The wonderful folks at the Cville Bubble Blog have returned to answer a few questions for us, and like Rosanne Barr singing the national anthem, a gaggle of sorority girls trying to hit the high note in “Living on a Prayer”, or Nickelback anywhere, things don’t sound very good.  You may remember the last interview cVillain did with them over a year ago.   A lot has happened in the real estate world since then, so I thought we could all stand for some updates.

Going through a roller coaster of answers, on topics such as BLOWmont, shrinkwrapping buildings, and getting out of town while you can, the Bubblers take us on a trip that doesn’t sound like too much fun.  Like a road trip to Minnesota with that flatulent uncle… a few high points, but generally unpleasant with no end in sight.  We asked:

1. Last time, you wrote, “The C’ville Bubble has burst.” Are we still bursting (in free fall) or are we anywhere close to being done (leveling off and stabilizing)? »Read More

I’m sure anyone who has been driving around the downtown mall over the past few weeks has noted the periodic shutdowns occurring on Water Street, and all of the miscellaneous closed sidewalks and detours the city has been throwing at us.  The assumption from day one that this is all blow back from the Standstill Hotel, was confirmed by the city today that this is indeed a result.

The original construction company had agreed to spend $800,000 of Charlottesville’s money in order to ‘beautify’ the sewer drains and sidewalks in the area, but as they packed bags and ran off to deal with actual projects, the city has taken the task back over.

The Box (if it ever opens) patrons will undoubtedly be excited about the consistent upgrades the area has been receiving, from the original slim covered alleyway, all the way up to the almost completely open street to stumble in.  Our question has to be why the sidewalk at the southwest corner of the parking garage were ever closed down.  This seems a good distance from the daily construction, and merely forced people to crisscross the area to safely walk towards the glass building.  Any thoughts?

Looks like the Landmark hotel battle rages on, and not just in the minds of all who are forced to live under it’s blatantly unneccesary shadow.  It appears as though Merryl Lynch is requiring Halsey Minor to return the $24 mill he borrowed from them, along with a court order to stop being a shin kicker to all those who are calling him to ‘lemme get that money back I lent you back in the day’.

Silverton Bank, the Atlanta-based bank that owns Specialty Finance Group (the hotel focussed financing group that provided financing for the unfinished Landmark Hotel), has been shutdown by the FDIC.

The Federal Deposit Insurance Corp. has shut down Silverton Bank, the failed Atlanta “bank of banks,” instead of selling it to private-equity investors, according to a person familiar with the situation.

The FDIC had previously setup a “bridge bank” to operate it while trying to look for someone to purchase Silverton.  However, this means no sale will take place.  The consequence?  I assume that means Silverton will go into liquidation, and someone will buy the Landmark at a firesale price.

Is that a good thing or a bad thing?  Time will tell.

More on the closing from DailyFinance.com.
[pic from Silverton Bank website]

A sign reading “Halsey Minor’s Big Failed Erection” bravely sits underneath the inactive Landmark Hotel construction site.  Some prankster(s) plastered these signs across the entire front facade of the Landmark Hotel site.   With a bankrupt construction bank and lawsuits between Minor and his development partner, Danielson, it looks like we aren’t going to experience a Charlottesville luxury hotel anytime in the near future.

[big picture here]

Halsey Minor, the Landmark Hotel investor, has just filed suit against his former local developer partner, Lee Danielson.  He’s already fired the guy, and now he is demanding  $100,000 in compensatory and $350,000 in punitive damages.  But, the most important details, is that Minor wants OUT of his obligation in the development agreement which is probably worth a whole lot more than the half million in the suit.

Will they settle and let Minor out of the agreement?  Who knows, but it sounds like we are going to have a monster ghost building on the mall for the next two years.  Anyone remember when the local government bailed out the Omni construction?  You think Charlottesville will bail out the Landmark?  Time will tell.

[via seevile]

A birdie sends in this question:

Anyone know why there is a second crane at the Landmark Construction Site? Are they taking down the original crane or speeding up construction?

Lee Danielson has been fired and is no longer the developer for the Landmark Hotel according to the Daily Progress.  No one knows the specifics of why.

[via DP]

Picture of the Landmark Hotel from Blanco Nino

If you recall, we asked some real journalists to investigate the whole story about the construction halt and lack of financing for the Landmark Hotel.  Thanks to a real journalist at the Daily Progress (his name is Brian McNeill), we have an update!  It gets messy…

»Read More

Will the Landmark hotel look like this again? Probably not, but according to the Daily Progress,  an Atlanta bank has failed to make construction loan payments on the Landmark Hotel site and Halsey Minor has halted construction on the hotel. The article explains:

Under an agreement with the bank, Minor said, he would pay $7 million in equity and the bank would pick up as much as $24 million to pay for the project’s construction. Minor said he has paid his share, but the bank has fallen behind and missed a $1.1 million payment that was due Friday. So far, Minor said, the bank has paid around $4 million of its total $24 million obligation. 

Um, hello. Banks just don’t not make payments on construction loans for no reason. Construction loans have a lot of covenants that are often overlooked in good economic times. If things don’t look as good, the bank might have a legal reason to not pay its obligation.  Or, maybe the bank has its own financial problems.  It’s hard to believe, even when you want to rooftop bar and free drinks sooo badly.

How about some real journalists call that Atlanta bank and find out the other side of the story?  Sure, maybe the bank is to blame, but my boozstincts tell me otherwise. Hopefully the bank isn’t shutting down, because that would delay the construction a long time.