Political Eye: Berkley, husband invest in yogurt shop franchise

If this U.S. Senate thing doesn't work out, there might be a fallback for Rep. Shelley Berkley in her family's new business. Berkley and her husband have obtained franchise rights to operate frozen yogurt shops in New Mexico.

Three U-Swirl Frozen Yogurt cafes have opened in Albuquerque, and the franchise agreement calls for seven more to be up and running in the state by May 2015, according to a company filing with the Securities and Exchange Commission.

Berkley and her husband, Dr. Larry Lehrner, closed the deal in May 2011, after Lehrner set up a company, Family Yogurt LLC, for the venture.

They paid between $50,000 and $100,000 to get into the frozen yogurt business, according to a Berkley disclosure to the U.S. House. At the end of 2011, Berkley valued the franchise at between $250,000 and $500,000.

The investment is but a small part of the couple's financial portfolio. Berkley, a Democrat and seven-term House lawmaker who is running for the U.S. Senate, last week was ranked by The Hill, a Capitol Hill newspaper, as the 35th wealthiest member of Congress, with net assets of at least $9.2 million.

Most of the holdings are in the name of Lehrner, a kidney specialist whose investments include stocks, mutual funds, real estate, medical companies and a Las Vegas restaurant, Double Diamond Food & Spirit on North Jones Boulevard. The couple married in 1999.

The frozen yogurt franchise was purchased jointly, according to Berkley's disclosure. The parent company, U-Swirl Inc., is headquartered in Henderson and is led by Hank Cartwright, an entrepreneur who developed Pizza Huts on the West Coast. He also pioneered the video rental superstore concept before selling his company, Major Video, to Blockbuster in 1989.

U-Swirl operates seven shops in Las Vegas and Henderson, and has been expanding through franchises in 10 other states. Lehrner has described himself as a satisfied customer who recognized a good product and a business opportunity.

"I am totally hooked on U-Swirl. I stop almost every day to get my fix," he said in a company news release.

He said he scouted several cities before settling on Albuquerque.

U-Swirl cafes portray themselves as healthy hangouts where customers serve themselves and pay by the ounce after adding toppings.

Yogurt also has health values as a source of calcium. Berkley, who has been affected by osteoporosis, has advocated early diagnosis and treatment of bone conditions. It's not clear whether that was a consideration in the investment.

Berkley's campaign spokeswoman said the couple took the New Mexico franchise after discovering there were no opportunities for one in Nevada.

"They chose to invest in U-Swirl because they enjoy the yogurt and wanted their franchise to support a Nevada-based company that employs approximately 400 people in the state," Xochitl Hinojosa said.

U-Swirl cafes generally employ five full-time workers and 35 part-timers, the company said in its 2011 annual report.

- Steve Tetreault

COUNTING COWS AND HOMEOWNERS

In Nevada, our elected leaders seem to know more about cows than they do about foreclosures.

During an Interim Finance Committee hearing in Carson City on Thursday, Assemblyman Pete Goicoechea, R-Eureka, repeatedly asked members of the state Supreme Court if they could give any estimates of the number of foreclosures on homes that banks eventually will file.

"Tell me how many homes face foreclosure," he said. "I know there are 450,000 cows in Nevada, but how many people face foreclosure?"

He got no answer from state Supreme Court Justice James Hardesty. The court administers the state Foreclosure Mediation Program under which mediators try to work on deals between homeowners and vendors in an effort to keep people from losing their homes.

Hardesty had told the committee that the number of employees in the mediation program must be reduced because the number of foreclosures, standing at around 10,000 a month in 2009, has dropped to about 1,000.

But aware that as many as 70 percent of homeowners owe more than their homes are worth, Goicoechea questioned whether banks are doing nothing now about the delinquencies and just waiting for a time when the market improves to file foreclosures.

"Frankly it is easier, Mr. Goicoechea, to count the number of cows than count the number of people who are not paying the loans on their homes," Hardesty replied.

Assemblyman Marcus Conklin, D-Las Vegas, said he does not expect a big bubble in foreclosures. Rather, he expects the number to remain at the 1,000- to 1,500-a-month level. Conklin said he does real estate research.

- Ed Vogel

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3900.