Urban Realty received the following letter from the owners/developers of the Centerpoint Condominiums development today. We thought it was worth sharing:
“We are excited to notify you that Centerpoint’s 22-story residential tower may open as early as this Spring with the retail plaza level following this Summer! We value our relationship with you, so we wanted to be sure to keep you informed of our significant milestones. We are writing to update you on a new strategic direction that we have selected to take in order to move forward more expeditiously to open Centerpoint Condominiums.
As the tallest towers in Tempe’s Mill Avenue District, Centerpoint Condominiums changes the City’s skyline and augments Mill Avenue’s status as the most vibrant and vital urban main street in the Valley. And the views, as you know, are incredible. In partnership with Valley celebrity chef, Michael DeMaria, Centerpoint will feature a 180-seat contemporary Italian restaurant, Trattoria M, and accompanying market-caffé, Aroma. Aroma will be a highly unique destination; offering artisan foods, locally grown, natural and organic whenever possible, in-house bakery, house made gelato, coffee barista, floral shop and a world-wide selection of cheeses and vintages. Residents of Centerpoint will also enjoy their own private “backyard” at the approximately 23,000 square-foot 7th level Great Room complete with a white sand beach pool with cabanas, poolside food and beverage service and an upscale fitness center with a Yoga and Pilates studio, among many other offerings. Centerpoint is likely the most innovative and exciting mixed-use destination to hit the Valley.
Our new plan, that we would like to share with you, has received overwhelming support from our homeowners and subcontractors as this sound business structure enables our homeowners to move into Tower One this Spring and the retail plaza level opened to the public by Summer. This will create a tremendous new destination for Tempe’s Mill Avenue District and the greater metropolitan area.
To give you some background, Centerpoint has been under construction since 2005 and was proceeding successfully, having procured many pre-sale commitments for condominium homes, until late 2007 when lender Mortgages Ltd., Arizona’s largest private lender who filed Chapter 11 in U.S. Bankruptcy Court on June 23, began defaulting on its funding obligations to us. This slowed and eventually stopped construction as you may know. After much patience over the past year and willingness on our end to work toward a resolution with Mortgages Ltd. and its investors, we have determined that they have no intention or ability to approve an equitable agreement with us. So, we are now taking action on our own terms to complete Centerpoint, and protect our investment in this landmark project.
In the recent past, we have negotiated a financing agreement of $75 million with a new lender. This plan has been in front of Mortgages Ltd. and its project investors for many months. Unfortunately, we have made little, if any, progress to obtain this new financing through Mortgages Ltd.’s bankruptcy court process. So, in an asserted effort to protect our asset and finish the job, we filed a lawsuit against Mortgages Ltd. for defaulting on their funding obligations to Centerpoint; as well as have filed Chapter 11 in U.S. Bankruptcy Court to afford us the opportunity to obtain new financing through our bankruptcy court’s authority. Gaining the court’s authority will allow us to move forward in a more streamlined, efficient and productive direction, benefiting all parties.
We requested our new lender finance $44 million initially. These are the funds needed to open Tower One so our homeowners can move in, and complete the retail plaza level, resident’s private “backyard” amenities level, the extension of 6th Street and the exterior of Tower Two. We are very excited to have established a partnership with this new lender who shares our commitment to providing the highest level of integrity and quality in every aspect of Centerpoint Condominiums.
While filing Chapter 11 may sound serious, it is an appropriate and routine step to take in this business situation and gives the federal court authority to restore order and protect assets. Once the bankruptcy court approves our new loan, which we hope to occur expeditiously, we will complete Tower One approximately 60-90 days after the close of the new loan agreement; then, the retail plaza level will open approximately three months following.
While much of our attention is on finalizing the terms of our new loan agreement, we certainly remain focused on delivering what Tempe Mayor Hugh Hallman and many other community and business leaders throughout the Valley refer to as a landmark project for the Mill Avenue District.
Please feel welcome to contact us with your inquiries. We will continue to update you on our progress as well. In the meantime, for your reference, we have attached the press releases recently distributed regarding our lawsuit and Chapter 11 filing, as well as a copy of the lawsuit. Please feel welcome to review them for further information.
Again, we sincerely value our relationship with you and look forward to sharing exciting milestones ahead. The lack of progress and commitment to our project by Mortgages Ltd. was unexpected. Nevertheless, good things come to those who wait; and in that regard, we know Centerpoint will be an amazing community for all of us.
Sincerely,
Kenneth K. Losch and David C. Dewar
Principals”
MORE:
Click Here to View News Release
Click Here to View Attorney’s Letter
Click Here to View East Valley Tribune Article
Click Here to View Arizona Republic Article
Click Here to learn more about the Centerpoint Condominiums
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