On paper it might look suspicious, but New Era of Networks Inc says financing the construction of its new headquarters through a separate company, owned by its chairman and CEO Rick Adam, is merely a sound business investment. Neon is loaning $5.1m to Adam’s Greenwood Plaza Partners LLP for the construction of two buildings and a parking structure about a mile south of the company’s present headquarters in Englewood, Colorado.
It is also making available a further $31.44m for one year with interest at 7.05% per annum. Neon said did not initially expect to make the loan but took it over from a bank when it realized its could earn 200 basis points – or 2% – more than it could have earned leaving the money in the bank. Once construction is complete Greenwood will find permanent financing from a third party. Neon said it had looked around but couldn’t find an appropriate contractor – or site – and Adams decided to effectively build the thing himself using Greenwood, which was not created specifically for the project. But it does stand to benefit.
Neon will lease the buildings from Greenwood, in whole or in part, for use as its corporate headquarters. A three storey building will be completed by August and a second, with two storeys, linked by an atrium will be finished by early next year. The first of Neon’s 250 to 300 Englewood staff will move that mile in August.
