The Vineyards Resort, touted during groundbreaking just a week ago as a major springboard for development in the Yakima Valley, is fighting...
The Vineyards Resort, touted during groundbreaking just a week ago as a major springboard for development in the Yakima Valley, is fighting foreclosure.
Backers of the $500 million destination resort are attempting to negotiate an extension with a Wisconsin hedge fund on an unpaid $12.9 million short-term note intended as interim financing to get the project off the ground, according to an attorney for the developers.
The project is being developed by SBC, a joint venture with partners in Colorado and the Yakima Valley. It includes an 18-hole golf course, 532 home sites, a hotel, clubhouse, recreation center, and a Tuscan-themed village.
The property, 500 acres along Nightingale Road, is scheduled to be sold Oct. 17 on the steps of the Yakima County courthouse, according to a legal notice printed in Friday’s Yakima Herald-Republic. A trustee hired by the originator of the loan, First National of America, is handling the sale.
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According to the notice, the developers were served with a notice of default on the loan in May. For now, the sale is still on.
Paul Larson, the Yakima attorney for the Vineyards developers, said he is trying to negotiate an agreement that would cancel the sale.
His discussions are with Stark Investments, a Milwaukee hedge fund that has taken over the loan from First National of America, its partner in a joint venture to finance golf courses. The two companies are now battling one another in a New Jersey federal court in a dispute over the venture.
Larson said he believes his clients are very close to resolving the matter short of foreclosure.
Larson said Monday the development finds itself caught up the crisis in the financial sector that has seen traditional sources of capital dry up and loan requirements tightened.
“This is a very difficult time, no matter how good your project looks,” Larson said. “Stark doesn’t want to own a golf course and housing development. We don’t have the money to pay for it until we get financing. It is a problem with everything in the equity mortgage crises we are having.”