East West: Near $19M default filing will be paid off, Lake Tahoe Ritz will avoid foreclosure
TRUCKEE, Calif. and#8212; An official with East West Partners said the near-$19 million default notice filed by Bank of America against the Ritz-Carlton Highlands Lake Tahoe provides the real estate development giant enough time to avoid foreclosure.
East West owes $18.6 million to Bank of America, the lead lender on the Ritz Carlton project, said Blake Riva, managing partner with East West in the Tahoe region. The default and#8212;-filed in Placer County on March 31 and#8212; involves two loans totaling $157 million, and is a first step toward foreclosure.
and#8220;We’re working closely with the bank to address some financing-related matters, and once those are resolved, the outstanding balance will be paid,and#8221; Riva said. and#8220;We hope to resolve this in the next 60 days.and#8221;
The loan payment will be separate from hotel revenue, coming from capital from financial partner Barclays, Riva said, a British banking and investment company that put up the $10 million reorganization loan in March for East West’s Chapter 11 filing earlier this year.
Riva said the notice of default is unrelated to the Chapter 11 filing, which was on a number of other Tahoe-area properties and#8212; notably Gray’s Crossing and Old Greenwood developments in Truckee and#8212; but not including the Ritz-Carlton.
Barclays’ $10 million debtor-in-possession intends to provide funding for East West to continue conducting business during its debt reorganization, Riva said in a previous interview, putting Barclays in control of Gray’s Crossing and Old Greenwood real estate and golf courses.
Those properties went up for auction earlier this year, but Barclays received no acceptable bids, Riva said, meaning the company will continue to own them going forward.
Barclays’ financial commitment to the Ritz Carlton notice of default is still being defined, Riva said, but would be on top of the $10 million loan and a $32.5 million commitment in long-term capital to those other properties from the British company, Riva said.
Upon emerging from Chapter 11, Riva said East West’s goal is to continue as a project manager for property development in the region, with plans for about 1,000 titled ski-in, ski-out units mid-mountain at Northstar-at-Tahoe as part of the Highlands project.
Acccording to published reports, East West bankruptcy documents say 40 of the 65 employees at its Truckee office have been laid off.
The Ritz-Carlton manages the Northstar property, said Steven Holt, director of public relations for the Ritz, and its management contract won’t be affected by the financial situation.
and#8220;We had an amazing winter season,and#8221; Holt said.
The Ritz-Carlton Highlands, a luxury resort with about 300 employees, temporarily closed its doors April 19, reopening May 10, for cleaning and maintenance during the shoulder season.
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