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Seven properties in the Point Ruston mixed-use development on the Tacoma waterfront are on the market after a recent ruling by a Pierce County Superior Court judge.
It’s the latest chapter in an ongoing legal drama involving Point Ruston developer Loren Cohen and unpaid investors, lenders and contractors.
The properties were placed into receivership in May after lender TerraCotta Real Estate Services sued to recoup $73.8 million in debt owed on the properties. (The amount has since increased to more than $82 million.)
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In a December ruling, Judge Stanley Rumbaugh split the seven properties into two groups with different disposition timelines, including one group of three properties to be marketed by a broker and a second group of four properties to be put up for sale directly by the receiver.
The three-property portfolio — which includes two retail structures with multiple tenants (buildings 8 and 18) and the Century Theatres building — is expected to sell for more than what’s still owed on the properties. The judge, for that reason, allowed the receiver, Resource Transition Consultants (RTC) of Lynnwood, to try to sell the portfolio rather than foreclose on it.
The portfolio, referred to as PR Main Street Retail, has an estimated value of $25.1 million, according to court documents. Among creditors, the first in line to receive payment is TerraCotta, which is owed $19 million on the three-property portfolio.
On Dec. 28, the court approved plans by the receiver to engage Kidder Mathews brokers Erik Swanson and Mike King to market the three properties. A sales flyer was posted last week.
The four other properties in receivership, worth around $12.9 million, include a retail building and three development lots. Roughly $63 million is still owed on those properties.
TerraCotta has begun a 120-day nonjudicial foreclosure process on the properties, but the receiver can try to sell them during this period, which concludes in mid-April, according to Kevin Hanchett, principal of RTC.
TerraCotta estimates the value of all seven properties in receivership is approximately $38 million.
The more valuable PR Main Street Retail portfolio will remain on the market until July 1. If they aren’t sold by then, TerraCotta will foreclose on them as well.
The Dec. 28 court order includes a provision allowing investor Dan Fast to sign a purchase agreement for some or all of the properties within 30 days of the issue date, a period ending Jan. 27. Fast had put in an offer to buy some of the properties in August, but later withdrew it.
The junior creditor on multiple Point Ruston properties is American United EB-5 Regional Center (AURC), which is owed about $87 million, according to court documents filed by the group’s attorney. AURC would be able to recoup some of the sale proceeds after TerraCotta’s loans are satisfied.
Point Ruston properties up for sale
PR Main Street Retail portfolio:
- Building 8, several addresses: 10,000 square feet; tenants include Rebels & Lovers, Indigo Urgent Care and Obee Credit Union
- Century Theatres building, 5057 Main St.: 27,000 square feet; houses Cinemark Century Point Ruston and XD theater
- Building 18, several addresses: size not listed; tenants include Stack 571, Misho Sushi and Jewel Box Cafe
Portfolio for sale by the receiver:
- Building 7, 5020 Main St: 18,500 square feet of commercial and retail space on the ground floor of the Village on Main Apartments
- Lot 14, 5320 Yacht Club Road: 3.4-acre vacant site for multifamily development
- Lot 15, 5451 Yacht Club Road: 5.8-acre vacant site for multifamily development
- Lot 16, 5225 N. Bennett Road: 6.4-acre vacant site for multifamily development