Sunday, June 6, 2010

Los Arcos Crossing facing foreclosure

by Jane Larson The Arizona Republic Jun. 4, 2010 12:00 AM

Los Arcos Crossing, the failed shopping center on McDowell and Miller roads whose latest developer vowed to turn it into Scottsdale's "center of life," is headed to foreclosure and a possible sale by the end of the year.

Phoenix-based developer PDG America has defaulted on its loan, and lender ML Manager LLC plans to take ownership of the property at a trustee sale Aug. 5, said Mark Winkleman, chief operating officer of ML Manager.

The Peoria-based firm was formed by investors as a successor to Mortgages Ltd., the high-flying Phoenix investment firm that collapsed in bankruptcy after chief executive Scott Coles committed suicide in 2008.

The potential sale of Los Arcos Crossing comes as Scottsdale is pushing for redevelopment of the McDowell Road corridor, a once-thriving strip that has lost auto dealers, grocery stores and other retailers as residents and growth moved northward.

The city is inviting developers' proposals for 3.7 vacant acres it owns between the shopping center and SkySong, the ASU Scottsdale Innovation Center. Some developers have already indicated interest in combining the two parcels into a bigger project, Winkleman said.

"They're interested in (whether) this could be a bigger deal," he said.

One of those interested is Global Entertainment Corp., a Tempe-based firm that has proposed building an event center that would host community events and commercial performances.

Having a larger parcel would allow the company and its partners to put the center on the city land and develop the rest with restaurants, shops and maybe a hotel, said Global CEO Richard Kozuback.

PDG America acquired most of Los Arcos Crossing in 2007 with plans to develop it as Scottsdale CentroVida, a $150 million mix of townhouses, apartments, restaurants and neighborhood shops. The property lies just east of the SkySong campus.

Mortgages Ltd. financed the deal. PDG made its last loan payment in June 2008, leaving an outstanding balance of $24 million, not counting interest and late fees, Winkleman said.

PDG's chief executive officer, Rick Sodja, said the deal fell apart because Mortgages Ltd. failed to fully fund its loan to PDG for assembling the property.

PDG has sued the investors and has tried to work with other developers, he said.

Winkleman said that barring a settlement or bankruptcy, ML Manager plans to hold the trustee sale, take ownership and choose a real-estate company to market the property.

Los Arcos Crossing facing foreclosure

Real Estate News

HootSuite - Social Media Dashboard