Controlling interest in a real estate empire started by the colorful Wall Street financier Eddie Gilbert, who served time in prison and moved to Santa Fe, where he built a billion-dollar property portfolio while his contemporaries were retiring, is being sold to an equity firm with ties to the H.J. Heinz Company.

Founded in 1991, BGK Group is headquartered on Garfield Street and owns buildings in 28 states. In 19 years, BGK has executed more than $3 billion in transactions and is one of the largest commercial real estate companies in the United States.

"Mr. Gilbert will be 88 this year. That kind of says it all," said Robin Smith, a company spokeswoman. "He wants to be here every day and impart his knowledge to the new crew. He really wanted to set it up so there would be a seamless transition to new management."

BGK is the largest commercial landlord in Albuquerque and recently lowered some rents in exchange for lease extensions, according to news articles. It owns 2.15 million square feet of office space in the Duke City and another 244,000 square feet in Santa Fe, according to Smith. Nationwide it has 12.5 million square feet of commercial space, 500,000 of retail and some 2,000 multi-family residential units, according to the company.

As of Monday, BGK will be known as Rosemont Real Estate, a subsidiary of Rosemont Capital Group. Rosemont is purchasing a 50.5 percent stake in BGK and the potential ability to bring in far more cash and acquisition power — much of it available at Great Recession pricing. The managing partners in Santa Fe are Daniel C. Burrell and Michael E. Mahony.

BGK has 192 employees — including 52 in Santa Fe and 23 in Albuquerque. The asset managers travel all over the country inspecting properties, managing and maintaining leases. Many were recruited by top headhunters to relocate to New Mexico and earn over $100,000 a year with thousands in bonuses over the holidays, though those have waned in recent years.

Burrell said Rosemont was looking for entry into the real estate sector, and BGK gives it good management with lots of growth potential in secondary markets such as Albuquerque, where prices can appreciate faster.

Rosemont is a firm that "looks for opportunistic investments that are ultimately off the beaten path," said Burrell, who has already moved to Santa Fe with his fiancé. "BGK has an extremely qualified talented pool that we think are well poised to take advantage of a generational opportunity in commercial real estate."

Burrell said he met Gilbert a few years ago at a private political function in Santa Fe, and discussion evolved from there. BGK has some 1,500 investors and is at a point, Burrell said, where it makes sense to take on a more stable partner who can bring ready capital for growth.

Gilbert started BGK with Wall Street friends Fred Kolber and Ed Berman, and used the founders initials in the name. Gilbert, who lives in Santa Fe with his wife, Peaches, will no longer be involved in day-to-day management, but has an adviser agreement with Rosemont, Smith said.

Smith said both companies are privately held, and details of the transaction were not being made public. Gilbert declined to be interviewed.

Donald Tishman, a Santa Fe commercial real estate developer who has worked with Gilbert, said BGK had an unprecedented string of successes — providing investors with a solid 15 percent return for many years until the recent downturn. "Not many people can do that," Tishman said.

Gilbert has a keen head for numbers and negotiation, and was able to get fantastic deals on financing, said Tishman. He then brought in solid management to ensure positive cash flow on properties. He always paid his investors back "before he got a penny," said Tishman, who thinks the partnership with Rosemont is a way to protect BGK investors at a time when asset values have declined and leases are more uncertain.

Tishman said he heard Gilbert was asking for $25 million for a majority stake in BGK, which would be "an incredible deal" for a company that might have been worth $500 million at the height of the real estate market, he said. Smith declined to confirm or deny that number.

Gilbert's life on Wall Street was documented in the 2003 book, Boy Wonder of Wall Street by Richard Wittingham. He went to prison twice after securities and fraud violations — including Sing Sing in upstate New York, though never took any money for personal gain, according to published background material. He once fled to Brazil, where there was no extradition treaty with the United States, and lived on the lam for six months before turning himself in at the urging of his attorney.

The biography touches on Gilbert's friendships with writer Jack Kerouac as well as playwright Arthur Miller and novelist John Dos Passos.

It was Peaches Gilbert who first vacationed in Santa Fe and convinced her husband to relocate here while he was in his mid-60s, Smith said.

In 1999, Forbes magazine said he invited many Santa Fe business leaders to his 70th birthday party (six years earlier) and spoke openly about his time in prison. "I hope you'll accept me despite this," he told them, according to the magazine.

Gilbert has seven children — including three Russian adoptees with Peaches, some of whom went to private school in Santa Fe. The couple lives in a home described by Forbes as a "three-acre estate where 10-foot electric gates open onto a broad, crushed stone" courtyard.

In addition to building the business here, both have been active in philanthropy individually and with their Garfield Street Foundation, which contributed over $1 million in the tax year ending June 20, 2009.

The foundation has consistently given $10,000 or more a year to the Santa Fe Symphony, National Dance Institute of New Mexico, the St. Vincent Hospital Foundation, the Santa Fe Animal Shelter & Humane Society and Assistance Dogs of the West, which has programs in schools and community centers that train canines to assist the disabled.

Two of the Gilbert children were part of one training program at a Montessori school in Santa Fe, and that's how they became supporters, said Carolyn Clark Beedle, executive director.

"I don't even want to think about him going away," Beedle said. She said the couple has also offered office space, technical assistance and encouragement to area nonprofits.

"There is a huge difference in having a relationship with a supporter. There is really a personal contact, a personal concern," she said. Assistance Dogs is housed in a commercial space at the Plaza del Sol Shopping center at St. Michael's Drive and Pacheco Street, which is owned by BGK. Having a secure, affordable lease has greatly helped Assistance Dogs, she said.

Smith said the foundation started small, doing the usual philanthropy around the holidays, and has blossomed into a year-round charity. Many apartment managers and social-service case workers know they can send individuals over to apply for help when nothing else is available.

Gilbert also shares a political affinity with his new partners — both have backed losing Democratic presidential candidates. Gilbert was a big supporter of Gov. Bill Richardson's presidential bid, while Burrell worked in the Clinton White House on domestic policy, then was an adviser to U.S. Sen. John Kerry's campaign in 2004.

Rosemont Capital was founded by Wall Street veteran Alan Sheriff and Christopher Heinz, the youngest son of Teresa Heinz Kerry and her first husband. Heinz is part of the family that made a fortune by building the Pittsburgh-based global food company.

Burrell, a graduate of Georgetown University and Yale Law School, has blog posts on financial sites as well as the Huffington Post. He intends to keep the company headquartered in Santa Fe. He said new flight connections from Santa Fe to Dallas make running the business here feasible.

"We're making a big commitment to keeping the business in New Mexico and hiring the talent pool. It's a vibrant, diverse state that has a lot to offer," he said.

His fiancée, Katherine Jetter, is an Australian with her own line of opal jewelry at katherinejetter.com.

Contact Bruce Krasnow at 986-3034 or brucek@sfnewmexican.com.

GARFIELD STREET FOUNDATION

Santa Fe grant recipients from the foundation for the year ending June 30, 2009. The school donations were for financial aid, while other giving often went for mortgage, rental help or debt payments. From 2008 IRS Form 990.

WorldWomenWork, $5,000

Desert Academy, $1,000

Santa Fe Symphony, $27,719

Assistance Dogs of the West, $10,000

Santa Fe Animal Shelter, $17,500

National Dance Institute, $21,000

JCPenney, Christmas gifts for needy, $18,400

Smith's, Christmas gifts, $19,000

New Mexico Community Foundation, $9,000

First Serve N.M., $2,500

Lensic Performing Arts Center, $10,000

Santa Fe Prep, $20,000

Guadalupe Credit Union, $2,962

St. Vincent Hospital Foundation, $15,000

Coronado Apartments, $650

Vista Allegre, $1,250

Vegas Verdes Homeowners, $735

Talavera Apartments, $1,575

Casitas de Santa Fe, $814

Tuscany Apartments, $969

Las Palomas, $1,597

"Other sundry organizations," $34,750