X-Message-Number: 1635
Date: 18 Jan 93 05:29:09 EST
From: Paul Wakfer <>
Subject: CRYONICS Failure of the Phoenix Building Project

From: Mike Darwin
To: All
Re: Failure of the Phoenix building purchase

     Steve Harris raises some very interesting points about the failure of 
the Alcor Phoenix building project to materialize.  Since I am largely 
responsible for Alcor acquiring the building it is now in, I feel I can 
add some background as to WHY Dave failed to raise the money.  

     Fasten your seatbelts its going to be a bumpy, bumpy ride.

     First a little background.  The present Alcor building was acquired 
in a crisis when Alcor was being evicted from its leased premises in 
Fullerton because of an inability to obtain liability insurance.  Since we 
couldn't get liability insurance, we had to raise roughly 160K in cash and 
persuade the seller to carry our paper (no bank will loan you money 
without insurance).  At that time I believe Alcor had fewer than 100 
members.  In order to raise this kind of money it was necessary to 
carefully inform them of the why's and whereof's, and further to offer them 
a piece of the action in the form of a limited partnership.  Those 100 or 
so members felt very involved with Alcor and they knew that they could 
trust both Alcor and me.  Still, they required a lot of hard assurance and 
that required a lot of attention to detail and a thorough prospectus.

     The prospectus for purchase of the building was a small book running 
52 pages in length.  Every major (and minor) concern was addressed.  We 
raised the money in big and small chunks.  But still it took time -- a 
couple of months in fact.  The building was the envy of the cryonics 
community at that time.

     Now let's look at the Pizer project.  A one page (front and back) 
mailing featuring a poor quality black and white photocopy of a photo of 
the outside of the building (ACS at least had the sense to provide color 
photocopies when they sought support to buy their building!).  Not even a 
floor plan!  What is more, no careful build-up of the membership had been 
undertaken before the project began and there was no detail about the 
project in the mailing.  It was just "we need this, give us your money."

     Furthermore, there was the total lack of careful planning to address 
the concerns of the LA members who constitute a large fraction of Alcor's 
membership and a larger fraction still of potential contributors to the 
project. After all these people were about to be left out in the cold in 
terms of suspension readiness when Alcor moved away.  How do you deal with 
the dis-incentive to these members?  Were there any contingency plans for 
how emergency responsiveness would be handled with Alcor flying the coop?  
No.

    Then there was Pizer himself.  He told me, and anyone else that would 
listen, that he was the "best fundraiser in the cryonics community" and 
that he alone could carry off this project and what is more that he 
intended to raise one million dollars so that there would be approximately 
$250,000 for renovation and contingencies.  He then proceeded to call 
every member he thought likely to contribute.  The results were, in several 
critical instances, disasters.  One member, a respected and highly 
competent attorney tried to point out several serious legal pitfalls with 
the project as it was structured.  Dave argued with her so incessantly 
that she actually hung up on him (great way to raise money, huh, piss of 
the potential contributors right up front).  Subsequently this woman 
talked with several other Alcor members and expressed her doubts and bad 
experience which were soon telegraphed to half a dozen or so key members.  
I know, I was one of them.

     Then there is a small fact which Steve Harris somewhat surprisingly 
(charitably?) doesn't mention: namely that when the flyers were mailed out 
and the promotion campaign was started by Pizer, et, al., THE BUILDING WAS 
ALREADY IN ESCROW TO ANOTHER BUYER!  I found this out when I flew to 
Phoenix to see the building at Pizer's invitation on his assurance that it 
was basically a done deal.  The good Dr.Harris accompanied me on this 
trip.  During the course of my tour of the building (it was a lovely 
building, in many ways ideally suited to Alcor's needs) I discovered in 
talking with one of Pizer's associates that the building had already been 
sold and was in escrow with another buyer!  

     I confronted Dave with this, more than a little miffed since I had 
spent $100 to fly in and see the building (a considerable sum of money for 
me then as now).  Pizer reassured me as follows (I paraphrase closely 
here):  "Don't worry about it.  This guy has had two extensions on his 
escrow already and from what I know he won't be able to perform.  
Furthermore, the bank won't give him a third extension since they know I'm 
interested and ready to put up 10K in cash as soon as his escrow is up and 
he can't come up with the money."

     I asked Dave if he knew the buyer and knew his financial condition 
(i.e., had he seen a financial statement?).  After much wiffling and 
waffling  he admitted that he didn't know him but was pretty sure...  
Later I learned that for Pizer even to have made an offer to a seller (in 
this case the bank) while another buyer is in escrow (something Dave 
claimed he had done) is illegal.

     I was too shocked for words.  What Steve Harris thought I don't know 
and I don't recall asking him (although I'm sure I must have).  
*Essentially what we had been told was that Pizer was selling a building 
that was NOT FOR SALE!*  (And this guy is Alcor's TREASURER and is on the 
Board!)

     But it gets better.  Depending upon who he had talked to last the 
date by which an offer HAD to be made would go forward or backwards by as 
much as 2 weeks!  To some people Dave claimed (including me) that Saul 
Kent had made a commitment.  Saul said otherwise.

     Then there was the constantly changing nature of the deal.  First it 
was going to be handled by a limited partnership such as the current Alcor 
building had been acquired with.  Then, without obtaining Board 
authorization to change the terms of the deal it was converted to a 
direct purchase by Alcor, with Alcor as the owner and the money to come 
from directed donations.

     But it gets better yet:

     The guy who was REALLY buying the building closed escrow.  What to 
do, what to do!  Why, come up with another building of course and try to 
sell THAT to the Alcor membership.  When that didn't sail (it wasn't 
nearly as good a building) Pizer then tried to persuade everyone to buy 
the FIRST building from the guy who had been buying it all along for 
roughly 100K more (a guy's got to make a profit, right?).  (Among my more 
pleasant fantasies is the one wherein the bank goes to the guy in escrow 
and uses Pizer's under the table offer to persuade the guy to close 
escrow!)

     Can you believe this guy?

     And now in his recent posting Pizer tells us that the building that 
was selling for roughly 500K less than year ago (last April if I recall 
correctly) has now gone up 500K in value.  WOW!  Why hasn't the news that 
Phoenix real estate is appreciating that fast made the WALL STREET JOURNAL 
or the front page of the LA TIMES?  What have I (and the rest of the 
world) missed?  What's more, where do *I* go to get in on such a deal on 
real estate? 

     So, why did acquisition of this building not go through for Alcor?  
Here's the take-home summary boys and girls:

1) A complete and utter lack of planning.

2) Per #1 above a complete failure to address the concerns of LA area 
members regarding suspension capability.

3) Complete and utter failure to provide adequate detail and background 
information about the project.

4) Inconsistencies and distortions of critical information about the 
project such as the date by which funds were needed, who was financially 
participating, and on and on and on.

5) Per #4 above, the building was NOT EVEN FOR SALE and was ultimately 
sold to someone else.

6) Abrasive, inappropriate interpersonal interactions with several key 
members.

     The miracle would have been if this project had succeeded, not that 
it failed!  I note with interest that Pizer has given up blaming Michael 
Paulle (his first scapegoat) for this debacle and is now trying to pin it 
on Saul. Who's really to blame?  I suggest that Dave stand in front of a 
mirror and say to himself:

     "You cannot try to raise one million dollars in the cryonics 
community using sleazy, used car salesman's tactics. That is why this 
project failed and I am largely, if not solely responsible for its 
failure."

     But then, if that were to happen it would be even *more* of a 
miracle.

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