The Puget Sound Business Journal reports this morning:
“A Mercer Island couple has obtained an $18.2 million judgment against local lender Thomas Hazelrigg III in connection with a 5,000-home development that was planned for the city of Yelm, in Thurston County.
The massive mixed-use project, which foundered as the economic downturn froze credit and tanked the housing market, was recently sold at a foreclosure auction. Whether the project will go ahead as planned remains unclear….
…Project developer Paul Liao, who assembled the tract. Liao and his son Darwin retained a 49 percent stake in the project. But the project foundered in the economic downturn, as the developers struggled to obtain additional funding and secure sufficient water rights, according to Jacobson and city of Yelm officials. The Liao family was able to buy back the project in the foreclosure auction earlier this year.
However, Grant Beck, community development director for Yelm, said there remains a bill for $120,000 in city expenditures that will have to be paid before the project can continue through permitting….
It’s unclear when, if ever, the project will be restarted.”
ED. NOTE: The money owed in this project was outlined here May 7, 2009 with the public documents.
In this economic environment of continuing foreclosures & with today’s banking practices tightened-up, what bank is going to loan money if this project comes a-callin’ again?
After all, Thurston Highlands’ primary lending bank was seized by the FDIC and sold April 30th citing inadequate capital and severe loan losses associated with the bank’s construction loan portfolio.