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From PSL.com

From Mysa.com
Back on drawing board?
By Creighton A. Welch - Express-News

It's been almost six years since a $100 million Italian-themed mixed-use project on the River Walk called Piazza San Lorenzo was unveiled, but work still has yet to begin.

Despite filing for Chapter 11 bankruptcy in December, being posted for foreclosure in January and then filing again for bankruptcy Feb. 2, Larry Raba, who runs the project's development company, says the company received a new infusion of funding and that construction is “imminent.”

“We have a new investor coming in and the transaction did not occur in time to pay the land loan off,” Raba said, declining to identify the investor. “We're really confident with this gentleman. He loves the project immensely.”

According to the first Chapter 11, which was filed on Dec. 1 and dismissed on Dec. 30, the investor promised $30 million.

Part of the hype for this project comes from its prime frontage on the River Walk and Houston and Soledad streets.

“It's definitely a gold mine, and it's definitely the bookend to Main Plaza,” said Greg Gallaspy, executive director of the Paseo del Rio Association. “I just think that is such a unique part of the river. We've been waiting and waiting for this.”

Raba, who heads up Raba Design Group and RTK Development Inc., is no River Walk newbie. He designed the Hilton Palacio del Rio and chaired the River Walk Commission.

The 1.27-acre luxury project is planned to have 28 condos, 39 private residence club units, five restaurants and bars, retail space and an open piazza that opens up to the River Walk. The private residence club units are similar to time shares, but buyers actually will own a 10 percent interest in their condo.

Raba said 13 of the condos are under contract, and that he gets three to five calls a week inquiring about the property.

The financial struggles started in February 2008, when one of the investing banks became disqualified from participating in condo loans. The developers then left their original lender, which in turn made the loans due. When the developers couldn't pay off the loans in time, they filed for bankruptcy.

The property also was posted for the February foreclosure auction, but did not get processed because of the bankruptcy filing.

Raba said he and his partners have $9.6 million in cash invested in the project.

“It's been extremely exciting; we just found ourselves in the middle of an economic decline,” he said.

When construction is able to begin, it will take about 21/2 years to complete the project and will be led by Bartlett Cocke General Contractors.

“It's been three or four years ago since we last even updated the estimate,” said Kirk Kistner, vice president of marketing and business development with Bartlett Cocke. “There's just going to be a significant amount of price escalation that has not been taken in to account. But in a sense, we're now in a period of deflation in commodities at least, so they may end up being OK.”

Bartlett Cocke is one of the creditors named in the bankruptcy filing; it is owed $50,000.Filing for bankruptcy to avoid a foreclosure is fairly typical, and is likely to become more common as landlords struggle to restructure loans and to get credit, said R. Glen Ayers, a bankruptcy attorney with Langley & Banack.

“This is a reasonable business decision for someone to make,” Ayers said. At the same time, “we really don't have Chapter 11 so you can stand around mowing the grass waiting for the price to go up.”