Condo financing motions OK’d
Bankruptcy judge Bruce Markell approved all motions Tuesday to finance completion of the Mira Villa luxury condo project in Summerlin, which left buyers in the lurch when construction was halted in February.
Markell's decision paves the way for $37 million in post-bankruptcy financing to finish the first 113 units, procedures for unit sales and payment of $10 million in mechanics' liens. Some 84 buyers had signed contracts for the condominiums.
"This is a huge accomplishment for the trustee," attorney Laurel Davis, representing developer HDB Inc., said after the hearing. "It allows the Mira Villa condos to be completed."
Markell said it strikes him that the Mira Villa property was "mismanaged" before it went into bankruptcy and is the type of matter suited for bankruptcy court.
He said the value represented by completion of the project -- approximately $108 million -- will result in higher dividends than the current appraised value of $67 million.
"I'm not saying everyone will be paid in full," the judge said, "but they'll be paid more than before. It's clear if it forecloses now, they get nothing."
Markell heard objections from one attorney who argued that his subcontractor clients should be allowed to complete their work. The trustee has indicated that the new general contractor, Isaac Construction, may seek different subcontractors to do the same work.
Davis said there's a sense of urgency to proceed on the project as building permits expire Jan. 6 and it's essential that the general contractor be on site for inspections.
The proposed loan is coming primarily from Nevada State Bank, Colonial Bank and Tier One. Terms of the loan are 1.5 percentage points above the base interest rate for 18 months.
Markell said he could not make a "good faith finding" with regard to the purchasers of units.
The judge also approved a motion seeking a settlement with certain lien claimants who will work on completion of construction of Mira Villa.
Attorney Jerry Gordon said the lienholders had "adequate protection" from the appraised value of the project, as well as how the liens will be released as the units are sold off.
Markell set a Jan. 6 date to hear objections to the mechanics' lien claims.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
