Photos by Harrison Hurwitz Mike Roberts

A former Valley real estate mogul went from rags to riches to rags again, came close to death and may now be on the brink of his best business venture yet. His potential success could be the
inspiration others need to reinvent
themselves and find post-bubble prosperity.

One night in October 2008, Mike Roberts was lying alone in his four-poster bed in the master suite of the 10,000-square-foot Pinnacle Peak home he could no longer afford to air-condition, much less pay the $25,000 per month mortgage on, and he’d had enough.

In August he’d filed bankruptcy. Some investors were suing him. Others were registering their dissatisfaction in the form of death threats. To protect himself physically, he purchased a gun. To protect himself emotionally, he numbed his mind with Jose Cuervo and Jack Daniels.

The more he thought about his predicament, the more hopeless it seemed. He turned his 9-millimeter Colt pistol on himself, placing it in his mouth with his finger on the trigger.

At that moment, the phone rang. He jumped, luckily not blowing his head off in the process. The gun barrel scraped the roof of his mouth, drawing blood. Without thinking, he answered the phone. That’s what you do as a homebuilder. You answer the phone. You fix problems. You keep projects moving forward.

On the line an eerily calm male voice told him, “You’re a dead man, Roberts. You hear me? A f***ing dead man.” 

His suicide had been interrupted by a death threat.

It distracted him enough to remind him of his children – Hannah, 16, and David, 14. “I could feel them with me as if they were in the room,” he says. “With all the mental strength I had left, I forced myself to focus on them. I knew they loved me and I knew they needed me. I couldn’t do that to Hannah and David.”

Road to Perdition
Mike Roberts was the owner of Charlevoix Homes, recognized by the Arizona Small Business Association in 2006 as one of its “50 Arizona Companies to Watch.”

That year, Charlevoix Homes was developing and building homes in Phoenix, Glendale, Chandler and the southwest Valley. Its communities included Saratoga Springs in the West Valley, 900 Devonshire in central Phoenix and Montage in Chandler. In 2003, it had closed homes at a rate of three per month. By April 2006, it was closing more than 40 homes a month. The company was riding high, and Roberts’ personal salary was about $2.5 million a year.

Then in May, closings suddenly dropped to 12 homes. The company had 300 homes under contract, but within 30 days, 268 had cancelled. Astoundingly, to all the bubble optimists out there, sales never picked up again. In June, Roberts’ company sold one house. In July, one more. Charlevoix had 100 houses in inventory across nine communities, and another 1,000 home sites waiting to be built on.

Roberts met with his strategy team. They speculated the market would take six months to a year to correct itself. Roberts likens the experience to being the captain of the Titanic.

“We were tweaking our business strategy when we should have been abandoning ship,” he says. “This was where I missed it. I was stuck on saving the company. It was the only way I knew how to think. I started borrowing from wherever I could. I took out the second mortgage on the house. When I should have been loading up the lifeboats, I was still bailing water.”

Things Fall Apart
By July 2008, Mike Roberts was forced to file bankruptcy for $118 million. He’d had a lot to lose, and he was losing it all. By his own account, that loss included two Cadillac Escalades, a Hummer, a Jaguar, a Mercedes, a Porsche convertible and his beloved 10-seat CJ-2 corporate jet. Not to mention the house that was in foreclosure proceedings – a six-acre equestrian estate with a master suite larger than most apartments, a colossal kitchen with Viking appliances, and fine cherry wood floors and cabinetry throughout. He’d bought it from Tom Van Weelden, the founder and CEO of Allied Waste Management, in 2005 for just over $3.1 million.

People were dropping out of his life as quickly as his possessions. His second marriage broke up after only a year. Bankers with whom he’d done millions of dollars worth of business no longer returned his calls. Wealthy Phoenicians he’d counted as friends ignored him. And the bankruptcy proceedings were sucking up every last dime he’d saved, including six-figure CDs for his two underage kids. “It’s their money, it’s in their name, but the court took that too,” he says. “They take everything.”

Of course, Roberts wasn’t the only one to experience loss. In the past three years, media has been saturated with stories of investors, developers and average Joes who have had to start over. And Roberts certainly hasn’t been the only one to consider taking his own life because of it. At least one big player in real estate was not able to see beyond the losses.

Scott Coles was the CEO of Mortgages Limited, Arizona’s largest private lender at the time, and an acquaintance of Roberts. In early 2008, Coles had hosted a Super Bowl party at his home where the comedian Chris Rock and rapper Ludacris had performed. On June 2, he committed suicide, ingesting deadly doses of alcohol, Oxycodone and the sleeping drug Ambien, according to media reports.

“The stigma that goes with failure can become emotionally devastating,” says Mark Stapp, executive director of the Master of Real Estate Development program at Arizona State University. “Many just can’t continue to operate.”

Letting Go
By May 2009, Roberts had survived his darkest hour but was unsure what came next. His house, which he was still living in, reflected his fall from glory, like a contemporary Southwest version of Tara from Gone with the Wind after the South’s defeat in the Civil War. The desert landscaping had gone to seed. The pool had turned green with algae, and the horse corrals stood empty. It was baking hot inside, and dust visibly coated the dark wood floors. Roberts could only afford to cool the master suite upstairs, so that’s where he holed himself up, plotting his comeback.

Pale, with puffy eyes and thinning hair, he looked older than his 50 years as he wandered around, accompanied only by a tiny white kitten with a tinkling bell on its collar. He was keeping it for his daughter, who was staying with her mother. It was just Roberts in this massive house with his black ghosts of business and life gone bad and this pure white kitten tailing him every step, its bell cheerfully ringing, like some kind of odd, insistent reminder to see the bright side too. And so he did.

“You can’t hold on to things,” he said at the time, “or they’ll pull you down. They’ll sink you to the bottom. You just have to let go so you don’t go down with it.”

Rags to Riches, Part I
Roberts had already achieved making something out of nothing. He’d grown up in southwest Flint, Michigan, a tough town in post-industrial decline. He lived within walking distance of the Chevy manufacturing plant 2A, known as “the hole,” where, in 1965, his father collapsed on the assembly line and died from a leaking aorta valve shortly thereafter.

Roberts was 6 at the time, the oldest child of four and the only son. His mother found work as a typesetter for the Catholic Press, but it didn’t pay well and money was scarce. Roberts recalls waking up during icy Michigan winters in a freezing house, the heating oil tank empty, and joining his mother and sisters under blankets in the kitchen, huddling in front of the open oven as the only source of warmth in the house.

“You might think we cried and whined about it the whole time, but it wasn’t like that for us. We huddled together and joked around and made the best of it. If anything, it brought us closer as a family. We had one bathroom in the house and we’d take turns making runs for it. We’d shower as fast as we could so we could get back to the warm kitchen. It seems like a crazy way to live, but it was all I knew. I thought everyone lived that way.” 

Roberts, who has a wry sense of humor, says his first paying gig was as an altar boy. “I got a $2 tip for doing my cousin Joann’s wedding.” But in his neighborhood, he saw that petty crime paid better. “Pretty soon I figured out that if you got stuff for nothing and sold it for something, that was a clear profit margin.”

As a kid, he shoplifted records and pulled tape decks and CB radios out of cars. Once, he even outfitted his entire junior high school football team with sports shoes. The coach sent all of his players to him. He’d write down their sizes then go “shopping” for them by stashing the shoes under a large parka he wore.

Later, he went to work in the Chevy plant like his father had done, building Monte Carlos and other General Motors models. But he says he didn’t want the life of a “shop rat,” so he set his mind on college, an ambition that drew reactions of disbelief from friends and even his school guidance counselor. “The crowd I ran with, our idea of higher education was getting stoned in the back parking lot at school,” he says.

Despite the naysayers, Roberts got accepted to Central Michigan University in 1978, then transferred to Michigan State University. In 1983, wanting to escape the cold, he transferred again to Arizona State University. But by the time he’d moved to Phoenix he was broke, so he found work selling pagers.

“All I had was my mouth,” he says, and it paid off for him. A year later he was the regional sales manager for Atlantic Bell. He met his first wife through work, and they still work together today. Ann Cuneo, now remarried, says of Roberts, “Mike never lets bad news stop him. Sometimes you can get hit with so many obstacles in business, but he always picks up the pieces and moves on. It says a lot.”

In 1988, they opened a video store in a strip mall at 35th Avenue and Union Hills, with just 800 square feet of space and only 400 titles. With no budget for employees, they worked “Nine to nine, Monday through Monday. We had no life, but we had a great life,” Roberts says.

Over seven years, they grew the business, Video Power Stores, to 40 stores in Phoenix, Tucson and Las Vegas. In 1995, they sold Video Power Stores, netting $9 million on the deal. Roberts tried to retire but says he missed the passion and purpose of building and operating a business. He made several bad investments, losing most of his money.

He came to homebuilding by way of a friend, who got him interested in his development at the Hassayampa Golf Course in Prescott in the fall of 1997. Ironically, the deal ended up being a bad one for Roberts. He paid a premium for home sites, which, he says, was supposed to give him exclusive rights that were later ignored by the developer friend. As a result, he says he got underpriced by another builder and lost his $2 million investment. Despite this debacle, Roberts got a taste for the business and could see the potential for similar deals done right.

Roberts seems to do some of his best work broke. He says he was down to his last $1,000 when he convinced Nick Bonanno, who is related to the infamous Bonanno crime family, to let him develop a plot of land he owned in south Phoenix. Bonanno agreed, and Charlevoix Homes had its first project.