Tuesday. The firm was too small for the job, analysts said.
The RTC, in turn, has a split personality that worsened problems. The agency seems to lack a focus on how it wants to sell its real estate.
"I am troubled about it, not so much because the auction won't come to pass, but because of what it says about the difficulties the RTC is having," said Bert Ely, an independent thrift consultant.
Clearly, Mr. Gall is a successful auctioneer. His firm is one of the largest of its kind in the country. His auction of CenTrust Bank's lavish furnishings earlier this year drew hundreds of people, who purchased items such as silver lobster crackers.
But by his own admission, the RTC auction was vastly different. The CenTrust items mostly sold for a few hundred dollars each; the take was about $300,000.
The RTC properties were valued at a minimum $1 million each, and the crown jewel -- the CenTrust Tower -- was valued at $88 million in a 1989 sales contract.
Proceeds were projected at $300 million.
Mr. Gall acknowledges difficulty in attracting interest in the RTC properties. But he blamed the RTC.
"To invest in commercial properties takes a tremendous amount of due diligence and dollars," Mr. Gall said.
"We couldn't supply investors with basic answers, we couldn't provide them the bottom-line price."