[Source: Jan Buchholz, Phoenix Business Journal] — A blockbuster plan to create a downtown Phoenix entertainment district is in jeopardy as the lender filed a notice of trustee sale on several of the properties involved. At the same time, three major Valley high-rise condo projects are poised for major court dates that could dramatically affect their future viability.
ML Manager LLC, the company created to administer the loans of Mortgages Ltd. following its Chapter 11 bankruptcy reorganization, filed a notice of trustee sale March 17 on several parcels that would have formed the core of the proposed Jackson Street Entertainment District. The auction is scheduled for June 17. SOJAC I LLC, headed by former co-owner of the Arizona Diamondbacks, Dale Jensen, was the entity that borrowed $24.2 million from Mortgages Ltd. in February 2007 to purchase properties on Third, Fourth, Buchanan, and Lincoln streets. [Note: To read the full article, click here.]
[Source: Andrew Johnson, Arizona Republic] — Investors’ rights have been a long-standing issue in the bankruptcy of Phoenix-based Mortgages Ltd. Former Managing Director Robert Furst testified in U.S. Bankruptcy Court that Chairman and Chief Executive Officer Scott Coles made the decision to alter an investors agreement to give Mortgages Ltd. more flexibility to bring in new investors as first lien holders ahead of existing investors.
Furst said he worked for Mortgages Ltd. from October 2005 to March 2008, when he quit. He testified unexpectedly on a proposed loan extension Mortgages Ltd. was offering local real-estate developer Dale Jensen. Jensen’s firm, SOJAC I LLC, has an approximately $24 million loan with Mortgages Ltd. for the development of a proposed entertainment district on Jackson Street in downtown Phoenix. Furst said he wanted more information about Jensen’s finances before a judge approved the extension.
Jensen was current on interest payments but the loan principal came due in late September. Because of turmoil in the credit markets, he likely wouldn’t be able to secure financing to pay off the balance, said his attorney, Don Gaffney. SOJAC wanted to have the loan-maturity date extended a year. Judge Randolph Haines ultimately approved the extension, calling it a reasonable deal. [Note: To read the full article, click here.]
[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.