Last year, an arbitrator awarded the lender, AURC, $11.49 million after finding Point Ruston had “actual intent to hinder, delay, or defraud AURC.” Point Ruston paid, according to the complaint.

AURC, the lender that represents 132 investors, agreed to provide a loan to help fund the second phase of Point Ruston project, which included 218 multi-family units, a movie theater, retail shops, a 175-room hotel and a parking garage. The project spans 97 acres in both Tacoma and Ruston.

The loan was negotiated between the late Point Ruston developer Michael Cohen and AURC. According to the complaint filed by attorney David Li, the loan established that Point Ruston would agree to pay all obligations as they came due, keep properties free of other liens, perform construction and improvements by schedule and by the plans. Point Ruston also agreed to provide AURC with evidence of required funds for construction and to keep AURC informed of Point Ruston’s finances.

The loan document required interest payments on a quarterly basis, the complaint states. Point Ruston Phase II initially made interest payments as part of the agreement then stopped, the News Tribune reported in September 2021.

AURC alleges Point Ruston breached the loan agreement by failing to pay interest and installments required and transferred properties to various other limited liability companies without the lender’s consent, which started in 2016.

Jack B. Krona Jr., an attorney who represents Point Ruston, said in an email Tuesday that the lender released its interest in the property and is now claiming to retain an interest again. He also wrote claims related to the transfers were “100% resolved in a previous arbitration.”

“To rehash these allegations now is outrageous — but certainly a sign of the uncertain economic times we are in,” Krona wrote.

AURC permitted Point Ruston to transfer ownership of the Century Building Property to Century Condos. But, according to the complaint, Point Ruston continued to transfer ownership and move its debt to other Point Ruston entities, including Century Apartment and Retail, Century Theater, Shops Property and PR Shops. The deeds of trusts ranged from $2.4 million to $30.35 million.

Entity transfers continued after the first AURC lawsuit. One deed of trust was changed to secure a $10 million loan, the complaint alleges.

Krona wrote in the email to The News Tribune that any purported transfer of property was authorized by the lender and “the allegations related to the transfers appear solely designed to gin up publicity.”

The complaint also alleges Point Ruston also failed to pay its property taxes when due and failed to comply with AURC’s request for accounting of the books and records.

According to the complaint, more than $82 million, which includes the original loan and its interest, has accrued since April 2021.

The trial is set for November 2023.

“My clients will respond to the complaint in due course,” Krona wrote.

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