9th Square Developer Seeks A Bail-Out

9th Square Developer Seeks A Bail-Out

There are 2 comments on the New Haven Independent story from May 9, 2013, titled 9th Square Developer Seeks A Bail-Out. In it, New Haven Independent reports that:

Saying it's running out of cash, the developer of the Ninth Square downtown apartment and retail district is asking the city to forgive $9.9 million in unpaid interest and obtain another 15 years worth of tax breaks.

Join the discussion below, or Read more at New Haven Independent.

Since: May 11

Wellington, OH

#1 May 12, 2013
Council Questions Developer's Request To Wipe Out Debt
(WLKY 4/22/2009, 9:12 PM, updated 10:06 PM)

Investors Want $7 Million Forgiven In Real Estate Deal

By Mike Petchenik

LOUISVILLE, Ky.-- Some Louisville Metro Council members are questioning a mayor's administration proposal to forgive millions of dollars in loans to an out-of-town developer whose project is losing money.

In 1983, the city loaned St. Louis-based McCormack-Baron nearly $8 million to build Phoenix Place apartments on the corner of Muhammed Ali Boulevard and Clay Street. Back then, city officials said the project cost about $25 million to build, but today, they said it is only worth $9 million, so the investors are trying to get out.

"The tax credits on it have expired and they said they've not made money," said Bruce Traughber, director of the Metro Louisville Economic Development Department. "The project is upside down in that they can't sell it for the amount of money that they have in it to satisfy our mortgages and the debt that's outstanding on the property."

Traughber said the McCormack-Baron is planning to sell the Phoenix Place land to the University of Louisville Foundation and the apartments to local developer Brown Noltemeyer so that the complex can be turned into affordable medical student housing. But, he said, in order to make the deal work, McCormack-Baron has asked the city to forgive all but $1 million of its debts to the city.

"Twenty-five years from now, we're still gonna be owed $8 million on the mortgage," said Traughber. "So, if we don't move the property today, who knows what the future holds and who knows what happens to that housing in the interim."

Traughber said the deal would also ensure that the downtown medical center could expand if needed.

"The hospital complex is a major driver of our downtown economy," he said. "So anything we can do to help that complex to ensure that complex is here in the future is important to us."

But some Metro Council Republicans said Wednesday they feel the administration is moving to quickly without necessary information, such as the financial impact it could have on Metro Government.

"To just wipe out this debt with no strings attached seems to many of us to be a big mistake," said Hal Heiner.

Heiner said the initial loan was made in an effort to ensure housing for low-income families on the eastern fringes of downtown. He said forgiving the loan could take away the city's control over the project's future.

"It's not only poor business practices," he said. "It's poor government."

United States

#2 Nov 5, 2015
I was the property manager for 9th square from late 1994 to 1996. I sat in on budget meetings with CHFA when I witnessed blatant misrepresentations of income numbers relative to expenses.

Tell me when this thread is updated:

Subscribe Now Add to my Tracker

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

West Haven Discussions

Title Updated Last By Comments
New Haven County Arrest Records and Criminal M... Sun Liam 2
News The 25 Most Dangerous Cities in the U.S. Are Mo... (Nov '10) Sat Big city 20,609
taxes? Sat discusted 1
Ginger from Texas road house Sep 20 Jerry 1
News Her disease and a special friendship (Jun '08) Sep 16 Chsr 10
News Job applicant claims insanity in construction s... Sep 7 BPT 1
News Norwalk man leads police in highway pursuit Sep 4 Sam 4

West Haven Jobs

More from around the web

Personal Finance

West Haven Mortgages