Greenbridge, the 10-story Rosemary Street development that opened last fall, faces the threat of foreclosure by its bank.
The (Raleigh) News & Observer reported Friday that the Greenbridge development could foreclose after Bank of America refused to pay $1.6 million in invoices on the project in October.
The bank claims the contractor, Weaver Cooke Construction of Greensboro, exceeded its guaranteed maximum price on the $54 million project, the N&O reported.
But Dan Estes, president of Weaver Cooke, said he made a separate agreement with Greenbridge developer Tim Toben to repay the $1.6 million, and the money should not be a factor in Bank of America’s decision to stop payment.
“My take is the developer worked out a way to alleviate that problem with going over guaranteed maximum price outside of his debt to Bank of America, so that shouldn’t even be on the table,” he said.
Greenbridge was touted as one of the most sustainable complexes in the state as it elicited bomb threats and graffiti from those who protested its location.
Toben and Greenbridge partner Frank Phoenix would not comment on the development or its finances.
In November, Estes filed a lien, or a legal claim for payment of debt, against Greenbridge, which still owes the construction company “several million” along with the bank, he said.
“Nobody can sell any condo units until we’re paid, until the lien is satisfied,” Estes said.
Estes said he is also owed retainage — an amount equal to 5 percent of the contractor’s payment for the job — to be paid by Bank of America through Greenbridge.
Once the retainage is paid, Estes said he would remove the lien, allowing Greenbridge partners to continue selling units to repay the $43.8 million loan.
The N&O reported that the development has sold 36 of its 97 condominium units.
After the loan is paid, Estes said he will receive the $1.6 million he is owed in invoices.
“The developer and I, we talk almost daily,” he said. “We understand one another. It’s entirely Bank of America.”
Bank of America spokeswoman Nicole Nastacie declined to comment in detail due to “customer confidentiality.”
“We have been working with this borrower for some time to help address the financial issues impacting the project,” she wrote in an email.
A similar financial pitfall for the 140 West Franklin project is unlikely, Ram Development Company spokeswoman Kim Counts said.
The development, located at the intersection of Church and West Franklin streets, is a public-private enterprise featuring living, retail, public art and parking spaces.
Counts said the project’s loans, which were secured with Wells Fargo, will be repaid through developer’s equity, not customer deposits.
She also said location is a key difference between Greenbridge and 140 West, which has sold about half of its units.
“We’re downtown on Franklin Street, so I think our location is a huge strong point for us,” she said.
Mayor Pro Tem Jim Ward, who is also on the Town Council economic development committee, said he isn’t concerned for 140 West’s future and doesn’t think Greenbridge is a litmus test for success in Chapel Hill.
“The difficulties that I’m aware of that Greenbridge is having is a matter of three years of financial trouble that the whole world has been experiencing and is not speaking to the project being well-suited to Chapel Hill or not,” he said.
“It’s a matter of banks being willing or able to loan money.”
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