Case Study Multi-use Development

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Multi-use Development 

  • $8 million A&D restructure and refinance for mixed use development.

The challenges:

  1. Foreclosure. A mixed use development (hotel, in-door dry-stack boat storage, retail, apartments and senior living) was in default with foreclosure being threatened by an angry bank.
  2. Diverted funds. Between $2 million and $3 million was diverted to other purposes by the managing member and nothing had been built.
  3. Personal guarantees. Unwisely, the minority members of the LLC had personally signed jointly and severally for a $5.2 million first mortgage and another $2.3 million in seller financing.
  4. TIF. A $9 million TIF had expired;
  5. The approved land plan had expired and
  6. Engineering problems. The engineering called for millions to be spent on apparently unnecessary under ground water detention and a strange concrete wall that would be 25 feet long and about 1,000 feet long.
  7. D.O.T. permits. Appropriate permits with the State Department of Transportation Authority were not pulled or even requested.
  8. Local buzz. The local municipal officials were very angry.

Action plan: In 10 working days, over Christmas and New Year—CCF analyzed the property and market conditions with their engineers, real estate market researchers. Simultaneously, they examined all the entitlements and TIF agreements with their associated land use legal team, came up with a plan and met with the lead bank on January 2nd.  Almost immediately, the bank slowed and then stopped all foreclosure efforts.

     The results:  Then in under a year, CCF arranged for:

  1. The bank released all the CCF clients of their personal liability.
  2. Negotiated the sale to a new buyer and shifted the liability of the second mortgage holders to the new buyer of the property.
  3. Changed the attitude of the municipality from resentment to full cooperation.

     Skill sets employed:

  1. Mortgage financing,
  2. Market analysis of real estate values and uses—particularly in apartment rentals, shopping centers, hotels, senior housing and resort indoor boat storage,
  3. Land planning,
  4. Environmental law and regulations,
  5. Civil engineering,
  6. Horizontal land development,
  7. Banking regulations and law,
  8. Bankruptcy law,
  9. Civil and criminal prosecution,
  10. Working with banking regulators,
  11. Forensic financial auditing and private investigations,
  12. Construction costing and review,
  13. Land use law and working with municipalities,
  14. TIF financings,
  15. Real estate brokerage, and
  16. Working with the press for effective media coverage.

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