Lender’s downfall puts downtown Phoenix plans in limbo

Exterior of Hotel Monroe renovation project.  Photo by Nick Oza, Arizona Republic.[Source: Jahna Berry and Andrew Johnson, Arizona Republic, June 25, 2008] — The financial storm brewing around Mortgages Ltd. has touched two key downtown Phoenix projects, a blow to ongoing efforts to reinvigorate the city’s heart.  There is no more loan money to fund construction and renovation work for Hotel Monroe, a high-profile luxury project, the developer said Tuesday.  And a proposed Jackson Street entertainment district is looking for new lenders for a land deal.  And it was unclear if other downtown projects could be next.

It’s unknown what developments are among the estimated 70 loans in the embattled Phoenix company’s $925 million loan portfolio.  The downtown projects are significant because Phoenix and state officials have invested years of planning and millions of taxpayer dollars to resuscitate what had once been a sleepy business district.

On Tuesday, city officials downplayed the impact, noting that Phoenix has many successful downtown projects under way.  That includes the expanding Arizona State University downtown Phoenix campus, the $600 million convention-center expansion, and the nearly complete 1,000-room Sheraton hotel project, said Phoenix’s downtown-development director John Chan.  “One segment of the market is slowing down, but there are a lot of positive things going on in downtown Phoenix,” said Chan, adding that the Mortgages Ltd. meltdown is a symptom of the national credit crisis.  [Note: To read the full article, click here.]

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