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With No Parking Revenue, Moinian Faces Foreclosure Across from Staples Center

By Eric Richardson
Published: Thursday, November 19, 2009, at 05:49PM
L.A. Central Eric Richardson [Flickr]

A June temporary injunction forbid developer The Moinian Group from running parking operations on the site of the proposed L.A. Central development. Now, the developer faces foreclosure.

In June, Moinian Group Director of Development Oskar Brecher said that the loss of parking revenue on an $80-million lot across from Staples Center could send the project into default. Turns out, he was right.

The Downtown News reported today that Wachovia Bank has initiated foreclosure proceedings after the project missed payments. The paper reports that the developer owes $45.6 million on a $55 million loan.

Also in June, Brecher said that debt service on the site was "approximately $495,000 per month."

The four acre site has been fenced off since June, when Superior Court judge David P. Yaffe forbid Moinian from operating parking on the lot. AEG, which sold Moinian the lot in 2006, appears to retain the right to operate parking until the developer breaks ground. It filed a lawsuit earlier this year after Moinian had begun to collect parking revenue.

Further complicating matters is a lawsuit filed by architects RTKL, who were contracted to design the project that was supposed to rise on the lot. It would have featured 860 market-rate residential units, a 222 room hotel and 250,000 square feet of retail.

RTKL claims that it is owed $3.6 million on its $14 million contract. It is attempting to foreclose on a lien filed against the land.

While the land is a prime development site, terms in AEG's sale contract and the Los Angeles Sports and Entertainment District plan limit what a prospective buyer could do with the parcel. The entertainment company retains a repurchase right should the project not break ground 48 months after the sale, but given the reduction in land values since the real estate peak, it seems more likely that it could acquire the property another way at less than the original price.

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