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Friday, February 04, 2000
Copyright © Las Vegas Review-Journal
Palm City foreclosure sale delayed
A businessman's $26.5 million cash offer for the Henderson property postpones the sale.
By John G. Edwards
Review-Journal
A foreclosure sale on a 500-acre residential site in Henderson was postponed Thursday.
The foreclosure sale on the site, known as Palm City, was delayed because a Carson City businessman has offered to pay mortgage holders $26.5 million in cash for the property, said John Netzorg, an attorney for mortgage loan investors.
About 120 investors funded three mortgage loans to developer James Rhodes, which were made by failed Interstate Mortgage Group.
Mortgage firms such as Interstate use money from individuals to fund mortgage loans to developers and homebuilders. Investors are attracted by high interest rates and the protection of having real estate as collateral for the loans.
Rhodes fell behind on mortgage payments, and David Ferradino, owner of Interstate, started foreclosure proceedings on behalf of investors.
On Monday, however, Rhodes sold the Palm City site to Commerce Associates, which is controlled by Rolland Weddell of Carson City.
Weddell's company bought the site from Rhodes on Monday for $30 million, including assumption of debts. Those debts included the mortgage loans arranged by Interstate.
Since then, Weddell has made a $26.5 million cash offer to mortgage holders, Netzorg said. That would return investors all of the principal on the loans, he said.
Investors in Palm City mortgage loans as well as the state, which put Interstate into receivership, "should be very thankful" that Weddell wants to buy the real estate, Netzorg said.
Weddell's company put $13 million in escrow to show good faith in buying the property.
"That lends them infinite credibility," Netzorg said.
Palm City has been graded but has few other improvements. It is on the northeast corner of Lake Mead Drive and Olsen Street in Henderson.
Rhodes planned to develop 2,375 single-family and multifamily homes on the site, as well as an 18-hole golf course. The site included six parcels, three of which were unencumbered by mortgages.
In a related development, Chief District Judge Lee Gates is scheduled to hold a hearing at 1 p.m. Monday on the appointment of a permanent receiver for Interstate.
The state Financial Institutions Division put Interstate into receivership in late December and named George Swarts, a certified public accountant, as temporary receiver. The state said the mortgage brokerage was insolvent.
Interstate had $140 million in loans outstanding that were funded by about 1,000 investors.
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