John Rebchook is a former Rocky Mountain News reporter with more than 30 years of experience in writing and communications... Zack Davidson, the developer of the Landmark high-rise condominium project in Greenwood Village that filed for reorganization under Chapter 11 about three weeks ago, has no intention of moving to Chapter 7 liquidation.
Indeed, the Landmark remains “open for business,” Davidson said in a letter to Realtors.
“Unlike some developers that have declared Chapter 11 reorganization and subsequently ended up in Chapter 7 liquidation, The Landmark has a strong asset to liabilities ratio,” Davidson wrote in a recent letter to Realtors. He also sent a letter to residents and tenants at the Landmark along Interstate 25 near Belleview Avenue, as I reported in an earlier blog.
Davidson said that his bankruptcy is different than other high-profile bankruptcies in the Denver area, such as Village Homes and McStain Neighborhoods.
The company is reporting $168 million in assets and $116 million in liabilities, some of which it is disputing.
Here is a copy of Davidson’s letter to Realtors:
We value our relationship with Realtors and believe it is important to keep you informed on the Chapter 11 reorganization filing for The Landmark
Since we entered into the reorganization on Aug. 30, our team has been working diligently through the many legal steps associated with the filing.
While it is early in the process, the court is making decisions that we believe your buyers might be interested in knowing about, and The Landmark team is pleased about.
Judge Michael Romero granted our motion for the interim use of cash collateral to continue day-to-day operations at the community. This is good news for the community since it assures visitors and residents that we’re continuing with the first-class service and maintenance of the residential towers and the retail shops. Your clients will see the beautiful streetscapes, stylish storefronts and immaculate lobbies and amenities that are the trademark of of our community.
The next important step in our reorganization is securing post-petition funding for operations.
Our hearing about funding is set for Oct. 1. We have a fully executed loan agreement with Carmel Landmark LLC for a loan of up to $15 million. This is known as a Debtor-in-Possession (DIP) loan and the use of proceeds from this loan will provide capital for all ongoing operations and will pay for costs associated with the reorganization.
The lender is an indirect subsidiary of Carmel Partners III, LLC, a prominent $700 million real estate investment fund headquartered in San Francisco with offices around the country, including Denver.
Denver-native Ron Zeff founded Carmel Partners in 1992 serves as Carmel’s CEO today. When approved by the court, the new lending facility will provide enough capital to complete all remaining construction in the development, as well as provide funds to pay for the day-to-day ongoing operations of the Homeowners Association, the retail center, and the costs necessary to market the residential and retail.
Just this week we filed a complete set of financial statements with the court that demonstrate our financial viability.
In the Summary of Schedules, we reported assets of $168 million and liabilities of $116 million, including $15 million of unsecured creditors, some of which is disputed. Unlike some developers that have declared Chapter 11 reorganization and subsequently ended up in Chapter 7 liquidation, The Landmark has a strong asset to liabilities ratio.
Each re-organization is unique, and ours is vastly different than what your clients may have read about with other local builders, including Village Homes, McStain or John Laing Homes.
The Landmark community is completely finished on the outside and there is only interior customization work left to be done in residences at the two towers and in some of the retail space. The Landmark remains financially viable, which is why Chapter 11 protection has been granted by the court.
We have a full schedule of Court activities in the weeks ahead, including the first creditors meeting and the hearing regarding the post-petition funding, however, it is important for us to bring to the Court a motion asking for approval to close homes that are under contract.
We have 23 buyers under contract and one reservation, all of whom are anxious to move into The Landmark and The Meridian. We understand from our legal counsel that is very typical for judges in Colorado to grant the motion to close homes because it is in the best interest of all parties to generate sales that inevitably allow the loans related to the partnership to be paid off.
We have also received the approval of Hypo (our largest creditor and primary lender) to begin closing units again, which will be looked upon very favorably by Judge Romero. We are hoping to be able to start closing residences again in October and move new homeowners into our community.
Homebuyer deposits are held at Land Title, (Editor’s note: a co-sponsor of InsideRealEstateNews.com) and are not exposed to any risk of any kind during the Chapter 11 proceedings.
This is important because you can be assured that the deposits are not put into our general operating funds but are separated and secure at Land Title. These funds are not at risk and if your buyer contracts on a home at The Landmark, their deposit would also be placed with Land Title.
Let us just assure you that The Landmark is open for business.
Our retail shops are over 80 percent leased and we continue to have strong interest in the remaining available retail spaces and the available condominium homes. Don’t be hesitant to bring your prospects to our community. FHA and Conventional financing is available for residences at The Landmark at current market rates and with standard down payments.
Your buyers will love our extensive amenities, including concierge services, rooftop spas and decks, infinity-edge swimming pool, spectacular mountain views, state-of-the art fitness centers, wine cellars, private dining rooms, private movie theater, art studio and much more.
The brokerage team of Rike Palese and Katie Everett from Re/Max Professionals, Classic New Homes, has onsite staff to answer all of your questions. Please visit our sales center, open regular hours of Sunday and Monday from 11 am to 6 pm, and Tuesday through Saturday, 10 am to 6 pm. If you have questions, please contact Rike Palese at (303) 552-5550.
Regards,
Zack Davidson
CEO and President
Contact John Rebchook with real estate news at JRCHOOK@gmail.com or 303-945-6865.
[...] http://insiderealestatenews.com/2009/09/landmark-plans-to-reorganize-not-liquidate/The lender is an indirect subsidiary of Carmel Partners III, LLC, a prominent $700 million real estate investment fund headquartered in San Francisco with offices around the country, including Denver. … The brokerage team of Rike Palese and Katie Everett from Re/Max Professionals, Classic New Homes, has onsite staff to answer all of your questions. Please visit our sales center, open regular hours of Sunday and Monday from 11 am to 6 pm, and Tuesday through Saturday, … [...]