[Source: Gene Urban, The Urban Connection]
Mark Synder, a partner with Synder Worldwide Real Estate, is excited about this property he represents and describes as one of the most important historic buildings in Arizona. I thought this a great realization as many commercial real estate brokers care little about the historic value of a building… only its commercial or monetary worth.
Synder says the renovation project that began and failed a few years ago is about 1/3 complete. Some of the floors are completely framed out and much remains to be done. He estimates an additional 30 million will be needed to finish the build-out. On the good news side, much of the ground work has been done to qualify for historic federal tax credits and the property is already on the both state and federal historic registers.
A BIT OF HISTORY:
- Built in 1930-1932, this building was originally titled “The Professional Building”.
- Currently the largest/tallest historic building in Arizona with approximately 157,000 sq.ft. of space.
- Built from concrete with Indiana (AKA Bedford) limestone facings.
- The project architects were Morgan, Wall and Clements. Morgan, Wall and Clements were well known for their work in California. The link above has information about many of their lavish designs.
- H.H. Greene was also involved in the design and building of this project. He is well known for his work with Dwight Heard.
- The architectural style is Moderne and sometimes called Los Angeles Modern.
- The ornamental work on the doorway facing Central Ave is made of bronze. I am told the elevator doors are of matching design and materials.
- The top story was added in 1958.
WOULD YOU LIKE TO OWN A PIECE OF HISTORY?
Bids to purchase the Hotel Monroe are currently being accepted. However, the time to act is ticking quickly. Mark Snyder tells me the bidding ends on November 10th. However, he’d be delighted to provide interested parties all applicable information. Naturally, a confidentiality agreement would have to be signed.
You can contact Mr. Snyder at Mark@brokerhotel.com or 480-344-7500.
[Source: Phoenix Business Journal]
ML Managers LLC has taken possession of the Hotel Monroe in downtown Phoenix and Ten Wine Lofts in Scottsdale, both busted projects that the now defunct Grace Communities had partially developed.
The announcement was made Friday by Mark Winkleman, chief operating officer of ML Managers, the firm created to administer commercial real estate loans made by Mortgages Ltd. That company was forced into Chapter 11 reorganization bankruptcy after its sole shareholder, Scott Coles, committed suicide in June 2008.
Mortgages Ltd. had been one of the largest lenders in the state for construction and land acquisition loans since the mid-2000s.
The Hotel Monroe historic redevelopment project was barely off the ground when the economy tanked in late 2008. Interiors of the property at the southeast corner of Central and Monroe avenues in downtown Phoenix had been stripped in preparation for new construction of a boutique hotel and have remained untouched but exposed to the elements for about two years.
Winkleman said that property will be put on the market shortly.
[Source: Jahna Berry, Arizona Republic] — A downtown Phoenix 1931 bank building that was entangled in Mortgages Ltd.’s collapse appears headed for foreclosure. The 12-story Professional Building at 15 E. Monroe Street is scheduled to be auctioned on April 20, according to a notice of trustee sale filed at the Maricopa County Recorder’s Office. The notice is the first step in the foreclosure process. Thirteen investors are owed $76.5 million, according to the notice. The largest share is owed to a court-appointed entity that is managing the remainder of lender Mortgages Ltd.’s assets.
Phoenix-based Mortgages Ltd., helmed by the late Scott Coles, was once considered Arizona’s largest private commercial lender. The firm ran into trouble when the real estate market crashed, the firm couldn’t raise new capital from investors and couldn’t meet some of its loan obligations. When Mortgages Ltd. went bankrupt, developer Grace Communities was transforming the former home of Valley National Bank into an upscale 150-room boutique hotel called Hotel Monroe. Construction stopped and the partially-renovated building sits empty near Central Avenue and Monroe Street.
[Source: Andrew Johnson, Arizona Republic] — The U.S. Securities and Exchange Commission has resolved fraud accusations it brought against an investment arm of failed commercial real-estate financier Mortgages Ltd. The federal agency on Monday announced that Mortgages Ltd. Securities LLC agreed to an order revoking the company’s registration as a securities broker-dealer.
The SEC also sought $7.3 million in penalties and prejudgment interest but waived the amount because the investment firm demonstrated a lack of funds to pay. The action stems from the downfall of Phoenix-based Mortgages Ltd., once considered Arizona’s largest private commercial lender.
Mortgages Ltd. distributed more than $900 million in loans for real-estate acquisitions, development, and construction projects… Mortgages Ltd.’s failure led to the collapse of several high-profile real-estate projects, including Hotel Monroe in downtown Phoenix and the Centerpoint condo towers in Tempe. It also left the company’s thousands of investors, many of them retired, in the lurch. [Note: Read the full article at Fraud case ends for Phoenix’s Mortgages Ltd.]
[Source: Mike Sunnucks, Phoenix Business Journal] — Phoenix Mayor Phil Gordon extolled the economic resilience of downtown Phoenix [last] week during this annual “State of Downtown” speech. Gordon said Arizona State University’s expansion of its downtown campus, construction of the mixed-use CityScape project, and the light rail system are helping the area. He also said while sales tax revenue is down citywide, it is up 13 percent in downtown Phoenix. “Yes, it’s been a tough year economically for everyone. You’ve heard all about it, read all about and felt it,” Gordon said. “But in spite of it all, we’ve still got a lot going on in downtown Phoenix.”
Notwithstanding the mayor’s optimism, downtown Phoenix faces some economic problems. High-rise condominium developers face questionable financial futures because of troubles with pricing and occupancy. The Hotel Monroe redevelopment at Central Avenue and Monroe Street remains stalled, and the boarded-up building has become a haven for pigeons. The total amount of vacant space in downtown Phoenix stands at 1.05 million square feet — up from 630,400 square feet in the first quarter of 2007, according to Colliers International. The downtown vacancy rate is 13.8 percent, compared with 8.5 percent in first-quarter 2007, according to Colliers.
Downtown also is feeling the effects of pulled-back consumer spending. A number of downtown businesses have closed because of the recession, including Weiss Guys Car Wash at Grand Avenue and Van Buren Street and the China Inn restaurant at the Colliers Center.
The two downtown pro sports teams also face economic challenges. The Arizona Diamondbacks had a poor season on the field and drew about 381,000 fewer fans than in 2008, according to ESPN. The Phoenix Suns have gotten off to strong start on the court — but, like other sports teams, they face hurdles in attracting and keeping fans during the consumer doldrums. [Note: Read the full article at Despite mayor’s optimism, downtown Phoenix feels real estate, consumer stress.]
[Source: Mike Sunnucks and Jan Buchholz, Phoenix Business Journal] — Some Valley city council members are frustrated with the lack of updates they are getting from real estate developers regarding projects tabled by the market crash and recession. A slew of construction projects have fallen short of expectations, and council members across the Valley are giving developers and their lawyers mixed reviews on keeping their respective cities updated.
“No, no, no, no, no,” Tempe City Councilman Ben Arredondo said when asked whether he’s been kept up to date on the status of stalled projects — including the Tempe Centerpoint condo high-rise, which is in Chapter 7 bankruptcy and sits unfinished on Mill Avenue. Arredondo said he’s not getting frequent or detailed enough updates on Centerpoint or other projects. He said developers — especially those in distressed situations, such as Centerpoint — aren’t giving Valley cities straight answers on their projects. “I don’t think they are ever going to give us the bottom line,” Arredondo said.
Developers and their various lawyers aren’t specifically obligated to keep cities updated on their projects, but some city council members are worried about the status of delayed or abandoned developments and how they might hurt short- and long-term economic development.
Centerpoint developer Ken Losch did not respond to requests for comment. Centerpoint is not the Valley’s only distressed real estate development. The Hotel Monroe redevelopment in downtown Phoenix sits empty and boarded up. Downtown condos such as 44 Monroe and the Summit at Copper Square are mostly empty, and a significant number of suburban subdivisions and commercial developments are unfinished or delayed because of lack of demand and financing.
“I think that everyone is cautious and holding close to the vest. This goes beyond the developers, as end-users are placing projects on hold,” said Surprise City Councilman John Williams. “That said, I believe much of the information shared is often one-sided and biased and may not reflect the exact state of our economic recovery.”
Valley cities signed off on scores of retail, condo, single-home and commercial projects during the real estate boom. Now, many of those projects are on the back burner. “Many of (the planned projects) look foolish in hindsight, but most looked really good at the time,” said Phoenix City Councilman Tom Simplot…
After extensive efforts to obtain updates on several of the largest mixed-use developments in the Valley, few elected officials wanted to discuss the uncertain, even dire, financial situations facing some of them. The Phoenix Business Journal asked for comments about those projects — including CityScape, CityNorth, and Main Street Glendale — from the cities of Phoenix, Glendale, Tempe, Scottsdale and Chandler. The only responses from public officials are those noted above. [Note: Read the full article at City council members annoyed by lack of communication from developers.]
[Source: Sarah Fenske, Phoenix New Times] — There’s a development on the edge of downtown Phoenix that captivated me even before I moved into the neighborhood: the Chateaux on Central. My interest wasn’t a matter of good design — everyone from Will Bruder on down is on the record mocking the place, and rightly so. (With its fanciful turrets, shiny copper roofs, and that ghastly faux-French “eaux,” the project’s overall effect is Disney Does Brownstones in the Desert.) No, the Chateaux on Central were somehow personally evocative. They made me homesick. [Note: Read the full article at Phoenix Interrupted: Downtown’s full of gleaming progress surrounded by vacant lots – now what?]
[Source: Andrew Johnson, Arizona Republic] — A judge approved part of a settlement Tuesday between Mortgages Ltd. and a real-estate developer that had threatened to sue the bankrupt lending firm for shorting it $100 million in constructing financing. The ruling answered a few questions about Mortgages Ltd.’s authority to negotiate deals that could affect the position of its 2,700 investors, who were the Phoenix-based company’s primary funding source. In an oral ruling, Judge Randolph Haines granted Mortgages Ltd.’s proposal to revise terms for a loan that KML Development obtained to build a high-rise condo tower at the northwest corner of University Drive and Ash Avenue in downtown Tempe. KML’s loan was supposed to be for $130 million. Mortgages Ltd. has admitted to funding only $30.3 million of the amount. Under the settlement, the outstanding principal due on that loan is reduced to $14.9 million. That is because the difference was never funded to the borrower. The settlement also allows for a five-year window within which development can commence. Project plans discussed in court call for high-end student housing to be built at the site.
However, Haines rejected portions of the settlement that would have revised repayment terms for two other loans worth a combined $13.1 million that KML borrowed to buy land in downtown Phoenix. One of those loans, worth $7 million, was to buy land in downtown Phoenix at Roosevelt and Third streets. The other loan, for $6.1 million, was to acquire nearby land for a mixed-use project. Allowing such a settlement would have been unfair to investors in those two loans, which Mortgages Ltd. fully funded and are now due for repayment, Haines said.
Investors fronted Mortgages Ltd. about $925 million to make loans to mostly commercial real-estate developers prior to the firm’s involuntary bankruptcy filing in June. Their rights have been a focal point throughout the case. Attorneys for some investors opposed the settlement. They argued that the agreements investors signed when giving money to Mortgages Ltd. do not give them the right to change terms of a loan without investors’ consent. Haines, however, said that even if investors withheld their consent for Mortgages Ltd. to alter deals, as some of have tried to do, that does not mean they were withholding Mortgages Ltd.’s right to continuing making decisions regarding loan terms for the other investors the company acted as an agent for.
Mortgages Ltd. is currently trying to negotiate settlements with other borrowers. Among them are the developer of the stalled Centerpoint condo towers in downtown Tempe and the developer of the stalled Hotel Monroe project in downtown Phoenix.
[Source: Arizona Republic from U.S. Bankruptcy Court records] — Bankrupt construction lender Mortgages Ltd. has reached settlements with seven developers that account for more than one-half the company’s $925 million loan portfolio. Under the agreements, Mortgages Ltd. will subordinate investor interest, find additional capital for certain borrowers, and reduce interest rates for others. The borrowers agree to drop pending lawsuits against the company.
- SOJAC I LLC — Proposed Jackson Street Entertainment District in downtown Phoenix.
- MK Custom Residential Construction LLC — Various condo projects in central Phoenix.
- Grace Communities — Hotel Monroe in downtown Phoenix, X Wine Lofts in Scottsdale, and others.
- University & Ash LLC, Roosevelt Gateway LLC, Roosevelt Gateway II LLC — Various proposed condo developments in Phoenix and Tempe.
- Rightpath Ltd. Development Group LLC — Main Street Glendale near University of Phoenix Stadium.
- Avenue Communities LLC — Centerpoint Condominiums in Tempe
- Bisontown LLC — Residential communities.
[Source: Andrew Johnson, Arizona Republic] — Attorneys for Mortgages Ltd. plan to unveil settlement agreements this week with several developers who contend that the bankrupt real-estate lender underfunded construction loans. The settlements could allow some of the developers to move forward on a boutique hotel [in downtown Phoenix], high-end condos, and other high-profile projects that have stalled because of the lender’s bankruptcy. The agreements, subject to U.S. Bankruptcy Court approval, will affect the standing of more than a thousand investors who supplied Mortgages Ltd. with millions of dollars to make construction and development loans.
Investors’ rights are a sticky issue in the 3-month-old bankruptcy. Mortgages Ltd. had more than $900 million in about 70 loans to developers and land speculators when one of its borrowers pushed it into bankruptcy in late June. Most of the money came from about 2,700 investors, who put money in various investment vehicles the company managed. Some invested directly in specific loans. Others bought memberships in limited-liability companies that owned interests in multiple loans. [Note: To read the full article, click here.]