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Railyards Lender Starts Foreclosure Process

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(Sacramento, CA)
Tuesday, June 15, 2010
Railyards developer Thomas Enterprises – headquartered in Atlanta – has poured hundreds of millions of dollars into the 240-acre project. But it’s an Illinois-based investor named Inland America Real Estate Trust that has the real sway here. Inland is the lender, and Thomas owes it around $185 million.  On Tuesday, Inland filed a notice of default against the Railyards property – the first step towards foreclosure.
Totah: “That is a precautionary measure that they took in order to protect their interest in the loan.”
Suheil Totah is the Thomas Enterprises official who oversees the Railyards. He says the two sides are negotiating an extension to the loan and thinks the talks will wrap up soon. As for the project itself?
Totah: “I don’t expect this notice will impact the infrastructure work that’s taking place and the progress we’ve been making at the Railyards.”
Sacramento officials are keeping a close eye on the situation. Assistant City Manager John Dangberg says the city knew the two sides have been talking, and isn’t surprised by the default notice.
Dangberg: “The good news is that we have had conversations with Inland and with Thomas Enterprises. And I think everyone is committed to the vision of the project and pursuing the project.”
The bad news?
Dangberg: “I think everyone recognizes that we need to preserve the funding that’s been committed to the project and complete those various infrastructure elements. This puts a wrinkle into it.”
… and Dangberg says he doesn’t know what will happen next. Meantime, the infrastructure work like building streets and bridges continues at the Railyards – for now.
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