Battered by the national housing slump, developer Barclays North, a real-estate powerhouse whose sales once topped $45 million, will fold...
Battered by the national housing slump, developer Barclays North, a real-estate powerhouse whose sales once topped $45 million, will fold July 4, the Lake Stevens-based firm announced Wednesday.
The closure, which follows a months-long scramble by founder and CEO Patrick McCourt to placate lenders, shows how the nation’s real-estate downturn is rippling through the local market.
“There are a number of landholders in the market, and I’m not just talking about Patrick McCourt, that are sitting on parcels of dirt right now wanting to sell,” said Todd Britsch, president of the Mill Creek consulting firm New Home Trends.
He added that the Puget Sound-area market has been more stable than other areas of the country.
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Barclays North typically took large undeveloped parcels of land, obtained all the necessary permits and resold the tracts to major homebuilders.
But Barclays entered this year in default with at least 56 creditors and faced a barrage of lawsuits this spring as some lenders exhausted their patience.
The company laid off employees, consolidated or froze operations and scurried to offload its projects, trying to stabilize its finances.
The company employed more than 100 people at its height. Now it has about 20; they will lose their jobs in July.
“Every effort has been made to clearly, consistently and frequently communicate our status with our employees, lenders and vendors,” McCourt said in a statement. “Unfortunately, circumstances are such that some obligations have not been resolved and we have no other option at this time but to cease operations.”
The company has not ruled out the possibility of filing for bankruptcy, McCourt’s statement said.
At least one of McCourt’s ventures did seek Chapter 11 protection from creditors last week. A real-estate project in Caldwell, Idaho, managed by McCourt, filed in U.S. Bankruptcy Court in Seattle, claiming both assets and liabilities exceeding $10 million.
Barclays North once controlled thousands of lots in Washington, Oregon, Arizona, Idaho, Nevada, Texas and South Carolina and had sales of $45.5 million in 2004, according to its Web site. It established more than 150 distinct entities for different projects, with creditors spread from Ohio to Hawaii, court records show.
By 2006 McCourt stood poised to sell over a dozen projects in Snohomish County and elsewhere for $150 million to heavyweight developers, including Centex, D.R. Horton and Quadrant. But as the housing market slid in late 2006, those contracts never materialized, leaving Barclays North with an unanticipated cash-flow problem — a deficit that has proved fatal.
The fate of its current holdings, including a 275-unit condominium in downtown Las Vegas, is uncertain.
Isaac Arnsdorf: 206-464-2397 or email@example.com