Wisconsin firm buys troubled midtown Phoenix project

[Source: Milwaukee Business Journal] — Main Street Ingredients, a La Crosse company that manufactures and distributes food-processing ingredients, has been selected to buy the “opulent” Chateaux on Central brownstone project in Phoenix for $7 million.  The unfinished residential development at the northwest corner of Central Avenue and Palm Lane has been financially troubled since construction started in 2005.  All forward movement stopped when the lender, Mortgages Ltd., took it back in 2008 shortly before that company was forced into Chapter 11 bankruptcy protection.

Mark Winkleman, chief operating officer of ML Manager LLC, said MSI West Investments LLC submitted the winning bid for the Chateaux.  Closing on the property is scheduled for Friday.  ML Manager is the court-approved entity administering the Mortgages Ltd. loan portfolio in the wake of the lender’s bankruptcy.  The Chateaux is one of the first Mortgages Ltd. properties to be sold off.

Dave Clark, CEO of Main Street Ingredients of La Crosse, confirmed that his company is behind the winning bid.  Main Street recently created MSI West, a limited-liability company registered with the Arizona Corporation Commission.  The company has purchased real estate in other states and started looking around the Phoenix area last year.  “We like what we see in downtown Phoenix,” Clark said.  “We feel this will be a good investment, but we’re not here to turn a dollar.”

The project was designed as 21 five-story residences with private elevators and rooftop terraces.  The announced prices ranged from $2.8 million to $4.5 million per unit, but none were sold.  Desert Hills Bank provided the first construction loan, but the relationship soured when the bank filed a lien on the property.  The late Scott Coles, then CEO of Mortgages Ltd., stepped in to salvage the project, but Coles committed suicide on June 2, 2008, thrusting the entire Mortgages Ltd. loan and property portfolio into limbo.  Within a month of Coles’ death, several borrowers forced Mortgages Ltd. into Chapter 11 bankruptcy.

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Posted on March 8, 2010, in Luxury Housing, Midtown Vitality and tagged , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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