There's a buyer for The Park condos, the stalled uptown tower, with the beginnings of a deal emerging Tuesday from a topsy-turvy three-hour court hearing.
The sale hasn't been approved yet, and its details, the plans for the project and the outlook for the buyers who each have invested tens of thousands of dollars in deposits, are uncertain. Talks will continue today in U.S. Bankruptcy Court.
Summitt Shores, which registered the top bid after a foreclosure auction in August, agreed to buy the property for $19 million. The company hasn't announced how it would proceed with the property.
Construction started several years ago on The Park, planned as a 21-story, 106-unit luxury tower at Caldwell and Third streets. Its developer, 222 South Caldwell Street Ltd. Partnership, part of Verna & Associates of Charlotte, accepted deposits from about 80 would-be condo buyers for the units, which were to be sold for up to $700,000 apiece. The deposits were to be used for construction.
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But construction stopped in January, with the building 70 percent complete, and the project went into foreclosure this summer. Court documents say the developer owed more than $28 million on its $30.7 million loan.
After an auction and bidding period this summer, Summitt Shores offered $18.8 million. But shortly after, three contractors filed an involuntary bankruptcy petition, forcing the condo tower into court and temporarily halting the foreclosure proceedings.
The Park is one of several uptown condos to face problems this year, despite showing strong sales.
210 Trade, the condo tower going up at the EpiCentre, has been stalled since February in a legal dispute between its developer and the EpiCentre's. Two other projects, One Charlotte and 300 South Tryon, have been postponed.
Tuesday's hearing was supposed to decide The Park's fate. Court-appointed trustee Langdon Cooper, a Gastonia attorney, had filed a motion to sell the project to the high bidder, partly because it was falling into disrepair, and those with a stake wanted to get things moving before winter weather caused more damage.
But the case took a bizarre turn Tuesday, with Summitt Shores initially lobbying to back out altogether. Attorneys for the company – an entity created by several investors, including N.C. businessman Leonard Ray Watts and a Utah company called Management Solutions Inc. – argued that a previously signed purchase agreement was invalid.
“It's like a circus in here,” one man said during a nearly two-hour break. Another whispered, “This thing seems to have a life of its own.”
Eventually, Cooper announced that the parties had made a deal. Summitt Shores agreed to buy The Park, and the company would have 45 days to close. If the deal fell through, the condo tower would go back into foreclosure, attorneys said.
Before Judge Craig Whitley could approve the sale, it hit another snag. Deborah Fletcher of Kilpatrick Stockton, who is representing condo owners, asked the court to keep the project out of foreclosure and rule on whether owners were entitled to their money back.
Cooper argued that the project's lender, BB Syndication Services of Wisconsin, should be first to receive money back – and that it would be unlikely for condo owners to get a refund.
“I'm sorry,” he said, turning to the crowd. “It can be bleak.”
Cooper said Summitt Shores intends to “contact each of the people and make a new deal … so they'll buy the units.”
After the hearing, condo owners said they supported a sale but wanted to know the details.
“We haven't seen what they're going to do with it,” said Tony Colletti, who bought a unit two years ago. “They haven't even told us if they're going to go forward with it.”