The owner of the Holsum Lofts, an early downtown redevelopment project, said he has lined up the financing to pull the project out of Chapter 11 bankruptcy.
According to owner Jeff LaPour, the private finance firm Quarry Capital put up $6 million at 7 percent interest. In addition, the company will contribute $200,000 cash, enough to pay off all the debt and costs of the bankruptcy case.
But the Quarry loan will come due after two years of interest-only payments, possibly setting the stage for a rerun of the problem that led to the bankruptcy.
When LaPour finished renovations and began leasing the office, design studio and restaurant spaces in 2005, two years after purchasing the former Holsum commercial bakery, he obtained a $6.8 million loan from Goldman Sachs Commercial Mortgage Capital. However, he was unable to repay when the loan came due in January 2011.
As recently as July, LaPour had a proposed $7 million sale of the project in case the previous, more expensive loan deal fell through. LGC231, the ownership entity in which LaPour is the managing member, still must submit, and gain a judge’s approval, to a Chapter 11 reorganization plan before the project is completely on its own again.
“We’re not worried about the loan,” LaPour said. “The financial markets are much better than they were in 2011 or even 2012. We have refinanced three other properties just this year.
Attorneys for Holsum Note 231241, an entity created by unidentified local investors that bought the first loan early last year, did not return calls seeking comment.
“Holsum Lofts was conceived and introduced to downtown in 2005,” LaPour said in a statement. “Things were very different at that time,” with the general real estate market booming but many of the projects that now define downtown still not in place. Further, the idea of recycling older buildings for new uses, common in many cities, was still new to Las Vegas.
Luxe Lofts is the second stalled condominium project in Las Vegas to be resurrected in the past year, with model units expected to be completed by the end of January and sales starting in February.
Patrick Humes and David Thurman of Los Angeles-based BondRok Partners bought the unfinished 83-unit luxury condo project in May for $6.75 million and renamed it The Modern.
The bank-owned project at 8925 W. Flamingo Road, once valued at $38 million, was listed for sale in March for $10 million, or about $120,000 a unit. Cost to build was $540,000 a unit, on average.
Five floor plans range from 1,135 square feet for one-bedroom, two-bath units to 2,700 square feet for three bedrooms and three baths. Pricing runs from $198,000 to $417,000, compared with prices starting in the high $400,000s when the project was announced in 2006.