Tempe Development Thread

[Luke Skyscraper]

Two thoughts come to mind looking at the picture of downtown Phoenix.
First, it seems that the last 2-3 floors of steel for OCPE have been not installed for weeks. I would have thought the skeleton would be done by now.
Secondly, it appears to be coming out shorter than anticipated. Look how much shorter it is than 44 Monroe. It also appears to be shorter than the Sheraton.
Someone awhile back stated that OCPE would only be 341'. I take my hat off to you- looks like your statement was spot on!

[Don B.]

^ I don't think OCPE is topped out yet, so I'd save the nut-swinging party (as our Vicelord John so eloquently puts it) until the building is done.

--don

[HX_Guy]

The floors have been going up as normal without a hiccup. They put up two floors at a time every 2 weeks and are just finishing up floors 23-24. In the next couple days why should start putting up 25-26.

It's true it won't be the 383' we had originally heard about, there is no way. It won't be much taller then the elevator core you see in the picture, maybe 1 floor above to hide the core.

[Luke Skyscraper]

I am looking at the elevator core to guage the overall height, that is why it is clear it will not be as tall as we had hoped. There may be an extra few feet above that to shield the rooftop mechanicals. I was hoping it would be at least as tall as 44 Monroe, but alas I shall have to be happy even this building got out of the ground before the wheels of the economy fell off.

[Don B.]

^ Exactly. We have to be thankful it is what it is.

I've heard in some other cities, major skyscrapers have ground to a halt in the framing stage, leaving large hulks on the skyline. There's one in Chicago that I think is 16 stories of steel framing and nothing else.

--don

[HX_Guy]

I think there are a couple at least in Chicago, I know of one that just the parking garage above ground was built and it stopped there. The Chicago Spire is also stopped with just a huge hole in the ground for the foundation.

[bwonger06]

12 news did a special (nothing special though) on downtown tempe. Few things they mentioned. Centerpointe stalled for foreseeable future. Mosaic is looking to be converted into student rentals, and whole foods is going to be replaced with a FRYS! WTF!

Sorry no link.

[KEVINphx]

Originally Posted by bwonger06

12 news did a special (nothing special though) on downtown tempe. Few things they mentioned. Centerpointe stalled for foreseeable future. Mosaic is looking to be converted into student rentals, and whole foods is going to be replaced with a FRYS! WTF!

Sorry no link.

If that's true, then GOOD, I'd rather a middle class grocery store that people can actually afford to buy their staple groceries than overpriced Whole Foods catering to a small market.

[exit2lef]

Originally Posted by bwonger06

12 news did a special (nothing special though) on downtown tempe. Few things they mentioned. Centerpointe stalled for foreseeable future. Mosaic is looking to be converted into student rentals, and whole foods is going to be replaced with a FRYS! WTF!

Sorry no link.

student rentals - good news

Even before the real estate crash, the dreams of turning DT Tempe into an enclave of luxury condos were unrealistic. Higher density is higher density. It has good effects, whether it's rentals or condos. Home ownership was oversold during the real estate bubble, and it's nice to see apartments becoming an acceptable living option again for more of the populatoin.

Fry's instead of Whole Foods -- I can take it of leave it

I find Whole Foods overrated and overpriced, and I find Fry's consistently uninspiring and mediocre. The perfect match for DT Tempe would probably be Trader Joe's or Fresh & Easy. Both are matched to middle class budgets but still different enough from the normal supermarket to work in an urban environment.

[andrewkfromaz]

(Mosaic) I think that would be the first urban application of a Fry's in the Phoenix area, so I think it's overall good news. There's no way the luxury condo complex they had envisioned would work today, so bring on the "student rentals..."

[ciweiss]

I would have preferred a Trader Joes or Safeway. Fresh and Easy would probably been nice as well(have not been there). Frys is ok but not my first 10 choices. I am curious what the new design will be. I tried going to the Mosaic site but it is down. I think Tempe Gateway is on their last floor (8). Looks good next to the lightrail stop. It will be nice to have storefronts all the way to town lake. Hopefully they can find tenants.

[ciweiss]

Sounds like they are getting closer to a downtown grocer.

Fresh and Easy coming to Mill and Broadway
http://www.eastvalleytribune.com/story/130706

[exit2lef]

Originally Posted by ciweiss

Sounds like they are getting closer to a downtown grocer.

Fresh and Easy coming to Mill and Broadway
http://www.eastvalleytribune.com/story/130706

So close, yet so far. That one mile, interrupted by the railroad tracks, will be a barrier to walking to the store for most residents of the ASU campus and DT Tempe. I like F&E and am pleased to see one in a relatively central part of Tempe, but it's still not the same as a Downtown store -- just as the Midtown F&E at 7th Ave & Indian School doesn't offset the lack of a grocery in Downtown Phoenix.

[Hysonk]

Kinda wordy, good news, but spin is everywhere...

We are writing to update you on a new strategic direction that we have selected to take in order to move forward more expeditiously with Centerpoint Condominiums; these moves will allow us to open as early as this Spring.

Our new plan has received overwhelming support from our Centerpoint homeowners and subcontractors as this sound business structure enables our subcontractors and construction team to go back to work, our homeowners to move into Tower One this Spring and the retail plaza level opened to the public by Summer. Centerpoint will create a tremendous new destination for Tempe’s Mill Avenue District and the greater metropolitan area.

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. 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 and the Mortgages Ltd. 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 including Mortgages Ltd. and its investors in our project.

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.

As the tallest towers in Tempe, 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.

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

Avenue Communities, LLC
Mill District
230 W 5th St
Tempe AZ 85281

[Don B.]

^ Nice spin there.

http://www.azcentral.com/realestate/...nt1206-ON.html

The developer of the stalled Centerpoint condominium towers in downtown Tempe filed for bankruptcy on the project Friday after months of legal wrangling with its construction lender, Mortgages Ltd.

With its Chapter 11 petition for reorganization, Avenue Communities LLC said it also planned to file a lawsuit against Mortgages Ltd. and the lender's investors for failing to fund loans to build the high-rise project.
The bankruptcy petition and pending lawsuit were brought by Tempe Land Co., a limited-liability company Avenue Communities formed to develop Centerpoint.
The filings come on the heels of accusations that the developer misused emergency financing it received from Mortgages Ltd. in September money approved through the lender's own bankruptcy case. Avenue Communities was to use the money to enclose portions of Centerpoint's partially complete buildings.

Centerpoint is one of several real-estate developments that have been mired by financial problems at Mortgages Ltd., considered the state's largest private commercial lender.

Those problems are believed to have prompted the suicide of Mortgages Ltd.'s then-chairman and chief executive officer, Scott Coles, and forced the hard-money lender into bankruptcy in June. At the time, the lender's portfolio included about 70 development and construction loans worth about $925 million.

Centerpoint consists of a 22- and a 30-story condo tower along with retail space near Mill Avenue. Avenue Communities has repeatedly pushed back the opening timeline due to a lack of funding.

The developer received about $133 million in financing from Mortgages Ltd. to build the project, which has been under way since 2005.

The developer was supposed to receive as much as $170 million. However, the lender could not raise enough cash from investors, who supplied most of the money that Mortgages Ltd. lent to developers.

Discussions between the various constituents in Mortgages Ltd.'s bankruptcy have stalled, Avenue Communities principal Ken Losch said. The developer believes it can gain approval for financing that it says is available for the project more quickly through its own bankruptcy.

"We're not looking to reduce any liability," he said. "We're looking for the judge to give us the authority to move forward and finish our community."

In the Chapter 11 petition, the developer said its assets and liabilities are worth between $100 million and $500 million each. The company has between 100 and 200 creditors.

Losch said his company has received a term sheet from a lending firm that is willing to provide up to $75 million to finish building Centerpoint. He declined to name the lender.

In order for a new lender to fund the project, a first-lien position on the property would be needed. That in turn would require Mortgages Ltd. to subordinate its current first-lien position on the Centerpoint project. The new lender then would be first in line to get paid if the project is successfully completed.

Losch said he believed it was more likely that his company could get such financing approved through its own Chapter 11 bankruptcy rather than Mortgages Ltd.'s.
Attorneys for Avenue Communities and Mortgages Ltd. have been in discussions to settle their clients' disputes since this summer. Part of the discussions focused on Mortgages Ltd. finding Avenue Communities additional money to complete Centerpoint through another lender.
In September, Mortgages Ltd. gained approval from the U.S. Bankruptcy Court to funnel about $2.8 million to the project via lending firm Stratera Portfolio Advisers.

That money was to be used to shore up the exterior of the partially complete towers, including installing windows and air-conditioning. Mortgages Ltd.'s attorneys filed a motion on Tuesday in bankruptcy court contending that accounting records show Avenue Communities misused some of those funds for "improper, unapproved expenditures," including legal fees, reimbursements and overdraft fees.

A hearing on the motion, which seeks for Losch and his business partners to show why they should not be held in contempt of court, is scheduled for 10 a.m. Monday at the U.S. Bankruptcy Court.

Losch said his company obtained approval from Mortgages Ltd. managers for all payments it made with the emergency funding.

Bradley Stevens, a bankruptcy attorney for Mortgages Ltd., declined to comment on the matter.

Mortgages Ltd.'s efforts to approve a larger settlement that involved finding as much as $75 million more for Avenue Communities have been delayed several times because of settlement discussions with other borrowers that also threatened to sue for a lack of funding.

Because Mortgages Ltd. is trying to reorganize its debts in bankruptcy, it must obtain court approval for all actions it takes related to its loan commitments and business operations.

That has been a difficult task because of opposition from creditors whom Mortgages Ltd. owes money and from the lender's investors. They have tried to block certain settlements out of fear of losing money in the deals.
Some developers have filed lawsuits against Mortgages Ltd., investment funds it managed and individual investors, claiming they should be held liable for underfunded construction loans. Avenue Communities is now taking that approach.

Attorneys working with Mortgages Ltd. have tried to dismiss the suits.

--don

[vertex]

This just gets curiouser and curiouser...

Condo project's accounts frozen

by Andrew Johnson - Dec. 9, 2008 12:00 AM
The Arizona Republic

Bank accounts for the Centerpoint condominium project are being frozen under an agreement between the project's developer and its construction lender, Mortgages Ltd.

The agreement, approved at a Monday hearing in U.S. Bankruptcy Court in Phoenix, stems from allegations by Phoenix-based Mortgages Ltd. that the developer misused emergency funds obtained this fall to secure the project.

Attorneys for Mortgages Ltd.'s investors and its largest creditor, investment firm Radical Bunny LLC, also are concerned that Centerpoint's two towers still are not adequately protected.

Mortgages Ltd., which is in Chapter 11 bankruptcy, obtained court approval in September to provide Avenue Communities LLC as much as $2.8 million to secure the two high-rise towers in Tempe.

The money technically came from lending firm Stratera Portfolio Advisers, which provided Mortgages Ltd. the money to lend to Avenue Communities through Mortgages Ltd.'s bankruptcy.

Of the amount the court approved, Avenue Communities received an initial $1.8 million.

Mortgages Ltd. and Avenue Communities disagree over whether the developer misused the money to pay for legal fees and bank overdrafts instead of paying to install windows and air-conditioning.

The dispute is another hurdle for the completion of Centerpoint, for which Avenue Communities filed a Chapter 11 bankruptcy petition on Friday. The project, considered a key part of development efforts in downtown Tempe, has seen its opening delayed repeatedly because of money problems.

Mortgages Ltd.'s attorneys are seeking to have Avenue Communities principals Ken Losch, David Dewar and other business associates held in contempt, accusing them of misusing the emergency funds.

No decision was made on whether to hold the partners in contempt Monday. There is a stay on filing actions against Avenue Communities because of its Chapter 11 petition on Centerpoint.

But attorneys for both parties have agreed to seek court approval to have the stay lifted so they can perform a full accounting of what Avenue Communities used the emergency money for and how much money remains. The hearing on the matter was continued to 2 p.m. Dec. 18.

In the meantime, all accounts tied to the development and construction of Centerpoint will be frozen. Losch's and Dewar's bank accounts also are frozen except to pay personal expenses.

The tentative agreement also stipulates that, for the time being, neither Avenue Communities, nor Losch and Dewar, can transfer assets to other accounts.

"We have a dispute as to how much money is still on hand for this particular loan," Mortgages Ltd. attorney Carolyn Johnsen said in Bankruptcy Court on Monday.

Avenue Communities attorney David Engelman said all payments the developer made were in accordance with the court order Mortgages Ltd. obtained in September.

He acknowledged that the developer did not have air-conditioning units installed on the project. He said that by the time the emergency financing was approved, temperatures had cooled.

He and Losch said windows have been installed and the buildings are sealed from the outside.

Shelton Freeman, attorney for Radical Bunny, disputed whether that was accurate. He said pictures taken of the project in mid-November showed that not all windows were installed.

The value of Centerpoint is important to Radical Bunny, which made nearly $200 million in loans to Mortgages Ltd.

Radical Bunny contends the loans it made were backed by Mortgages Ltd.'s assets. Those assets include portions of loans that Mortgages Ltd. made for real-estate developments, including Centerpoint.

Centerpoint's fate also is important to Mortgages Ltd. investors, who supplied a significant portion of the money for the construction loans. The project is worth less to investors if the project is damaged or is not finished.

Investors in the original loans Mortgages Ltd. made for Centerpoint are now the target of a lawsuit Avenue Communities filed with its bankruptcy petition Friday.

Avenue Communities contends investors who put money into its loans should be held responsible for damages resulting from Mortgages Ltd.'s failure to meet its funding commitments.

The developer received about $133 million in construction financing from Mortgages Ltd.

The developer was supposed to receive as much as $170 million, but Mortgages Ltd. could not raise enough money from investors.

Reach the reporter at andrew .johnson@arizonarepublic.com.

[HX_Guy]

This sucks and it's definitely not the direction you want to be going in...

Borders may close Mill Avenue store in January

3 comments by Dianna M. Náñez - Dec. 12, 2008 01:44 PM
The Arizona Republic

The Tempe Borders bookstore on Mill Avenue in downtown Tempe is closing sometime in late January, according to an employee who said she was not allowed to speak to the media.

Calls to Borders' corporate headquarters were not immediately returned.

The closing comes on the heels of about four shops opening on Mill in recent months, but as the area attempts to recover from more than a year of economic woes. Several Mill Avenue merchants have said Tempe's downtown is struggling because of the economy and competition from Tempe Marketplace, near Rio Salado Parkway and McClintock Drive.

There is a Barnes and Noble bookstore at Tempe Marketplace.

[exit2lef]

Originally Posted by HX_Guy

This sucks and it's definitely not the direction you want to be going in...

How ironic. Changing Hands, the metro area's major indie bookstore, left Mill Avenue largely because of the competitive threat of Borders. Maybe they could move back into the Borders space.

I have mixed feelings about this. I'm not crazy about Borders, but the recent spate of closures on Mill shows just how insane it was for the City of Tempe to subsidize Tacky Marketplace.

The Bamboo Club restaurant in the same building just closed. Again, I won't miss it. All the food was covered in the same salty brown goo, but it's not good to have so much failing at once on Mill.

[ciweiss]

That is to bad. I think the city of Tempe was looking to bring a public library into the area(off of Ash). Seems they should move into that space just to fill the vacancy. Or let changing hands move in. This is what happens when you put in a new mall within a few miles of a current shopping center. Add the poor economy and only the strong will survive. Tempe better think long and hard what they are going to do with Mill or they are going to have serious problems. Hopefully light rail will help.

[Jsmscaleros]

My 2 cents: You now have two major shopping destinations in very close proximity, Tempe Marketplace and Mill Avenue, and absolutely nothing to distinguish the two except now Tempe Marketplace offers everything Mill has in a more easily accessible package with more parking spaces, more retail stores, a movie theater (huge piece now missing from Mill), frequent free concerts and events, and no hobos to scare the kids.

I think the concept of Tempe Marketplace is disgusting and a huge step backwards in terms of tackiness, unsustainable design, further promotion of a car-dependent culture, seclusion from everything that immediately neighbors it on all sides, and gross pandering to big-box retail with almost no local representation. But when you feed the people of this town exactly what they want in a retail and entertainment destination, how is the little guy going to compete?

To me, the answer is diversification. Mill Avenue must redefine itself in a way that does not put it in the same market pool as Tempe Marketplace. I think the pendulum has just begun to swing back in the direction of the ma' and pa' operated business; let Tempe Marketplace gobble up the business of those who want the same old merchandise from Best Buy or Bed Bath and Beyond, Mill Avenue should bring back live music, local retail, and promote - dare I say - Arizona culture. If they compete toe-to-toe by trying to lure back the same demographic as Tempe Marketplace, they will lose.