In a letter to a small Colorado daily newspaper, the developer of a Sparks, Nev., shopping center in technical default on its bonds tried to explain financial issues surrounding the Nevada project while pitching Eagle, Colo., residents on a retail project he is planning there.
The developer asked residents to visit a website that talks about the Eagle River Station project, but also admitted that RED Development has some failed projects in default.
Voters will decide the fate of the Eagle project in a referendum Tuesday.
“As was reported approximately 60 days ago, we were in a strategic default situation on our project in Sparks,” said the letter by Jeff McMahon, one of the five managing partners of Trinity/RED Development.
Trinity/RED Development is the developer of Outlets at Legends in Sparks and the planned Eagle River Station.
“At that time, I stated that it was a common negotiation process when dealing with a group of banks on a loan of that size, and I stated in public testimony that it would be resolved in the next 30 to 60 days,” he said.
Now the issue has been resolved, according to McMahon.
“I’m pleased to say that is exactly what happened,” he wrote in the letter, adding the company successfully negotiated a resolution to the terms of its loan, and put private funds into the project to make the loan sustainable.
The details of the loan resolution must remain confidential as the documents are being drafted, he wrote, but he anticipated the company will issue a press release within the next two weeks with more details.
“We can say that the resolution includes paying off any and all liens and bills owed to our consultants and contractors,” he said.
Payments are current on sales tax anticipation revenue bonds issued by the Sparks Tourism Improvement District No. 1 to help finance the Nevada shopping center.
However, there have been unscheduled draws on reserves, according to filings made on the Municipal Securities Rulemaking Board’s online Electronic Municipal Market Acess site, known as EMMA.
This is the first time RED, which has 30 projects in its portfolio, has gone through a negotiation such as this, McMahon wrote.
These negotiations did not affect the performance of the Nevada shopping center, the sales tax generation or the repayment of the bonds, according to the letter.
RED has also begun construction on the second phase of the project that will include around 200,000 square feet of new retail tenants, a 14-plex theater and Imax, which will open in spring 2013, it said.