Apr
05

Completed Charleston Condos Without Water

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NO WATER … Townhouses tangled up in legal, financial web

April 4, 2008

By Katy Stech – The Post and Courier

The newest townhouses in Mount Pleasant’s Park West subdivision were built with luxurious amenities such as high ceilings, deep soaking tubs and intricate crown molding. But the units, which have been completed since January, lack the most basic feature of all: water.

The reason is that the underground utilities are entangled in a legal mess involving a nearby piece of property that was supposed to be transformed into Cambridge Square, a mix of shops, offices and lofts.

Instead, that land is being foreclosed on, and several firms have placed liens on the property, preventing the townhouse developer from getting its certificate of occupancy. So the units at Cambridge Commons sit empty, waiting for water and buyers.

Several purchasers had contracts but canceled them after they could not be assured of a closing date, said Harrison Murray, who is part of the group that built the townhomes. One prospective buyer from New Jersey held out for more than a year before giving up last week, Murray said.

“We can’t sell the units, and in this market people don’t seem to be interested in something they can’t close on in some finite amount of time,” Murray said.

It’s unclear when or if the owner of the neighboring 30-acre property can sort out its financial situation. The property is owned by Centrium Associates, which is led by John Zahoudanis of Santa Monica, Calif.

When Cambridge Square was first unveiled about five years ago, it was touted as an urban-style commercial hub for residents of the sprawling Park West community, which lacked restaurants, shops and basic services such as dry cleaning.

Centrium got involved about three years ago. The company owns vineyards and develops retail centers throughout southern California. Zahoudanis said this week that he heard about the project through his wife, Sandra, who grew up in South Carolina and is related to Mount Pleasant-based appraiser Michael Surles.

Centrium bought about 35 acres from the original investor for about $6.7 million in 2005. It then unveiled a mixed-use development surrounding a traffic circle on Park West Boulevard. The collection of “live-work” buildings was to feature more than 100,000 square feet of commercial space on the ground floors and residences upstairs.

Murray’s group got involved when his Cambridge Commons LLC bought some of the land in 2006 for its townhouse project.

According to the sales contract, Centrium was supposed to provide infrastructure, including parking, landscaping and water and sewer lines. But the company got caught up in the residential real estate slowdown, which has made financing difficult for most developers, Zahoudanis said.

“Even though problems were caused by residential builders, it has moved over to the commercial side,” he said.

The company’s property fell into foreclosure. Also, contractors who worked on the project and the townhouse developer have filed lawsuits, saying they were not paid for their work.

The debt on the project tops $35 million, according to court documents.

When and how the Cambridge Square project will proceed remains to be seen.

Zahoudanis hopes to file another design plan with the town’s planning department that calls for fewer residential units, which he said could make the proposal less risky for lenders.

“It’s a great site and a great location,” he said. “Our plans will fit very well there.”

But if the legal and debt issues are not resolved, the property could still be sold at a foreclosure auction.

Surles, a former Mount Pleasant planning commissioner who said he has no financial interest in the Cambridge Square site, said he is looking into other options for the land. He estimated that more than 40,000 vehicles pass the property every day.

Also, Surles said, the site is within walking distance of a new condominium development, a retirement community that is under construction and Park West’s main amenities center.

“It will be a tremendous asset to the neighborhood no matter what,” Surles said of Cambridge Square.

Meanwhile, the Cambridge Commons townhouse project is stuck, with no water service and no certificate of occupancy. Murray, the developer, referred to the circumstances surrounding the project as the “perfect storm.” Not only is Centrium in financial trouble, the residential real estate market has gone soft, he said.

“We don’t feel like we have done anything foolish,” Murray said. “We’re proud of the thought we put into the units, and we feel like we have built a great product that we’re anxious to show people and anxious to sell.”

LINK TO ARTICLE HERE:

http://www.charleston.net/news/2008/apr/04/no_water36033/

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