Developer of Willits criticizes the tactics of Bank of America
Right up until Wednesday, things were looking up for the Willits Town Center at Basalt. The long-awaited agreement with Whole Foods Market has been completed and announced, and the project is moving forward in the government approval process; the leasing program is active, with new leases being signed and new tenants opening, all while we have been exploring viable sources of funding going forward to replace Bank of America, which inherited the existing loan from our former lender LaSalle Bank. We expect to bring a new alternative source of funding to this project in the near future.
But, in a move that elevates form over substance, Bank of America moved for appointment of a receiver for the property even though the only changes to the property recently have been the positive ones listed above. This action is simply the latest in the bank’s emerging strategy for dealing with relationships Bank of America inherited from its takeover of LaSalle Bank.
This strategy of terminating existing relationships for projects that have been moving forward in various communities is unhealthy, unwarranted and insensitive to local needs. Each of these projects is important to the local community, and collectively, these projects are key to economic recovery.
Developments like Willits Town Center mean more jobs for the local economy – first, construction jobs and later, retail and office jobs and finally, jobs in the broader markets as people have more disposable income; more money for schools and family services from increased tax revenues – good results that help people and communities move forward.
But lately, Bank of America has ignored the benefits of keeping active projects moving forward. Instead, the bank wastes everyone’s time in discussions between the parties to extend or modify loan agreements; in some cases, actually reaching perceived agreement and then filing a lawsuit or seeking a receiver to oust the developer from the project.
That is not how we do business. Joseph Freed and Associates LLC is a family-owned company that has been in the real estate business for over half a century. We make long-term investment in the projects we undertake. We are not in business to make a quick buck.
We are used to working with lenders to reach equitable terms on our projects. And we have been able to do that, except in transactions led by Bank of America, despite the tough times the real estate industry currently is experiencing. Just within the last two weeks, we signed an agreement with PNC Bank extending the $170 million loan on the 1-million-square-foot Sullivan Center retail and office project in downtown Chicago.
However, all Bank of America seems to be interested in doing is litigating issues that resolve none of the truly important questions nor take into account the realities of the situation nor the impact on the communities in which our projects are located. This approach is in no one’s best interest.
But everyone needs to remember that Joseph Freed and Associates LLC still owns the Willits Town Center project and remains firmly committed to its long-term viability and success.
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