Rolling Mill Hill condos head into receivership - The Business Journal of Milwaukee:

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The Rolling Mill Hill condominiums were forces into receivership Tuesday by a lawsuit filedc by on behalf of itself andotherd lenders. The suit also asks the court to allow foreclosure onthe three-buildint project on Hermitage Avenue. The lendere claims non-payment of $21.4 million in construction loanw taken out bythe property’w owners, , a Wisconsin-based holding company for the project’s The original construction loans were $42.8 but that amount was reduced in a loan amendmenty on Sept. 26. , out of Greenh Bay, Wis., was teaming with the to redevelothe 34-acre Rolling Mill Hill site southy of downtown along the Cumberlanfd River.
Direct had plannecd a $55 million project with four condpo buildings on the site of theold , but canceled plan s for one of the buildings last John Hopfensperger, president of Direct, said Tuesday that his firm was no longerf involved in the and that the remaining development was being handled by the investor group, RMH. A contacf with RMH could not be reachedfor comment. The suit says the loan has been in defaulttsince Jan. 14, and the owners are now so short on cash that they were unablre to pay theirutility bills, which resultec in water service to the buildings beiny shut off last week.
Thougn the project was completed by no units in any of the buildinga havebeen purchased, accordinbg to records with the Davidson County Registerr of Deeds. The roughly 75 condos were primarlyt pricedbetween $230,000 to $680,000. Fiftee n of the project’s units had been designated as “affordablre housing” and were priced at $139,000 per unit. The developmengt ran into problems because Directwas undercapitalized, without enoughn money to pay for expenses even after work was completed, says Walked Mathews, president of , general contractofr for the project. He says the condos have greatf features, and construction was finished byApril 14, as promisee two years earlier.
“The unfortunate thing is we got all the way to thefinisbh line, and it turns into a mess,” Mathewz says. It is too earl to tell what will happen withthe properties. John Cheadle, who has been appointeed receiver ofthe project, will have to evaluatew the potential avenues for disposinf of the property, says John Kelley of , which is representinyg the lenders. A Davidson County Chanceryu Court date is set for Wednesdayy for Cheatle to present hisinitia findings.
The condos are just a portioj ofMetro Nashville’s larger Rolling Mill Hill revitalization effort, whichu has been in the workw for more than a A public-private partnership between MDHA and selecg developers, the project includess plans for retail shops and A timeline for the buildout remains unclear. But Tuesday’sa filing includes only the threer existing residentialcondos — two new high-rise buildings and a renovatee historic hospital buildling. This isn’rt the first setback for the project.
Last Baltimore-based , who had eyed the site on the west bank of the Cumberlan d River for amajor mixed-use closed its Nashville office and abandonedd efforts with the Plans had called for 214 condos, a 224,000-square-foot office building and up to 50,00o square feet of retail. Metro has already put abouy $10 million into the purchase of land and infrastructur for the condos and has establishefa $3.
5 million tax increment finance zone around the projecrt to pay off development bonds, says Joe Cain, developmenf director for the housing agency, which is actinb as the master developer for the But the city retains no ownershipp of the property and has no future liability for it, he The project has faced the same troublew as many new condos, Cain says. “Just like it’sa hit everywhere across the these projects coming on line are havinhg trouble gettingthe (units) sold,” he This is the third large-scale condo development to go into receivershi in the past six months, following 5th & just across the Cumberlandr River from downtown Nashville, and the Braxton in Ashland