Columbus real estate investor Mike Schiff first demonstrated an appetite for distressed properties in late 2010 with a relatively conservative play with the discounted purchase of a loan on the former Yankee Trader site near the North Market.
Stepping it up a bit, he purchased the nearly vacant Atlas Building downtown in late February with plans to redevelop the historic property into apartments and perhaps offices.
Now Schiff has worked his way into the Short North to the pocked, vacant site at 830 N. High St. that for the last four years has proven a financial black hole for Apex Realty, the would-be developers of the failed 11-story Ibiza condominium tower. A Schiff-led venture began solidifying its development rights for the property this week when it took over a contract from Columbus’ Core One Properties LLC to buy out Apex’s mortgage for the site. The loan has an outstanding balance of about $4.6 million but any developer could buy it at a discount and control the real estate.
The Ibiza saga goes back to 2006, when Apex first unveiled its plans for the 11-story tower. After numerous delays, the developer told about 70 would-be condo buyers in January 2010 that it would scuttle its bid for 138 condos and pursue apartments instead. Core Properties showed interest a few months later as it began talking to the Finance Fund, a financier of projects in distressed neighborhoods, about buying out the loan and putting apartments on the site.
Schiff said he wants a mix of offices, retail and residential units in a tower similar in scope to the failed Ibiza.
“It will have a much better shot at success than something that’s strictly residential,” he said.
But those plans still offer plenty of risks. For one, Schiff will have to pay off more than $550,000 in past-due property taxes. And those prospective buyers remain in line for an estimated $1.2 million in deposits Apex has yet to return, according to numerous lawsuits filed in Franklin County Common Pleas Court. Such litigation, and rumors the developer may file for bankruptcy, may impede any plans.
Schiff also will have to go back to the Italian Village Commission since the project’s “certificate of appropriateness” has long since expired. He said he has lined up two unspecified developers to work through the minefield, but the unveiling of a formal plan will take a few months.
“We think we’ll bring Italian Village something they can be happy with,” Schiff said.
Core Properties CEO Jeff Coopersmith did not get specific in outlining his reasons for walking away from the project after nearly a year of trying.
“We basically sold our contract (to develop the site) in order to recover some of our expenses,” he said. “... We just couldn’t figure out how to make it work economically within our risk parameters. It was just too big of a risk.”
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