The Republican candidate for Colorado treasurer has come under fire for past business deals that critics contend make him unfit to take charge of the state’s investments. But he says that experience is precisely why he is needed.

“I know what it’s like dealing with an economic meltdown,” Brian Watson said. “I know what’s it’s like to have fiduciary responsibility to protect investor capital, and because of that my returns overall have been extremely high, but we have had our hits, and those happened during the down economy.”

Even in flush times, Watson’s spending has been notable.

He made a $650,000 down payment on a Cessna 560XL jet in 2016, according to a document reviewed by The Denver Post. Months after the purchase, an IRS notice demanding payment for $2 million of overdue taxes warned that his property could be seized, another document shows. Watson confirmed both facts. The IRS has since been paid, along with a bridge loan in excess of $2 million he took out the same year that the tax man came knocking, according to an interview with the lender.

Watson defended the seven-seat airplane as a good investment that allows him and staff to make out-of-state business trips. He said there is no connection between the overdue tax bill and the plane purchase. As to whether the loan of more than $2 million was for the taxes, he states: “I don’t know what went to the taxes or not at the time. We have money come in, we pay our bills.”

Denver Post Voter Guide

Read all of The Denver Post’s election coverage — including stories, endorsements and candidate Q&As — in our 2018 Voter Guide.

But the account points to a broader pattern for Watson, a 46-year-old real estate developer who paints himself as an astute, no-nonsense businessman on the campaign trail.

It’s part of a carefully crafted image, and one that Watson hopes will take him to the state treasurer’s office. He has written a self-published motivational book titled “The 7 Rings: A Journey to a Balanced Life of Peace, Passion, and Purpose.” He’s had it mailed out with a box of toffee to billionaires. Within his office, the effort to cultivate billionaire readers is called the “billionaire book club” or the “billionaire book mailing.”

At the same time, Watson’s businesses have faced lawsuits alleging that he failed to pay vendors. Liens have been filed against his properties for unpaid taxes and bills. Past associates of Watson say the repeated problems raise a broader question: Is Watson qualified to oversee the state’s finances and investments?

A wealth generator

The state treasurer has wide financial responsibilities: investing state tax dollars, running the state’s unclaimed property division and serving on the Public Employee Retirement Association board, which oversees the state pension system for government employees.

Watson argues that his background in high-stakes real estate gives him an advantage over Dave Young, the Democratic candidate and longtime legislator who has sat on the powerful state budget-writing committee. Watson said he’s a wealth generator while his opponent is not.

But Susan Barnes-Gelt, a former Denver councilwoman, said she lost more than $100,000 investing in various ventures Watson pursued more than a decade ago.

“If I had cash, I’d bury it in my mattress and run the risk of my mattress catching on fire before I’d give him a dime,” Barnes-Gelt said. “He’s a snake-oil salesman. He belongs in a carny show.”

Watson and his supporters say some failures are to be expected in the boom-and-bust real estate world that is his profession. He said he has learned from past mistakes, and points to more recent successes he’s had with his company, Northstar Commercial Partners, as evidence his troubled past is behind him. He has said he plans to continue running the company, which he touts as having $1.3 billion in assets, if he is elected.

But Watson’s business problems aren’t old history for those on the losing end of deals. Adam Wimmer says he is still trying to recoup $415,000 for his role in lining up financing for a development.

By the time Wimmer got involved, Watson’s company, Colfax and Sable, had defaulted on a loan and foreclosure was pending. The architect for the project, which will provide services to veterans, had filed a mechanic’s lien against the property, which has since been paid.

In October, Wimmer filed an injunction for the money he says he’s owed to be put into a court trust account for safekeeping while the dispute is pending.

Watson strongly denies that he owes the money, saying the financing came from a different lender without Wimmer’s help.

“Ran it into the ground”

Watson has taken successful endeavors and mismanaged them after buying them, say those who dealt with him firsthand.

Grant Cohen said he spent 25 years building his company, Aspen Moving and Storage, into the premier moving company in the Aspen area. He sold the business to Watson in 2008, and within 17 months it was all gone.

“He ran it into the ground,” Cohen said.

He added that Watson wouldn’t listen when he told him that he had hired the wrong people to manage the company. Two of the employees quit in disgust before the closure, Cohen said. They have since rebuilt a successful moving company, which shows that good fortune favors those who properly manage their endeavors, Cohen said. People who invested in Watson to help him buy a warehouse tied to the moving company lost their investment, Cohen recalled.

“It was always me, myself and I when you dealt with Brian,” Cohen said.

Watson said he also lost money on the warehouse deal, but he stressed that he’s since paid off more than $200,000 in IRS liens for unpaid payroll taxes connected to a party rental business tied to the moving company. He said a manager in the Aspen operations failed to pay the payroll taxes.

Not everyone has had a bad experience with Watson. Boulder developer Stephen Tebo has had no qualms about giving Watson loans over the years. About the same time as the 2017 tax issue surfaced, Tebo agreed to loan Watson more than $2 million as a “bridge loan,” Tebo said. The money has been repaid. Tebo said he has profited on all of the eight similar transactions he’s made with Watson.

“He does hundreds of millions of dollars of stuff these days,” said Tebo, who said Watson worked as an intern for him while attending the University of Colorado. “He’s stellar. I don’t know how he comes up with some of the deals that he does. It’s been a good relationship.”

But on a business park deal, investors had a relationship with Watson that soured.

In 2010, Watson took into Chapter 11 bankruptcy a company he was running that had cobbled together investors for a business park in Boulder, according to court records. At the time, the bank that had financed the deal was seeking to foreclose on the property. The bankruptcy was dismissed after Watson found another buyer for the property.

Management questions

People who invested in the business park project said they lost as much as half of their investment.

The management of the three-building business park in Boulder by Watson’s company, Northstar, also generated controversy, court records show.

The issues included the discovery that a tenant was subleasing a unit to an unlicensed marijuana grow operation that had caused water damage, alleged an affidavit filed by John Stone, who was appointed as receiver over the business park. Stone said he evicted the person who was subleasing. Another marijuana grow operation had to be evicted after complaints of odors from another unit, he said.

Stone added in the affidavit that he “had learned there was very little hands-on management by Northstar,” a situation he said he fixed.

Watson said he was the victim of a predatory lender on the Boulder deal, which he said forced a premature foreclosure. He said the bankruptcy gave him time to find another buyer. He paid the bank in full and recouped some of the money the investors put up, but not all, he said.

One former Greenwood Village neighbor of Watson’s, Bernard Wildes, said he eventually stopped investing in deals Watson brought to him. He said he had invested more than $150,000 with Watson but got tired of waiting for the promised returns. Some of the investments performed miserably. Others made money.

“You hear a lot of delays and postponements and excuses, basically,” Wildes said.