RESIDENTIAL
In early July, officials with Santa Ana-based Nexus Development Corp. dismissed speculation that part of the company’s most prominent local project under construction,the twin 25-story Skyline at MacArthur Place condominium towers,might be converted to apartments because of the tough residential market.
For another sizable residential project Nexus has in the works for Costa Mesa, a conversion is already being planned, at least temporarily.
Nexus has been working with the city of Costa Mesa for several years on planning for Westside Lofts, a mixed-use project at 1640 Monrovia Ave. The site previously was an Eaton Corp. aerospace plant and is surrounded by a number of other industrial buildings.
The project called for 151 condos, five live/work units and six commercial and office buildings totaling about 41,500 square feet. The development’s expected to cost about $45 million to complete, according to Cory Alder, Nexus president.
Plans were tweaked recently. The city approved a request from Nexus to initially offer the 151 condos as apartments. The units still will be built to condo specifications, in case sales were to resume, Nexus said.
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1640 Monrovia Ave.: Nexus building apartments here instead of condos |
The developer is hoping to break ground in early 2009 and to finish the project about 16 months after that.
The city approved the request over the objections of several locals who complained that the area near the project already has too many apartments.
Some other Westside business owners have worried,much like business owners in the Irvine Business Complex,that building homes near industrial areas will just lead to complaints over noise coming from those businesses.
Officials with Costa Mesa-based Trico Realty Inc., which owns several industrial properties near the site, also expressed concern that Nexus might end up selling the project to another developer.
The project “has the potential to be as unsuccessful in the market as our previous white elephant, Triangle Square,” Trico officials said in a letter to the city.
Bankruptcy Bills
A year ago, I wrote a story about how Irvine-based New Century Financial Corp.’s bankruptcy likely was to be a boon for law and other professional services firms.
Lynn LoPucki, a bankruptcy law professor at the University of California, Los Angeles, who tracks court costs, said last August that there was an 80% certainty that the lender’s court costs would exceed $48 million at the end of the case. The final bill could come close to $100 million once all was said and done, he said.
LoPucki’s estimates look like they are on the mark.
Through May, there have been $67 million in professional fees and expenses paid in New Century’s case, according to the latest monthly operating report filed by the defunct subprime lender with the Securities and Exchange Commission.
If you factor in the volume of work done in the past few months, as New Century’s lawyers worked to get a liquidation place finalized, along with fees billed but not paid, that total likely is closer to $80 million, if not higher.
New Century Financial won bankruptcy court approval for its liquidation in July; unsecured creditors should be paid about $200 million.
The largest biller so far has been Los Angeles-based O’Melveny & Myers LLP, which has been paid nearly $15.5 million in fees and expenses through May. AlixPartners LLP, a restructuring consulting firm, has been paid another $11.2 million.
It’s unclear whether the $67 million figure includes all the costs associated with a probe of accounting issues by court-appointed examiner Michael Missal, a partner with Kirkpatrick & Lockhart Preston Gates Ellis LLP’s office in Washington, D.C.
As of January, the examiner’s probe had eaten up more than $20 million, according to statements made in bankruptcy court. Missal’s report was made public in late March.
K & L; Gates has only billed about $11 million for work in the case through May, according to the latest monthly operating report.
COMMERCIAL
Portland’s Guardian Management LLC, a real estate investment and management company, has acquired the franchise rights for the Irvine-based Sperry Van Ness brand in Southern California, Arizona and Oregon.
The deal includes eight previously corporate-run offices for Sperry Van Ness, including its Irvine headquarters, which counts about 60 brokers. About 190 brokers in total are in the eight offices, primarily in Southern California.
The deal’s scheduled to close at the end of August; terms of the deal were not disclosed.
Guardian will continue to operate the brokerages as an affiliate company under the Sperry Van Ness brand. It will become the largest Sperry Van Ness franchise owner.
