Tempe condo towers project awaits funding

His project may be in limbo, but that doesn't diminish Ken Losch's optimism.

He's certain the first of his Centerpoint condominium towers in downtown Tempe will be ready for occupancy by Christmas.

Losch, managing partner in the $200 million project, is as intense as he is optimistic.

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With the sweep of his hand during a tour this week, he points out to a visitor where the Trattoria M restaurant and accompanying Aroma market-caffé will be located on the ground floor of the towers. On the 30th floor of the taller of the two towers, he looks out at the expansive view of Tempe to the east and downtown Phoenix to the west and declares that buyers will be willing to pay upward of $10 million for the penthouse suite.

"This will change the way people interact with the Mill Avenue district," he says. "This will take it to a new level."

Losch even has coined a term for the type of urban living the project will inspire - sophisticated bohemian. It's the sort of place where people wearing $500 designer blue jeans will hang out, he says.

But there's been a speed bump in Losch's high-powered drive to create a new focal point in downtown Tempe. His lender, Mortgages Ltd., has filed for bankruptcy protection, leaving $75 million of the loan for the project unfunded.

Losch insists that a new financing deal is almost at hand to finish the job. But as of Thursday, it had not been filed with the federal bankruptcy court.

The result is a semi-construction site looming over central Tempe that looks almost done, but not quite, and with few signs of continuing progress. Many of the residential units are virtually complete, with kitchen appliances and other furnishings installed. A little cleanup, and they'll be ready for move-in. But the lobbies and retail part of the complex look far from ready.

In an interview, Losch said he has had no trouble attracting sufficient capital to complete the work.

"Twelve lenders would love to finance this project," he said.

The problem is not money, but authority, he said. The new lenders want to make sure they are first in line for repayment once the project opens and revenue starts flowing in. So far those issues haven't been resolved, but Losch insists the go-ahead will happen soon.

Forty-one of the 171 condo units in the 22-story first tower have been sold, and 250 potential buyers are on a waiting list to tour the model units once the building is open, he said. Out of that waiting list should evolve at least 60 more sales, he said.

The first tower is scheduled for occupancy within 90 days after the new financing deal is approved by the bankruptcy judge, Losch said. The second, taller tower should be ready six months later. The restaurant area is expected to be open in January.

The project was originally scheduled to open in March. So far, the buyers are "hanging in," Losch said.

Jason Rose, a spokesman for the project, said Centerpoint is benefiting from the slowdown in the housing market, because several nearby condominium buildings that would have competed against Centerpoint haven't gotten off the ground.

"We don't have all of those to contend with," he said.

The project includes 10 levels of parking and 18 podium units that will be sold on a fractional basis. A sand-beach swimming pool will be located on the seventh level for use by the residents, while the penthouses on top of the two towers will each contain their own private pools.

A second phase of the project is planned later with two 30-story towers.