One thing is for certain, the courts have been kept busy by developers. In an interesting turn, the owners of Fontainebleau are accusing their lender, Deutsche Bank of trying to destroy their project in order to protect their own condo project.
Deutsche Bank, along with several other lenders were named in a lawsuit claiming that they violated financial obligations when they canceled an $800 million revolving credit facility needed to complete construction on the Fontainebleau resort.
Fontainebleau filed a suit last month, stating that they are not in default and accused the banks of trying to get out of their financial commitments (the loan was canceled on the grounds that the project had defaulted on unspecified loan requirements).
Deutsche Bank is also developing the Cosmopolitan resort on the strip after buying the property for a Billion dollars after it went into foreclosure. The amendment filed by the Fontainebleau alleges that Deutsche Bank is trying to minimize the competition with their project.
Meanwhile Irish based Harcourt Developments has filed a counter claim against Glen, Smith Glen Development, its principals and one of their spouses for fraud. Harcourt was an equity partner in the stalled Sullivan Square condo project. Harcourt is claiming that Glen, Smith Glen Development tried to induce them to fund construction of the project based on straw man condo sales.
Earlier this year, some of the original charges filed against Harcourt were dismissed. It seems that Sullivan Square will join the ranks of other Las Vegas dream projects.
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San Diego Homes Blogger 05.14.09 at 1:03 pm
There have been a number of interesing developments in the downtown San Diego condominium market. Several of the new developments pre-sold units to home buyers between 2006 and 2009, and they are only now reaching their move-in dates. During that time the values of San Diego condos in general has dropped around 30%. So several of the condo developers have decided to unilaterally reduce the purchase prices of the pre-sold units by as much as 20%. This has been sufficient to keep most of their existing buyers from walking away from the purchases. It also shows very good faith on the part of the condo developers.