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Tempe Centerpoint condos purchased by Cleveland company by Dianna M. Náñez - Sept. 2, 2010 05:45 PM The Arizona Republic Downtown Tempe business owners are celebrating this afternoon's announcement that Centerpoint Condominiums has been purchased by the Zaremba Group, a national real estate company based in Cleveland with an office in Scottsdale. The condos sold for $30 million. They were marketed for sale after failing to sell at a foreclosure auction in April. ML Managers LLC., successor to Mortgages Ltd., had originally loaned the condo's developers, Tempe Land CO., about $135 million to build the towers. "This is the largest loan that Mortgages Ltd. made and it's our largest asset," said Mark Winkleman, chief operating officer of Managers LLC. "It's important to the investors of Mortgages Ltd. that it be sold." He added that the sale was the result of "a very intense marketing process that lasted several months. We had initial interest from over 300 potential buyers throughout the United States, Canada and England. Even though the process is substantially less than the investors had invested in it, we are confident that this is the highest amount we could have got and best buyer for this project." The sale is subject to approval from the bankruptcy court and a vote by investors. Zaremba owns Barolo Place, a condominium project in Scottsdale and apartments in Mesa and Peoria. Seeing the project complete would be a major boost for downtown Tempe, which has struggled in the economic downturn. Many downtown business owners had hung their hopes on the sales boost Tempe officials had said would come from having hundreds of residents living in luxury condos off of Mill Avenue. But those hopes died when the buildings remained empty and began looking tattered.Development of the Tempe condos and several other major Valley real-estate projects funded by Mortgages Ltd., which was Arizona's largest private real-estate lender, stalled after the lender was forced into a high-profile 2008 bankruptcy. The Tempe condo's 22-story tower is nearly complete, while extensive work is needed on the project's 30-story tower. The towers have 375 residential units. Proceeds from the Centerpoint sale will go to pay back the development's investors. CB Richard Ellis was marketing the condo project. Centerpoint Condominiums timeline July 2005: Tempe marked groundbreaking for developer Avenue Communities' first two of four proposed 22-story towers near Mill Avenue and Sixth Street. City officials said the luxury project signaled the transition to the kind of downtown Tempe had long envisioned. The four towers on the 5 acres were to include 700 residential units, retail, a boutique grocery store, a penthouse level with a pool, private theaters, concierge service and wine lounge. The units' pricing was expected to start at about $250,000. City officials said the influx of condo dwellers would move downtown Tempe toward the kind of "24-hour life" that would boost area businesses' customer base. November 2005: Tempe City Council approves Avenue Communities' request for a height change that would make Centerpoint the tallest building in the city. The vote was 5-2 in favor of the height change. Members Ben Arredondo and Len Copple voted against the approval. Mayor Hugh Hallman favored the added height, saying the towers would fix the "fundamental flaw downtown" by integrating housing into the mix that is dominated by bars and restaurants. The developers said the extra floors were needed because the cost of construction had increased 80 percent in the preceding 18 months. Ken Losch of Avenue Communities called the height-addition process "painful" but said it will be worth it in the end. "We see Tempe becoming a world-class environment," he said. "It'll be on par with Miami's South Beach in the next 10 years. The approval paved the way for three of the four condo towers to be built to 30 stories, which would soar 39 feet over Sun Devil Stadium, the highest man-made Tempe structure at the time. Prior to the council approval the towers were approved 22 stories and 15 stories. February 2006: Attorneys for Phoenix question Centerpoint's height, saying it would affect safety of planes from Phoenix Sky Harbor International Airport. Oct. 2006: Federal Aviation Administration gives go-ahead for Centerpoint's 30-story tower. June 2007: Centerpoint finishes roof on its first 22-story tower. The building was the tallest in Tempe at 258 feet. The other three towers have approval from the city to reach 30 stories. June 2008: Mortgages Ltd., the state's largest private commercial real-estate lender, files for bankruptcy following the suicide of its CEO. Centerpoint, among the slew of high-profile Valley developments backed by the lender, is in jeopardy. In the months to come, stakeholders enter extensive legal negotiations. December 2008: Developers for Centerpoint had worked to get court approval for a second financier to back project. That effort did not result in financing and developer filed bankruptcy. Second 30-story tower is about half finished. February 2009: City officials and Ken Losch disagree over information Losch had provided Tempe on efforts to find financing for condos. January: Towers in foreclosure with auction set for April. April: Towers fail to sell at auction and M.L. Manager LLC, formerly Mortgages Ltd., readies to market towers for sale. Area merchants complain that towers are rundown, tarp covering windows is falling off and transients are entering towers for shelter. September: M.L. Manager official announces buyer, making way for the condos to be completed.
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