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Judge grants short-term funding for Centerpoint
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A U.S. Bankruptcy Court judge granted the developer of the Centerpoint condominium towers in downtown Tempe $2.8 million of a requested $4.8 million to continue work on the project.
During a hearing Tuesday, Avenue Communities LLC was granted approval of a portion of their request for debtor-in-possession financing to be funded by Mortgages Ltd., which filed Chapter 11 bankruptcy in June.
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The remaining $2 million of the loan will be reviewed for approval at a hearing scheduled for Oct. 16.
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Avenue Communities broke ground on Centerpoint in December 2005, but construction halted in recent months due to a financing shortfall of about $75 million brought about by the bankruptcy of Mortgages Ltd.
On Aug. 19, Avenue Communities and Mortgages Ltd. filed a joint settlement agreement that includes a structure to allow for $75 million in financing, which includes $2.8 million to be funded by Mortgages Ltd. immediately. The money will cover Centerpoint operational costs, such as staffing, utilities and elevator fees.
Avenue Communities plans to file with their selected new lender for the remainder of the $75 million loan package upon approval of the $4.8 million. The new lender will be disclosed at the time of filing with the court.
The $75 million balance will fully fund completion of the two towers, as well as the public plaza, said Ken Losch, Avenue Communities’ principal and managing partner.
“We are pleased we did not have to go down the litigation route at this time,” he said. “We are developers, not litigators, and our goal is to create an amazing asset that will be a marquee destination for Valley residents and a landmark to Tempe’s Mill Avenue District.”
Losch expects that Tower One residents will begin moving in within 60 to 90 days from the close of the new loan package totaling $75 million. About $24 million worth of condos have been purchased, with more than 250 interested buyers since March waiting to view model homes, Losch said.
Combined, the 22-floor Tower One and 30-floor Tower Two comprise 375 homes ranging in price from the low $300,000s up to premium pricing of the penthouses in the millions.
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