Two Point Ruston buildings — a garage and public market — are set for auction next month after a Pierce County Superior Court judge entered a $91 million judgment against the developer of the 97-acre Tacoma waterfront project.
In late March, Judge Shelly Speir-Moss ruled that a pair of entities associated with developer Loren Cohen — Tacoma-based Point Ruston LLC and Point Ruston Phase II LLC — must make good on a $66 million loan extended in 2013. Interest, penalties and attorney’s fees have added another $25 million to the total. The auction will help pay off some of the $91 million judgment.
The lender is American United EB-5 Regional Center III LLC (AURC), which includes 132 foreign investors who contributed $500,000 each in 2013 through the U.S. Citizenship and Immigration Services EB-5 program. In exchange for their investments, they were able to obtain green cards to come to the U.S.
The properties in that loan include the Waterfront Market at Ruston and the development’s parking garage — which is also the site of four planned buildings.The building permit requests for those structures are now voided by the city of Tacoma, but 222 residential units and 69,000 square feet of commercial and retail space had been planned for the site at 5106 Main St. It would have also had 3.3 acres of open space and about 16,690 square feet of landscaped area.
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The total value for all the properties is about $45 million, AURC’s attorney Russell Knight has stated in court documents. The sale is expected to occur sometime in mid-May at the Pierce County Courthouse. An outside buyer could acquire the structures, or AURC may choose to use credit from the judgment to buy the assets itself, Knight said.
“The largest portion of the judgment will be collected by foreclosing on the Waterfront Market at Ruston and the Point Ruston Garage,” Knight told the Business Journal. “These buildings will still exist and serve Point Ruston, but will no longer be controlled by Loren Cohen, who is the sole owner of Point Ruston, LLC. Point Ruston, LLC guaranteed the loan and still owns multiple components of the Point Ruston site. These assets will be used to collect the judgment.”
Point Ruston LLC owns several buildings and undeveloped properties in Point Ruston.
“AURC is keeping all of its options open to collect the balance of the judgment,” Knight said.
Cohen and Jack Krona, the attorney for Point Ruston LLC, did not respond to requests for comment.
This is the second time the Waterfront Market building has been foreclosed on. Family-owned Serpanok Construction acquired the building and about 300,000 square feet of the adjacent garage for $3.4 million in 2021 after a legal battle dating back to 2016. Serpanok conveyed the title of the building to AURC on March 1 through a deed in lieu of foreclosure, according to court documents.
A representative for Serpanok did not respond to a request for comment.
The fact that the court entered the judgment against Point Ruston LLC is significant because it was not the borrower of the loan.
“Point Ruston Phase II, LLC was the borrower, but it transferred away its assets and is insolvent,” Knight said. “Point Ruston, LLC guaranteed the loan and still owns multiple components of the Point Ruston site. These assets will be used to collect the judgment.”
This is the second judgment in the case since September 2021 when an arbitrator ruled Point Ruston LLC and seven of its related entities to pay AURC $11.5 million in interest. The judge’s decision brings the total dollar value of the judgments obtained by AURC to more than $100 million.