Wow, what started off as a very dull real estate week ended up with a bang. Here are some tidbits:
Legends – The Legends project in Sparks was one of the focuses of the fine article about STAR Bonds that Brian Duggan wrote up in the RGJ last weekend. I’m working on my own article about STAR Bonds for your consideration, especially on the 3rd approved district – the Freight House. The bombshell is that Sparks Legends Development received a Notice of Default (NOD) on Friday on what appears to be their $155M construction loan through Key Bank, separate from their STAR financing. The notice of the document posted late Friday, but the document won’t populate until Monday, so I don’t have any more details. UPDATE: Here is the Legends NOD. It looks like they missed interest payments on a $155M construction loan and $38M bond loan on 15 March 2011.
Wingfield – The RGJ reported this morning that Wingfield Springs developer Harvey Whittemore is being sued by his partners in Wingfield Nevada Group Holding, Thomas Seeno and Albert Seeno Jr. $8M in embezzlement is being alleged. Whittemore and the Seenos are tied together on numerous other projects, including Coyote Springs and the pipeline project in Las Vegas. The Seeno’s also own 15% of the Peppermill and several home construction companies, including Legacy Homes who is finishing out the Vue in Somersett. Bring on Gloria Allred for this divorce case!
Boomtown – The sale of Boomtown hasn’t closed yet, but new management seems to be in place. The Cabela’s STAR bonds talk got me looking into how the rest of Boomtown (PNK Reno aka Pinnacle Entertainment). A string of loans all through Lehman Commercial Paper Inc. started in December 2003 with $330M package. This was upped to $400M in September 2004, and upped again to $1B in December 2005. Finally in November 2006, a loan for $1.5B – $1,500.000,000 – was issued, though it may not all have been used. The Grand Sierra sold for $42M for reference. Boomtown looks like it is going to be a short sale to end all short sales. We will have more information when the sale actually closes.
Golf – HOA – If you subscribe to this blog, you got to read the short lived post about trouble at some of out local private golf clubs. I’ll post the Golf portion at the end of this post, in case you are interested. I took the post down because, though I stand by everything I wrote about the situation in Somersett, the post was not documented to the standards I like to hold myself to. There will be a lot more to say soon about Somersett and its approaching “Arab Spring”.
I used to golf along the Mississippi River in Little Falls, MN. The first hole had the river on the right, and I’d always slice it in. Second hole was an uphill dogleg to the right, perfect for my slice, and I’d hook it back to the clubhouse. Somewhere around the 8th hole, I found my inner Tiger and let loose with a shot down the center of the fairway that was PGA quality, aerodynamic perfection. Then it landed and rolled and rolled and rolled – and rolled down a gopher hole. That was my last round of golf.
Golf as a game is tough. Golf course development is much tougher, especially here in the high desert where the climate is extreme and water is expensive.
– The Crystal Peak 9 holer in Verdi is gone. This one is so complicated that even I can’t unravel it. BK, annexation issues, land development for housing gone bad, and a feud with the owner of the biggest house in Reno.
– D’Andrea was profiled in the RGJ last week, after Sparks cut off their gray water (one step above brown water!) supply over an owed $145,000. The 1200 or so members of the HOA are being asked to kick in another $28 a month to save the course. 1200 homes x $28 per month x 12 months = $403,200. Huh? Check out the golf entities – there are hundreds of thousands in mechanic’s liens outstanding for the clubhouse renovation and expansion. There is a lot more going on here than is being reported.
– ArrowCreek – Went through hell, found a new operator, who had a $100K+ IRS lien notice filed (since removed) and another IRS lien for the current year.
– Northgate, AKA Aiazzi State Park. RSCVA closed the course when it became unsustainable financially, sold the water rights, created a special assessment district to finance its purchase as a park (as well as stripping funds from the Somersett park funds). You can search this site for some thoughts about this one