Centerpoint Condo Towers in Tempe Set for Auction Tomorrow; Future of Empty, Unfinished Buildings Still Uncertain
Got a few million bucks to blow?
If so, you can try your luck on a couple of unfinished condominium towers in Tempe.
The Centerpoint towers and the five acres of land beneath them at Sixth Street and Maple Avenue are scheduled to be up for open auction starting Thursday.
Typically, such auctions put the property in the hands of the lender, often a bank. In this monster foreclosure case, the lender was Mortgages Ltd., a company that went bankrupt just before the suicide of its CEO, Scott Coles.
Mortgages Ltd. was turned into ML Manager LLC, made up of investors screwed by Coles. To be fair, the recession didn't help matters. But our previous coverage of Coles' company -- (click here and here for the articles) -- makes it clear the millionaire partier wasn't playing a straight game.
Still, the auction will be open to anyone. Rumor is that Ken Losch, the developer who borrowed the money from Mortgages Ltd. to build the towers, wants to put in a bid, says Keith Hendricks, one of the lawyers for ML Manager.
Hendricks explains that the lender could obtain the property because it can offer a "credit bid," based on the amount owed (in this case, a cool $195 million), that is higher than any cash bid is likely to be.
New Times covered the story of Losch and the towers in our extensive October 15 article.
A bankruptcy judge approved the sale of the towers in late October. At the time, the most recent appraisal judged their value to be $35 million "as is."
Tempe Land Company, owned by Losch and his partners, sunk about $135 million into the project before Mortgages Ltd. stopped sending checks. The lending company, then operated by Scott Coles, had run out of cash. In mid-May 2008, Mortgages Ltd. declared bankruptcy.
As our October 15 article revealed, Coles committed suicide hours after he was told that Centerpoint -- Mortgage's Ltd.'s biggest project -- would declare bankruptcy before its completion.
Last we heard, it would take about $45 million to finish the shorter of the two towers, and $75 million to finish both.
Kris Baxter, Tempe's spokeswoman on Centerpoint issues, declined to speculate on the future of the project.
"It will depend on who buys it," she tell us.
Mark Winkleman, CEO of ML Manager, didn't return our voice mail.
A few possible outcomes for the towers:
*Rich folks might buy them, finish them and sell them.
*The lender, ML Manager, will acquire them, then sell them to someone who will finish the project.
*One could open years before the other.
*They could become condos, as planned.
*They could be turned into apartments, housing for Arizona State University Students, a hotel or office space.
*They could be imploded, demolished, and scraped away.
Whatever happens, it'll likely be better than having a couple of dark, unoccupied behemoths as constant reminders of the bad economy.
UPDATE: Winkelman gets back to us, tells us the bidding will start at $8 million. Click here for the latest.