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Through Auspicium, Lorenz "puts skin in the game"

By Norman Poltenson

Date:

DeWITT — “Creating value using liquid management.” That’s the tag line on Michael J. Lorenz’s business card and on his company’s home page.

Lorenz is the principal who, in 2008, founded Auspicium, LLC, a consulting firm headquartered in the town of DeWitt. The company moniker is taken from Latin, meaning to “move forward.” Auspicium offers a wide variety of consulting services including general-business transactions, financing, mergers and acquisitions, public-private partnership projects, real-estate development, and startups.

Lorenz says that liquid management is his term for “… delivering high-impact, senior-executive leadership into a situation on an as-needed basis. Under the principles of liquid management, [Auspicium] takes responsibility for both developing the strategy [of a project] as well as leading the execution to deliver the desired results using a hands-on approach. We [Auspicium] can increase or decrease key resources as needed to accomplish the goal, hence the term ‘liquid.’”

Auspicium leverages its experience, relationships, and reputations to create new value in each project it undertakes. Lorenz insists “… first on a critical assessment of the project and second, an agreement by the client to make Auspicium a team member.” Convinced that there is a good fit, Lorenz then aligns his efforts with that of the stakeholders’ interests by putting his own investment at risk. Most of his compensation is based on the value Auspicium produces.

So how does Auspicium address the issues of fee and method of payment? Lorenz says he “… determines his return based on the value his firm can create. The payment method varies depending on the client’s preference … Auspicium generally offers multiple-payment options.”

An 8-K filing with the SEC on Feb. 10, 2009 illustrates the flexibility of Auspicium to craft a consulting agreement. Patient Portal Technologies, Inc. (OTC: PPRG) — a publicly held corporation based in the town of Lysander that provides communications systems to hospitals — entered into a consulting agreement with Auspicium. Patient Portal Technologies, owned by a hedge fund in Boston, managed the operation and rental of in-room, patient phone and television systems in hospitals and was “experiencing operating losses,” according to Lorenz.

Lorenz became the interim president of Patient Portal Technologies and says he turned a $1.3 million loss into a $2.3 million gain. In return, the agreement granted him 2 million shares of restricted common stock and compensation equal to 3 percent of the gross proceeds raised as part of a planned capital transaction. Auspicium also received a monthly retainer and a minimum compensation amount in the event the financing transaction didn’t close on time.

 

Armory Square hotel project

Auspicium is currently working on a hotel project with Syracuse executive Richard Sykes, the former CEO of RMSCO. In 2008, Sykes, a principal in RHS Holdings, undertook to build a $31 million, 180-room Marriott hotel in downtown Syracuse, but the ensuing recession made it difficult to finance the project. Lorenz then joined Sykes “ … to restructure the deal, redesign the hotel to control costs and to increase room availability, raise the capital, negotiate the operating-partner agreements, and oversee the design and construction.”

The Inns at Armory Square project, which will combine a 78-room Residence Inn and a 102-room Courtyard by Marriot, secured funding from M&T Bank and is currently scheduled for a grand opening in the spring of 2013. Auspicium put most of its compensation at risk by becoming the second largest shareholder in the venture behind Sykes, with only a modest retainer and performance bonuses, according to Lorenz.

Auspicium is also working with Ephesus Technologies, LLC, based in Syracuse. Ephesus, which employs 12, describes itself as a lighting-innovation company that designs, engineers, and manufactures LED lighting. Lorenz has joined the business as the interim COO and as the CFO. His associate, Andrew Sussman, is the firm’s general counsel.

Auspicium is also pursuing the development of the Riverview wastewater-treatment plant located on the site of the abandoned Miller Brewing Co. plant in the town of Volney, just outside the city of Fulton.

Lorenz estimates that an “… investment of $6 million to $8 million is needed to make the plant operational. The facility, which has the capacity to produce 10 million gallons of water a day, could serve a city of 350,000.” The project offers the potential for substantial economic development in the region and for being environmentally beneficial, all at a low cost.

Auspicium is not confining its efforts only to Central New York. It has worked with clients, or is now exploring projects, in Portland, Maine; Boston; Miami; Oakland; and San Diego.

This is not Lorenz’s first rodeo. He has a long track record of transforming companies into profitable, growth enterprises. A native of Yonkers and Carmel, N.Y., Lorenz graduated from SUNY Binghamton with a degree in accounting and joined PriceWaterhouse in 1979, where he worked with emerging companies. Lorenz’s record includes his role as president or CEO of Blount Lumber, the Galson Corporation, CXtec, and Destiny USA, before launching Auspicium.

At 55, Lorenz is just getting warmed up. He reviews a growing list of projects to determine whether he wants to be involved, and is simultaneously working on a book about innovative thinking. He also continues to find time for volunteering in nonprofit work. As the name Auspicium suggests, Lorenz will move forward focused on value-creation for his clients and on innovative thinking, which includes a new consulting model that “puts skin in the game” and relies on “liquid management.”

 

Contact Poltenson at npoltenson@cnybj.com

 

 

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