|Image: Jaime Peachey|
Foreclosure will be the next step for the unfinished Centerpoint Condominium towers in Tempe, but what happens after that is anybody's guess.
At a hearing in Tucson today, U.S. District Judge James Marlar lifted a stay on foreclosure for the buildings and five acres of land they stand on near Maple and 6th Street.
The project's bankrupt owner, Tempe Land Company (a.k.a. Avenue Communities), owes about $135 million on the project to the company that financed it. New Times covered Centerpoint's failure in a feature story last week.
The company that lent the cash for the towers, Mortgages Ltd., is now defunct and bankrupt itself. The people who made the loans are still around, though, and likely praying their losses aren't too big. They've formed a new company, ML Managers LLC, which will now foreclose on the condo project and become the new owners for its buildings and land.
Tempe Land Company and the trustee in the bankruptcy case consented to the initial steps to foreclosure, says Cathy Reece, one of the attorneys for ML Managers LLC.
The foreclosure will occur in about 90 days, during which time the LLC will try to figure out "what it needs to do to get money back for its investors."
The project is worth only about $35 million "as is," last week's article revealed. If the LLC decides to simply sell the condo towers in their unfinished state, they'll obviously pocket just a fraction of their investment.
The expected new owners will first want to find out how much it will cost to finish the project (last we heard, the developer was saying it would be about $45 million to complete just one tower, and $75 million to complete both). They need to think about who might serve as contractor -- it won't be the original contractor/developer, Tempe Land Company. And they need to pay off or reduce the $24 million in debt that Tempe Land Company owes separately to the many sub-contracting companies who worked on the project.
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"A lot is going to happen in the next 120 days," Reece says.
Unfortunately for Tempe residents, most of what happens will be people e-mailing documents, bids and other info back and forth.
More construction work -- that's still just wishful thinking.